News story

Historic devolution deal to power the Midlands Engine

West Midlands’ leaders agree revolutionary devolution deal, including over £1 billion of government investment to boost the West Midlands economy.

The Chancellor’s devolution revolution has hit the West Midlands with a major devolution deal agreed with local leaders which includes £1 billion of government investment.

Members of the West Midlands Combined Authority Shadow Board met with government ministers including the Chancellor George Osborne today (17 November) in Coventry to put pen to paper on a historic deal. This will see the region become the first outside of the north of England to sign up to a devolution deal with an elected mayor.

The agreement puts Britain’s second city and the wider West Midlands in line to be governed by a metro-mayor. They will work together across an area that runs from Telford and Wolverhampton in the west to Coventry and Nuneaton in the East and from Tamworth in the North to Redditch in the South. They will also work alongside the rest of the West and East Midlands to power up the Midlands Engine.

The agreement is another massive boost to the government’s plans to rebalance the economy with the West Midlands becoming the fifth major city region to sign up to deal, which will give its local leaders sweeping new powers after Greater Manchester; South Yorkshire; the North East and Tees Valley.

The Liverpool City Region is also set to announce a new devolution deal today (17 November) bringing the tally to six metro mayors.

Voters in the West Midlands will now choose a directly elected Mayor in 2017, who will take on a raft of new powers as part of plans to take power out of Whitehall and hand it back to local people.

This includes power over local transport budgets and franchised bus services and increased responsibility over employment support and skills provision. The government has today also backed key transport ambitions for the region including funding the Curzon Street Enterprise Zone extension and funding the Metro extension to Eastside, subject to a business case.

Chancellor George Osborne said:

We want to make the Midlands Britain’s engine for growth and this deal will give the region the powerful levers it needs to make that happen. We have worked with local council leaders across the party divide, and today we are announcing a collaborative way of working that would not have been countenanced in this region even just a few years ago.

I want to congratulate everyone who has worked so hard to make this happen but the work is now just beginning to drive the Midlands Engine forward. This is just the start.

Business Secretary Sajid Javid said:

The Midlands is already an engine for growth in the UK but we know there’s so much more potential across the region. We want to help businesses and support by adding as much as £34 billion to the Midlands economy by 2030 and creating 300,000 extra jobs. This devolution deal is the fuel that will keep this engine running at full speed.

Cllr Bob Sleigh, Chair of the Shadow Board of the West Midlands Combined Authority said:

This is an historic moment for the West Midlands. We have moved incredibly quickly to create the partnership between the seven metropolitan councils and our three LEPs and we are delighted the government has recognised this and has rewarded our ambition with the biggest investment package in the country.

We are committed to building on our strengths, including our exports and our inward investment, and to working towards increasing the £80 billion that the region currently contributes to the UK economy. This proposed deal, which must be agreed by each individual authority, allows us to keep more of the income that we generate and to re-invest it across the region, without the need to refer back to government.

A new, directly elected Mayor for the West Midlands will act as Chair to the West Midlands Combined Authority (WMCA) and will exercise the following powers and functions devolved from central government:

  • responsibility for a consolidated, devolved transport budget, with a multi-year settlement to be agreed at the Spending Review
  • responsibility for franchised bus services, which will support the WMCA’s delivery of smart and integrated ticketing across the Combined Authority’s constituent councils
  • responsibility for a new Key Route Network of local authority roads that will be managed and maintained at the Metropolitan level by the WMCA on behalf of the mayor
  • planning powers will be conferred on the mayor, to drive housing delivery and improvements in housing stock, and give the same competencies as the Homes and Communities Agency. The government will also work with the WMCA Land Commission

The WMCA will receive the following powers:

  • control of a new additional £36.5 million a year funding allocation over 30 years, to be invested to drive growth.
  • responsibility for chairing area-based reviews of 16+ skills provision, and devolved 19+ adult skills funding from 2018/19
  • joint responsibility with the government to co-design employment support for the hardest-to-help claimants
  • responsibility to work with the government to develop and implement a devolved approach to the delivery of business support programmes from 2017 and deliver more integrated working together on investment and trade. In addition the government:
  • supports the ambition of the HS2 Growth Strategy and the emerging West Midlands Strategic Transport Plan, and commits to funding the Curzon Street Enterprise Zone extension in order to help deliver this strategy
  • commits to funding the Metro extension to Eastside, subject to business case, to support the first part of the HS2 Growth Strategy, and supports the work of the WMCA to develop a delivery plan, encompassing the Metro extensions from Curzon to Interchange and from Brierley Hill, in order to realise the full benefits of HS2
  • will work with the Combined Authority through the development of the second Roads Investment Strategy to explore options for reducing congestion on the strategic road network in the West Midlands.
  • commits to support the programme of public service reform across the WMCA, including working with the West Midlands to consider the scope for further devolution of youth justice services

Further powers may be agreed over time and included in future legislation.