Give cities more power over their destiny

The new City Deals are a step in the right direction

Throughout July and August all eyes will be on London. Whether it is the unveiling of the Shard or the opening ceremony of the Olympic Games, London is demanding the attention of the nation. It is therefore no surprise that last week’s announcement of new powers for England’s eight cities was met with little fanfare. Yet, these "City Deals" represent the most significant devolution of power from Whitehall in decades and are deserving of more attention. This is not just the summer of the capital; it is very much the summer of the cities.

England’s eight core cities and their surrounding areas are forecast to add £71bn to the economy over the next decade. But evidence suggests that they have the potential to achieve much more. That is why the City Deals, that include transport infrastructure funds, new investment for SMEs, and apprentice hubs to support NEETs, will play a crucial role in the nation’s future growth.

The first clear indication of a new relationship between central government and England’s cities was the creation of a Minister for Cities last year. Greg Clark was appointed to this role, with further support from Nick Clegg and ministers and officials in BIS, CLG and HMT. The Deals are the result of an almost year-long negotiation between Clark and his team in the Cabinet Office, Whitehall and the core cities.

Arguably of most significance are the new transport infrastructure funds. They have a combined value of over £5bn and should have significant impact on the ground. Transport has been the policy area that the Mayor of London has had most influence over; the congestion charge, tube upgrades, a bicycle hire scheme and even a cable car over the Thames, have been the result. Getting around the capital is now easier and the same could soon be true for England’s core city-regions.

Better connections will support economic growth. Leeds City Region, for example, hopes that its £1bn West Yorkshire "‘plus" Transport Fund will create a 2 per cent increase in the region’s economic output and 20,000 extra jobs. Strategic investment in new stations, roads and public transport networks could have a dramatic impact on the daily commute.

People’s daily lives and commutes do not reflect arbitrary council boundaries, so another positive to have emerged from the Deals has been councils which are increasingly willing to work together to make investments. Greater Manchester’s councils combined strategy for a new Metrolink is a demonstration of the benefits of this approach. Such collaborative governance arrangements will prevent the jam-spreading of funds that can harm local areas.

The next step for the core cities will be to ensure they deliver on the ground. There is more work for central government to do as well. Greg Clark has said that this is just round one of City Deals. 142 upper-tier councils don’t have a Deal. A devolution bill could package up some of the powers in the City Deals allowing all areas to invest for local growth.

Greg Clark, the minister in charge of City Deals. Photograph: Getty Images

Joe is a senior researcher at the New Local Government Network

Getty Images.
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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.