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Although now symbolic, in medieval England freedom of the city was originally conveyed to signify that someone enjoyed a ‘free status’, had the right to trade, earn money and participate fully in the economy.  The parallel for decentralisation to cities from the state is similar in this one respect

Cities drive growth, and they do best when freed from central constraint.  Core Cities Group has laboured over this single, critical message for more than 15 years, building evidence and positive argument, and many others have made very significant contributions particularly in recent years.  

‘Unlocking City Growth’ is therefore very much welcomed by the Core Cities.  Its publication comes at a decisive moment for the economy, and its contents contain some ‘keys to the city’.  But its publication is also a landmark because it heralds a shift toward national acceptance of the macroeconomic role of cities and their economic sub regions. There is though still a journey ahead.  

It is true that we have come close to the edge of real devolution and decentralisation before, only to step back.  But this feels different; commitment resonates from the document.  The process is also underpinned by a change in legislation which enables decentralisation (through an amendment to the Localism Act, moved on behalf of Core Cities).  The publication also makes this is a very public process, one that will require a significant outcome.

This moment is different in other important respects, taking place as it does against a backdrop of economic restructuring and public sector reform.  It’s important to recognise therefore that this is decentralisation with a specific purpose; to drive macroeconomic growth, and encourage wider public sector reform.  The prizes for cities, citizens and the national economy could be decisive.

Core Cities recently commissioned independent forecasters Oxford Economics to model three different economic scenarios for our cities, and for the eight Local Enterprise Partnership areas that incorporate them.  The baseline scenario assumes that there is little additional investment, but also that there are no markedly downward trends or significant additional public funding reductions beyond those planned.  It produces an additional £128 billion GVA and 417,000 jobs between 2012 and 2030 on a gradually ascending graph – slow growth.  The best case scenario delivers profound transformative effects of another £61 billion GVA on top of this and a total of 1.3million jobs.  But there is also a worst case, with a loss of £41 billion GVA and 1 million jobs below the baseline.  In current circumstances, each of the scenarios is possible.  To state the obvious, we want to avoid the worst and get to the best, so what will support business to achieve that and what is the role of the public sector?

Unsurprisingly it largely boils down to the usual suspects: investment; skills; infrastructure; housing; innovation and enterprise.  But there are some nuances to this, including the urgent need to deal with energy price rises, through local energy generation, transport measures and efficiency.  Building on these forecasts, there are two critical factors that will have to work in tandem: a more sensitive, localised application of the policy levers to increase growth, productivity, and reduce dependency; and direct stimulus into projects, places and sectors capable of creating demand.   It’s not possible for either local or national government to do these things separately.  Success relies on finding a completely different way of the national and local working together - jointly with the private sector - a new economic paradigm to deliver growth from cities.  This in turn requires a complete culture change at both levels.

Core Cities do a lot of economic heavy lifting, with their urban areas accounting for about 27% of the country’s economy, more than London.  But the process that has moved forward with this publication is not and should not be just about Core Cities.  There are other towns and cities that can and do drive growth, that should have more opportunity, and yet others that must benefit from increased urban economic strength.  

For me the central question for decentralisation has never been if, but when.  Why?  Because we will eventually have (and are now having) to accept that we have probably gone as far as we can with the existing model, and other cities elsewhere – even despite the highly challenging Eurozone crisis for some  – have got a big head start on us.  Its time to do some catching up.

 

Written by Chris Murray
Thursday, 22 December 2011 11:11

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