1. Governance
March 15, 2016

What will this week's Budget mean for the UK's cities policy?

By Alexandra Jones

With the Budget fast approaching, debate has been growing about what devolution deals will and will not appear this week. Negotiations continue and we wait to hear the results – but, as I said in our annual Budget letter this week, if their priority continues to be economic growth, the Centre for Cities would like to see devolution deals retain their urban focus.

So what might this mean in practice?

Ideally, we will have major devolution deals done with all the remaining major city regions. These would be along the lines of (but not exactly the same as) Greater Manchester, and should include additional powers over transport, skills and planning.

Agreeing to have metro mayors for the West of England (Bristol) and Leeds City Region, for example, would give these significant economic centres additional powers and a leadership model that will help those city regions make the most of their local economies. We’d also like to see more on the table for all city regions with devolution deals in terms of housing and skills policy.

In other areas, I hope we will see more deals, but different to those agreed with the major city regions and tailored to local need. One of the best policy developments in recent years has been the insistence – by Greg Clark, George Osborne, Lord Heseltine and others – on tearing up the old rules for policymaking. They have explicitly rejected the idea of having geographies decided in Whitehall, going at the pace of the slowest and having the same policies everywhere or nowhere.

Instead we have seen demand-led, bottom-up policymaking carried out at the level of the “real” economy; thisa llows for innovation, ambition and different policies across the country. I hope that this Budget will demonstrate that this flexible, far more innovative approach continues to be rolled out in policy. In particular, I’d hope that devolution deals agreed with areas outside the major city regions will:

  • Ensure that, where there are county deals, there is still a focus on making the most of the cities that so many prosperous counties contain. For example, any deal with Oxfordshire or the Solent should explicitly commit to ensuring that the economies of Oxford, Portsmouth and Southampton are supported to thrive in a way that benefits those cities and the surrounding areas of Oxfordshire, Hampshire etc.
  • Be tailored to local need. Despite the inevitable temptation to standardise deals once complex negotiations have been completed, individual tweaks is what has made this process innovative.

As we said in a report commissioned in January and published this week by the new “Fast Growth Cities” group (Cambridge, Milton Keynes, Norwich, Oxford and Swindon), these smaller cities are dealing with the consequences of success – congestion, high house prices and creaking infrastructure. They do not necessarily need a Greater Manchester style mayor, but could benefit enormously from a deal about, for example, financial mechanisms and incentives that help them build more homes.

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  • Be agreed at the level of the “functional” economy, to maximise opportunities to make the most of the labour market and local economic assets. This should not and cannot preclude partnerships across borders – but when it comes to powers over economic issues such as transport, housing and planning, academic evidence suggests that operating at the level of the “real” economy has significant benefits.

In an era of global economic challenges, this Budget will be a tough one to craft – but devolution deals offer a real opportunity to support future prosperity, as well as redesign public services. My hope is that the government continues to make the most of UK city regions, of all sizes, by equipping them with the tools they need to grow in the years ahead.

Alexandra Jones is chief executive of the Centre for Cities.

This article was originally posted on the think tank’s blog.

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