By Richard Johnstone | 28 August 2014
England’s core cities have called for decade-long public service funding settlements to form part of Chancellor George Osborne’s devolution plan for the North.
Nick Forbes, the leader of Newcastle City Council and Core Cities Cabinet member for reform, said 10-year funding deals in the areas of skills, transport and adult social care would help boost the growth potential of cities.
Forbes said the group – which includes the five northern cities of Leeds, Liverpool, Manchester, Newcastle and Sheffield – wanted place-based settlements to form part of Osborne’s ‘Northern economic powerhouse’.
‘Rather than fund public services in national tramlines, give us financial settlements over a longer period of time than one year, or even one Comprehensive Spending Review period,’ he said. ‘We need financial settlements for a decade if we want to see the long-term risk taking that we need to ensure we have the right infrastructure in place.’
His comments come after Osborne announced in August that he would set out a localism drive in the Autumn Statement that would include ‘new money, new infrastructure, new transport and new science, and real new civic power too’.
In a response to the One North report from the five cities, which put forward a £15bn transport improvement proposal for the region, the chancellor said the wide-ranging plan would encompass capital projects and university research, as well as control over budgets.
Forbes told Public Finance that Osborne had ‘raised the stakes of expectations to unprecedented heights, and if he delivers he will be the chancellor that has transformed the centralisation of Whitehall for good’.
Skills, transport and health and social care were the top areas for action. ‘We know that there is a big skills issue in all of our cities – it’s a different skills issue in each place, but there is no doubt that there is a real skills problem.
‘Similarly with transport, we know that transport funding per head in the northern cities is far less than it is in London. Our argument is that if we have a greater level of transport infrastructure [spending] and greater flexibility in how we’re able to use it, we could plan the city of the future, which would accelerate economic growth.’
Health and social care funding reform was needed to join together public sector delivery in a coordinated way. ‘The trouble at the moment is that there isn’t the incentive within the system to make the investment at local level,’ Forbes said.
Across these areas of spending, the core cities would be able to demonstrate the benefits. ‘Allowing us a different way of planning public services over long periods of time will enable us to develop greater efficiencies as well as improve outcomes – that’s true in those three areas of activity.’
Forbes added that the One North report had set out a route map towards transport improvement. Among the proposals was a call for quicker delivery of the High Speed 2 rail line and a new high-speed HS3 trans-Pennine route.
The cities of Leeds, Liverpool, Manchester, Newcastle and Sheffield had brought their respective area transport plans together for the first time to determine what was needed across
the region, Forbes said. ‘We want to see particularly significant rail investment over the next 15 years, in advance of HS2 and HS3, so that we have a public transport system fit for the 21st century where the northern cities are able to operate as one when it comes to economic activity.’
Jim O’Neill, the economist and chair of the City Growth Commission that is examining how to increase the growth rate of municipalities across the UK, told PF that the One North report’s recommendations could maximise the economic benefits of agglomeration.
‘High-quality connectivity is vital for enhancing productivity and we are delighted the chancellor is seriously considering the cities’ proposal,’ he said. ‘If the UK is to continue to compete globally we need to allow all our major metros to thrive by creating a “system of cities” and equipping each with the freedoms needed to manage investment more strategically.’
