Birmingham and Liverpool agree ‘devo deals’ with Treasury

17 Nov 15

Chancellor George Osborne has struck devolution deals with Birmingham and Liverpool city regions, giving the areas control over infrastructure investment, transport and skills in return for the election of a ‘metro mayor’.

A total of six ‘devo deals’ have now been reached, with Birmingham and Liverpool following Greater Manchester, Sheffield, the North East and Tees Valley. Elections for all the metro mayors are to take place in 2017.

Significant infrastructure funding is to be devolved. The West Midlands combined authority will control £36.5m in a year for 30 years, while the Liverpool City Region combined authority will receive £30m annually for 30 years, to be focused on development around the river Mersey.

In both agreements, the combined authorities will undertake reviews of both 16-plus skills provision and take responsibility for adult skills funding for those aged 19 and over, from 2018/19.

Each area will also be given joint responsibility to work with the government to co-design employment support schemes, such as the Work Programme, to better reflect local conditions.

The mayors for the two city regions will also be responsible for a devolved and consolidated local transport budget, with a multi-year settlement to be agreed at the Spending Review and responsibility for franchised bus services. Planning powers are also included in the deals, with Liverpool to create a single statutory city region development framework, and the West Midlands mayor to be given the same powers as the Homes and Communities Agency for housing development.

The West Midlands deal commits to funding an extension of Birmingham’s Metro tram network as part of the city’s HS2 Growth Strategy, while the government has pledged to work with Liverpool City Region to agree specific funding flexibilities after the Spending Review. This is intended to create a single pot to invest in economic growth

Announcing the deals today, Osborne said they were a boost to the government’s plans to rebalance the economy.

The West Midlands deal would help make the region “Britain’s engine for growth”, he stated.

“We have worked with local council leaders across the party divide, and today we are announcing a collaborative way of working that would not have been countenanced in this region even just a few years ago.

“I want to congratulate everyone who has worked so hard to make this happen but the work is now just beginning to drive the Midlands Engine forward. This is just the start.”

Bob Sleigh, chair of the shadow board of the West Midlands Combined Authority and leader of Solihull Metropolitan Borough Council said it was a historic moment.

“We have moved incredibly quickly to create the partnership between the seven metropolitan councils and our three LEPs and we are delighted the government has recognised this and has rewarded our ambition with the biggest investment package in the country,” Sleigh said.

Osborne said the Liverpool deal meant the momentum of the Northern Powerhouse was now unstoppable.

Communities secretary Greg Clark added: “This Liverpool City Region deal demonstrates how local leaders are embracing this opportunity to have a direct hand in shaping the future of their area, whether in skills, transport or housing.”

Phil Davies, leader of Wirral Council and chair of the Liverpool City Region Combined Authority, said the deal was “the best … we can secure at this time for the benefit of the Liverpool City Region”.

He added: “Each respective council will be meeting on Thursday 19 November and I hope that – like me – my colleagues will be recommending that their authorities agree the deal.”

Centre for Cities chief executive Alexandra Jones commented that the deal would only go ahead if the Cities and Local Government Bill is passed by Parliament in the next few months.

But she called them a “great step forward” that would make a big different to the lives of people in the areas.

“Crucially, the investment included in this deals, will help local leaders to undertake ambitious infrastructure projects, such as developing the new deep water port in Liverpool, or extending metro connections in Birmingham,” Jones said.

“Having a mayor will also ensure that these regions are well placed to acquire more powers and funding from the government in the future.


The Birmingham combined authority comprises:

Birmingham

Coventry

Dudley

Sandwell

Solihill

Walsall

Wolverhampton

The Liverpool combined authority comprises:

Halton

Knowsley

Liverpool

Sefton

St Helens

Wirral

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