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Whitehall transfers spending powers to England’s ‘core’ cities

Eight of the largest cities in England – Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield – have agreed deals to transfer powers for spending and investment from Whitehall.

Liverpool and Manchester city councils had already negotiated their individual ‘City Deals’ earlier this year, but the new agreements mean all of England’s ‘core’ cities now have their own deals with government.

Under the schemes, councils will no longer have to drive through lengthy appeals to central government for infrastructure funding, with guaranteed funding now supplied.

The spending powers will be devolved in exchange for commitments to reduce youth unemployment, improve governance and boost regeneration and growth.

Deputy prime minister Nick Clegg said the deals represented “an unprecedented transfer of power from central government to local communities”.

“I firmly believe one size doesn’t fit all - whether it’s a Mayor or whether it is a Council Leader, what cities have to show in return for a City Deal is that there is strong clear leadership”.

Cities minister Greg Clark said: “We’ve said to each city ‘make us an offer – tell us how you can drive growth in ways that have not been tried before, or which harness your city’s unique strengths in new ways.’”

Leeds, for example, has promised to reduce the number of unemployed people, in exchange for control over regional transport policy.

Civil Engineering Contractors Association director of external affairs Alasdair Reisner welcomed the move, saying funding was “the main factor that prevented new work being unlocked” and that government moves to address the problem were “to be applauded”.

“We have therefore been pressing for the development of new fuinding models for infrastructure that will deliver then ew infrastructure the country needs while releasing new activity for the industry.

“But there is no time to waste. Our current research suggests that the industry is on the edge of a new downturn. Without rapid action the sector faces a bleak future.”

Sheffield City Council, meanwhile, says the deal will allow it to unlock a £72m skills investment fund and £500m in transport funding.

Leader of Sheffield City Council Julie Dore said: “Last year in Sheffield, there were seven engineering jobs for every one young person that trained for an engineering qualification.

“The City Deal will mean that local business leaders and local partners, who best understand the needs of the local economy, will decide how over £20m of government skills funding should be invested.

“It allows us to invest decisively in the major transport schemes that we know will make the biggest difference to the region’s economy.”

The government estimates that the deals could create up to 170,000 jobs, 37,000 apprenticeships and free up £8.2bn for infrastructure spending.

Many cities will combine with other regional authorities in order to more effectively deliver planning and infrastructure.

Some have also been granted powers over business rates for certain kinds of company.

The deals, negotiations for which began in December, are aimed at unlocking private financing for infrastructure projects, with local authorities able to borrow against future revenue from projects.

In March Manchester became the first city with powers to reinvest its national tax revenues, and will invest £1.2bn in infrastructure projects on a payment-by-results basis.

Manchester will also establish a Greater Manchester Investment Framework to drive growth, and a Greater Manchester Housing Investment Board to build thousands of new homes, as part of the city’s agreements.

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