Cities ready for power: who's first and why?
Author: Adam MarshallDate: 01/04/2009
Publication: Public Servant
With rare exceptions, British cities have never been good at collaborating across administrative boundaries, which often bear little relation to their real economies. Mutual suspicion between local authorities has been reinforced by Government funding formulae, political competition, and historical sensitivities around local identity. Even as recession takes hold in cities up and down the country, many councils still find it hard to work together to safeguard jobs and investment.
The health of our major city-regions - and solutions to their transport, training and regeneration needs - is critical to Britain's economic bottom line. So the Government's Pre-Budget Report commitment to pilot new statutory arrangements for city-regions is important. Senior Cabinet ministers preoccupied with finding solutions for the problems of the international financial system, but Whitehall is also taking a close look at the arrangements cities need to lead the economy back onto a path of growth.
Since last November, over a dozen areas have expressed interest in becoming a ‘forerunner' city region. All eyes are now on the Chancellor's Budget statement on April 22nd - when agreements with ‘at least two' city-regions will be publicly announced.
The case for city-regions
Why should city-regions be on the national policy agenda, at a time when company closures, job losses and the credit crunch continue to dominate the headlines?
In the short term, city-regions with greater local power will be able to respond more flexibly to the worst effects of the recession. Historically, Britain's cities have not had strong enough levers - for example, over back-to-work programmes or infrastructure projects - to develop their own responses to economic shocks. Strong, statutory city-regions will have more scope to address economic problems as they emerge, with backing from Whitehall departments and agencies.
Longer-term, statutory city-regions will also help to prioritise investment. From 2010, bank bail-outs and temporary stimulus measures will give way to tight - if not austere - public spending conditions. Capital investment will be more limited - meaning that a lot less money will be available to support cities' transport, housing and economic development priorities. City-regions that prioritise projects, pool resources, and develop innovative new financing mechanisms will get more ‘bang for the buck' - and make the most out of more limited investment resources.
Additionally, city-regions with statutory responsibilities for economic development will be able to re-think long-term growth plans - many of which were based on assumptions around financial services jobs, rising house prices, and levels of public investment that no longer make sense in a post-credit crunch world. By looking across a functional economic area, rather than just a single council district, city-region authorities can help to identify future sources of growth and jobs, and deliver the infrastructure and skills needed for future prosperity.
What happens next?
Statutory city-regions can play an important role in moving the country out of recession. However, the Government's proposals are still poorly understood in some parts of Whitehall - and even in many town halls.
In an understandable effort to avoid being too prescriptive, Whitehall officials have set out a number of paths that city-regions can follow, ranging from voluntary agreements through to statutory authorities. Unfortunately these options also come with a blizzard of new acronyms and complex guidance, leaving many cities wondering how to find their way through the bidding process and choose the solution that best fits their local circumstances. The Treasury and the Department for Communities and Local Government, which lead on city-regions, need to do more to clarify what's on offer - and communicate the potential that city-regions have for future growth.
There's also the knotty question of who goes first, and why. Greater Manchester, where the ten local authorities have been working together for over fifteen years, is a clear front-runner. We believe that Leeds and Birmingham should also be in the first wave - giving England's three largest regional cities London-style powers to improve transport, prioritise training funds, and promote future economic growth.
Ministers often find it difficult to make announcements that focus on particular places - and do whatever they can to include North and South, small and large, unitary and two-tier areas, and so on. In the case of city-regions, this would be a mistake. A mixed bag of forerunner city-regions would increase confusion around this important policy innovation, and could even undermine it altogether.
Of course, Alistair Darling's Budget speech will focus on the Government's latest proposals to stabilise the national economy - and long-awaited revisions to Treasury growth forecasts. City-regions and local government will only be minor players, if they are mentioned at all.
But Whitehall and Westminster have come a long way on city-regions. The concept now has backing from heavyweights in both main political parties. While some Labour MPs remain opposed, and Conservative frontbenchers struggle to sell the idea to the party's huge crop of council leaders, there is bi-partisan recognition of the need to coordinate policy across real economic areas.
The Prime Minister himself has said that the downturn is ‘absolutely the wrong time to turn our back on devolution'. He's right. Radical, clear devolution to Britain's city-regions is needed - so let's hold the PM and Ministers to it.
A version of this article first appeared in Public Servant.
