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Birmingham is shown a clean pair of heels by our friends in the north

Birmingham is shown a clean pair of heels by our friends in the north

🕔06.Jan 2014

Birmingham and the West Midlands are at risk of being left in the slow lane by cities in the north of England when it comes to persuading the Government to devolve powers and budgets to councils.

Five northern regions will have Combined Authority status by 2015, allowing councils in Greater Manchester, Liverpool, the North East, South Yorkshire and West Yorkshire to take control of strategic decision making for economic development, transport, and regeneration.

The emergence of regional government in the north, albeit in a very limited form, has excited the Institute for Public Policy Research (IPPR), which is arguing that the combined authorities should use their new status to “speak with a single voice so that they are better heard in the corridors of Whitehall and Westminster”.

The willingness of other cities and regions to work together contrasts sharply with the West Midlands, where historic antipathy between Birmingham and the Black Country, and Birmingham and Coventry, make it difficult to imagine that agreement could ever be reached voluntarily on establishing a joint regional body.

Birmingham City Council leader Sir Albert Bore backs the idea of a combined authority for the West Midlands and was instrumental in holding a dinner last year for council leaders where ideas for closer cooperation were discussed.

However, a proposal to move forward on closer co-operation by merging the Greater Birmingham and Solihull Local Enterprise Partnership and the Black Country LEP does not appear to have made much progress.

In a report called ‘Rebalancing the books: How to make the 2015 spending review work for all of Britain’, the IPPR argues that cities across England that successfully introduce measures to help increase local employment should be entitled to claim ‘cashback’ from the Treasury.

The report recommends measures to rebalance the economy and says the north of England needs a figurehead like the Mayor of London – a Boris of the North – to advocate for investment and make the case for further powers and controls.

It urges the leaders of Manchester, Liverpool, the North East, South Yorkshire and West Yorkshire to join together and put the case for devolved powers and budgets to the Government.

And in a separate development, it’s been suggested that an independent Scotland could benefit cities in the north of England by offering lucrative cross-border trade deals. The sheer distance of the north-east and the north-west from London could make Scotland a better bet for economic ties with Glasgow and Edinburgh, according to playwright David Greig.

Greig told the Guardian newspaper that the emergence of a “prosperous and independent” Scotland would persuade cities such as Newcastle, Manchester and Bristol to seek greater political and economic freedom of their own from Westminster.

However, Greig admitted he didn’t think the forthcoming referendum on Scottish independence would deliver a yes vote.

According to the IPPR report, the north of England is in pole position to seize the devolution initiative. The report says the north continues to lose out on public spending on economic development which is skewed towards London and the south-east. Instead, the north is currently compensated with welfare payments and grants.

The report says this is a vicious cycle which needs to be reversed with more investment and financial freedom for northern cities to grow jobs and bring down their welfare bills.

The report shows that local investment into schemes to support the unemployed into work results in national savings: with more taxes being paid and benefit payments reduced. But the report argues that city budgets need to reflect their successes. The report says both the Treasury and local areas should agree to share elements of the risk involved in the ‘earnback deal’, with control being re-centralised in the case of any failing authority.

Other measures that would help to rebalance investment in the regions and drive forward growth in the north include:

  • The identification of top priority infrastructure priorities for the north on a similar scale to Crossrail and the Thames Gateway in London.
  • A doubling of applied research funding spent in universities outside London and the South-east.
  • Ten per cent of the income tax take in combined authority areas being assigned to those local authorities with a corresponding reduction in central government grants.
  • Reduced central government interference with council tax and business rates.
  • Substantial place-based budgets carved out of government departments and set for a five-year period.

It says that the five combined authorities which will exist in the north by 2015 will be best placed to be the first to take on these new powers and recommends that provisions are made to introduce them in the 2015 Spending Review.

Ed Cox, Director of IPPR North, said: “The Prime Minister used to talk about the public ‘sharing in the proceeds of growth’ and that’s the same logic he should apply to cities in the north of England. Cities which have the greatest potential for growth also have the worst poverty and unemployment.

“An ‘earnback deal’ would provide an even greater incentive to invest in employment schemes which will not only finance growth, but will also help relieve poverty. Boosting northern prosperity would in turn boost national prosperity.”

Cover Image: Wikipedia

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