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Forget independence for Scotland, Greater Manchester needs more freedom to boost UK economy, claims report

Greater Manchester should be given more powers by central government to allow the UK economy to ‘reach its potential’, a report by the City Growth Commission has said.

The commission was set up to address how the UK economy could benefit by devolving more power to UK’s 20 big cities, which it refers to as ‘metros’.

The report, entitled Powers to Grow: City Finance and Governance, said the UK economy is falling short of its potential as our cities are ‘stifled by the overt centralisation of policy decision-making’.

“As we have all witnessed with the run-up to the Scottish referendum on independence, some of our citizens want to have more decisions made about their futures by those who live and operate in their communities,” economist Jim O’Neill, chairman of the commission, said.

“However, the economic importance of our metros is the basis of our medium and long-term economic future.

“What happens in the likes of Bristol, Cardiff, Edinburgh, Glasgow, Leeds and all of the other 15 metros we defined in our first paper will be more important for UK economic growth than what happens in the rest of Scotland combined.

“So enabling the leaders of these major urban areas to decide what is right for them, and with it, for them to carry the responsibility for those decisions is crucial.”

In the report, the commission discuss in detail the crucial topic of city finance and governance, which it says are significant issues for our policymakers at all levels of government to consider in order to ‘realise the full potential of the UK economy’.

The commission argues that the default mode of ‘Whitehall knows best’ still remains a significant hurdle to future economic prosperity, and claims a greater devolution of political and financial powers to areas outside the capital is needed.

Recommendations include allowing metros to raise and retain funding through taxes and charges, pooling revenue streams and leveraging other assets, giving metros the flexibility to borrow through the creation of place-based budgets.

Mr O’Neill claims some cities are already ready to handle the risks of devolution, with already appointed leaders, financial management and accountability structures to administer a devolved city-region.

He says that greater representation in national decision making forums from these metros, in collaboration with other metros will enhance the UK’s economic potential.

“We have found from our evidence gathering around the country that some metros are more ready today than others, and it would not make sense to devolve responsibility to them all now,” Mr O’Neill said.

“Indeed, it is probably the case that only the best organised and most focused should be given those responsibilities. We have deliberately held back from naming those metros that might be capable of increased responsibility in this report.

“The experience of our previous reports has taught us that our ideas can quickly gain traction, promoting responses from national and city leaders; our recommendations for limited devolution for some today might encourage others to organise themselves more effectively to warrant the same responsibilities tomorrow.”

The City Growth Commission will officially launch the City Growth and Fiscal Devolution report at a private roundtable event tomorrow evening.

For more information, click here.

Image courtesy of Tom Blackwell, with thanks.

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