25 Apr 2014
Michael Chambers asks if we about to enter a new age of revitalised regional cities with vastly devolved powers, and if this would this be good or bad news for the property sector.
Ever since they were elected, the Coalition Government has toyed with the concepts of localism and devolution. The Coalition Government has introduced Enterprise Zones, City Deals, Local Enterprise Partnerships and the Regional Growth Fund since 2010 in an effort to boost economic development in the English regions. But in spite of these initiatives central Government remains firmly in control, doling out a bit more autonomy here and there but all within very tightly controlled parameters. It is not surprising, then, that Michael Heseltine’s proposals to shift tens of billions of pounds of spending to the local level has been watered down to a £2 billion pot to be shared among over 300 authorities, most of it on a competitive basis – by no means insignificant, but hardly a game changer.
Now the Labour Party has got in on the act promising English cities greater powers over transport, housing and employment to help close the “productivity gap” with London. If elected, Ed Miliband says that a Labour Government would hand £20bn to councils to spend on skills, back-to-work schemes and infrastructure. Its message is that it would implement the Heseltine proposals that it says the Government has “flunked.”
Pressure for greater devolution is coming, too, from Boris Johnson. In a report last year that was heavily backed by the Mayor of London and the Core Cities Group, Professor Tony Travers called for a major expansion of fiscal and financial powers for London and by implication for other major cities as well.
Against this background, our Chief Executive Liz Peace recently found herself giving evidence to the DCLG Select Committee on the whole concept of devolving fiscal and financial powers to cities and city regions. Her message, strongly backed by our Development Committee, was that strong local leadership and initiative are essential to taking forward a long-term vision for a city or city region but that the ambition and enthusiasm of civic leaders and other local leaders is being stymied by a continuing reluctance within central Government to relinquish control. She signalled that the property sector shares the desire to move away from what has aptly been dubbed the ‘infantilisation’ of local government.
Her view was reinforced by that coming from a string of member roundtables that we have been holding in Birmingham, Manchester, Liverpool and elsewhere. Those events revealed widespread sympathy for the view that the poor comparative performance of many English cities is due at least in part to the over centralised nature of Government in the UK. The predominant message was that there is now a new generation of civic leaders strongly committed to generating economic growth and creating constructive relationships with those in the private sector who could help achieve this. As a result, the relationship between the property sector and local authorities in most major cities is now generally excellent.
We have, therefore, been happy to lend our support to the principle of devolving greater powers and responsibilities to cities and city regions. Initiatives such as City Deals represent a step in the right direction, but we want to see much more being done to give our major cities the degree of initiative and the level of resources that will enable them to fulfil their potential as drivers of growth.