The cash would be spent on a plethora of projects designed to improve skills, housing and transport - as well as boost the local economy and tackle climate change.
The staggering sum is contained in a blueprint drawn up by the region’s 15 council leaders, who have agreed a draft basis on which they could seek a so-called “county deal” with Whitehall.
The document, which has been seen by the Local Democracy Reporting Service (LDRS), sets out four wide-ranging themes that would be likely to dictate the shape of any future agreement with ministers.
Crucially, the local authority leaders have also signed up to a series of principles about how Lancashire would govern itself if it secures the funding - and an elected mayor is no longer on the cards for the county.
The creation of such a post has often been painted as a government prerequisite before an area could expect to receive devolved powers and the cash to go with them. But some parts of Lancashire have long balked at the idea and, although the opportunity for Lancashire to proceed without that figurehead has previously presented itself, spats over the subject have previously derailed the county’s tentative steps towards devolution.
Back in 2020, all 15 leaders finally agreed, in principle, to explore the formation of a combined authority to be overseen by a mayor with “limited powers” - careful wording which seemed to betray an ongoing reticence to the concept in some corners of the county.
More controversial still was a separate government demand for Lancashire to simplify its complex two-tier system of local government - a move which could have led to the abolition of every existing council in the region and the creation of three new standalone authorities. The prospect sparked a flurry of sometimes contradictory proposals around 18 months ago, the most memorable of which saw Preston City Council write to the government to propose a four-way tie up with South Ribble, Chorley and West Lancashire councils - only for its three proposed partners to make their own merger suggestion 24 hours later, but excluding Preston from the equation.
However, both the mayoral and council reorganisation roadblocks were swept away last summer when Boris Johnson declared in a speech on levelling up that there was no “one size fits all” template for devolution - and invited areas like Lancashire to apply for their own, seemingly bespoke, county deals.
The LDRS can reveal that discussions between local leaders to design a devolution bid began back in the autumn - resulting in the draft plan on which the region’s MPs were briefed on Wednesday morning.
The proposed themes and governance arrangements are now set to be put before meetings of each of Lancashire’s councils later this month in order to seek approval from their members for what has been suggested so far - and to authorise leaders to work towards building up a formal bid, which would require separate approval by the authorities at a later date.
Phillippa Williamson, the Conservative leader of Lancashire County Council, said that the proposal was a “bold and exciting step towards a new deal for Lancashire that will benefit every part of the county”.
Speaking to the LDRS, County Cllr Williamson added that all of her counterparts across Lancashire were convinced that this was an opportunity to secure extra powers and cash which the county could not afford to squander.
“It's not about…councils losing power - it's about us coming together to have one voice and being a credible partner with the government and others to be able to get investment and development and really improve things in Lancashire.
“In many ways, it was about building trust [between the authorities], because, over history, trust wasn't brilliant.
“We have made a lot of progress, but we just need to edge along now, because it gets more difficult the more detail you go into - and people will have their favourite projects.
“But we have to start somewhere - we cannot carry on without trying to find a way to unite us all and I think it’s also about giving confidence to the government that we can actually deliver,” County Cllr Williamson said.
Confidence is the least the government will demand if it is to cough up the requested £5.6bn over a seven-year period. The calculation has been made on the basis of evidence emerging from a series of commissions which have taken place over the last two years, including an audit of the county's economic fortunes which concluded that if Lancashire could bridge its productivity gap, it would generate an extra £10bn for an economy currently worth £34bn annually.
To that end, the largest share of the funding being requested under the county deal - at £260m per year over the lifetime of any agreement - is provisionally earmarked for schemes to improve education and skills. If the deal is secured, there would be a particular focus on early years and getting children school-ready, as well as boosting the employment prospects of school leavers and those who are already in the world of work.
Physical and digital connectivity is another key theme of the draft report, which sets out an ambition to improve East-West travel links across the county and ensure that digital infrastructure is sufficient to enable the county and its people to reach their full potential. An indicative £150m per year has been set aside for that purpose.
A £200m per annum programme to tackle climate change is bound up with a related push to improve housing quality throughout Lancashire by boosting energy efficiency and generating local sources of renewable electricity. Much of Lancashire's housing stock is decried in the document as falling "severely below standards" set over the past 20 years, since so much of it was built a century earlier - and is cold and damp as a result.
The pursuit of low carbon technologies - and making Lancashire a leader in the sector - also features under the umbrella of economic growth and investment, for which £200m could be set aside each year.
