1. Governance
December 5, 2014

The Autumn Statement was a missed opportunity

By Paul Watson

Yesterday’s Autumn Statement was bitter sweet for Key Cities. While our members welcomed the Chancellor’s announcement that the door is open for local authorities seeking further devolution of powers, we believe the time for talk must come to an end.

Our cities are major contributors to the national economy and all play major roles in their regional and local economies through trade, finance, commerce and tourism.
 Historic cities such as York, Norwich or Bath are already known as major players in their regional economies. Brighton and Southend-on-Sea are in similar situations; Sunderland is a major player in the north-east.

Despite the rhetoric, we have not seen any powers devolved to our members. Rather than to-ing and fro-ing, the government needs to take action and liberate the powerful engines of future growth: the UK’s mid-sized cities.

Key Cities “Charter for Devolution” clearly outlines the steps needed to decentralise power, and fulfil the Chancellor’s ambition of a “resilient economy”. Granting local authorities with greater skills commissioning powers, for example, would enable them to use their acumen to improve the life chances of citizens and quickly respond to the needs of local businesses.

Another opportunity the government must seize is to trust cities with the responsibility to allocate Whole Place Community Budgets (a new way of allocating council funding, piloted since 2012). Only then would they reap the benefits of greater efficiency savings and improved public services. After all, it is councillors “on the ground” who best understand the unique needs of their residents, because they are often the first point of political contact for members of the public.

Furthermore allowing cities to bring together assets owned by local and central government will allow cities to either put them to productive use or to put them into a financial vehicle to leverage private sector funding.

We also want local authorities to be liberated to generate income through local taxes. The UK has one of the most centralised systems of public finance of any centralised OECD country. Unlike cities in countries such as the United States, local authorities cannot raise their own revenues and designate funding for specific projects. This makes it extremely difficult for them to respond to local concerns in an innovative and timely fashion

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The way funding is managed is crucial. Because of this we advocate pooling public funding for all cities into one block, with funding fixed for a five-year period. City leaders would then be free to allocate funds as they see fit.

Finally, providing cities with more powers to regulate local bus services will help ensure that the transport interests of the public are placed at the heart of all policy making decisions. Unregulated bus companies are often more concerned about their bottom line, then they are about the need to provide a service that will enable people to get to work.

If the government really believes in creating growth outside of London, it must seriously consider the measures we have outlined, to empower cities to support their local communities and UK plc.

Our mid-sized cities are dynamic, agile and have great potential to deliver growth. They would be able to do even better if the government fully embraced devolution for all our cities, not just the ones with the largest economies.

Cllr Paul Watson is leader of Sunderland City Council and chair of the Key Cities group of 24 mid-sized cities.

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