A new deal for cities

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Draft text of the speech - may differ from the delivered version. I’m delighted to be reunited with IPPR North. I was with you when I set…

Draft text of the speech - may differ from the delivered version.

I’m delighted to be reunited with IPPR North. I was with you when I set out my goals as Cities Minister, so it’s only fitting that I be here today as we set out the next steps in our plans to put England’s cities in control of their economic destiny.

The remarkable building we stand in today is a symbol of the civic pride and independence that first flourished thanks, in no small part, to the clout of local industry. It is just such independence, and such economic success, that we aim to reignite today.

After the long, slow decline of the mid-twentieth century, many of England’s cities have begun to take real steps forward. They have reversed the urban flight of the 1970s. Many have seen fresh investment in civic buildings and town centres.

But the picture is not uniformly bright. Many of our cities struggle with long-term challenges, both social and economic. Even in the supposed boom decade leading up to 2008, the number of private sector jobs in Nottingham, Sheffield and Birmingham actually fell, leaving them all more vulnerable when recession struck. And the most prosperous English cities still struggle to outshine competitors on the continent when it comes to innovation and skills. The facts make for sombre reading:

Frankfurt, Rennes and Bologna see twice as many patent applications per head as any English core city. Stuggart has five times as many.

Bilbao, Toulouse and Dresden have comfortably more graduates per resident than any of our core cities.

In England, Bristol is the only core city that has GDP per head above the national average - while in Germany, every single one of the eight biggest cities outside Berlin has better than average GDP per head. In other words, German core cities are the engines of national growth, generating wealth and prosperity, pulling the rest of the country behind them. Most English core cities are not doing the same - yet.

Yet we know that, overall, English cities have so many of the right ingredients. They account for more than their fair share of jobs; they are home to a critical mass of creative, entrepreneurial people; they house many of the universities and centres of research which will pave the way for the new technologies, techniques and processes that will be the key to growth in the coming decades.

This country invented the modern city in the 19th century. I want us to reinvent the city for the 21st. I want our all cities to be thriving places, living up to their full economic potential, matching growth with greener ways of living and doing business. And the fact is, as we all know, that when our cities do well, our country does well.

To achieve this, we need a shift in the way Whitehall works.

Instead of a tight focus on the very urban core, we need policies that recognise how cities really work, the flow of people and jobs and money between the centre and periphery. The fates of both are intimately linked. For example: it’s impossible to dissociate what happens in central Birmingham from what happens in Selly Oak or Sutton Coldfield. Through Local Enterprise Partnerships, we are encouraging local leaders to think and work together in ways that reflect their true economic geography.

Instead of seeing Government’s job in cities as being primarily to arrest decline, we should be seizing opportunities for growth. Sustainable, long-term prosperity does not come from indefinite heavy reliance on public funding. Forward-thinking leaders are already facing up to the challenge of improving their offer to the private sector. Many are considering, for example, how they will be able to use the New General Power of Competence to boost skills, encourage entrepreneurs and attract investors.

Perhaps most important, Whitehall needs to get better at listening to cities. Rather than prescribing pat solutions, rather than “rolling out” an approach designed by a bunch of bright people in a room in SW1, I believe we can best enable cities to live up to their full potential by letting them articulate their own needs and aspirations, and putting power in their hands. It’s self-evident that what’s good for Leeds isn’t necessarily good for Bristol; that Mancunians may wish to organise their own affairs in their distinctive ways, and exercise different powers to Liverpudlians.

Over the past months, I’ve been in discussion with the biggest cities outside London. I’ve been asking them a genuine, open question: if it was entirely up to you - what powers would you draw down, what flexibility over funding would you want, what discretion would you need to boost your local economy and make your city the best place it could be?

Naturally there have been a few wry smiles, the odd “we’ve heard it all before.” Delivering on the promise is what counts. But even old hands sat up and took notice when we amended the Localism Act. Simply by creating the means to devolve powers to cities and their partners, we have gone further than any recent administration I can think of. To make real progress, however, we must match these new means with a new mindset.

On one hand, we need renewed leadership from cities.

Cities need to make a case for new powers - with a clear evidence base, and a strong economic rationale. They have to show how new flexibilities could benefit local people. They will have to demonstrate how they will manage budgets, and hold themselves accountable to residents.

While there are evident differences between London and the core cities, the capital’s experience is instructive all the same. In London, the transfer of powers was predicated on the leadership a mayor can provide. Over the past eleven years, the capital has benefited immensely from having a clear and accountable figurehead with a strong mandate - attracting investment; giving a strategic direction to the development of infrastructure and public services; and raising the city’s prestige and international profile. So well has the model worked, that we have been able, with parliament’s consent, to extend new powers to the mayor through the Localism Act over housing and regeneration. As a result, the winner of the 2012 mayoral election will have a wider set of tools than ever to galvanise the capital. It could be a real moment of lift-off for London.

Next year, a dozen other English cities will have the chance to vote on whether to move to a mayoralty. Let me be explicit. Local leadership can come in many different forms, but mayors provide, in my opinion, the clearest form of all. Where city deals must be underpinned by accountability and leadership, elected mayors will without question meet that test. And whatever path other cities choose, it’s clear that a local leader or leaders able to marshal resources, speak truth to national government, and represent the city to the world, will be crucial in closing the gap between London and the rest. Balanced growth, with new jobs and businesses in every town and city, will be far better for local people and the nation as a whole.

When city leaders make a proposal about the powers they want, and what they could achieve with them, my colleagues and I in Whitehall will examine them carefully.

But we start from the assumption that the onus shouldn’t be on cities to do all the legwork, and to have to present themselves as supplicants. Whitehall needs a new demeanour. Where cities have made a reasonable case, and Whitehall wants to retain control, the burden should be on central government to show why it’s necessary and proportionate to keep influence and power at the centre. I want my colleagues and civil servants to start by asking themselves “why not pass down power?”.

As in any negotiation, there will be an element of back and forth, of offers and counteroffers before we reach consensus. The deals we strike will most likely be as distinctive as our cities themselves - with power devolved in proportion to evidence of leadership and potential for growth.

Today we have produced a paper, based on debate so far with cities and across Whitehall, that will set the framework for the next stage. It shows the areas where I think there is room for real discussion, real movement about cities drawing down powers and funding. As you’ll see, it’s a big list. Some twenty new powers, flexibilities and freedoms over Budgets. Housing. Transport. Skills and worklessness. Planning.

In many cases, these are freedoms and flexibilities that cities have been crying out for a generation or more, at long last within their grasp. We could see cities wielding greater influence than ever before over how and where the homes their growing population needs get built, over the train and bus services that take them to work, over the inward investment that supports new job and industries. The scope and the ambition speak about our commitment to getting our cities firing on all cylinders.

The next step of course is to bring the different deals with cities to a head. There’s a lot of hard work to come but I couldn’t wish for a more important or more fulfilling task for the New Year. I want to see England’s cities proud and resurgent; home to thriving businesses and new jobs; recognised as some of the best places to live and work not in Europe. It’s a prospect that justifies every effort.