Those four themes make up what has been termed the “New Deal for a Greater Lancashire” which will set out the immediate priorities for the county to pursue under any devolution deal. However, the ongoing work also seeks to develop a longer term plan known as “Lancashire 2050", which will draw in other issues such as health and wellbeing and community-building, in an attempt to create a healthier and more prosperous county over the next 25-30 years.
The money that Lancashire is minded to seek from the government dwarfs the amounts that have been previously been regarded as standard devolution deals - where for all but the most extensive agreements, the offer has generally been in the order of £30m per year over 30 years.
County Cllr Williamson acknowledges that Lancashire’s provisional plan sets some lofty financial aspirations. However, she said that some of the £5.6bn being sought would stem from the county taking over responsibility for existing projects for which money was already available - but which are currently being delivered by the government or its agencies.
“We decided to be ambitious [as] we know there is a big job to be done. We have been quite open about that in the discussions - let’s focus on the art of the doable.”
However, for Lancashire, the doable when it comes to devolution has so often been constrained by what has been deemed desirable by its councils and their leaders over nearly seven years of tortuous - and sometimes torturous - discussions. At various points since a now defunct shadow combined authority was formed in 2015, councils including Wyre, Fylde and Ribble Valley have all spent time absent from the table - while others such as Pendle and Burnley have expressed similar concerns over the framework being set for devolution.
While the draft proposal for a county deal is quite specific about what Lancashire does not want - namely, a mayor or local government reorganisation - it stops short of specifying the exact governance arrangements that would be deployed to implement any devolution deal.
A joint committee, a statutory or non-statutory board or a local authority-owned company are all floated as possible vehicles - but whatever is finally agreed, it would be expected to adhere to the core principles to which the leaders have all put their name.
That means a one council, one vote arrangement - with a two thirds majority required to approve any proposal. Each council - which would be represented by that authority's leader - would have a veto over any proposed project that was in their patch or if their money is required for it or if they can “reasonably demonstrate that it is reasonably likely to have a material impact on their area”.
County Cllr Williamson is hopeful that such a set-up would be sufficient to keep Lancashire's devolution show on the road - and avoid use of the ultimate power that each council would also have of walking away from the deal and the devolution decision-making body.
The council leaders acknowledge that their outline plan may have to be modified depending on the contents of the government's long-delayed white paper on "levelling up", which is now expected before the end of the month.
While the governance arrangements for any Lancashire county deal have been given careful consideration - for obvious reasons - the County Hall leader said that it was important not to “get locked into an argument about ‘what if’ and [so] lose sight of the main goal of all of this - which is getting some powers and investment into Lancashire”.
“What we want is the 15 councils to be able to agree…to the principles, because that would be a major step forward based on where we have got to before.”
While securing a deal which involves wresting £5.6bn from the government will no doubt be a tough task, it seems Lancashire could be on the verge of striking the deal that has so far proved the most difficult of all when it comes to devolution - the one it has to do with itself.
WHAT'S THE BIG IDEA?
Highlights from the four themes that make up the draft version of the "New Deal for a Greater Lancashire" - and the suggested levels of investment over the course of seven years:
Economic Growth and Investment
***Protect existing employment, drive up productivity and accelerate the commercialisation of low carbon technologies
***Strengthen and diversify the economy to extend the existing pockets of UK-leading productivity in Lancashire to the county as a whole
***Deliver growth through investment and manufacturing/innovation accelerators in town centres and local economies, unlocking strategic sites and focusing on jobs, skills, health innovations, clean energy and manufacturing, cyber, digital, and the visitor economy.
Proposed investment: £1.4bn
Transport, Connectivity and Infrastructure
***Improve both East-West and digital connectivity in Lancashire to tackle some of the worst climate, health and socioeconomic outcomes and provide employers with a larger pool of
workers to draw from - integrating Lancashire’s divided economy into one.
***Improving links East-West transport across the county along the corridor on which most people live - with a focus on travel by bus, electric heavy and light rail, cycling and walking
***Invest in full fibre broadband, unlocking major development and employment investment
Proposed investment: £1.05bn
Early Years, Education, Adult Skills and Employment
***Build a talent pipeline aligned with the needs of the economy, enhancing productivity, tackling climate change and opening up opportunities for career progression, higher
wages and improved standards of living.
