How will the government's "city deals" work?

A tale of eight cities.

The Government’s announcement about "City Deals" has thrown open debate about the balance of power between central, regional and local government. Nick Clegg and Greg Clark have signalled that these "ground breaking deals represent a dramatic power shift, freeing cities from Whitehall control". 

The Coalition has set out a challenge for eight of England’s cities – if they can deliver more effective and accountable local government, then central government will transfer more powers and provide incentives for cities to apply their own solutions. Cities are keen to be in control of their own growth agendas and these deals represent the government’s biggest commitment yet to fulfilling its localism policy.

The proposals put forward by the eight cities show interesting differences in definition and priority. Alongside the areas you’d expect cities to focus on, such as housing and regeneration of specific districts, several cities propose focusing on areas such as physical and virtual connectivity, with powers on transport and superfast broadband. Birmingham has identified life sciences as a potential and exciting growth opportunity. 

The role of the private sector also varies from city to city. For example, Birmingham’s Local Education Partnership (LEP) looks set to play a significant role. In Liverpool, the city has looked at the transition from Council leader to mayor and how this can effectively engage the private sector. There are a number of major corporate players involved in the development of Liverpool’s future and, if successful, this could become a model for other locations. 

Each city has defined the geographical boundary between the city and surrounding region differently.  Manchester, Leeds and Bristol have taken the most regional strategies, with Greater Manchester in particular having the benefit of building on a number of years of collaborative working with different agencies and groups within the area.  Bristol’s deal also establishes "enterprise areas" outside the city boundaries and areas such as Bath, where full retention of business rate growth will apply. 

There is also considerable variation in how the low carbon agenda is incorporated. Six cities refer to it, with Manchester, Liverpool, Birmingham and Newcastle placing it prominently in their proposals.

These variations will help trial different models for devolving authority to regional, city and local authorities and it will be interesting to see how they progress. 

Despite the variations in approach, there are two factors which will shape the practical and commercial success of these schemes. For the City Deals policy to be transformative, the detailed powers transferred must be embedded in a robust governance framework, underpinned by access to sustainable finance for investment in projects.  These two key pillars are critical determinants of success or failure. 

As well as providing governance, the city authority should be a catalyst for change and provide for an effective working relationship between local and national government, business and communities. It needs to allow the clear space to be created where trust can be nurtured and the alignment of objectives achieved.

Delivery should be at arms' length from policy, so cities will need robust region-wide economic and financial assessment frameworks to appraise and prioritise projects.

Considering both governance and financing frameworks, Manchester's deal is particularly distinctive. Founded on the long-established governance framework of AGMA (Association of Greater Manchester Authorities) its 'earn-back model' aligns investment resources and economic development returns for reinvestment in strategic priorities. The model allows retention of additional business rates over and above that allowed by the forthcoming reform of local government finance, benefiting the city region to the tune of £30m per year. Not that substantial in isolation, but bigger ambitions underpin this and, used effectively as enabling finance, this could unlock substantially more private investment.

The "earn-back model" could offer a genuinely sustainable source of finance through which Greater Manchester is rewarded for good investment decisions made locally. Being region wide and non-sector specific, it is broader in scope and potential than those funding elements more narrowly defined and tied to specific spatial (enterprise zones) or economic policy areas such as skills or apprenticeships, and to that end it marks a more substantive devolution of powers and resource.

UK cities are at the beginning of the journey towards devolution and there is potential for significant change.  Could cities take a share of local collected corporation tax or secure powers to vary national policy in other areas of the public sector? This is an exciting opportunity, but to capitalise on it cities need to think, plan and govern differently and, for the long term, sustainability and flexibility needs to be built in at the outset.

Philip Woolley is a partner in Grant Thornton’s Government & Infrastructure Advisory team.

The city deals will

Philip Woolley is a partner in Grant Thornton’s Government & Infrastructure Advisory team.

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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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