The UK’s major cities could become self-sufficient economic powerhouses through a ‘Devo Met’ deal that releases them from the suffocating grip of central government.
The claim comes in the final report from the RSA City Growth Commission, which said devolution of powers and responsibilities to the 15 largest urban areas could boost the economy by £79bn a year by 2030.
Its report argues that such a settlement should run alongside Devo Max for Scotland, with draft legislation put in place by January 2015.
Set up with support from Core Cities Group, London Councils, the Greater London Authority and the Local Government Association, the Commission’s report recommends a raft of new powers to major cities covering everything from tax raising to planning, transport and skills.
It argues that the UK’s political economy was so over centralised it was ‘not fit for purpose' and could not deal with future challenges.
‘Decentralisation would empower metros with the capacity to respond more dynamically to the needs and opportunities of their economies,’ it said.
‘Those metros with the most robust governance structures, which have a track record of delivery and risk management, should be considered for “devolved city status”.
That status would secure the same rights as devolved administrations, it said. ‘Powers and responsibilities would be agreed between the devolved city-region and central government and might vary by time and place.’
The Commission said this could include the flexibility to borrow from the open market and the right to raise and retain a range of taxes. It might also involve giving city-regions longer funding settlements of up to ten years.
Charlotte Alldritt, secretary to the RSA City Growth Commission, said: ‘During the 19th century, metropolitan industrial growth drove our national economic success and established a strong industrial heritage of which many of our city-regions can be proud.
‘The challenge is now to ensure these places have the capacity to fulfil their economic potential in the 21st century – whether through better connectivity, leveraging the power of data in public service reform, or by fostering their creative, innovative economies.’
The Commission said handing city-regions strategic planning authority powers would enable them to align housing and transport development – similar to model used by London boroughs and the Greater London Authority.
LGA chair Cllr David Sparks said the Commission had confirmed the benefits of devolution to local areas in England were ‘simply too big to ignore’.??
He added: ‘Our current over-centralised system, which has Whitehall holding the public purse strings, is no longer fit for purpose in the 21st century. This report highlights the extent to which some of our great cities are being held back by being denied the same sort of autonomy enjoyed by equivalent European cities.??
‘The huge economic benefits of devolution identified by the Cities Growth Commission are likely to be just the tip of the iceberg. Devolution to cities should be the start of a much bigger and wider process of devolution for the whole of England.??
‘People from across the country should benefit from more of the important decisions affecting their lives being made close to where they live, whether home is a big city or a rural area. Across a wide range of issues, there is compelling evidence that taking decisions closer to communities, through councils, achieves better results and saves money.’
