New deals for cities: LEPs may get planning powers, and be involved in local housing

Local enterprise partnerships covering the UK's eight core cities outside London could become statutory consultees on planning applications under a menu of options revealed by deputy prime minister Nick Clegg.

Clegg outlined a list of measures which cities could be granted in an attempt to devolve powers away from Whitehall, says the Centre for Cities.

The document said that granting LEPs statutory consultee status for planning proposals could ensure 'better strategic planning across cities and their LEP areas'.

Nick Clegg announced the Government will be striking a series of 'City Deals' with the eight core cities over the next few months. The deals are designed to give the cities and their Local Enterprise Partnerships (LEPs) new powers to support growth.

Funding and decision-making power has slowly been devolved to LEPs through the Enterprise Zones (23 of the 38 LEPs have Enterprise Zones) and the Growing Places Fund over the past few months. Now it seems the Coalition are going further and faster. Clegg views these new deals as an unprecedented step change in fiscal devolution.

According to the Government, cities are being placed at the heart of the economic growth agenda. This is very positive news - Great Britain’s cities account for 60% of jobs and 52% of businesses. The deals are also designed with the recognition that different cities have different needs. As the DPM stated, some cities - Birmingham included - saw declining private sectors in economically buoyant times. Birmingham's priorities will be different to Bristol's.

The document published today sets out a menu of options for cities. But cities are not supposed to be bounded by these, in Clegg's words 'nothing is off the table'. The deals are anticipated to fall into 3 categories:

1. Consolidated capital pots (NB. capital as opposed to revenue);
2. Infrastructure, including planning and housing;
3. Skills and jobs, and New Apprenticeship Hubs.

The Government will offer cities greater economic and political freedom. In return, cities will need to demonstrate that initiatives are achievable and efficient, and contribute to economic growth. Cities will also need to shoulder some of the risk - the Government will not do all of the underwriting.

Clegg was also clear that it’s not just about deals with cities; it's about deals with Whitehall. Clegg's test of real devolution from the centre and step change is 'making Whitehall feeling uncomfortable'. It will require a significant culture change on all sides if these deals are to result in real devolution and effective decision-making over the longer term.

Greg Clark and Nick Clegg will continue to lead negotiations with city leaders and Whitehall departments with the aim of striking deals in time for the 2012 March budget. Whilst there is a general feeling of positivity over the city deals, big questions remain. And, of course, the devil is in the detail.

It does raise issues about the institutional structures and capabilities to deliver a new form of devolved decision-making and investment. One of the biggest opportunities is for cities to prioritise and coordinate funding more effectively across policy areas in ways that respond to their unique circumstances.

Finally, the soon to be published legislation to allow local authorities to retain a proportion of business rates taxes needs to ensure that cities are sufficiently incentivised to prioritise development that will create jobs and growth.

Cities - and the Centre for Cities - have been arguing for more powers for years. Cities now need to seize the opportunity and prove they can deliver. And the Government needs to prove that it can let go of power and enable cities to drive the economic recovery.

The document also opened the prospect of devolving non-planning consents to cities. Clegg said: 'Cities are the engines of economic growth. Whitehall should not be like an overbearing parent, throwing money at cities but refusing to let them stand on their own two feet.

'So we will have a bonfire of Whitehall controls to empower our cities to go for growth.'

He said that each city deal would be different, and not all cities would take all of the powers outlined in the document. The document also said that cities would be empowered to create local property companies to manage public sector assets.
A spokesman for the Cabinet Office confirmed that this could include former regional development agency assets held by housing and regeneration quango the Homes & Communities Agency.

Other powers which could be devolved include control over transport spending and commissioning. Cities could also be given one consolidated capital pot, rather than multiple funding streams from different departments.

Lizzie Crowley, researcher at think-tank the Work Foundation said that for the devolution agenda to be effective, all departments must sign up to the policy, which had been a problem in the past.

She said: 'The previous government tried to devolve responsibilities to cities, but were in the end unwilling to give up real powers. City Deals represent an important first step towards allowing our cities to shape their own futures. But there is still some way to go.'

The eight core cities are Birmingham, Bristol, Leeds, Liverpool, Newcastle, Nottingham, Manchester and Sheffield.

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