Cities call for powers to generate £70bn growth

Jim O'Neill's City Growth Commission has released its final report, with a set of recommendations for national and local government on how city-regions can take on a new role in the political economy.

According to the Unleashing Metro Growth report, if the UK's top city-regions, or 'metros', were to realise their potential, they would generate an additional £79bn growth.

The report considers evidence heard by the commission in the form of written submissions and evidence hearings, and discussions hosted by the commission at seminars, roundtables and other stakeholder engagement. It also draws on interim reports which have focused on skills, infrastructure, fiscal devolution and the role of universities in driving metro growth.

Key recommendations outline a significant shift in policy and finance from the centre to metros, enabling regional cities to grow and allowing local leaders to:

• Coordinate resources across their city-region and make strategic policy and finance decisions via place-based budgeting and investment strategy
• Make more informed and responsive decisions based on evaluation of local data and evidence
• Develop effective ways of integrating public service reform and economic development
• Have greater flexibility over their spending and borrowing arrangements, including multi-year finance settlements and retention of tax proceeds

The report called for a review in how the metro areas were represented in national decision making, particularly on issues to do with enhancing connectivity and growth. The report recommended an investigation into how current and future digital infrastructure needs could be met, and asked for accelerated connectivity between metros, potentially through creating an Oyster card for the North. Making it easier to move around places such as "ManSheffLeedsPool" was a prime example, which the report said could generate "many agglomeration benefits".

Highlights of Unleashing Metro Growth

Foreword from Jim O'Neill, chairman of Cities Growth Commission, on devolution of powers

"We should be clear that the process of devolution we have described will require cities to have more robust governance, policy making and economic delivery functions in place. Even those who appear to be most in the vanguard will need to address these challenges to demonstrate that they are ready for substantial devolution… It seems to a majority, but not all, of Commissioners that at the outset only London, Manchester and West Yorkshire may be ready to manage these risks and therefore to apply for devolved status."

Vision: Age of the City

"The concentration of the key ingredients for growth in cities is having a profound effect on the global economy. Urbanisation is driving growth across the world, improving living standards and helping to offset some of the associated costs of economic success (e.g. ageing societies, increasing incidences of chronic health conditions and climate change). Even as fertility rates decline, cities are growing, fuelled by domestic and international migration. By 2030, urban areas are expected to house 60% of the world's population and generate up to 80% of global economic growth. The growth of future cities is unlikely to respect political, even national, boundaries."

Empowering UK metros

"The configuration of our political economy – while encouraging this healthy business environment at the aggregate level – is, in our view, holding our metros back. The UK economy is falling short of its potential as our cities, with their concentration of labour, capital and information flows, are stifled by the overt centralisation of policy decision-making. While global competitors are free to invest in their major cities, UK metros are at the mercy of central government."

Recommendations

"The City Growth Commission does not argue for a top-down blanket policy of devolution, but a process through which the UK's major metros can benefit from new powers and flexibilities that match their capability and ambition. City-regional devolution hinges upon effective governance and accountability structures, visionary leadership and the economic growth potential to ride the difficult storms of decentralisation and devolution."

In response to the report, Lord Peter Smith, chairman of Greater Manchester Combined Authority and leader of Wigan Council, said: "The case for devolution to places such as Greater Manchester is gaining more momentum all the time. Documents like this latest report show that it's not wishful thinking but based on hard evidence about how cities can reach their full economic potential with more freedoms. If we're allowed to shape our own destiny, we can do more to create jobs and prosperity and more to ensure that Greater Manchester people benefit from – and contribute to – this success."

To view a copy of the report, click here