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Mixed is, I think, the fairest answer.
There continues to be a lack of a ‘place’ focus in policy announcements, resulting in a lack of debate about what decisions will mean in different places around the country. In addition, despite the Government’s commitment to localism and delivering Heseltine’s report, No Stone Unturned, the decisions about devolution were fairly timid, with too much emphasis on central government control rather than local autonomy.
The announcement on Heseltine’s Single Local Growth Fund is the clearest demonstration of localism in name more than in practice. Heseltine argued for £49bn over four years; what was announced today was £2bn a year for five years. While I recognise that we are living in an era of austerity, it’s hardly a ringing endorsement for devolution to local areas. Divided between 39 LEPs, it’s not a great deal of money (roughly the same as the 9 Regional Development Agencies had in the mid 2000s), and the worry is that Whitehall could require places to jump through a lot of hoops in order to access relatively small amounts; hardly a localised process.
While it was good to see a direction of travel announced over five years, I’m hoping that tomorrow’s announcement will give details of other sources of funding available to LEPs that could not be rolled up into the Single Pot – for example, Structural Funds. I’m also hoping that there are more announcements to come on greater powers and freedom for local areas, for example to influence spending of Skills Funding Agency monies and Highways Agency decisions.
Local government has again been hit hard by cuts, receiving a 10% cut that Stephanie Flanders of the BBC suggested would amount to a 35% cut in real terms for local government since 2010 (although the Chancellor argued that other measures meant that the ‘true’ cut for local government would be 2% in 2015/16). Combined with cuts in welfare, which will affect some city economies significantly, it will be very tough for many cities to manage their budgets giving rising demands for their services.
To help them manage cuts more effectively, more action is needed on innovative measures such as Manchester’s Earn Back proposal in its City Deal. This proposal involves Manchester keeping a proportion of the benefits generated by increasing local economic growth. Manchester’s City Deal is in the AME in the Spending Review so I’m hoping this is a good sign that Manchester can again be a trailblazer for other cities seeking to benefit from their local investment – hopefully more word on this tomorrow.
We were also hoping for announcements on infrastructure and housing, and both were there. £3bn was announced for affordable housing and an additional £300bn capital investment is planned up to 2020, with various departments, including DfT, Education and BIS seeing their capital budgets increasing significantly in 2015/16. However, the headline commitment to spend £50bn on capital investment in 2015/16 does not represent a rise in projected spending over and above what was previously announced. There is also a need to ensure that we are looking now for ‘shovel-ready’ projects in which to invest; far too few infrastructure projects have got off the ground in recent years.
Finally, it was good to see the science and innovation budgets protected, with a rise in capital spend for science. They are critical to the future prosperity of the UK and we need to make the most of them in the years ahead.
We will know more tomorrow when Danny Alexander announces more detail on £100bn worth of ‘growth’ related projects but overall it’s going to be a tough few years for cities. I’m hoping tomorrow and the coming months see Government giving greater freedom to local areas with the capacity to deliver, and providing greater support to those areas struggling with capacity, decline or both. More to follow tomorrow…
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