This blog first appeared on Policy Exchange’s PolicyBytes.
Plans to create a ‘Northern Powerhouse’ took a significant step forward this week with the announcement that Greater Manchester will gain its own directly elected mayor from 2017. The government has made the introduction of the position a condition of devolving significant powers and budgetary responsibility to the region. The mayor will have control over a £300 million housing fund, take charge of strategic planning, and have the ability to implement integrated transport initiatives (such as an Oyster-card system). The mayor is also expected to absorb the role of the local Police and Crime Commissioner, directing the police budgets of the area’s 10 local authorities.
Although the move has been supported by local political leaders, there has been some criticism that the creation of the mayoral office ignores Mancunians’ (and eight other cities’) clear rejection of elected mayors in the 2012 referenda. While acknowledging this, Policy Exchange has long argued that they could deliver significant benefits for the UK’s cities, and believes there is good reason to welcome their latest incarnation.
For a start, directly elected mayors have the potential to support economic development. This point was highlighted in our recent report, Silicon Cities, which explored how government can nurture the growth of technology clusters to boost job creation outside London and the South East. Our research found that the private sector must lead local business development, but that businesses want clearly-identifiable, responsive city leadership with powers to remove obstacles and meet local needs. Some regions may need greater investment in transport; others in skills or office space. It is therefore good for business if decentralisation enables decisions to be taken at a level where local needs and priorities are best understood.
Elected mayors may also help address some of the challenges presented by the fragmented nature of local government. As Lord Heseltine noted in his report, No Stone Unturned, local authorities are vital for localism, but their boundaries often fail to represent Functional Economic Market Areas. When trying to take coordinated action to boost economic development across an entire city region, it is of huge value to have an elected official who has the responsibility and mandate to take decisions at that scale. Elected mayors will also be well positioned to be their region’s Champion-in-Chief. This role has been well exemplified by London’s Boris Johnson, and is increasingly useful for cities seeking to secure inward investment from the rest of the UK and abroad.
The move to decentralise powers from Whitehall has gained considerable political momentum following the Scottish independence referendum and the subsequent commitment to ‘devo-max’. As parties now struggle to reach agreement on how to respond to the West Lothian question, giving more powers to England’s cities may at least help provide a partial answer. Cities are, after all, the country’s economic powerhouses. Manchester alone has a larger economy than Wales, and a larger population than Northern Ireland.
The government is surely right that new powers for cities should be accompanied by new forms of governance. At a time when the public is increasingly disengaged from the political process, giving powers to mayors – clearly identifiable and democratically accountable individuals representing their community – may help strengthen civic engagement. It is all too easy for those working in the Westminster village or in local authorities to forget just how opaque government can be to the average citizen.
George Osborne clearly expects Manchester to be just the first of several cities to adopt an elected mayor. But mayors alone will not be enough to convert the government’s vision for a Northern Powerhouse from rhetoric to reality. This point was repeatedly emphasised at an event held yesterday in Leeds as part of the Deputy Prime Minister’s Northern Futures initiative, which has sought ideas on how to revitalise northern cities. Three points from that event stand out.
Transport: Improving transport links between northern cities will be vital to help them realise their collective potential. The 2011 census found that the average commute of someone who travels into London to work is 40 miles. Drawing a similar radius around Manchester takes in Sheffield and Liverpool, Lancashire, Cheshire and Yorkshire, and contains ten million people – more than Tokyo, New York or London; an area including nearly two million graduates and many of the UK’s top universities. Yet those facts and figures will be of little benefit if people, ideas, investment and resources cannot easily move between cities. The Prime Minister and Chancellor have recently thrown their weight behind the idea of an HS3. This idea deserves serious consideration, but thought must also be given to how all forms of transport – and indeed digital – infrastructure can be improved.
Cooperation and Competition: There was also much discussion about the need for northern cities to stop competing and start cooperating. Within reason, this makes good sense: the whole region will gain if cities collaborate on areas of mutual strength. In the technology sector, the TechNorth initiative promises to do just that, developing links and helping build the collective brand of the North’s tech clusters. A similar model is already in place for the medtech sector thanks to the Northern Health Science Alliance, and no doubt the model could be extended to other industry sectors, too. However, we should also not shy away from healthy competition between cities. Economic development is not a zero sum game, and it will benefit the whole country if cities are encouraged to play to their greatest strengths. Whether they like it or not, all urban centres must now compete with regions around the world and need to find ways to stand out.
Tax: A third major topic raised was the subject of local taxation. The UK has a highly centralised tax system with little direct link between economic growth in specific cities and the money available to their local authorities to spend. There was a call for government to explore ways for cities to be able to raise and retain more of their own taxes to give local government a direct and compelling incentive to focus on economic development as well as public service delivery.
These, and many other, ideas will need to be explored carefully as part of the government’s strategy to build a northern powerhouse.
The model of elected mayor in Greater Manchester has the potential make major improvements in the North. (One of the key flaws of the model being offered to cities in 2012 was that the office was not accompanied by greater powers. Small wonder there was such little enthusiasm for them.) Much rides on proving the model can work; Manchester will be a vital test case. The challenge now will be to find candidates of high enough calibre to live up to expectations and deliver results.
Follow Eddie Copeland on Twitter @EddieACopeland