Top Story
Property Industry Alliance has launched Property Data Report 2015
Business rates an increasing burden on businesses compared to rent Business rates are a growing burden on businesses as compared to the rent
27 October 2015
Birmingham 8th September 2015
Devolution will have a profound influence on how the UK develops in the forthcoming decades. Mark Rogers, Birmingham City Council and Andrew Carter, Centre for Cities led a roundtable discussion recently in Birmingham to share what the implications devolution will bring to real estate and cities.
Galvanised by the Scottish Referendum, devolution is a top priority for the Government providing an opportunity for regions to work more collectively to develop, but will this lead to economic benefits on a local level or will the UK continue to be managed centrally? Fundamental challenges facing government include local government funding, how services will be run and financially managed (figure 1).
Figure 1. LB Barnett Council Graph of doom- local Government Funding Context
Many UK cities economically under perform in comparison to the national average, however this doesn’t truly reflect the impact and influence UK cities and regions have on national economy. The Midlands Engine is a recognition of the Midlands city regions potential to develop in much a similar way as the interlinking relationships between London, Reading, Brighton and Milton Keynes. Not all deals will get exactly what they planned for and there should be an acceptance to variations with the primary focus on new funding methods for public services, transport, supplementary business tax and rates.
Please refer to the UK City Performance slide in Andrew Carter’s Centre for Cities slides below.
Greater devolved control within the Midlands should lead to better land use planning and investment within 5-10yrs. Increased importance of localities with a significant tax base for funding will should lead to ‘no borders’ approach to global opportunities.
The West Midlands Combined Authority area in numbers and why devolution matters:
Current single ‘Global City’ approach by the Government is limiting the ability of the wider country to develop. No single Midland city is capable of competing on a global scale however Midlands Engine will create greater scale and ambition which will allow the region to be competitive on a global economy scale.
There is also a need to shift the balance of economic power and benefits around the country rather than everything referenced on London or the South. Devolution is therefore seen as a means of networked growth, reducing resources, re-balancing housing and addressing structure deficits in local economies such as skills.
The process of Devolution is not static with September 2015 seen as the initial negotiation period. Further refinement of the regions macro-economic analysis are yet to take place in alignment with the wider fiscal agenda and the regional planning control.
Attributes of the West Midlands Devolution Deal include:
Commercial Real Estate market across the Midlands is positive with a belief the region is in the middle of cycle with further growth predicted. The transfer of office to residential is putting further pressure on this area but the wider market also needs to be supported by higher wages.
Opportunity that were highlighted include: Innovative sectors such as medical, science, life science and university partnerships, where the public sector can make a difference by providing the availability of laboratory spaces for small researchers to foster greater growth across these sectors. Devolution could accelerate this opportunity but the wider skills shortage and its interlinking relationship with housing and education also needs to be addressed.
A successful devolution across the midlands will require a coordinated agreement with the private and public sectors, possible reduction in the number of local authorities and ultimately confidence from the Midlands to recognise their unique position. Regional confidence is essential as the Midlands recognises its needs to change and devolution could bring much needed cohesion, leadership and possible path to deliver successful change.
Challenges still remain such as the deficit in local public spending while retaining talent in the Public Sector will require new approaches such as greater Public Private Partnerships with a stronger emphasis on Joint Ventures. Devolution is also seen as a mechanism to bring together the strength of the Local Enterprise Partnerships under a single elected mayor.
If a significant devolution deal is agreed with Government, then a West Midlands metro mayor will be in elected either in 2017 or 2018. Caution around how radical this person will be was a raised concern but as highlighted by Andre Carter, one should observe how the London Mayors influence over a regions agenda are not that radically different and both run almost identical programmes.
The meeting highlighted that Devolution should be seen a regional evolution where no single deal is perfect and ongoing negotiations will provide a platform for increasing regional recognition. Successful international devolution examples can be observed in areas such as Spain’s City regions, the Netherlands and Canada, but the success relies on the support of a joined up approach with an ambitious new vision to succeed.
Andrew Carter’s Presentation can be viewed here: Devolution Implications_ULI Midlands_Centre for Cities_September 2015
Thank you to our presenters Andrew Carter, Centre for Cities, Mark Rogers, Birmingham City Council and EC Harris for hosting this exciting debate.
Delivered in partnership with and hosted by:
Don’t have an account? Sign up for a ULI guest account.