More spending power should be devolved to Greater Manchester under the control of a directly-elected mayor, according to the Centre for Cities. New research published today (Wednesday) says Manchester should be able to fund its own transport priorities, such as extending Metrolink, rather than depending entirely on Whitehall.

The report argues that, as one of England's biggest ‘city-regions', Greater Manchester should run its own economic development and have control over budgets for regeneration, transport and skills. It argues for around £600 million to be devolved from the North West Development Agency, regional Housing and Transport Boards and the Learning and Skills Council. The report suggests that this could be topped up by a five per cent levy on business rates.

International evidence from Bilbao in Spain to Portland in the USA, shows that mayors, with tax raising and spending powers, can significantly improve economic performance and political accountability.

Adam Marshall, Centre for Cities Researcher and report author, said:

“Greater Manchester needs more power. It is big enough to control its own economic development. This is the best way to increase jobs, improve transport and drive economic growth. Unelected regional quangos are too big and undemocratic but local authorities are too small. Directly-elected mayors will be controversial but they provide clear leadership and a visible line of accountability, as Ken Livingstone has shown in London.”

The report identifies an 11-district Manchester City-Region, including Manchester, Salford, Trafford, Stockport, Tameside, Oldham, Rochdale, Bury, Bolton, Wigan, Salford, Trafford - and Macclesfield. Its total population is around 2.89 million.

City Leadership: Giving City-Regions the Power to Grow, by Adam Marshall and Dermot Finch, is available here.

The report recommends for Greater Manchester:

• City-Region Contract to co-ordinate and devolve over £600 million in existing funding from the North West Development Agency, the Regional Transport and Housing Boards, Greater Manchester Passenger Transport Authority and post-19 funding from the Learning and Skills Council.
• City-Regional Supplementary Business Rates. The ability to levy up to five per cent on the business rate, ring-fenced to strategic transport projects. This could raise £35 million a year, and cost an average small business less than £150 per year.
• Directly elected city-region mayor to lead and deliver City-Region Contracts, scrutinised by a board of local authority leaders, businesses and community representatives.

Notes to Editors:

Defining city-regions: Local Authorities in Greater Manchester have put forward proposals to the Office of the Deputy Prime Minister (ODPM) for the creation of a city-region based on the former metropolitan counties (10 districts). The Centre for Cities has added in Macclesfield, which also has strong economic links with the rest of Greater Manchester. The report does not propose any boundary reorganisation.

Maps are available from the ippr press office.

Supplementary Business Rates (SBR)

In the Manchester City-Region, an SBR of 2 pence (4.7%) from 2000 to 2005 would have raised £35m per year, or £175m over five years.

The Centre for Cities is an independent urban research unit, based at the Institute for Public Policy Research (ippr). Launched in March 2005, it is taking a fresh look at how UK cities function. Tom Bloxham MBE is the Chair of the Centre for Cities Steering Group.

The Centre's research work this year focuses on eight cities and towns: Birmingham, Manchester, Liverpool, Sunderland, Derby, Doncaster, Barnsley and Dundee.