***Increased focus on preparing children in the early years of life for school readiness as well as focusing on upskilling young people and adults and those in their
***Address the fact that 23 percent of residents have either no qualifications or NVQ1 - and the "skills deficit" at NVQ Level 4 compared to the North West and UK averages.
Proposed investment: £1.8bn
Environment, Climate Change, and Housing Quality
***A need for locally-led energy solutions, such as decarbonising heating systems, improving energy efficiency and local renewable electricity generation to meet current and future growth needs.
***Intervention in areas of "chronic housing failure", including some urban centres where there are significant volumes of housing stock over 120 years old, to create better social outcomes and new jobs, skills and training in construction, as well as tackling climate change.
***Invest in achieving the pathway to net zero carbon emissions, protecting our natural environment and neighbourhoods.
Proposed investment: £1.4bn
Source: Lancashire County Council
The leader of Preston City Council says that any devolution deal agreed for Lancashire must match the ambition of those secured by Greater Manchester and Merseyside - in terms of both the money and powers on offer.
Matthew Brown also warned that the £5.6bn valuation of the draft proposal which he and his fellow leaders will continue to develop - subject to the agreement of their councils - could be misleading, because some of it simply involves transferring existing funding from central to local government.
“It's not necessarily additional public spending," the Labour politician explained.
“But we’re pushing for the policies which will really transform the Preston and Lancashire economies, tackle inequalities and be a lot fairer for communities
“For instance, the buses are regulated in Greater Manchester - and that’s something that we would want to push for in Lancashire. Things like that have made a big difference.
"We do also feel it's an opportunity to try to make arguments about increasing social housing numbers to provide the scale that’s needed."
Rossendale's Labour leader Alyson Barnes reflected on seven years of devolution deadlock, but said that on this occasion, she was confident Lancashire was going to "get across the line".
"Provided we can convince government that our plans are workable and the right things to be doing, we could bring a significant amount of extra funding into the county.
"There is a will to make it work from all parties, which is really refreshing and...the money [will] enable us to address some real issues in the county," Cllr Barnes added.
Cllr Caroline Jackson, Green Party leader of Lancaster City Council, said that the blueprint of a new deal for Lancashire was the result of a consensus developed in just a few months with the help of all the districts, the two unitaries and Lancashire County Council. It represents a fantastic effort to work collegiality collegiately to overcome former differences and grasp the opportunity to improve life across the historic county of Lancashire for every resident. I recognise there is much still to do. This is just the start of the negotiations with government which will involve us all in shaping the future. “
“As a district, Lancaster will continue to help to shape the deal so it includes effective and ongoing engagement between this new entity and our residents, and developing our community wealth is priority. We want stimulus for local economies, especially the visitor economy and investment in green skills and retrofitting housing stock plus a greater say in transport, health and culture. We continue to fight to ensure that climate action is not a separate event but runs through all elements of the deal so we see effective action taken both for climate mitigation and to reduce our county-wide carbon footprint,” Cllr Jackson said.
Under a plan begun during a previous Labour administration, Lancaster City Council had attempted to form a standalone authority with Barrow Borough Council and South Lakeland District Council across the border in Cumbria, as part of proposed local government reorganisation in that county. However, the move was rejected by the government last year.
Meanwhile, Cllr Alistair Bradley, the Labour leader of Chorley Council - who was also speaking on behalf of his counterparts at those borough and district authorities that did not issue separate comment - said that as part of a county deal, the region would "expect to get extra money that can be spent in a way that works best for Lancashire".
"We are all currently working together to bring about transformational change for our county and ensure we secure additional funding that will ultimately lead to positive change," he added.
Cllr Lynn Williams, Labour leader of uniary authority Blackpool Council, commented: “For too long, decisions that impact Lancashire have been made in London. Devolving funding and power to the most local level possible is absolutely the right thing to do.
“A strong Lancashire can ensure that the significant inequalities affecting our communities can be addressed and that the Levelling Up agenda truly delivers the investment in people and place that we need.”
Blackburn with Darwen Council's Labour leader Cllr Mohammed Khan said of the draft plan: “The progress being made to reform how we work collectively is positive. I’m deeply committed to working together across Lancashire to make sure services stay truly local as well as high quality. It’s got to be about what is better for the whole area, all of our places and people.
“It’s essential that we have a united voice to give us greater influence with government to access much needed resources to directly benefit the people we serve. We can only do this effectively by unlocking the powers and funding to tackle the issues and inequalities we know we have here which have been brought into sharp relief by Covid.”