Urban autonomy? ‘City deals’ and elected mayors

Part 1: City-regions and Local Enterprise Partnerships

Liverpool’s city deal highlights some important questions about how cities’ potential new freedoms will fit with the wider role of cities within a region, including their role in providing jobs to a wider Travel to Work Area (TTWA).

Government guidance on city deals recognises that ‘in some areas the lowest appropriate level [to exercise power] may be a local authority, but in others it will be the local economic area. When it comes to powers related to economic development, such as strategic planning and transport, there is likely to be a strong case for aligning powers with the functional economy.’ LEPs are seen as the obvious vehicle for ‘encouraging local leaders to think and work together in ways that reflect their true economic geography’. LEPs were established in 2010, in a move seen by some as an attempt to counterbalance the government’s abolition of Regional Development Agencies, with geographic partnerships of local authorities and local business organisations invited to bid for LEP status. In theory LEPs broadly reflect established economic areas such as TTWAs. The partnerships have no statutory income but are able to bid for money from funds such as the £1.4 billion Regional Growth Fund and, recently, the Growing Places Fund for infrastructure development.Practically all of England is covered by LEPs as of January 2012.

Significantly, as reiterated by the government when making its ‘city deal’ offer to Liverpool, monies from business rate growth generated within an EZ will by default go to the LEP area hosting that EZ. In Liverpool, this may see tension between the city council and its partners in the city-region LEP – including the surrounding boroughs of Halton, Sefton, Knowsley, St. Helens and the Wirral – over the distribution of money raised. A more significant complication arises from the likely establishment of elected mayors in core cities but not elsewhere across the wider city-region, potentially causing a mismatch of power and influence between LEP partners. Several powers that the government cites as potentially available to cities – particularly those concerning transport commissioning and funding – could see problems of representation and accountability arise if devolved in such an unequal system. Conversely, the decision to hold mayoral referendums in some geographically proximate cities, such as Leeds and Bradford, makes it difficult to define city-regions straightforwardly as overlapping with LEPs, and could lead to unproductive rivalries, with the relatively loosely-knit LEPs an insufficient vehicle for finding consensus. For example, writing in Planning magazine, Sir Peter Hall notes that Salford, within the Greater Manchester metropolitan county, has voted to switch to a mayoral system before the city of Manchester has decided its position, citing ‘Manchester and Salford mayors slugging it out over the critical question of the terminus of the High Speed 2 rail line’ as the type of deadlock that could potentially occur. He concludes that ‘the logical answer would be the one that has worked successfully for 12 years in London: an executive mayor for the entire city-region, who could assume local enterprise partnership powers.’

There are also concerns over how far a LEP-led and city-focused approach to driving growth will recognise the needs ofrural economies and communities, the extent to which new city powers (particularly compared to the previous arrangements for regional development) are likely to contribute to the larger national task of rebalancing the economybetween North and South, and the ability of smaller cities to claim new powers. The last point was illustrated well by the government’s decision to limit bids for its fund to support the priority rollout of super-fast broadband to the 14 cities with over 150,000 homes, and the rejection by Culture Secretary Jeremy Hunt of Brighton’s campaign, based on the prominence of its digital industries, to be allowed to bid. However, in January 2012, Greg Clark made a speech to theCentre for Cities (which concerns itself with all cities in the UK) in which he invited all cities to put forward proposals for city deals.

Part 2 will look at what powers and with what strings attached.

This post is based upon an LGiU member briefing. For more information about LGiU membership, please contact chris.naylor@lgiu.org.uk.