The leaders of Lancashire, Blackburn with Darwen and Blackpool councils met with the Levelling Up minister for the historic signing of the county's devolution deal.
The agreement gives Lancashire more control over its powers and budgets, which will be overseen by a newly-formed combined authority.
The devolved powers will include local skills provisions, including Adult Education functions, transport and budget.
There will also be new powers to utilise Compulsory Purchase to drive area-based regeneration and build more affordable homes.
Lancashire LEP will be integrated into the combined authority and a Lancashire Business Board will be created in order to give independent local businesses input into the strategic economic planning.
A total of £20m will be provided to Lancashire Combined County Authority along with a further £1m to support the authority in the early stages of the deal. The Adult Education Budget will also be devolved as part of the deal.
The Lancashire Level 2 devolution deal is now subject to local consultation, ratification by the constituent councils, and parliamentary approval.
Coun Phillippa Williamson, leader of Lancashire County Council, said: "The signing of this document is a hugely significant milestone for us and marks the start of a new beginning for Lancashire.
"We are hugely ambitious for our county and believe devolution will unlock so many more opportunities for our businesses and residents. Ensuring local decisions are made at a local level is absolutely key to what devolution is all about. Through this deal Whitehall will pass these powers to us in Lancashire, as well as the resources to make them happen."
Coun Phil Riley, leader of Blackburn with Darwen Council, said: “We’ve talked a lot about getting on the bus so we can start the journey to meaningful devolution. We have made that first step to accessing more funding and using local knowledge to benefit people in Blackburn, Darwen and wider Lancashire. This is something which can lead to real improvements over time.
“We have a strengths and opportunities across the whole of the county and by pulling together we can make the most of them. Just imagine how much more sense it will make to have transport which operates as one across Lancashire."
Coun Lynn Williams, leader of Blackpool Council, said: “This is the start of something really significant for us. I’m pleased we have got this far, but this is just the beginning of our devolution journey.
“Lancashire needs devolution, we need a direct line to government and more power over how we deliver services that work for us locally. A ‘one size fits all approach’ does not work. The people of Blackpool will benefit from this crucial step forward and will see opportunities and improvements in things like adult learning and transport and infrastructure."
Jacob Young, Levelling Up minister, added: "This marks a significant milestone as we finalise the Level 2 devolution agreement with Lancashire. This transformative deal is set to channel additional resources and authority away from Whitehall, empowering local communities.
"In a region with a rich history of innovation and entrepreneurial spirit, Lancashire's prowess will be further harnessed through this arrangement, unlocking the full economic potential of the entire area."
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