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Birmingham: the Cinderella City which risks missing the Devolution Ball?

Birmingham: the Cinderella City which risks missing the Devolution Ball?

🕔11.Apr 2014

Last week Labour leader Ed Miliband promised “the biggest devolution of power to England’s great towns and cities in a hundred years.”

Precise details of the policy have yet to be hammered out but it seems that under the Labour plan, LEPs would gain control over skills budgets currently allocated in a top down way at a national level, and ‘combined authorities’ would gain powers over transport, housing and other infrastructure spending. That makes sense.

It appears that only those ‘city and county regions’ that meet “strict tests” established by the ongoing Adonis Review will be given such new powers.

So far so good, as such a radical decentralisation is much needed. England is by far the most centralised state in western Europe despite the current government’s much-hyped offer of localism and City Deals. Indeed, England’s second-tier cities – Birmingham included – punch well below their weight economically.

The inspiration for Labour’s ideas is in large part Lord Heseltine’s ‘No Stone Unturned’ report. The Tory peer’s report came up with 89 proposals, with the goal of shifting almost £60bn over four years from central government to English regions.

As Miliband said this week, Osborne’s response to Hezza was much too modest: “the best report this government has produced has been the one that they have most ignored.”

That was in part because of a ‘Yes Minister’ style turf war won by the Treasury which curtailed real decentralisation. That Treasury victory was no surprise, and neither is Labour’s current enthusiasm for backing Hezza.

For Labour has been trying to figure out what to do with LEPs, recognising that it couldn’t – if elected – scrap them as the current government did with RDAs, as that would cause yet more chaos and alienate businesses which have put time and effort into making a go of them.

And this is where the latest Labour move comes in, recognising that the argument over the LEPs’ lack of democratic accountability shouldn’t be used to forestall broader devolution to English cities.

Look north and the big cities such as Greater Manchester, Greater Leeds and the North East have built or are setting up new ‘combined authorities’ or ‘supercouncils’ which have the legal footing to receive large amounts of public cash and which have some public accountability. Greater Manchester has even been allowed by Whitehall to retain some business rates through an ‘earn back’ scheme.

Here, the West Midlands has a city region-wide transport authority, but moves to create a combined authority have failed to get off the ground.

Albert Bore has made noises about a combined authority but has failed to deliver one, and Mark Rogers, Birmingham City Council’s new Chief Executive, doesn’t actually seem that interested. He was recently reported here at the Chamberlain Files as saying that he would not be pushing immediately for combined authority status and there were other ways for councils and LEPs to co-operate.

Birmingham risks missing the boat. Indeed, sadly ‘Birmingham and the Black Country’ (or whatever name might eventually be used) looks increasingly like a Cinderella city unable to get to the devolution ball.

That’s because it’s this ‘Manchester model’ of cooperating super-councils which offer the route for channelling public money down to the local level.

But look at the detail and Miliband’s initial plan is actually pretty tame. He says he wants to “at least” double central government funding allocated annually to the local growth fund from a paltry £2bn to £4bn.

So while there is much to welcome in Miliband’s statement all we can really say is that Labour is only slightly less timid than the Tories over decentralisation to our great cities. We can and should go much further.

Our big cities need to be cut free from the dead hand of central government and given the real powers and resources to plan, fund and deliver the transport, housing and skills they need to grow and develop.

Meanwhile, the message to local council leaders is simple. Get your act together, Manchester-style, or risk missing the devolution party, whoever is in power centrally.

 Professor David Bailey works at the Aston Business School.

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