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Devolution For English Cities: Give Us The Money

Liverpool, Manchester and others want liberating

Written by . Published on June 18th 2014.


Devolution For English Cities: Give Us The Money
 

LIVERPOOL is hosting leaders of some of the world’s biggest cities to discuss and share ideas on devolution and growth. 

According to the OECD, the level of taxes managed at the local or regional level is about 10 times greater in Canada, 7.5 in the US, 7 in Sweden, almost 6 in Germany, and over 5 times greater across the OECD on average.

All eight of the English Core Cities (explained below) are attending the BT Global City Leaders Summit that brings together more than 300 city leaders and senior members of local government.  

World renowned cities such as Shanghai, Istanbul, Mexico City, Santiago and New Delhi will be exchanging ideas and visions with the Core Cities Cabinet on the key role cities can play in promoting economic growth, rebalancing the economy and delivering for local communities. 

International cities, such as Paris, Berlin and Barcelona, have enjoyed huge amounts of economic success due to having the policy and tax freedoms to boost their local economies. Comparatively, England’s Core Cities are being hindered by central Government retaining control over 95% of funds raised locally. 

Birmingham Alabama for example, who are attending the Summit, retain a lot more locally raised taxes than Birmingham UK. According to the Organisation for Economic Co-operation and Development (OECD), the level of taxes managed at the local or regional level is about 10 times greater in Canada, 7.5 in the US, 7 in Sweden, almost 6 in Germany, and over 5 times greater across the OECD on average. 

Liverpool Mayor, Joe Anderson will lead a working lunch with specially invited senior guests from major UK and overseas cities, and Lord Heseltine, the former deputy Prime Minister. The discussion will focus on the powers that cities need to help drive economic growth. 

Liverpool skyline

Liverpool skyline

Core Cities’ urban areas already deliver 27% of the English economy and are home to 16 million, yet they underperform by the standards set by some of today’s international visitors. This is because, currently, cities only retain about 5% of the total tax base raised in them, which is damaging their economic potential. 

Greater freedom to decide how to spend the money generated in cities, such as property taxes, would help the Core Cities meet their target of outperforming the national economy, and becoming financially self-sustaining. Independent forecasts demonstrate this could mean an additional £222 billion and 1.3 million jobs for the country by 2030. That is like adding the entire economy of Denmark to the UK.

Back in 1889 Manchester controlled its own money and was one of the most important cities in the worldBack in 1889 Manchester controlled its own money and was one of the most important cities in the world

Joe Anderson, Mayor of Liverpool speaking from the event said:

"Cities are engines of growth and they are critical to the global economic recovery. At this summit we will debate the powers and responsibilities our cities need to deliver the best economic future for our communities.

“Important leaders from major cities across the UK will join us in Liverpool, to exchange ideas with the international cities attending today that could help us all in giving our cities the freedoms they need to grow. This is very much a two way street with the Core Cities sharing ideas and concepts, as well as hearing about ones that have worked overseas.”

Sir Richard Leese, Leader, Manchester City Council and Chair, Core Cities Cabinet said:

"This Summit is a great opportunity to highlight the success devolution can bring. You only have to look at the success a city like Barcelona has achieved by being given the freedom to make decisions based on local need and circumstance.

“England’s cities need to be given the powers they need to compete or we will fall behind the international cities visiting today.” 

King Street, Manchester

King Street, Manchester

United Cities and Local Government president and Mayor of Victoria, Seychelles, Jacqueline Moustache-Belle said: 

“For over a hundred years, the spirit of the municipal movement has been to promote learning and create the conditions to better serve the citizens, but also to bring the experience of local and regional leaders to the international debates. Towns and regions must have a strong presence and role in the new global governance.”

Mayor of Istanbul and UCLG co-president Dr Kadir Topbas, said: 

“Urbanisation is underpinned by the concentration of investment and the economies of agglomeration that cities offer to many enterprises are well-known. However, what are perhaps less recognised are the many economies of agglomeration that cities provide for most forms of infrastructure and service. Sound management of these services is central to their capacity to support growth, prosperity and equality.”

