Budget 2017: Philip Hammond just showed that rejecting metro mayors was a terrible, terrible error

Sorry, Leeds, nothing here for you: Philip Hammond and his big red box. Image: Getty.

There were some in England’s cities, one sensed, who breathed a sigh of relief when George Osborne left the Treasury. Not only was he the architect of austerity, a policy which had seen council budgets slashed as never before: he’d also refused to countenance any serious devolution to city regions that refused to have a mayor, an innovation that several remained dead-set against.

So his political demise after the Brexit referendum was seen, in some quarters, as A Good Thing for devolution. The new regime, it was hoped, would be amenable to a variety of governance structures more sensitive to particular local needs.

Well, that theory just went out of the window. In his Budget statement today, in between producing some of the worst growth forecasts that anyone can remember and failing to solve the housing crisis, chancellor Philip Hammond outlined some of the things he was planning for Britain’s cities.

And, intentionally or otherwise, he made it very clear that it was those areas which had accepted Osborne’s terms which were going to win out. 

The big new announcement was a £1.7bn “Transforming Cities Fund”, which will

“target projects which drive productivity by improving connectivity, reducing congestion and utilising new mobility services and technology”.

To translate this into English, this is cash for better public transport.

And half of this money will go straight to the six city regions which last May elected their first metro mayor elections. The money is being allocated on a per capita basis which, in descending order of generosity, means:

  • £250m to West Midlands
  • £243 to Greater Manchester
  • £134 to Liverpool City Region
  • £80m to West of England
  • £74m to Cambridgeshire &d Peterborough
  • £59m to Tees Valley

That’s £840m accounted for. The rest will be available to other cities – but the difference is, they’ll have to bid for it.

So the Tees Valley, which accepted Osborne’s terms, will automatically get a chunk of cash to improve their transport system. Leeds, which didn’t, still has to go begging.

One city which doesn’t have to go begging is Newcastle. Hammond promised to replace the 40 year old trains on the Tyne & Wear metro at a cost of £337m. In what may or may not be a coincidence, he also confirmed a new devolution deal with the “North of Tyne” region (Newcastle, North Tyne, Northumberland). This is a faintly ridiculous geography for such a deal, since it excludes Sunderland and, worse, Gateshead, which is, to most intents and purposes, simply the southern bit of Newcastle. But it’s a start, and will bring £600m more investment to the region. A new mayor will be elected in 2018.

Hammond’s speech contained other goodies for cites too, of course. Here’s a quick rundown:

  • £123m for the regeneration of the Redcar Steelworks site: that looks like a sop to Ben Houchen, the Tory who unexpectedly won the Tees Valley mayoral election last May;
  • A second devolution deal for the West Midlands: that includes more money for skills and housing (though the sums are dwarfed by the aforementioned transport money);
  • A new local industrial strategy for Greater Manchester, as well as exploring “options for the future beyond the Fund, including land value capture”;
  • £300m for rail improvements tied into HS2, which “will enable faster services between Liverpool and Manchester, Sheffeld, Leeds and York, as well as to Leicester and other places in the East Midlands and London”.

Hammond also made a few promises to cities beyond England: opening negotiations for a Belfast City Deal, and pointing to progress on city deals in Dundee and Stirling.


A city that doesn’t get any big promises out of this budget is – atypically – London. Hammond promised to “continue to work with TfL on the funding and financing of Crossrail 2”, but that’s a long way from promising to pay for it. He did mention plans to pilot 100 per cent business rate retention in the capital next year, however – which, given the value of property in London, is potentially quite a big deal.

So at least that’s something. And London, as has often been noted, has done very well for itself in most budgets down the year.

Many of the other big regional cities haven’t. Yet Leeds, Sheffield, Nottingham and Derby were all notable for their absence, both from Hammond’s speech and from the Treasury documents accompanying it.

And not one of them has a devolution deal or a metro mayor.

(If you came here looking for my thoughts on the housing element of the budget speech, then you can find them over at the New Statesman. Short version: oh, god.)

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason.

Want more of this stuff? Follow CityMetric on Twitter or Facebook

 
 
 
 

Meet the Sheffield social enterprise using shipping containers to tackle the housing crisis

A shipping container, repurposed as housing. Image: REACH.

A Sheffield-based social enterprise is hoping to navigate the rocky waters of the UK housing market, by creating affordable 1, 2 and 3-bedroom homes from shipping containers.

Inspired by an episode of Grand Designs, former police officer Jon Johnson set up REACH – Recycled, Environmental, Affordable Container Homes – in January 2017. Following a small grant from charity UnLtd, the social enterprise built a prototype which it is currently showing off to interested parties from around the UK. Johnson believes it can build 6,000 units a year, helping to plug the housing shortfall and creating genuinely affordable homes.

