Getting to the core

London is being given the chance to shape its own economic future, so why shouldn’t other cities? Chris Murray tells Austin Macauley why changes must be made to the localism bill to make that happen

‘It has to be about fundamentally changing the game and terms of reference with government – not a little bit of freedom and money here and there, we need a total shift.’

With that in mind, Chris Murray was hardly likely to have been too excited by the announcement of new enterprise zones in the Budget. Initiatives like this, along with the Regional Growth Fund, while welcome, fall a long way short of the changes he believes governments have avoided for far too long.

As director of the Core Cities Group he has the unenviable task of channelling the varying needs and wants of England’s eight largest cities outside London into a single, clear voice. The group is well-established, having been around since the mid-90s. But given the unprecedented pressure cities like Manchester, Birmingham and Liverpool now find themselves under, it would be easy to understand if they had retreated into firefighting mode.

However, rather than fragmenting the group, it’s brought them closer together.

‘In an odd way it’s further unified the group,’ he says. ‘They understand there are some unique threats and opportunities in this agenda. Going forward the challenge is to remain focused on the opportunities as well as being a reasoned voice of constructive criticism.’

Core Cities has long argued the economic rationale for greater investment and freedom, but that’s been stepped up in recent months amid what he calls the ‘slightly chaotic’ environment created by the coalition government.

Analysis carried out on behalf of the group by Oxford Economics and published in January calculated that local enterprise partnership (LEP) areas covering the core cities could generate one million jobs and an extra £44bn of economic output over the next decade. But this was the best case scenario, relying on improved ‘growth factors’ like investment in infrastructure and better skills – areas that are currently largely out of cities’ control.

‘We understand London is important and have never made an anti-London argument. We’re making an ‘us too’ argument’ Indeed, Murray spelled this out at a seminar held to launch the report when he said ‘there is compelling evidence that the cities that have greater local control over their finances have the best chance of economic success’. He went on to point out that on average OECD countries raise 55% of public finance locally through taxation. In the UK it’s 17% with local authorities having direct control over just 5% of all taxation. Interestingly, the launch was attended by a staunch supporter of local taxes, deputy prime minister Nick Clegg.

Having made the point in figures, the group is now attempting to bring about reforms that could potentially change the economic course of Core Cities like never before. It has drafted an amendment to the localism bill which it hopes to introduce later this month as the bill reaches its first reading in the House of Lords.

In a nutshell, it calls for parity with London and the powers that are already outlined for it in the bill. Murray is quick to stress that this isn’t about competing with the capital: ‘We understand London is important and have never made an anti-London argument.’ But he adds: ‘We’re making an ‘us too’ argument. You need the rest of the big cities of this country to be performing.’

The bill already paves a way to change the way towns and cities work, for example by opening the door to elected mayors armed with greater powers. And after a long campaign by the Core Cities Group we will soon see tax increment financing (TIF) introduced in England, giving areas greater flexibility and leverage to get major projects off the ground. But measures like these pale into insignificance when compared with the powers and freedoms proposed for London in the localism bill.

It will allow secretaries of state to pass on powers over a wide range of key areas, from skills to infrastructure. Housing investment currently carried out by the Homes and Communities Agency will be taken on by the mayor, as will the London Development Agency’s economic development work once the quango is abolished.

What the Core Cities are proposing is the creation of ‘designated urban economic growth areas’. The amendment would, over time, ‘allow core cities and local enterprise partnerships access to a similar set of powers as those that will be available to London in the bill’, says Murray. ‘It’s not wholesale devolution but earned autonomy so that large urban areas can drive economic growth.’

He concedes that government views London as an exceptional case where the regional governance structures in place offer a ‘neat fit’. But he doesn’t accept the argument that it should prevent the devolution of similar powers elsewhere.

‘We don’t see it as an issue. Our business partners don’t see it as an issue. It’s only seen as an issue in government.’ He points out that local authorities can provide the democratic accountability required and that while regional structures are being dismantled, sub-regional ones like Agma in Greater Manchester remain.

Given the pace of change since the new government came to power and its growing focus on economic growth in London and the southeast, how realistic is it to expect such a radical change for cities outside those two regions? His response is to offer up a figure that will no doubt be repeated time and again in the coming weeks and months: the Core Cities urban areas deliver 27% of the nation’s economic output. Give them the freedom to drive their own economies and those figures produced by Oxford Economics might be realised.

The Core Cities have the ear of government at present. ‘In a very real way the Core Cities Group is being thrust up the queue – government needs someone to deliver sub-regional growth,’ says Murray. With the winding down of the pan-regional Northern Way this month, the group could prove to be even more important to Core Cities in the north in lobbying for change. ‘It heightens the critical strategic role of the group going forward,’ he says.

In recent months studies have warned that the continued imbalance in investment will create an ever more skewed economy. ‘Government seems to have acknowledged that in its narrative but not in its actions,’ says Murray.

Could it be the kind of action that sets cities free to control their own destiny?

‘We are not saying give us it all now – it’s about earned autonomy. We don’t know what governance arrangements might emerge in the future. Create in law a right to devolving control over the levers of productivity in these places now and set us on a journey.’