By Nick Mann | 8 December 2011
Plans to give English cities outside London more power to raise funds, decide on infrastructure projects and develop new businesses and jobs have been announced today by the deputy prime minister.
Nick Clegg told an IPPR North conference in Leeds that the bespoke ‘City Deals’ would ‘unleash city power’ by freeing them from central government control.The eight largest cities outside the capital – the Core Cities – will be the first to be offered the chance to agree which powers they should have with cities minister Greg Clark.
A spokesman for the deputy prime minister told Public Finance that the first City Deals would ‘hopefully’ by in place by spring 2012. The eight cities are Birmingham, Bristol, Leeds, Liverpool, Newcastle, Nottingham, Manchester and Sheffield.
Among the powers
listed in an Unlocking Growth Cities document, jointly published by Clegg and
Clark today, are plans to give cities just one consolidated capital pot, as
opposed to several separate funding streams.
According to the government, this will give cities the ‘freedom to direct and prioritise economic investment’. Such merging of funds is also being proposed through the government’s community budget pilots.
Cities could also be given the freedom to offer discounts on business rates to attract more companies specialising in a particular business sector.
They could also be given more power over major transport funding, as well as responsibility for commissioning regional and local rail services. Other powers could include integrating the use of public sector assets by bringing them together into a single local property company and investing the receipts in local economic development.
Clegg stressed, however, that the suggested powers mooted by the government today were open to discussion with the cities being offered deals.
‘Nothing is off the table,’ he said. ‘We want cities to come to us with ambitious proposals for powers they want to take back. And we will approach those proposals with a degree of openness never before seen in Whitehall.’
He added: ‘Our cities have been straining at Whitehall’s leash. They now have a once-in-a-generation opportunity. I urge them to seize it and make it count.’
In his speech, Clegg also confirmed that all councils will be able to retain business rates from April 2013, rather than paying them into a central pot to be redistributed as part of the Formula Grant.
‘We will be setting out details of the changes and beginning the necessary legislative process by Christmas with the benefits of business rate growth back in the hands of all local authorities by April 2013,’ he said.
'We will introduce a mechanism to strike the right balance between incentivising councils to attract the best businesses and ensuring we protect areas that cannot grow as quickly, through no fault of their own, so that all councils can still continue to deliver vital services.’
Labour’s shadow communities secretary, Hilary Benn, said Clegg’s announcement was a ‘smokescreen’ for the cuts the government was making to council funding.
‘Nick Clegg's out-of-touch claim to be giving our big cities the key to their future is so hollow as to be meaningless,’ he said.