Just 1.4 per cent of homes in large developments approved by planners in Sheffield in 2016 and 2017 met the government’s affordable definition. In Manchester, it was literally none..

“We need to build the houses people want, where they want them, rather than what developers can bully through,” says Johnson. “I’ve got 40 or 50 housing reports. Are we going to keep writing reports or are we going to do something about it?”

During Johnson’s almost 30-year career in the police force, he saw first-hand the effects that insecure and poor-quality housing can have on communities in Britain. “It underpins everything in society. Everybody needs somewhere to live,” he says. “And if you haven’t got a decent place to be, that is adding to mental or health problems. You're onto a loser from the outset.”


“Decent housing is a human right like air and water,” he goes on. “It’s always been done to us by people who don’t care about standards or quality as long as they’re making money.”

Johnson used skills learnt through his furniture recycling store, Strip the Willow, to decorate the prototype, and sourced every bit of second-hand wood he used locally. The panelling used to be a counter in a local Indian takeaway, the cladding on the roof came from a local mosque. The bedroom headboard is made out of a piano, and light fittings are made out of cymbals.

Each of his eco homes will be 60 per cent recycled, built offsite in three weeks and powered by renewable energy sources. “We aim to make use of million tons of waste we put into landfill every year,” he says.

Changing the playing field

But followers of the UK housing market will be unsurprised when Johnson says there are vested interests and serious obstacles to overcome before REACH can achieve its dream of turning a cottage industry something more substantial.

“The same people will just keep profiteering out of everyone else’s misery,” he says. “We're trying to do housing the right way. It’s about people and planet, not just profit. Housing shouldn't be about giving out millions in bonuses at end of the year.”

But REACH won't be able to build any homes without land – perhaps the biggest hurdle for them to get over.

Following the Second World War, the government freed up land and built prefab housing estates around the country. Johnson believes a similarly bold approach is needed to meet the housing demands of the 21st century.

However, the publication of the social housing green paper last week made no promises to build more social housing. It “doesn’t commit a single extra penny towards building the social homes that are desperately needed,” said housing charity Shelter.

Frustration with this situation led Johnson to set up the National Federation of Affordable Building (NFAB), which brings together organisations from across the offsite construction sector who all would like to see a change in policy. “The reason we set up NFAB was because so many SMEs have had conversations with Homes England and got nowhere.”

The current Homes England system for listing land means building companies need to have a turnover of £50m before they can even be considered for public land – a bidding process that excludes all SMEs such as REACH.

REACH does have backing from the Local Government Assocation, though. It also has Sheffield City Council on board, and is hoping the council will soon be given a piece of land to build the first nine homes, freeing up funds for its first off-site factory.

It's clear that it’s going to take some forward-thinking councils for it to succeed. “We need a Dunkirk style situation with SMEs getting some innovation into the market,” Johnson says. “The issue of land and how much its worth is entirely notional. Land is expensive because people think it is.

“If Homes England can ringfence a percentage of the land they give to the big builders every year, and have that for affordable development, we won’t have a problem because the SMEs will have somewhere to access the market instead of queueing up for massively expensive land.”

At the moment, he notes, “Big builders don’t want to do things any differently because they're protectionist of their profit margins. SMEs can’t get a look in. We need to alter that playing field.”

A sustainable trend?

One popular misconception of homes made from shipping containers is that they are too cold in winter and uncomfortably hot in summer. Some critics also suggest that say the current trend for modular housing is a fad.

But Johnson says that residents will need the heating on for only two months a year: the homes are designed using ‘Passivhaus’ principles, which optimises energy efficiency through its design.

“They are light and spacious,” he says. “It’s how we use the offset of parts of the containers. They are like adult Lego. We can use architectural glass and make some fabulous buildings.

“They’re affordable but they will look like architect-designed houses.”

The one, two and three bedroom models will be sold at £35,000, £65,000 and £90,000 respectively. There is already a large waiting list of people ready to move in once they've secured some land.

At present, “I don’t think it’s a trend,” Johnson admits. But “it will take over the market if it's done right. The tech has now caught up and modular housing can be controlled a lot more intelligently in the factory. It cuts down on construction costs, waste and theft of materials from sites. It makes the whole process of housebuilding a lot more efficient.

“It’s a once in a lifetime opportunity to get housing moving in the right direction and get sustainability on the agenda,” he concludes. “That’s not going to happen if we leave it to the big builders.”

Thomas Barrett is the editor of New Start magazine, where this story first appeared. He tweets as @tbarrettwrites.

All images courtesy of the author/REACH.