The Adonis Review on Growth (and England's regional cities)

This is mainly a few thoughts around today's report by Lord Andrew Adonis - Mending the Fractured Economy. The document was commissioned by the Labour leader and makes a range of policy recommendations. I also make reference to a speech last week by the UK Chancellor in which he called for creation of a 'Northern Powerhouse' for England.

THE ‘POSITIVE-SUM’ VISION IS GOOD

Like the Chancellor’s recent speech the report talks of giving more powers to cities/city-regions in the hope that they will make better decisions with the money and therefore make economically stronger cities that complement the capital – so a positive-sum game not a zero-sum one of taking workers/companies from London.

IT’S GOOD THAT GREATER POWERS FOR ‘THE NORTH’ SEEM TO BE FIRMLY ON THE AGENDA

Greater devolution for cities/city-regions seems to be very firmly on the political agenda of both main parties – with, hopefully, competition to outdo each other as the 2015 Election nears. Cities, certainly in this report, seem to be part of mainstream policy not an add-on.

THERE SEEMS TO BE NO REAL ATTEMPT TO QUESTION THE DESIRABILITY OF ‘GROWTH’

The review looks at how to get more economic growth – no effort to discuss the desirability of this in social or environmental terms (though, to be fair, nor does it forbid city-region public-private partnerships from discussing this). This topic has actually been the subject of a report by the same think-tank that published today's document.

WHAT DO ‘MORE MONEY AND POWERS’ REALLY MEAN?

It seems as though much of the money talked about is actually Whitehall simply removing controls on how the money it gives to cities is spent. An even more empowering alternative would surely be to give cities the right to introduce more tax mechanisms - possibly as part of some wider national effort to shrink the central tax take?

Allowing local authorities to retain ALL surplus business rate growth (as opposed to half under the Coalition) is a step in the direction of greater fiscal autonomy. However, this is something that will benefit the more economically successful local authorities. In Minneapolis, USA they have an interesting tax that pools the growth in the business rate base at a metropolitan scale.

It would be good if Adonis gave some examples of the difference that new powers would make – e.g. a current scenario in, say, West Yorkshire, that would look much different following this review being implemented. Put another way, where would it improve upon what City Deals, LEPs and Combined Authorities are already doing.

The report doesn’t seem to be as interested in elected mayors as Osborne was last week – this is good as the desire and need for these has been questioned by some. The answer is surely to give cities and city-regions the right to introduce these if they want them?

It will indeed be great if these measures throw up what Adonis calls a "new generation of Joe Chamberlains" as he, Chamberlain, also took his understanding of cities into national government roles. Imagine if we had political leaders that actually had experience of governing and of ‘the regions’ before entering national government – as opposed to Cameron (London p.r.) and Ed Miliband (London think tanks). At least Miliband secured a northern constituency.

As ever, there would be yet more new machinery were the report to be implemented – more Combined Authorities and LEPs that are tinkered with. And they wonder why people get bored/confused by politics....!

THE CHANCELLOR STOLE A MARCH, OF SORTS, WITH HIS ‘HS3/NORTHERN POWERHOUSE SPEECH’

George Osborne’s kite-flying around a High Speed 3 rail link between Manchester and Leeds (creating a de facto city like the Dutch Randstad) has no equivalent in the Adonis Review. HS3 is an interesting idea that can only benefit the North - although whether it is value for money and whether the money will ever appear remain to be determined.

Osborne also name-checked – it was little more than that – the role of northern universities in science and technology that can then benefit local industry. This seems an area that parties can hopefully develop further in the run-up to the election.

THE REPORT COVERS A LOT OF SUPPLY-SIDE MEASURES

The report comes up with a lot of supply-side measures that seem to have been well received by business groups.

If you aspire to be a more balanced economy then it makes sense to eye nations that are nearer to this. The report's efforts to do this include proposals for introducing some German-style regional institutions:

• mention of possibly expanding the number and capacity of Catapult Centres – which have shades of the German Fraunhofer institutes;
• recommendations for a regional network of Small Business Investment Companies in line with Labour’s policy on introducing regional banks – like the German Sparkassen.

Adonis and Osborne need to talk more about how other countries manage to have several major centers – without it causing any obvious detriment.

WHAT ABOUT LONDON?

Why so little about London – the U.K.’s major economic growth driver? Whilst I welcome the focus on the regions and their cities, this seems a slight non-sequitur.

SOME BIGGER QUESTIONS ARE LEFT UNRESOLVED
There is no effort to even entertain the idea of a more decentralized way of thinking about Britain. This really does require a shift to some policies/ways of thinking that have hundred year-plus horizons – moving Parliament North; decentralizing Government; the next national stadia for rugby and football to move to Birmingham etc. In terms of decentralizing Government it could be that one or more major departments goes to each of the Core Cities - if the Government rubbish this they should be reminded that there are going to be high speed trains everywhere!

The in-/famous Policy Exchange report of 2008 – which included the argument that regeneration policy that targeted failing areas was money poorly spent – has been deftly side-stepped. The policy here is for growth  - which implies focusing upon viable businesses rather than, say, supporting weak business in highly disadvantaged areas.

Everything in the report and recent debates is about increasing powers/governance beyond the city level yet the need is for politics to also be local and to engage – what of the Double Devolution (down to cities and then to neighborhoods) that was talked about in the late Blair era? Neighborhood level government is not relevant to most formal/conventional economic activity - apprenticeships, R&D, transport etc. - but hopefully newly empowered cities will not lose sight of its importance.

CITIES ARE MORE THAN JUST ECONOMIC UNITS
What makes cities around the World exciting is not so much how economically successful they are but how they look and feel (think Barcelona). I appreciate that economy and environment/feel are connected – and that the Farrell Review has just looked at the built environment - but we need to ensure that cities are talked about as more than economic units. It is, for example, George Ferguson’s non-economic work that makes me take an interest in Bristol.