Giving more power to cities like Manchester over their finances might be beneficial, says the RSA City Growth Commission. Allowing UK cities to make their own decisions on tax and spending might boost economic growth by £79 billion a year by 2030, a yearlong study has concluded. The amount equates to boosting current UK productivity by 5%, said the RSA City Growth Commission, which conducted the study. It is pushing for draft legislation to be in place by 2015.
The commission, chaired by economist Jim O’Neill, concluded that shifting power away from government ministers and officials to cities might drive up the UK’s long-term rate of economic growth. “There needs to be a radical reshaping of the UK’s political economy, with our metros given sufficient decision-making powers and financial flexibilities in order to become financially self-sustainable,” the commission said.
Jeremy Blackburn, Head of Policy & Parliamentary Affairs at the Royal Institute of Chartered Surveyors (Rics), said: “The Cities Growth Commission has set out a panoramic vision for the future of our largest cities. These proposals may define the debate over devolution of powers and funding in England during the next parliament. How these proposals result in actual economic growth may, to a large part, depend on how cities, LEPs, enterprise zones and funding streams are wired together.”
London is a global city of opportunity and its success is a major asset to the national economy. De-centralisation is about making the country stronger overall by giving other cities the opportunity to grow, while London goes through its own extensive infrastructure updates and revamps. Private sector businesses are the backbone of the UK economy, 80% of which are outside London. Identifying the unique plusses of other UK cities and strengthening the connections between regions and countries might give these businesses the best chance to develop ideas, create jobs and thrive. Many economic experts agree that northern regions need strengthening.
John Allan, National Chairman of the Federation of Small Businesses, said: “The RSA City Growth Commission is right to highlight broadband access as an area to be improved for many regional centres. The government must get the message that the UK needs much more ambitious digital infrastructure plans. Our members are also very clear that regional growth depends on a better-connected transport network that makes east/west transport connectivity as much of a priority as north/south. It is a crucial element to rebalancing the national economy, so areas outside London and the South East are able to prosper.”
Manchester and Liverpool is a good example of cities working together. The north must start thinking more collectively if they are to become a ‘northern powerhouse’ and stand a chance of taking on the world, as the chancellor has suggested. That means coming together as ‘one north’ and improving transport links. Changing the north’s transport system might enable the region to fulfill its economic potential. However, it is essential that the region develop its own economic model, rather than just copying London.
Also this week, George Osborne announced that Greater Manchester is to have an elected mayor to preside over regional issues. The move, agreed with leaders of the region’s 10 councils, aims to give local politicians greater control over billions of pounds of public money. The mayor aims to oversee policies such as transport, social care and housing, as well as police budgets.
The chancellor described the deal as “a massive moment for the north of England”. “I have reached an agreement with the civic leaders of Greater Manchester to create the first metro-wide elected mayor outside of London. This aims to give Mancunians a powerful voice and bring practical improvements for local people, with better transport links, an Oyster-style travel card and more investment in skills and the city’s economy.”
“I want to talk to other cities that are keen to follow Manchester’s lead, every city is different and all models of local power might be different. Giving cities power is part of our long-term economic plan to reduce the decades-old gap between north and south; London and the rest,” he said.
What additional recommendations might be made to empower metro cities?