Memorandum by the Centre for Cities (RG
55)
INITIAL REPONSE
CENTRE FOR
CITIES
1. The Centre for Cities is an independent
urban policy unit, based at the Institute for Public Policy Research
(ippr). It is taking a fresh look at how cities function, focusing
on the economic drivers behind urban growth and change.
2. Dermot Finch is Director of the Centre—he
was previously a senior policy adviser at HM Treasury (1994-2005).
Tom Bloxham MBE (Chairman, Urban Splash Ltd) is Chair of the Centre's
Steering Group. Lord Sainsbury of Turville is the founder of the
Centre. The Centre's website is www.ippr.org/centreforcities.
3. The Centre is currently carrying out
three research projects in Barnsley, Birmingham, Derby, Doncaster,
Dundee, Liverpool, Manchester and Sunderland. They are:
— City People, on city-centre
living in Liverpool, Manchester and Dundee (published 11 January).
— City Leadership, on financial
devolution to city-regions (to be published on 24 February)—Sir
Michael Lyons will speak at our launch event, in Birmingham.
— City Markets, on business
location and growth in deprived areas (to be published in May).
RESPONSE TO
INQUIRY
4. Our response to the Committee's Inquiry
is based on our City Leadership work. We will submit a full response
by 7 February. This shorter, initial response sets out the key
findings of our research. We would be very happy to deliver oral
evidence to the Committee, if that were helpful.
The potential for increasing the accountability
of decision-making at the regional and sub-regional level, and
the need to simplify existing arrangements
5. The regional government experiment has
failed. The "no" vote in the North East devolution referendum
in November 2004 put an end to the prospect of accountable regional
government in England. Further devolution to the regional level
would be unwise, given the lack of accountability.
6. There is a strong economic case for devolving
certain funding streams to the city-regional level. This fits
with the vision of "variable geometry", where different
places have different degrees of autonomy. In the first instance,
we would recommend that regeneration, transport and skills funding
should be devolved to the two biggest city-regions in England—Greater
Manchester and Greater Birmingham. This would require the two
relevant RDAs (NWDA and AWM) and the Learning & Skills Council
to cede control over regeneration and skills funding, for example.
7. For this to work, Greater Manchester
and Greater Birmingham should consider the case for directly elected
mayors in their city-regions. These would provide the greatest
degree of accountability, visibility and strategic decision-making
across existing local authority boundaries.
The potential for devolution of powers from regional
to local level
8. Devolution works best when political
boundaries match functioning economic areas. City-regions are
the most appropriate scale for economic development purposes.
This is the basis of the economic case for devolving significant
financial powers to our biggest city-regions—and also, to
a lesser extent, to local authorities generally.
9. As well as gaining control over funding for
regeneration, transport and skills, city-regions should be able
to raise their own revenues—for example, through a partial
re-localisation of business rates. The local authorities within
our two biggest city-regions should pool these revenues, which
would be allocated strategically by a directly-elected city-regional
mayor.
The effectiveness of current arrangements for
managing services at the various levels, and their inter-relationships
10. Our research backs up years of findings
from the Audit Commission: the current arrangements for public
service delivery and economic development are too complex and
involve too many layers of governance. Government needs to review
what functions are best delivered at what level. For example,
regeneration, transport and skills would best be delivered at
the city-region level.
The potential for new arrangements, particularly
the establishment of city regions
11. As a first step, our biggest city-regions
should gain significant new financial powers and be run by directly-elected
mayors.
12. City-regions are both economic and political
entities. They already exist as economic areas, but they are politically
difficult. They include a core city, as well as surrounding areas
that have close economic relationships with that city. These relationships
can be measured in a number of different ways, including labour
markets, housing markets, retail catchment areas and business-to-business
linkages.
13. If governance arrangements are imposed
at a level that matches specific economic flows, city-regions
become political entities, with administrative boundaries that
broadly reflect an economic area. But the formal establishment
of city-regions will not be easy. Existing local authority leaders,
for example, strongly oppose the idea of directly-elected city-regional
mayors. Nevertheless, we believe this is the right approach.
The impact which new regional and sub-regional
arrangements, such as the city regions, might have upon peripheral
towns and cities
14. Up until recently, the focus on Core
Cities has tended to exclude smaller cities and towns. City-regions
provide a clearer role for peripheral towns and cities. Barnsley,
for example, is considering carefully its role as part of both
the Sheffield and Leeds city-regions, and stands to benefit from
the growth of both. However, there is a need to prioritise policy
around our largest cities, as they can make the biggest contribution
to national and regional economies.
The desirability of closer inter-regional co-operation
(as in the Northern Way) to tackle economic disparities
15. Closer inter-regional co-operation is
not a top priority. The Northern Way is a useful concept, but
it contains too many city-regions and risks losing momentum. Almost
two years since its establishment, the Northern Way has failed
to prioritise on key investment priorities in the North's most
important cities. It must recognise the primary importance of
its biggest city-regions, especially Greater Manchester.
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