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

The report, City Leadership: giving city-regions the power to grow, will be launched at Austin Court in Birmingham on Friday 24 February. Speakers at the launch event are Cllr Mike Whitby, Leader of Birmingham City Council; Sir Michael Lyons, Head of the Lyons Inquiry into Local Government; and David Frost, Director-General of the British Chambers of Commerce.

The report argues that, as one of England's biggest ‘city-regions', Greater Birmingham should run its own economic development and have control over budgets for regeneration, transport and skills. It argues for around £675 million to be devolved to Greater Birmingham from Advantage West Midlands, 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 Birmingham 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 a 13-district Birmingham City-Region, including Birmingham, Solihull, Sandwell, Walsall, Wolverhampton, Dudley, Coventry, Bromsgrove, Redditch, North Warwickshire, Tamworth, Lichfield and Cannock Chase. Its total population is around 3.07 million.

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

The report recommends for Greater Birmingham:

• City-Region Contract to co-ordinate and devolve around £675 million in existing funding from Advantage West Midlands, the Regional Transport and Housing Boards, Passenger Transport Executive 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 would cost an average small business less than £150 per year.
• Directly elected city-region mayor to lead and deliver the City-Region Contract, scrutinised by a board of local authority leaders, businesses and community representatives.

Cllr Mike Whitby, leader of Birmingham City Council, said:

“This report is an important contribution to the devolution debate. We are pleased that it calls for new financial powers for our city-region. This will help deliver key projects such as the regeneration of New Street Station. But we have concerns about the governance structures proposed by this report. Birmingham would rather work closely with its local authority neighbours in the surrounding area through an Executive Board of leaders, working with strategic partners.”

Notes to Editors:

Defining city-regions: Local Authorities in Birmingham 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 (7 districts). The Centre for Cities has enlarged this to include 13 districts, each with strong economic links to the rest of Greater Birmingham. The report does not propose any boundary reorganisation.

Supplementary Business Rates (SBR) case studies:

In the Birmingham city-region an SBR of 2 pence (4.7%) from 2000 to 2005 would have raised £35m per year, or £180m over five years.

The Centre for Cities is an independent urban research unit. 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.