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Clegg looking for 'quick wins' on city deals

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Nick Clegg will be pushing government to devolve powers a select range of powers to core cities ahead of the Spring budget in a bid to give his ‘city deals’ agenda momentum, LGC has been told.

Source: Nick Clegg

Following the launch of the ‘city deals’ prospectus, sources close to the process told LGC that ministers were keen to ensure significant progress was made in devolving powers to core cities ahead of next year’s budget.

However, LGC was told that the ‘city deals’ would not be “one off” packages, rather an “open and flexible process” through which powers were incrementally handed down to cities on a case by case basis.

“The aim will be to sign off a small number of things by the Spring to get things moving but that will be the beginning of a much longer process,” one senior figure said.

“It won’t be one deal for one city, with everything handed down at once. That’s not how it will work. It’s a process. But Clegg definitely want some quick wins.”

The ‘city deals’ prospectus, developed by the new Cities Policy Unit in the Cabinet Office, suggests a range of powers over transport, regeneration, skills and economic development would be on offer to England’s eight largest regional cities as part of a series of bespoke ‘city deals’.

But the prospectus makes clear the deals will be conditional on cities demonstrating strong, stable governance arrangements as well as closer engagement with the private sector.

It also emphasises that local enterprise partnerships will be the main recipients of any new powers, making clear that cities must “pool individual LA powers to achieve greater gains for the wider LEP area”.

A “menu” of the types of power that could be on offer has been published (see box), although the prospectus makes clear that not all cities will be able to access them and that the list is “illustrative, not exhaustive”.

Options for city deals include:

  • A single consolidated capital pot (rather than multiple funding streams) allowing cities to direct and prioritise economic investment
  • Powers for cities to offer business rate discounts to local businesses, with the opportunity to match fund this through RGF bids
  • Access to new infrastructure funding through Tax Increment Financing, where this is spent on economic development projects
  • Allowing cities to take strategic transport decisions by devolving local transport major funding
  • Increasing cities’ control over rail services, through devolving responsibility for commissioning local and/or regional rail services, including the management of franchise arrangements
  • The opportunity to develop proposals to for greater accountability to local communities for local bus services
  • Putting greater regeneration funding and responsibilities in the hands of cities, by devolving Housing and Communities Agency spending and functions
  • Supporting the development of connected urban spaces through a £100m capital pot for broadband infrastructure projects
  • Creating a City Skills Fund to enable cities and colleges to work together to tailor the provision of adult skills to the needs of employers in the city
  • Better service integration with Jobcentre Plus, including the alignment of local resources to aid job growth;
  • Improving integration between welfare to work programmes and other social services by allowing cities to expand existing DWP contracts (e.g. the Work Programme Contract) to include other wraparound services

To read more on last minute changes made to the powers on offer in the prospectus, go to LGCplus.com/5039239.article

Sources close to the situation also played down the significance of differences between proposals in a draft copy of the prospectus and the final version.

A reference to a ‘city bonus’ in the form of a financial incentives for local enterprise partnerships to pool their business rates across their economic area was removed, but LGC was told this measure would likely be included in the local government resource review.

However, the softening of the clause on buses, from giving cities “greater control over local busses through devolution” in the draft version, to helping cities develop “greater accountability to local communities for local bus services” in the final version, reflected ministers reluctance to hand cities powers over buses equivalent to the Mayor of London, LGC was told.

The prospectus also cites evidence that economic performance is better when “the level of decision-making is a good fit with a city’s economic footprint”, suggesting city-regional governance models will be considered.

A senior figure said this could take the form of a combined authority, as in Greater Manchester, economic prosperity boards - a statutory city region mechanism developed by the previous Labour government - or some other form of legal vehicle. “There will be different solutions for different areas. There’s a lot of blue sky thinking going on,” the source said.

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