If you’re already bored with hearing about devolution, look away now. And for the next eight weeks. As the election campaign proper approaches, every politician will be claiming that their party is the one that will give more power back to the people in the different regions of the UK. How exactly this will happen, though, might be a little unclear.
Except, for the people of Manchester, there is some clarity. In November last year, chancellor George Osborne revealed his proposals for “devo Manc” (see panel, page 109), including a directly elected city-wide mayor, due to take office in 2017.
At the time of the November announcement, the mayor was to have been responsible for less than 5% of the total public spending budget for Greater Manchester. At the end of last month, however, Osborne revealed that, from 1 April this year, Manchester’s 10 local councils will be given control of the city’s £6bn health and social care spending. It will fall to the new mayor, once in office, to oversee how this budget is allocated.
In addition, the mayor’s remit will include housing, transport and planning, so for the city’s property sector this could be a very big deal.
That’s how most property professionals see it, and by and large they are in favour of the coalition government’s plans.
Doug Hann, director of Indigo Planning and head of its Manchester office, has no doubt that giving city regions control of their own infrastructure is the right way forward. “Perceptions of urban sprawl and unwanted development need to be replaced with a push for strategic growth that meets the economic and social needs of local communities,” he says. “Regional decision-making and spatial planning will help address conflicts between local authority areas that cannot be tackled by central government policy.”
The region’s politicians themselves see the “devo Manc” plans as just the start. Sir Richard Leese, leader of Manchester City Council and – according to some bookmakers, at least – one of the favourites to be Manchester’s mayor, has said he would like to see the city given responsibility for spending the full £22bn public-sector budget. He even talks of a local rate of income tax.
Many in the property sector also see the proposals as just the beginning of a transfer of power.
“The further away decisions are made from the coalface, the less effective they can be,” says Andrew McFarlane, head of North West, Colliers International. “In Manchester, political leaders and the business community – the people who deal with transport and infrastructure – are best able to see how money can be spent locally.”
Does that mean that a political restructure is necessary, though? Manchester already has a reasonably cohesive layer of regional government. The city’s councils have been working together for many years through the Association of Greater Manchester Authorities (AGMA), a non-statutory body. Four years ago, the Greater Manchester Combined Authority was established, with responsibilities for transport, economic development and regeneration.
According to Michele Steel, a director in the Manchester planning team of Deloitte Real Estate, there is a widespread feeling that political devolution would bring further benefits.
“At the moment the 10 authorities have their own local plans for employment and housing,” she says. “While there has been a duty to co-operate across local authorities on cross-boundary issues, there hasn’t been the ability to produce a framework that has statutory weight.”
And the fact that Manchester’s local leaders have already shown they can co-operate effectively is a strong argument that the city deserves to be given more powers.
John Keyes, head of DTZ’s Manchester office, says: “There is a good level of trust in the ability of Manchester’s public-sector leaders to work together and to deliver to the needs of the city region. There needs to be a strategic approach on issues such as transport and housing and in the way that the city engages with inward investors.
“Our mayor will need to work in a team alongside the other leaders of each council. Yes, there will be some tensions and difficult issues, but they will be worked through locally without the need to involve the Whitehall bureaucrats.”
Even those who want more power for Manchester know any reorganisation can bring problems as well as opportunities.
“The AGMA and the 10 authorities have done very well with the arrangement they already have and you can understand why there is a certain amount of nervousness about moving to a clearer political structure,” says Peter Tooher, director of planning consultancy Nexus. “But it’s good for democracy to have a very clear figurehead.”
There are some with serious doubts, though. David Lathwood, lead director North West, JLL, thinks that, aside from new funding for key projects, the appetite for greater independence on a regional level is limited.
“Many of the powers offered under Manchester’s devolution fall under housing and transport,” he says. “The region’s politicians have a good track record in these areas, and if you look at the city’s recent successes – receiving the government’s growth deal and attracting £800m Chinese investment into Airport City – it is clear that the area hasn’t been held back by a lack of autonomy.
“This begs the question whether devolution is really what the city needs in order to make the most of Manchester’s fortunes. As long as the additional £1bn is headed the city’s way, control of this residing in the region, rather than in Westminster, isn’t likely to have a significant impact on the property market in the city.”
Few in the industry think that the North will ever be as prosperous as London, and they accept that the capital leads the UK economy. But the UK’s regional cities could be better placed to match the economic performance of some other European centres.
A recent research report by GVA, Driving future growth: core cities and the knowledge economy, explains that output per capita in the core cities in England is significantly lower than in cities in France, Germany and The Netherlands.
“We simply have to deliver the right framework to facilitate economic growth across this wider geography to contribute to our national economy,” says Nicola Rigby, director in GVA Manchester’s planning, development and regeneration team. “In Manchester, this will include recognition of the strategic need for employment land, housing requirements and potential green belt release.”
Is redistribution of political power really needed for the regeneration of Manchester and the North of England, though? If the funding and the long-term planning are there, do we really need mayors?
In Going for growth, a report published last November by the British Property Federation (BPF) and Nathaniel Lichfield & Partners on behalf of the All Party Urban Development Group, devolution of powers to cities was just one of 10 recommendations. The other nine – which included improving the offer in Enterprise Zones and gearing them more closely to local conditions, using Tax Increment Financing (TIF) more constructively, and expanding the role of the Growing Places Fund – are not dependent on any rearrangement of political power.
But BPF assistant director Ghislaine Halpenny says that most feedback from the industry suggests widespread support for devolution.
“The overwhelming feeling is that, although quite worrying, devolution would speed things up and give local authorities the confidence to make decisions more quickly,” she says. “LEPs are rather rich bodies and are holding rather a lot of the purse strings. If a local authority were able to use the funds in a more place-appropriate way, you would see things move a lot faster.”
Whatever the political future for the North, there’s little doubt about what the region needs to stimulate economic growth: better transport links, and, in particular, better rail connections.
“The local network is poor,” says McFarlane at Colliers International. “They are investing £530m in electrification of the line to Liverpool and improvements at Manchester Victoria. It’s a lot of money, but it’s a drop in the ocean compared with what is necessary. In some ways it’s unfortunate that HS2 includes the word ‘speed’ – as it is as much about separating out capacity and connectivity as it is about anything else.”
There is unanimous agreement that transport is the biggest factor in unlocking the potential of Manchester and the Northern Powerhouse as a whole. The North needs better connections to London (HS2), but it also needs better connections between and within the northern cities themselves.
There’s less unanimity on what form devolution should take, especially among the national politicians. Labour has said that, if in power after the next election, it will devolve £30bn of public money to the regions, but it is not 100% certain that a Labour-led government would not revise the coalition’s plans for Manchester. There will be more devolution, though. There is real appetite for it in the power-hungry regions – and Manchester is happy to sit on the throne.
The Greater Manchester devolution agreement
The mayor of Greater Manchester will have:
• Responsibility for a devolved and consolidated transport budget
• Responsibility for franchised bus services and for exploring the opportunities for devolving rail stations across Greater Manchester
• Powers over strategic planning, including the power to create a statutory spatial framework (subject to unanimous approval by the mayor’s cabinet)
• Control of a new £300m housing investment fund
• Responsibilities covered at present by the police and crime commissioner
The Greater Manchester Combined Authority will be given responsibility for devolved business support budgets, control of the apprenticeship grant for employers in Greater Manchester, control of an expanded Working Well pilot, plus input into the next phase of the work programme.