Cities represented at the summit include: Istanbul, Shanghai, Paris, Barcelona, Rabat, Berlin, Vienna, Beijing, Glasgow, Surabaya, Seoul, New Delhi, Buenos Aires, Sao Paulo, Santiago, Montreal, Mexico City, Birmingham (Alabama), Johannesburg, Rabat and Dakar, as well as all English Core Cities.

At play on the Pierhead, Liverpool

 

At play on the Pierhead, Liverpool

What are the 'Core Cities'?

The Core Cities consist of: Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. 

The Core Cities recently released a Growth Prospectus which can be read online here

Property taxes consist of: council tax, business rates, stamp duty land tax, annual tax on enveloped dwellings and capital gains property disposal tax.

The Core Cities form a local authority voice to promote the role of their cities in driving economic growth. They represent the councils of England’s eight largest city economies outside London. The Core Cities Group has a track record of 15 years as a cross party group, led by the City Leaders. 

The BT Global City Leaders Summit is part of the UK’s inaugural International Festival for Business 2014 (IFB) hosted in Liverpool and the city region over 50 days in June and July.

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30 comments so far, continue the conversation, write a comment.

Calum McGJune 18th 2014.

Interesting stuff. Please could you fix the missing link to the Growth Prospectus? Thanks!

1 Response: Reply To This...
Jonathan SchofieldJune 18th 2014.

Sorted Ali

AnonymousJune 18th 2014.

And will all the MPs of those 'Core Cities' be attending and demanding "Devolution For English Cities" Jonathan? No they won't and there's your problem. Our MPs could, if they so desired, form parliamentary allegiances & demand change. But is getting a top "all powerful" job in "big central" government - more the career aim (professional passion) of a 'Core City' Labour MP???

AnonymousJune 18th 2014.

I'd love to see our Core Cities have more power locally...and then I think about how corrupt Manchester City Council is...and how much litter is piling up on our streets...and how much money is wasted on vanity projects while essential services are cut...and how the concerns of the local community are ignored when planning decisions are taken...and I think be careful what you wish for.

2 Responses: Reply To This...
AnonymousJune 18th 2014.

Absolutely agree. Of-course we need more power, Londoncentrism has to end and the whole political system needs its corruptions breaking open both nationally and locally. The shameless lies of our council leaders are sickening as is the pseudo emphasis 'Manchester cares about communities'. Time for the leaders of MCC to be ousted locally, and nationally, what dangerous times we are in. Will it happen? Probably not, as London is all about self, self, self and the rich principality will not give opportunity and fairness willingly, nor will any 'blended' colours of the political classes. Nevertheless, peoples power is making noise and daring to question the failings and demand better. Hope these demands can be stronger and impact Westminister and its 'powerful' failings.

AnonymousJune 19th 2014.

Looking at Piccadilly Gardens & Library Walk etc, perhaps we should be "stripping" local councils of power (over planning etc) instead of giving them "more"? Lets thank heavens for English Heritage and their listed building status too, because if such "decision making powers" resided totally in Manchester Town Hall, I doubt any historical building of merit would now be left standing in Manchester!

AnonymousJune 18th 2014.

It would be good if Manchester were to be able to use the taxes raised in the region on projects to develop this region. But it needs to be Greater Manchester not just Manchester. We need to have a Greater Manchester Council that actually reflects the voting pattern of the people and not this anti democratic FPTP that has thrown up the one party state that is the City of Manchester Council. And we need an elected Greater Manchester mayor who can fight the region's corner on the national and international stage. Politics aside Boris does this wonderfully well for London. And local MPs should be throwing their weight behind Greater Manchester and not toeing the party line in Westminster. They were elected to be our representatives, not yes men/women to Milliband and Cameron.

5 Responses: Reply To This...
AnonymousJune 18th 2014.

here here!

AnonymousJune 18th 2014.

When you compare Manchester's City council which is perpetually Labour with Liverpool's lib dem one minute labour the next I know which I would prefer. Having a stable leadership means better long-term planning.

Mark FullerJune 18th 2014.

