Communities Secretary Sajid Javid said Barnsley and Doncaster ‘would be free’ to join a One Yorkshire deal if they consented to the Sheffield City Region agreement first.
It is a significant shift after months of insisting neither borough could join a wider proposal because they had signed up to the South Yorkshire deal and it had been enacted in Parliament.
The hope now is Sir Steve Houghton of Barnsley and Ros Jones of Doncaster give their consent.
The move would open the door to £30m-a-year devolution funding, which would attract grant funding and private sector investment, and could release the Adult Education Budget and Early Intervention Pilot which have been paused due to the row.
Mr Javid said he hoped the compromise would ‘open the way for the people and businesses of South Yorkshire to have the full benefits of the Sheffield City Region deal, whilst not in any way precluding your council and others from pursuing their ambitions for a One Yorkshire deal’.
The letter states: ‘Barnsley, Doncaster, Rotherham and Sheffield councils now agree to do, as soon as practicable after the mayoral election in May, all that is necessary for the existing deal to be fully implemented...at the same time, the Government and South Yorkshire councils also agree if a One Yorkshire deal comes forward, and is concluded and agreed by the councils concerned and by Government, some or all of the South Yorkshire councils would be free to join that deal, subject to certain provisos, particularly that arrangements would be put in place to maintain the integration of transport across South Yorkshire’.
The letter also states the consent of the elected mayor would be needed to allow councils to leave.
The results of a community poll on the devolution preference of residents in Barnsley and Doncaster is due on December 21.
A South Yorkshire mayor without powers or funding will be elected in May after all four leaders signed up and the deal was enacted in Parliament.
Henri Murison, director of the Northern Powerhouse Partnership said: “The Secretary of State, Sajid Javid MP, has made a welcome offer in his letter today to compromise with the councils of Barnsley and Doncaster who have expressed a preference for a One Yorkshire deal to their residents during recent consultation, having previously signed up to the Sheffield City Region deal.
“By making it possible to join with a Yorkshire wide settlement there is now clarity that the only way to reach that outcome is to have a Sheffield City Region mayor first, who would need to agree that their own position would only last until it was replaced by a deal which would be in the better interests of local people.
“Whether there is a preference for either One Yorkshire or a Sheffield City Region deal tomorrow when detail of public views who have responded is announced, whatever the turnout, the approach of compromise means that a two-stage deal to reach One Yorkshire can and should be viewed as the way to fulfil any mandate for a pan-Yorkshire settlement – because the Secretary of State has today made that the way to achieve it.
“Those, such as Dan Jarvis MP and fellow parliamentarians who have, as we do, wanted to secure progress on devolution which gets investment in transport and skills to develop the economy have seen our calls for compromise listened to – which I certainly welcome.”