Do it your way: Deputy Prime Minister launches new 'city deals'

8 December 2011

Cities will be set free from the Whitehall leash to do things their way, under a dramatic shift in power, Deputy Prime Minister Nick Clegg announced today at an IPPR North event in Leeds.

England’s largest cities – the economic powerhouses of our country - are being offered a menu of transformative new powers which the Government wants to explore as the basis of a series of bespoke ‘City Deals’.

Government will free cities from Whitehall control in a number of areas, with the aim of stimulating growth. The first wave of deals will be with the eight largest cities and their surrounding Local Enterprise Partnerships.

As with any deal, cities will have to offer something in return for new powers and funding. For example, cities must guarantee that they can provide strong and accountable leadership, improve efficiency and outcomes, and be innovative in their approach.

The ‘first wave’ of City Deals will focus on the eight core cities and their Local Enterprise Partnerships. The Government will look to roll this process out to other cities in due course.

The Deputy Prime Minister is also asking cities to bid for a share of a £100 million capital investment pot for ambitious broadband infrastructure plans. In addition to the four national capitals, this fund will support up to six cities, who will be free to bid for a range of ambitious projects, including superfast broadband to strategic business areas and free public Wi-Fi.

Deputy Prime Minister, Nick Clegg, said:

Cities are the engines of economic growth. Whitehall should not be like an overbearing parent, throwing money at cities but refusing to let them stand on their own two feet. So we will have a bonfire of Whitehall controls to empower our cities to go for growth.

“We need our cities to be economic, social and cultural magnets – places people aspire to live. Firstly, cities will have greater freedom to invest in growth. Secondly, having power over transport, housing, broadband. Finally, the power to boost skills and jobs.

“Our cities have been straining at Whitehall’s leash. They now have a once in a generation opportunity. I urge them to seize it and make it count.”

Cities Minister, Greg Clark, said:

Our cities are engines of growth and crucial to economic recovery. We want to do everything possible to give cities the freedoms they need to meet their economic potential and get them firing on all cylinders.

"City deals are a bold and ambitious new idea to put cities back in charge of their own economic destiny and to seize the opportunities for growth. They represent a fundamental shift in the way Whitehall works, the presumption being that powers should be handed down wherever cities make a convincing case."

Financial benefits – cities will have greater freedom to invest in growth.

• An end to the current system of bidding to Whitehall departments for different pots of cash for different things like roads and housing. Instead, cities could get one consolidated capital pot to direct as they see fit.
• Giving local authorities the freedom to set lower business rates for certain types of company – for example, if one city wanted to attract more companies specialising in computer-assisted design, they could offer those companies a reduced business rate to boost the sector.
• £1bn boost to the Regional Growth Fund to create jobs. The Government will encourage cities to bid for this money to help clusters of businesses in their area – so one bid could help several small companies.

Skills and jobs – new ways for cities to boost jobs and apprenticeships.

• Many small businesses find the system of taking on apprentices too daunting, so cities will set up City Apprenticeship Hubs. These hubs will do all the administration and paperwork needed for apprenticeships, so that employers don’t have to. Apprentices will be placed with employers by the hub.
• Improving the way services work together to make it easier for people to get back in to work. Instead of being passed from one service to another – from JobCentre Plus to town hall to careers advisor – all of that can be done under one roof where it makes sense to do so.

Power over infrastructure – unlocking investments to improve transport, housing, broadband.

• Currently transport projects can be delayed because cities have to jump through numerous Whitehall hoops. The Government wants to hand over the decision making to cities so they can press on with projects that will make the biggest difference. And the Government will want to look at ways of increasing local accountability for local public transport, building on models like Transport for London.
• Cities will have greater control over regeneration funding and responsibilities taking on functions and spending currently held by the Homes and Communities Agency.
• Cities can bid for a share in a £100 million capital investment pot to spend on ambitious broadband infrastructure projects. In addition to the four national capitals, up to six cities could benefit from this new investment. We expect bids to include a range of projects including:
  o superfast broadband to strategic business areas;
  o city-wide high-speed mobile connectivity (e.g. Wi-Fi); and
  o information and demand-building activities.

Notes to Editors

1. Cities facts:
The Core Cities are: Birmingham, Bristol, Leeds, Liverpool, Newcastle, Nottingham, Manchester and Sheffield. The eight core cities are the largest and most economically important English cities outside of London.

Cities account for 58% of England’s population and 61% of its jobs. When their wider commuting areas are taken into account, this rises to 74% of population and 78% of jobs. Source: Data for 2008, from DCLG (2010) Updating the evidence base on English Cities. Data for cities relates to Primary Urban Areas; for hinterlands includes travel to work areas (TTWA).

2. The menu of options as part of the deal is not exhaustive and is intended to raise debate and stimulate debate to do things differently.

3. For further details on the City Deal, read the full document here: http://www.dpm.cabinetoffice.gov.uk/resource-library/unlocking-growth-cities