Having committed the"crime" of consorting with the Devil ( the Conservatives), the Lib. Dems are finished in Liverpool, at least for a generation. Labour are now almost as dominant as they are in Manchester. At the recent local elections, there was a marked increase in support in some areas, for the Greens and Ukip. It will be interesting to see which of these emerge as the new alternative to Labour. Ukip seem to appeal more to the working class electorate, so my money would be on them.

AnonymousJune 19th 2014.

Heaven help us then, Mark... UKIP are bonkers.

AnonymousJune 20th 2014.

UKIP are bonkers but if the major parties actually took people's concerns seriously and changed their policies accordingly there would be no need for UKIP. Rather like the BNP seem to have withered on the vine. They used to be seen by some as the place to put your protest vote. Thankfully they seem to be on the retreat these days. Main stream politicians should listen to, and DO, what the voters want they to do and not be dictated to by a metropolitan, political elite of whatever colour takes your fancy.

Poster BoyJune 18th 2014.

It will never happen. To do so would open the Pandora's Box of federal states in England, dominated by Labour/Conservative tribalism and ‘postcode’ lotteries similar to those experienced with say levels of Council Tax in England, health in Wales or tuition fees in Scotland. Society in England is underpinned by equality and this can only be delivered by centralism in government and fiscal policy. The only type of devolution which works for England is the type of ‘localism’ propounded by the likes of Eric Pickles. Peripheral.

2 Responses: Reply To This...
AnonymousJune 19th 2014.

Greater Manchester wouldn't end up with a Boris Johnson or Ken Livingstone type "inspirational" regional leader either I bet. More a John Merry or Sue Derbyshire type me thinks?

AnonymousJune 20th 2014.

No one inspirational in a city region of 3,000,000? I bet there is. Let's give it a try and see what happens.

AnonymousJune 18th 2014.

But when local councils, such as Manchester, did have more arbitrary tax raising powers under the old domestic rates system, they "drove" the wealth & job creating middleclasses out of their cities! This "political cleansing", especially back in the 1960s & 70s, is directly why there are no opposition councillors in Manchester Town Hall today. So giving local Labour, more local tax raising & spending powers - NO THANK YOU.

9 Responses: Reply To This...
AnonymousJune 18th 2014.

Local Labour authorities, such as Manchester, drove down educational standards and wrecked local schools too. (Compare the performance of Labour Manchester schools to Tory Trafford schools.) So also give back local Labour councillors more power over our schools etc - NO THANK YOU Jonathan.

AnonymousJune 18th 2014.

In case you hadn't noticed Trafford is traditionally a much more affluent borough. There is a clear and long standing correlation between income and educational attainment in this country. It's a complex relationship and is strongly linked to patterns of social and income inequality in wider society. You see the same patterns throughout the developed world. Notwithstanding, attainment has improved dramatically in recent years in manchester even if there is a way to go... ... I guess in your case anon, as they say, simple minds reach instinctively for simple explanations. Maybe a little more education would have done you some good?

Peter CoppingJune 18th 2014.

Yes they drove them out the middle classes an I came in. Just socially mobile!

AnonymousJune 18th 2014.

Incidentally in the 60's Manchester had a Tory Council! then we had Thatcher and even the people in Trafford voted Labour.

Mark FullerJune 18th 2014.

Anon you understandably fear that a fiscally empowered Labour authority would run amok with other people's money. But were this to occur, the voters would have the opportunity to replace them with a sensible,efficient, Trafford type council.If they didn't take the opportunity, they would only have themselves to blame. Empowering Manchester and other large cities could re-invigorate local government and re-engage the electorate. The absurd monopoly of power currently enjoyed by Labour in the town hall would go, because with more power,responsibility and autonomy would come more intense scrutiny from the local media and public at large. Devolving power and control to Manchester is a risk well worth taking.

rinkydinkJune 18th 2014.

Mark you are forgetting that most people who vote don't know about how a country or town is run or how an economy works and who is the best party to run it. Peer pressure and pure ignorance means that most will vote Labour cos they always have done, their parents did and their mates do. So people who do have an objective view see their votes sunk in a sea of idiotic voting. Look at what Labour did last time they were in government. Just look - criminal in many ways. Yet the masses will vote them in again next time cos they haven't got a clue

Mark FullerJune 18th 2014.

