With ministers set to announce on Monday the places that will benefit from the much-trumpeted £2bn regional growth fund, there is a real sense that this government is serious about putting fuel in the tank of regional economies.
The fact that there are barely 300 days to go until a General Election is not a coincidence, of course. Nevertheless, from Leeds to Liverpool – and beyond – there is a belief that ministers want to devolve power and accountability to a more local level. And it’s been decades since that happened.
At the International Festival of Business in Liverpool this week, Manchester city council chief executive Sir Howard Bernstein talked enthusiastically about ministers’ commitment to decentralisation. Liverpool mayor Joe Anderson echoed George Osborne’s belief that the big cities of the North of England were stronger together. And at Estates Gazette’s Question Time in Leeds on Wednesday the liveliest part of the debate concerned regional transport issues, again something that the chancellor put at the heart of his ambition to create a Northern powerhouse.
Monday’s announcement will reveal where among the 39 Local Enterprise Partnerships government sees the most compelling growth prospects. And while £2bn is no small sum of money – nor is the five-year commitment to spend £10bn – to many it will never be enough.
At the IFB Sir Howard voiced the ambition of many of his peers when he called for local control of business rates. And while this government has managed to convince local authorities that it has a strong decentralist streak, for now at least it will not go that far.
With all this talk of regional power and regional growth, the reaction of developers in the room at the IPB was revealing. Argent’s David Partridge and Bruntwood’s Chris Oglesby both warned against too much intervention. Rather than attract property investment through market-distorting incentives, they argued that the state should focus on delivering the infrastructure (transport, education, residential and social) that would encourage the private sector to invest. The idea of “build it and they will come” was a nonsense, they insisted.
Since Cameron and Osborne were in the North West last week, it was no coincidence that Ed Miliband picked Leeds – close enough and far enough removed – to deliver his promise that a Labour government would devolve £30bn of spending to the English regions. Easy for him to say now: his test would come in government. After all, in opposition politicians tend to be decentralist, in government they tend to revert to central control. Monday’s announcement may be the first evidence that the tide is turning.
¦ Congratulations to Louise Brooke-Smith, the new president of the Royal Institution of Chartered Surveyors. Brooke-Smith is a qualified urban land economist and chartered town planner. More notably she is the first female president of RICS in its 222-year history. Her presidency is timely as the industry puts overdue emphasis on the issue of diversity. It also shows how far there is to go for it to cease to be an issue.
¦ It wasn’t so long ago that London was being billed as too expensive for UK institutional investors. This week figures from Savills showed British pension funds were involved in 23% of deals between January and May this year, up from just 10% over the same period in 2013. Meanwhile, private equity firms are enjoying their strongest fundraising year since the crisis. New research from Private Equity International shows that European real estate leads the way, accounting for $24.6bn (£14.4bn) of the $56bn raised globally in the first half of the year. With more funds typically closing in the second half, all the signs are that last year’s total of $117bn will be exceeded. It’s further evidence that, in London especially, there has never been so much money seeking a home – and reassurance that property’s prospects are improving further, not weakening.
But a word of warning: as one Chinese investor tells EG this week, anti-foreign money rhetoric will slow the flow.
damian.wild@estatesgazette.com
