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Devolve greater power to the cities, says think tank
Published: 2010-02-02 16:15:50
In the run up to the general election, think tank Centre for Cities has released its "Outlook for 2010", re-affirming its support for the devolution of key powers over skills, transport and housing.
Outlook for 2010 provides a league table of economic performance for the UK's cities. It concludes that "despite progress with Multi-Area Agreements and statutory City Regions, UK cities outside London still lack the powers they need to raise the performance of their economies".
With cuts in public spending looming, there is a prospect of further job losses, particularly in those regions where public sector employment represents a significant proportion of jobs and agencies, quangos and other public bodies are in line for further cuts, mergers or even dissolution.
But it is the UK's cities that will lead economic recovery, providing they are given greater power and control. In 2008, cities accounted for 62% of jobs in England and a similar percentage of high-skilled jobs. Policies should focus on stimulating city economies to build sustainable private sector employment.
"The next Government needs to put a renewed focus on cities at its heart of the economic agenda," says the report. The Centre for Cities proposes policies aimed at:
• Increased local revenue-raising powers to give incentives to go for growth. In the UK, only 19% of revenues are raised by local authorities. The OECD average is 55%.
• Better focused skills strategies. Cities need to play to their strengths with plans focused on sectors and industries where they can most naturally achieve growth.
• Collaboration with neighbouring cities will help authorities to benefit from the aggolomeration effect.
As part of this process, there is a strong case for re-evaluating the current way in which funding and economic powers are controlled. Outlook for growth makes a number of recommendations for the next government to follow:
• "City regional governance would deliver more effective outcomes for the UK's major cities
• "RDAs' functions should be tested for their effectiveness and allocated to the most appropriate spatial level.
• "Metro Mayors should be introduced in the four biggest City Regions outside London."
As part of the overhaul, Centre for Cities points out that strengthening city region policies makes sense as businesses and labour markets operate across local authority boundaries. This could enable authorities to pool funds and "potentially give them access to larger pots of money" even in years of tighter public spending.
Post-election, the future of Regional Development Authorities (RDAs) looks uncertain. Dermot Finch, the Centre's chief executive, says that they are unlikely to continue in their present form:
"The three post-election scenarios are that they could all get scrapped, some are kept or every region keeps a scaled-back smaller RDA."
Currently, RDAs can lack accountability, have unrealistic goals and often overlap with other bodies. The Centre for Cities, he says, is "open-minded about the precise architecture of the regional tier. The debate should be about value for money and the effectiveness of the programmes that RDAs run."
Recovery from the recession will be uneven. "Cities like Brighton and Milton Keynes will bounce back quite well," says Finch, "because they have a strong business base and high-skilled workers. But Burnley and Stoke face a much tougher outlook – they were losing private sector jobs even in the good times and it will still feel like a recession in these cities for a long time yet."