13.10.15
Time to deliver a devolved, joined-up approach to investment
Source: PSE - Oct/Nov 2015
Sir Albert Bore, leader of Birmingham City Council and Core Cities cabinet member for Transport, discusses why the Spending Review provides a golden opportunity to create a radically different framework for investment.
A joined-up approach to infrastructure and investment is critical to the future success of the UK economy. As the UK’s largest cities and city-regions we know that this can best be achieved through devolving public funding streams and enabling local partnerships with business to steer investment more efficiently.
Urban renewal in the Core Cities
Over recent decades the Core Cities have rightly become associated with urban renewal and vibrant economies. Together they generate some 25% of the UK’s wealth. But they have the potential to contribute much more to the nation. Closing the productivity gap between the cities and the national average would add over £66bn a year to the national economy.
Investment in infrastructure has always been a key determinant of the potential for growth and the level of productivity and in an age of globalisation it is more important than ever. This is as true of the soft infrastructure of skills, healthcare and amenities as it is of the hard infrastructure of roads, houses, factories, offices and digital connections. The cities are a major focus for investment and the places where most of our stock of infrastructure is held.
Public investment in transport and regeneration is vital to underpin market-based activity, but it needs to be designed to lever in the maximum level of additional private investment. In the UK private investment in infrastructure has outstripped public investment in every year since 1998. Local leaders are better at leveraging this additional investment than central government because we have better knowledge of our local places and business networks and the needs of employers and investors.
We also know that finance needs to be rebalanced so that areas outside London and the south east also see more investment and we can make greater progress in rebalancing the economy as a whole. HS2 is a vital part of this rebalancing because it will help to improve regional productivity, support intra-urban commuting and provide a catalyst for significant wider investment in each of the cities it serves.
Well-educated, healthy workforces
Economic and social investment must go hand-in-hand. Successful cities and successful nations have strong businesses, modern infrastructure and high levels of investment, productivity and growth. But they also have well-educated, healthy workforces, strong and cohesive communities and excellent public services.
We are making progress through city, growth and now devolution deals, but the Spending Review provides a golden opportunity to create a radically different framework for investment in all the cities, to devolve funding and decision-making and to join up public spending.
As Core Cities we are calling on the government to create an innovative ‘place-based, multi-year’ approach to public investment and service delivery, devolving power and resources to create jobs, build homes, increase productivity, strengthen our transport links and improve health and wellbeing.
Our recommendations
In our submission to the Spending Review, we are proposing several vital steps on infrastructure and investment, alongside many other recommendations:
- Infrastructure Investment Funds – single pots in local control including transport, housing, energy, digital and other capital pots, within structures that allow cities to benefit from uplifts in tax and land values, to reinvest.
- Devolved transport funding as above, including for maintenance, simplified appraisals that understand local economic context, alongside the National Joint Infrastructure Plan, Road, Rail and Freight Strategies built around Core Cities’ priorities. Bus re-regulation and devolution of Moving Traffic Violation Orders.
- Cities to be offered Intermediate Body status for EU funds.
- Enabling statutory spatial strategies for city-regions/combined authorities linked to economic plans, managing land to maximise growth and development.
- Land Commissions and Single Public Estates.
- Devolved housing and planning policy and funds. Review existing incentives, such as the New Homes Bonus, and create new incentives, e.g. for brownfield development. Explore new land value uplift capture mechanisms to help get development going. Remove Housing Revenue Account caps.
Our cities are Britain’s best bet for a brighter future and we must use the Spending Review to set a course for the rest of this Parliament – a course towards a joined-up and devolved approach to investment.