As I understand it the NE and West Yorks have or are likely to sign up too?
It will be interesting to see how this goes. If it goes well then these areas will start to boom and finish the Labour party off for good over time?
Another scenario may be that the localities, likely in the short-term to be Labour controlled will have to raise local taxes to try to keep the health services, etc up and running. That will prove unpopular, we may see cities going bust / hospitals closing / being privatised by the nack door. In this scenario Labour also loses.
Smart politics from Osborne. But to give him the benefit of the doubt it is a potentially bold move that gives these areas a degree of autonomy to develop themselves. Gives them a chance to get out of the shackles of a Labour party that has had a vested interest in perpetuating poverty and largesse via the public sector in order to gain votes.