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INTERVIEW: The door is open to greater devolution

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Jim O’Neill has spent much of his career observing the global economy: the former Goldman Sachs economist is most famous for coining the acronym ‘Bric’ to describe the emerging market economies of Brazil, Russia, India and China.

But for the past year he has been devoting himself to matters closer to his home town of Manchester. He has been criss-crossing the UK in his capacity as chair of the City Growth Commission, which was set up by the RSA to identify ways of boosting the UK’s big regional cities.  

The commission published its final report a fortnight ago.

The report includes one of Mr O’Neill’s signature acronyms - ‘Man-Sheff-Leeds-Pool’. While unlikely to feature on any road signs, the name encapsulates the economist’s vision of an interconnected northern super-city, which will enjoy the benefits of a so-called ‘agglomerated’ economy. Enabling individuals and businesses to move about more easily, he believes, will boost the economies of England’s 15 largest cities to the tune of £79bn per annum.

The report recommends creating powerful new city-regional bodies, with greater powers than the new breed of combined authorities, able to borrow on the open markets and raise their own taxes without interference from Whitehall. The new authorities would be overseen by what the report calls ‘metro mayors’, whose remits would extend across whole city-regional areas.

This week’s pledge of more powers for Greater Manchester goes some way to meeting Mr O’Neill’s vision.

Bristol is one city that would benefit from stronger arrangements, he argues, pointing out that the city’s elected mayor George Ferguson (Ind) “can’t control a lot of issues relevant to Bristol because they are controlled by North Gloucestershire or South Somerset”.

George Osborne’s speech has been a game-changer. It’s probably the most important speech on the balance of economic competencies for at least 30 years

The report sets out a demanding timetable for delivering greater devolution to Britain’s biggest cities. It recommends that what it terms ‘devo met’ should proceed in tandem with the devo max being offered to Scotland. By Burns Night, an independent devolution commission to evaluate applications for ‘devolved city status’ should be established.

Mr O’Neill argues it is important to set such a tight timetable so that the momentum building behind the city devolution agenda doesn’t dissipate.

“I really hope our report provides added momentum,” he says, adding that the commission will publish a progress report on moves to greater devolution.

Mr O’Neill is amazed at how quickly the cities agenda has moved on since the commission began its work just over a year ago.  

The ardent Manchester United fan particularly lavishes praise on chancellor George Osborne’s speech in June in which he outlined his ambition to create a “northern powerhouse” economy.

He says: “George Osborne’s speech has been a game-changer. It’s probably the most important speech on the balance of economic competencies in our country by a chancellor for at least 30 years.”

Within the Treasury, the civil service is more likely to be a block to progress than the politicians, he says.

He sounds more frustrated with local government, urging the sector to get out of its comfort zone and embrace the opportunities presented by the city devolution agenda.

Recalling a recent meeting with council leaders, he describes how “they had a bitch about having no powers but didn’t come out with a credible or persuasive agenda for getting more”.

Mr O’Neill expresses surprise that Birmingham and the West Midlands authorities have yet to establish a combined authority. “They should have one,” he observes bluntly. “This an open door for local authorities to take up the baton.”

As for local government objections to elected mayors, he insists clear accountability is important within the new structures. “This might be able to be done collectively but somebody needs to carry the can,” he says.

But, drawing on his economic globetrotting, Mr O’Neill insists reform is worth it.

“If you look at the world’s three or four largest economies, they have a lot more decentralisation than we do. It may be a coincidence but I doubt it.”

 

 

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