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Local authorities in Birmingham and Manchester seek Scottish-style funding powers

Business leaders from Manchester, Birmingham and Scotland have backed increased spending powers for local authorities.

Speaking at the Construction News Summit 2014, Scottish Futures Trust chief executive Barry White said that devolution had given Scotland the power to “divide the cake up” and that it was “absolutely” a good idea for English regions as well.

“Through following a tax increment financing model we’ve been able to invest at Grangemouth and in central Glasgow, and we’ve now shifted to what we call a Growth Accelerator model,” he said.

“Going forward we will have more direct income coming from taxes in Scotland, perhaps as much as 40 to 50 per cent of the budget, and I think that’s fabulous. Decisions you take [can then] have a direct impact on your own future.”

Devolution for HS3

Leeds City Council CEO Tom Riordan has backed devolution to help deliver plans for a new east-west high-speed rail link connecting Leeds and Manchester, dubbed High Speed 3, stating there is “definitely a link” between devolution and proposals to create a new trans-North transport body.

HS2 chairman Sir David Higgins proposed the creation of a new Transport for the North body in his report Rebalancing Britain, which would include representatives from major northern cities including Manchester, Leeds, Liverpool and Sheffield.

Mr Riordan said: “I think we would need the ability to levy the transport resources through the combined authorities.

“I’d hope we aren’t held back by specific models of governance put on the table in return for that – that’s a discussion that’s quite active at the moment.

“This part of the world voted two to one against a mayor three times a matter of two years ago, so to go out and say we need that now is the wrong thing to do.

“We’re certainly prepared to look at current governmental structures to look at who’s accountable.”

This view was echoed by both Greater Manchester Chamber of Commerce head of business intelligence Christian Spence and Birmingham City Council director of regeneration Waheed Nazir.

Both expressed a desire for greater control over budgets and the positive effect this could have for increasing local development.

Mr Nazir said: “We’ve been talking about [£450m mixed-use office, retail and leisure scheme] Paradise Circus for a very long time – it could never happen before because there was an infrastructure gap.

“When we were able to do a TIF model, we were then able to borrow on the projection of those rates to fund the infrastructure needed.”

But Mr Nazir added that the local authority was only able to do this as the Treasury “probably didn’t realise what we were doing”.

In Manchester, £10bn-worth of work will come to the market in the next four years, with the 10 local authorities in the region working together to set out a detailed pipeline.

Mr Spence said that all three main political parties hold power somewhere in the region and admitted that this could lead to disagreements.

However, he added that “dirty laundry is aired behind closed doors” before a united front is presented to investors and the government.

Mr White expressed concern at “granular” devolution, arguing that English cities might not possess the required scale to hold devolved powers on their own and might need to work together in regions.

He said: “Scotland also took one layer of local government out to have devolution.

“No one in the general population is keen to see extra layers of government – if you want to maintain current structures and have devolution, you might have to think again.”

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