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Major cities given more powers to finance infrastructure

The biggest eight cities in England will be given more powers to invest in their own infrastructure under plans revealed by deputy prime minister Nick Clegg yesterday.

The government said it wants to hand over the decision making to cities so they can press on with major projects. Cities will also have greater control over regeneration funding and responsibilities, and will take on functions and spending held by the Homes and Communities Agency.

The ‘first wave’ of City Deals will focus on Manchester, Leeds, Liverpool, Birmingham, Newcastle, Sheffield, Bristol and Nottingham, and their Local Enterprise Partnership.

In return, the government said cities must guarantee that they can provide strong and accountable leadership, improve efficiency and outcomes, and be innovative in their approach.

Just last month, James Stewart, former head of Infrastructure UK and current chairman of global infrastructure at accountancy giant KPMG, told Construction News that cities will become more self-sufficient as government funding reduces.

Mr Clegg, said:  “Cities are the engines of economic growth. Whitehall should not be like an overbearing parent, throwing money at cities but refusing to let them stand on their own two feet. So we will have a bonfire of Whitehall controls to empower our cities to go for growth.

“We need our cities to be economic, social and cultural magnets – places people aspire to live.

“Firstly, cities will have greater freedom to invest in growth. Secondly, having power over transport, housing, broadband. Finally, the power to boost skills and jobs.”

Cities Minister Greg Clark added:  “We want to do everything possible to give cities the freedoms they need to meet their economic potential and get them firing on all cylinders.”

The government is also asking cities to bid for a share of a £100 million capital investment pot for ambitious broadband infrastructure plans.


Power over infrastructure – unlocking investments to improve transport, housing, broadband.

  • Currently transport projects can be delayed because cities have to jump through numerous Whitehall hoops. The Government wants to hand over the decision making to cities so they can press on with projects that will make the biggest difference. And the Government will want to look at ways of increasing local accountability for local public transport, building on models like Transport for London.
  • Cities will have greater control over regeneration funding and responsibilities taking on functions and spending currently held by the Homes and Communities Agency.
  • Cities can bid for a share in a £100 million capital investment pot to spend on ambitious broadband infrastructure projects. In addition to the four national capitals, up to six cities could benefit from this new investment.

Financial benefits – cities will have greater freedom to invest in growth.

  • An end to the current system of bidding to Whitehall departments for different pots of cash for different things like roads and housing. Instead, cities could get one consolidated capital pot to direct as they see fit.
  • Giving local authorities the freedom to set lower business rates for certain types of company – for example, if one city wanted to attract more companies specialising in computer-assisted design, they could offer those companies a reduced business rate to boost the sector.
  • £1bn boost to the Regional Growth Fund to create jobs. The Government will encourage cities to bid for this money to help clusters of businesses in their area – so one bid could help several small companies.

Skills and jobs – new ways for cities to boost jobs and apprenticeships.

  • Many small businesses find the system of taking on apprentices too daunting, so cities will set up City Apprenticeship Hubs. These hubs will do all the administration and paperwork needed for apprenticeships, so that employers don’t have to. Apprentices will be placed with employers by the hub.
  • Improving the way services work together to make it easier for people to get back in to work. Instead of being passed from one service to another – from JobCentre Plus to town hall to careers advisor – all of that can be done under one roof where it makes sense to do so.


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