I agree with most of your remarks Rinkydink. However, if a council becomes egregiously wasteful and fiscally incontinent, then that will effect people in their pockets. This scenario happened in Liverpool in the 1980's, with the result that Labour voters deserted the party at local level. This may occur again, especially if Labour councils control the purse strings once again.

AnonymousJune 18th 2014.

Oh dear, its descending into party politics again. You are missing the point. The main problem is concentration of power at the centre rather than whether it is red, blue or yellow in power there or elsewhere.

rinkydinkJune 19th 2014.

The whole country succumbed to a wave of Conservatism in the 1980s so Liverpool was maybe just part of that. I suppose what I was trying to say was that most people see voting Conservative as abandoning their working-class roots that they dearly hold onto for some bizarre reason - whether or not Labour is actually any good. I can't really see this changing any time soon

AnonymousJune 18th 2014.

The comparison with the powerful and effective city state that Manchester was in 1889 and today's largely impotent institution is extremely poignant. We built and ran our own utilities, transport networks, built vast public parks and monuments as well as a Ship Canal to the sea. When Westminster politicians and their civil service lost the Empire (for it was the Empire that the civil service was created to run) they responded by clawing more and more power and resources from town halls. Nowadays England (and to a lesser degree Wales, Scotland and NI) is effectively run from Westminster as though it were a distant colony. Towns and cities have lost their identity and the means to shape their own destiny. Westminster and London-based civil servants apparently know best what we need and how to spend our money despite the enormous differences between the different towns, cities and regions of the UK. Central diktats and one-size policy responses do not fit all. If they really did know best then based on the economic under performance of our major cities over the last 70 years and entrenched social problems we can categorically say they (Westminster government) have FAILED us and failed badly. We need substantial devolution and we need it now.

AnonymousJune 18th 2014.

I assume you have long since moved anonymous to the joys of the country where you don't have to fight the class war against those entrenced social problems

AnonymousJune 18th 2014.

If taxation was moved to be more at the local level this would mean lower revenues as many northern cities are net spenders in terms of the UK budget. The comparrisson with Barcelona which has a regional government and is the 10th most popular tourist destination on earth is miles off. If manchester for example had tax raising powers that isn't suddemnly going to attract 6 million tourists. Birmingham, Alabama would be a better comparisson, is that an economic success story? How is that linked to autonomy and tax raising powers? I can see why council leaders are keen as it expands there own powers but I'm not sure the case has been well mae here.

1 Response: Reply To This...
AnonymousJune 18th 2014.

That's not really true though is it? Most city economies, just like London, extend way beyond local authority boundaries. Think how many businesses in Cheshire East for instance use the services of the various lawyers, corporate finance houses and banks based in central Manchester? In reality the Manchester City Region makes a net contribution to national taxation even if its economy is not reflected in how it is administered (and how statistics are presented). And to further undermine the notion that Westminster knows best, look at the sort of things they spend our taxes on outside London compared to within: t.co/aIs8ckxO01… More is spent on unemployment and welfare than on economic development in every region apart from London where the situation is reversed. A completely perverse situation considering London's booming economy. Such a situation does however deepen the country's dependence on London and the political elite that govern from there. So it is clear, our overly-centralised form of governance is bad for our great towns and cities, bad for our quality of life and bad the country. Devolve. Now.

AnonymousJune 18th 2014.

A lot of the locally raised taxes in the US come from property and sales tax rates which individual cities set at rates competitive to neighbouring cities. Some states and cities have no sales tax at all (which they believe drives economic growth and/or is fairer for the poor). Cities in close proximity to one another often have rates that are in direct competition and local residents are engaged enough to understand the importance of spending their $ in their local communities to raise much needed revenue. A lot of cities also have property tax rates that correlate to the price paid for one's house. The tax rate is then fixed and paid to the local govt on a monthly or annual rate for as long as you own it (Ex: 1.22% in L.A. w/ avg residential property price of $340 per sq ft.). Its a system with some benefits. The biggest inconvenience is the price differential of goods between cities...and the fact that nothing ever costs what it says on the price tag.

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