'Metro mayors' for East Mids? Chancellor's new ultimatum

George Osborne said he wanted to see a "radical shift" in power from Whitehall

The Chancellor of the Exchequer George Osborne has issued an ultimatum to East Midlands' politicians who want more powers from Whitehall: No mayor, no devolution.

He told a business audience in Derby the local devolution package is dependent on the appointment of a so-called "metro mayor" - an elected figurehead who would be directly answerable to the voters.

The Chancellor George Osborne has been in the East Midlands again but without his election gear of hard hat and hi-vis jacket.

He was also inspecting some of the know-how that's turned around the economic future of Garrandale, an engineering business that sums up his new theme of the Midlands as the engine for growth...and offering devolved powers to accelerate that economic push.

"What I want to see is a radical shift of power away from Whitehall and back into the hands of local people," he said.

The government would like to see services currently provided by civil servants in London devolved to the regions

Many in his audience know local politicians in Derbyshire and Nottinghamshire want the promises of devolved economic power from Whitehall but without a mayor to run it all. I asked the Chancellor how he intended to square that circle.

"It is up to local communities and local people to see if that is the model that works for them," he said.

"But there has to be accountability to local people for these powers - after all they are spending local people's money. That's why I think the elected mayor is the best model that delivers."

The chancellor couldn't be more clear. The East Midlands won't have full devolved power unless the local politicians sign up to have a directly elected mayor.

But I've yet to hear from any council leaders in Derbyshire and Nottinghamshire who are prepared to budge on this issue.

One council leader from Derbyshire said a "metro mayor" would create a "terrible blob", in effect, a municipal mess.

There are two things here: one is that in Nottingham, voters rejected the idea of having an elected mayor to run the city a couple of years ago.

Leicester already has a directly elected mayor in Sir Peter Soulsby

And the councils of Nottinghamshire and Derbyshire have already sunk their political differences to agree to a combined authority - with a board of council leaders, rather than a mayor, to act on the new devolved economic powers.

The view from Leicester is very different: it already has a powerful city mayor in Labour's Sir Peter Soulsby.

The Leicester South MP Jon Ashworth told me: "Leicester has a city mayor. Why doesn't George Osborne give us in Leicester those extra powers?"

The leader of Nottinghamshire County Council Alan Rhodes has talks later with the new Communities and Local Government Secretary Greg Clarke.

Alan Rhodes says the Chancellor's approach simply doesn't work for counties like Nottinghamshire and Derbyshire, with the county council and boroughs running different local services.

It's a two-tier system; whereas in the West Midlands and Greater Manchester, the local metropolitan council runs everything.

Alan Rhodes says there needs to be clarity from the government on its offer. The Chancellor will no doubt argue, that's exactly what he did in his Derby speech.