County councils should be given ‘city deals’, says Essex
By Richard Johnstone | 6 September 2012
The government has been warned today that it is ‘missing a major trick’ by devolving economic powers to cities only rather than offering them to wider local government.
A report by Conservative-led Essex County Council says counties should be given the same freedoms as have been awarded to England’s eight core cities as part of the government’s ‘city deals’ programme.
These have allowed authorities to negotiate bespoke deals to ‘unlock growth’ in cities, such as Tax Increment Finance schemes to fund infrastructure in Newcastle, Sheffield and Nottingham. Other examples include responsibility for local rail franchises being devolved to Leeds, Sheffield and Manchester and ‘apprenticeship hubs’ being created in Bristol, Leeds, Newcastle, Nottingham and Manchester.
Today’s City limits report criticise the ‘arbitrary’ targeting of economic powers at cities, saying this will ‘significantly limit the potential for regional and national growth’.
It states that counties ‘have as much to contribute to the local and national economy as the eight cities’ after comparing areas on issues such as productivity, access to higher education and transport links.
Among the report’s findings are that non-metropolitan contributed a majority (51%) of Gross Value Added to the economy in 2009 – the latest available figures – compared with 25% from London, and 24% from England’s core cities. GVA is used by the Office for National Statistics to measure the contribution of economic regions to gross domestic product.
Each additional job in county areas such as Berkshire, Surrey and Buckinghamshire produces around 40% more GVA than each additional job in city deal areas such as Newcastle, Sheffield and Liverpool, Essex council’s researchers found. They also said that more than half of students studying degree courses outside London – 52% – attended universities in county areas.
Essex’s report follows the call from the Local Government Association in June for the government to open up the negotiations to more authorities, including counties.
Essex council leader Peter Martin said he agreed with the coalition’s policy that ‘local leaders, rather than Whitehall departments, are best placed to understand and address their own local economic issues’.
However, he wanted to ‘challenge the rationale for simply providing economic freedoms and flexibilities to cities’.
He added: ‘We are missing a major trick if we simply concentrate our efforts to boost the economy of our cities and ignore the major part our county and non-metropolitan areas play in supporting the economy.’
The report comes after Tuesday’s ministerial reshuffle, when Greg Clark, the minister responsible for city deals, was moved from the Department for Communities and Local Government to the Treasury.
However, he confirmed on Twitter that he would retain his role as minister for cities. In June, he told Public Finance that the deals could be rolled out to more locations.