City regions and future growth

The other big idea for devolved economic development to the sub-region has been the idea of City Regions. City Region is a concept which relates to those major industrial and commercial cities capable of influencing an economic region, including other smaller cities, towns and rural areas. The Core Cities group had been pushing for such developments since 1995, and it had been a major subregional policy initiative of both the previous Labour Government and the present Coalition Government, intended to stimulate economic growth and political engagement.

As we saw in Chapter 5, the Labour Government's Local Democracy, Economic Development and Construction Act (2009) first empowered some cities to develop Combined City Authorities (CCAs), with London being the first to be granted that status. It was followed by Manchester. All political parties have been very interested in developing the City Region idea. Not surprisingly, the main partnerships for the majority of the Core Cities under the Coalition are with their LEP partners. Leeds, for example, had constituted its LEP as the Leeds City Region LEP (Leeds City Region website). The main difference in approach between the Labour and the Coalition Governments has been that while Labour's strategies tended to be imposed from the centre, the Coalition rejected what they called 'a one-size-fits-all model' in favour of 'individual city deals' which are binding agreements enabling the devolution of specific powers, resources and
responsibilities to each City Region. Further city deals are being approved with the second level of cities, many of which are now calling themselves the Key Cities. The actual process has taken some time, and the powers granted do vary considerably between the various City Regions. Presumably, as they develop and if they succeed, powers will be adjusted.

Few would argue against an integrated approach to infrastructural improvement based on natural economic relations at a sub-national level, and City Regions are known throughout mainland Europe. However, it is unclear if the present government's approach is the right one. We found that where City Deals were based on already effective regional partnerships, there was every expectation that they would develop quickly and effectively. However, in other places there were fears of conflicts between the dominant city and its hinterland and between the City Region and neighbouring local authorities and LEPs adjacent to but not included in the City Region. There is also the danger that whereas the previous system of regional governance and local partnerships was intended to encourage co-operative working, the present competitive bidding approach could lead to excessive competition between City Regions and other neighbouring cities, and between City Regions and other more rural LEPs.

Indeed, further conflict is developing over the Coalition Government's apparent tendency to place its emphasis upon urban areas. The Rural Services Network (2013) has produced comparative data which suggests that rural local authorities are hard done by compared with their urban counterparts. It has claimed that more than 30 MPs 'have demanded a fairer share of government funding for rural local authorities' (Derounian, 2013). As with our own interviewees, much of the blame is placed on the shoulders of the Communities and Local Government Minister, who is described as 'hobbling the ability of parish and town councils to foster rural community action. The words may be localist but government actions tend towards centralisation' (Derounian, 2013). As much as anything, though, this appears to be a consequence of the Coalition's commitment to reduce government spending and to shrink the state. While the Coalition has given limited control over some taxes to some City Regions and is focusing what funds are available on urban growth areas, rural areas are suffering from the massive reductions in Central Government funding for local government. Some of our own interviewees were calling for 'county regions'. The latest (2013) City Deal bids, which include smaller cities and some of their more rural surrounding hinterlands, may go some way towards reducing disparities, but that has its own problems, and large areas of rural England will still not be included.

So, it is not altogether clear that City Regions are the panacea they are claimed to be. While they have been a major policy driver for economic growth in Europe, research findings on their effectiveness have been ambiguous (Martin, 2006). Furthermore, in a recent study of English City Regions between 1978 and 2010 under the Labour Government, Champion and Townsend (2012) found the performance of City Regions was closely tied to national cyclical trends of
recession and recovery and that generally they appeared to be less resilient than Britain as a whole.

Is there value in regional and sub-regional approaches?

It seems possible that the idea that there is value in English regional economic initiatives is returning to the political scene. In the meantime, the length of time taken in establishing individual City Deals has meant that the first tranche of city regions are only just finding their feet, and while the second tranche has been designated, most of these City Deals will only be announced at the beginning of 2014. At the LEP level, a few local initiatives are in place and look interesting. For example, Bristol, Bath and Gloucestershire Chambers of Commerce have joined together in the Business West Partnership to provide business advice centres, start up workshops, marketing classes and digital marketing.

As has been seen, one of the problems seems to be that the Coalition Government is so concerned to stress competition between the various subregional bodies that little effort has gone into considering how they might fruitfully co-operate to resolve wider issues. Our interviewees were very supportive of decentralisation of powers but deeply concerned that structures might not be in place to constructively utilise them. In this regard, the IPPR report (IPPR North, 2012) is interesting and offers one potential model for such co-operation through the creation of a number of over-arching regional bodies to co-ordinate and plan above the level of City Regions and LEPs, and methods of generating appropriate funding to support regional and sub-regional activity as well as the reduction of differences in treatment by national government between City Regions and LEPs and between urban and rural areas.

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