CITY leaders are celebrating after Exeter was given the green light to be run as a unitary authority — despite ministers admitting the sums still do not add up.

The announcement  by Local Government Minister Rosie Winterton ended weeks of speculation that Exeter’s bid for home rule had been successful.

The news prompted contrasting scenes of emotion. While the city’s civic leaders hailed the decision as “great news for local democracy and for the people of Exeter”, authorities outside the city   labelled it a “disaster” for the people of Devon.

Bizarrely, county council staff would remain based in the city,  where they would have no responsibility for services.

The new unitary authority would cover Exeter City Council’s exisiting boundary.

At the moment, local services in Exeter are split between two authorities.

Education, buses, roads and social services are all under the remit of Devon County Council, while rubbish collection, council houses and most planning issues are dealt with by Exeter City Council.

The change is not yet a done deal and needs to be given the necessary parliamentary approval.

But it would see the city council gain control of all the county council’s functions in the city, including education, highway and social services.

The city would take over the repayments for the city’s five new secondary schools built under a Private Finance Initiative (PFI).

The city has been fighting for home rule for several years. An application was rejected by the Government two years ago.

Philip Bostock, chief executive of Exeter City Council, said: “It’s all part of a very big and complex transfer of budgets which will have to take place from the county council to the new authority. None of that data has yet been worked through.

“The costs of the PFI schools will transfer to the new unitary council at the end of April 2011. A complicated set of transfers have to take place and that is one part of that.

“The appropriate budgets will be transferred and the appropriate share of liabilities.”

The latest decision is unlikely to be the end of the long-running controversy, which has deeply divided opinion, as it is likely to be challenged in the courts.

The Tories have already said they would ditch the plans if they win the next General Election. But a tight timescale has been set that could should see it voted on in the House of Commons and Lords ahead of the expected May election.

If Parliament approves the proposals, the councils can start putting in place transitional arrangements ready for elections in 2011.

Ms Winterton admitted that the figures still failed to stack up but said it was felt that “there are compelling reasons to depart from the presumption that unitary proposals which do not meet all five criteria are not to be implemented”.

She argued that unitary status would make the city a “far more potent economic force” than under the existing two-tier structure and that Exeter, as a regional economic centre, needed “strong decisive local leadership”.

A super-authority covering the whole of Devon was ruled out as the proposal “did not command support from any of the local councils”.

Ms Winterton said: “The city of Exeter is at the centre of regional economic activity and its economic performance is crucial for its residents and the wider area. That’s why today we’re putting Exeter’s local leaders who know their areas best in charge of delivering all local services and at the heart of delivering economic growth.

“A unitary Exeter authority will work for the interests of the people who live, work and study in Exeter and they will have one body to hold to account.”

Exeter MP Ben Bradshaw said: “I am delighted at this news and congratulate all those in Exeter, including all of the political parties in the city, for their strong and united campaign.”

But Tory MP for East Devon Hugo Swire said: “Exeter is a fundamental part of Devon without which neither can function effectively.

“It is inconceivable to me why the Secretary of State would have come to this decision when his predecessor, Hazel Blears MP, requested the Boundary Committee to provide new advice as she decreed a unitary government in Exeter not financially viable.”

He added: “Pressing ahead with any unitary reorganisation in the current climate is madness.

“This legislation is now being rushed through in the run-up to the General Election, in a move not designed to benefit the people of Exeter.

“This is simply cynical political engineering on the part of the Government designed to shore up flagging support for Ben Bradshaw.”

Leaders of the city council’s four political parties were united in their delight at the decision.

Liberal Democrat council leader Adrian Fullam said: “We certainly have a huge task on  our hands and the timescales are tight but this is fantastic news and will mean local people have control over local services.”

Labour leader Cllr Pete Edwards said: “It is excellent news for the council and the people of Exeter and Devon. Now Exeter can decide its  own destiny and not have our main services controlled by the county.

“It will be hard for a couple of years but in the long term it will be better for city prosperity and decision making.

“It’s taken a long haul to get here but this is just what this city has always asked for.

“Exeter is different from the rest of Devon and for all of Devon to flourish and succeed, the city needs this change.”

Tory group leader Cllr Yolonda Henson said: “I am delighted but I feel, three months to a general election, the timing of this has been done to save Ben Bradshaw. It has been done in undue haste.”

Liberal group leader Cllr Joan Morrish said: “This is a great victory for local democracy and commonsense. This is evidence of what happens when  all the parties on the city council work together with one aim.

“We have lots of challenges ahead and need to keep the same idea for what is best for Exeter, but this is wonderful news.” However there was strong criticism from neighbouring councils.

Cllr James McInnes, leader of West Devon Borough Council, labelled it a “tragedy for Devon that will fracture the county.”

The leader of Teignbridge Council Cllr Alan Connett said: “This is a long delayed announcement and demonstrates the Government’s complete disregard for the views of the majority of people in Devon. The whole reorganisation programme is a scandalous waste of public money at a time of national belt tightening.”

Mid Devon District Council Leader Peter Hare-Scott said: “A unitary Exeter will necessitate a whole new unnecessary bureaucracy and create great difficulties for Devon County Council.”

The leader of East Devon District Council Sara Randall Johnson said she wanted assurances that this would not prompt a “land grab” over the borders into neighbouring East Devon.

She said: “I want an assurance from the Government this will not be the precursor to a crude land grab in which the boundaries of Exeter are moved so that the city can expand into East Devon.

“We already know that East Devon has the space that a growing Exeter will need if its economy is to thrive. We are happy to be a good neighbour and to collaborate with the city on an equal basis, but we would be very protective of our borders.”

But the strongest impact could be felt at County Hall.

Devon County Council leader John Hart said: “This decision is complete madness and we will fight it all the way.”

He added: “Rosie Winterton has agreed with former ministers and the Boundary Committee in admitting a unitary Exeter is unaffordable. But still she gives it the go ahead.

“It is a vanity project that has already been rejected by every expert with the Boundary Committee. This Government itself discounted it as a hugely costly and unworkable option before, bad for the city and the people of Devon. Rosie Winterton agrees with that analysis. But now, as ministers scrabble for votes ahead of the General Election, they think this unnecessary and expensive decision to rip the heart out of Devon will galvanise their party workers in the city. Most sensible people can see that wasting more time and money on reorganising local government in the current economic climate would be very foolish.

“We are investing in jobs through developments like the Exeter Science Park  and planning modern, public transport systems to service the growing city as it expands.

“One of the smallest unitary authorities in the country will lack the economy of scale to match investments like this.

“Neither will it have the expertise to pilot through the multi-million pound reorganisation of education that Devon County Council successfully managed, resulting in five brand new secondary schools and eight new primaries and soaring examination results.”