Britain’s cities hold the key to solving our productivity problem as the UK prepares for Brexit. Representing over a quarter of the UK economy, and containing nearly a third of its population and a quarter of its businesses, the 10 Core Cities have a vital role.
The recent Industrial Strategy and Autumn Budget both contained measures that can help us realise this potential – but the government did not go far enough. Despite hopes that the Budget would mark a break with austerity, it contained little that will help our member cities cope with the financial crisis they face. Most significantly of all, there was nothing in the budget on funding of social care, the issue which is threatening the financial position of councils across the country and their ability to carry on delivering high quality public services.
Despite the government’s promise of a review of social care funding by the end of this year, the review has been postponed. As the government delays, councils struggle to cope with rising demand and vulnerable people suffer from poorly funded services.
Extra funding for the NHS is undoubtedly needed, but providing money for the health service to deal with the winter crisis while not providing extra funding for social care – which could make a real difference to preventing people having to go into hospital – is the wrong choice.
Extra investment in housing was the centrepiece of the Budget, but the announcements failed to deliver on the promises of radicalism from Downing Street and Treasury. We do need to see 300,000 homes built a year, but we need to reach those levels quicker than the mid-2020s.
The lifting of the HRA borrowing cap is good news – but rather than trusting cities to get on with building the social homes they need, freedom is limited, tying councils up to negotiate with Whitehall rather than getting on and building. We believe that all core cities should be given the right to borrow against their housing income to build the new homes we desperately need.
A week after the budget came the Industrial Strategy. There was much in it that we welcomed, including a focus on place and infrastructure. But as we have told ministers in recent face-to-face meetings, a significant factor in our cities’ productivity is not due to poor connections, but is linked to deprivation.
The only way to get more people involved in our city economies is to invest in better, reformed public services – for example schools and housing – that will pay dividends later on and can help cities fire on all cylinders, delivering up to an extra £90bn for our economy every year.
International evidence shows that cities that have the most control over taxes raised in their area and the delivery of policy in a way that meets their local needs tend to be the most productive. The UK is still one of the most highly centralised countries in the world – and as a consequence the productivity of our cities is much worse than most international competitors.
There have been some positive moves on devolution from government, but there is much more to be done to deliver the decentralisation of power in the UK, giving cities the freedom to align services and investment at the level of place.
The Budget in particular was disappointing for cities. Their financial position isn’t significantly improved, the promised radicalism on house building failed to appear and we are still a long way from having the tools we need to deliver significant mprovements in productivity.
However, we are working hard to engage with government and recent meetings with both the secretaries of state for transport and communities have seen government signal its willingness to listen to our ideas and work in partnership with Core Cities UK to deliver a better, fairer and more productive Britain.
Cllr Jon Collins is Core Cities UK cabinet member for finance and leader of Nottingham City Council.