Manchester ‘must make most of few tools it has’

Despite its relative success at bidding for central government funding and devolved powers, Manchester is still not regarded in Whitehall as a big UK city 'capable of making its own decisions and generating real growth', according to an AGMA briefing paper produced following the June Spending Review.

The paper was written by New Economy, the think tank within the Manchester family of public sector bodies that run the city, and presented to the Association of Greater Manchester Authorities' planning and housing commission on Monday.

The four-page response to the Chancellor's Spending Review for 2015/16 announced on 26 June, which outlined £11.5bn of additional spending cuts, concluded:

"With the hard parameters already set, the Spending Round was broadly more of the same, with cuts falling on the budgets of Departments that have already taken most of the strain. Whilst the measures announced around reform are welcome, there is a significant underlying funding cut for local government. The ability of Authorities and Local Enterprise Partnerships to take more coherent and strategic steps towards growth is not transformed with the small steps taken in response to the Heseltine Review, but does represent slow progress in the right direction. These opportunities need to be seized and made the most of, but pressure for much greater progress, much faster, for big cities that are capable of more responsibility should not relent."

The authors called the Chancellor's decision to award £2bn a year extra to LEPs, compared to £70bn recommended by Lord Heseltine, a "disappointing end to a period of aspiration that the need to cut down central government would lead to the broader devolution of funding and decision-making to large economic areas."

The briefing paper goes on: "A notable exception to the slow pace of devolution was the further advancement of London's governance and financing under its mayoral system, with £9bn of new capital funding announced. Also, no sooner was a wish for a new underground line, the £12bn Crossrail 2, set out in the Mayor's 2020 vision, than development funding was found. GM and others have as yet failed to be seen in Whitehall as big UK cities capable of making their own decisions and generating real growth. Even the Capital however does not have an Earnback mechanism [part of the GM City Deal with Government allows GM to 'earn back' up to £30m in 2015/16 from the Government of the £1.2bn it is investing upfront in transport infrastructure to reinvest in growth], making the opportunity to drive growth with the few tools GM has, and keep more of the benefit it generates, more important than ever."

• Visit the New Economy website to view the report in full