“Inclusive investment is the foundation of a global city region”

Liverpool City Region mayor Steve Rotheram on the day of his victory in 2017. Image: Getty.

The Labour mayor of the Liverpool City region on its £500m new Strategic Investment Fund.

Devolution can be a complex topic. But at its root is a concept that could not be simpler – that the people who live in a place are best placed to make decisions about it.

Whilst the pace of devolution has arguably slowed of late, those decisions are increasingly about how we spend our money. And as we enter an uncertain, post-Brexit world, devolution gives us the opportunity to decide to use our resources in ways that benefit and protect our residents and communities.

That is why I am announcing a £500m fund to help transform the city region’s economy, creating high-quality jobs and boosting living standards for local people in the Liverpool City Region.

The new Strategic Investment Fund will feature a new approach to how our Combined Authority funds projects, which recognises the importance of building resilient communities, and puts the creation of social value at the heart of what we do. Some £100m will be available in the first year of the fund, rising to £500m over four years.


Our key purpose as a Combined Authority is to improve our residents’ lives, by creating the right ecosystems for our economy to thrive, while ensuring that growth benefits everyone through well paid local jobs and increased living standards.

Through the Strategic Investment Fund we will have £500m available to support projects in areas such transport infrastructure, economic development, skills, culture and housing.

Devolution gives us the opportunity to do things differently – and one of the ways we will do that is by making clear to applicants that they will have a better chance of success if their bids demonstrate positive social impact.

So, for example, we will consider their bid more favourably if they pay the living wage, refuse to use zero hour contracts, create apprenticeships and use local supply chains and labour to deliver their projects.

We are determined to ensure that, in an uncertain, post-Brexit world, this funding delivers the maximum possible benefit to the people of the Liverpool City Region.

As a Combined Authority we have already identified projects which can receive support from the fund, including:

  • Ultra-fast broadband for every borough, delivered by building a fibre superspine, that will connect all six of our constituent districts, and see digital exchanges created throughout the city region;
  •  A new smart ticketing system as part of our move towards a truly integrated public transport system; 
  • Help for our high streets, through a £5m Town Centre Fund that will help regenerate towns throughout our city region;
  • And a new generation of Mersey Ferries.

We know the difference that we can make as a Combined Authority from projects supported even before the adoption of this new approach.

Through our previous Single Investment Fund we have allocated £400m for investments across the city region, money which has enabled us to leverage in another £500m of additional investments.

We know that this investment will support around £1.7bn of economic activity, and directly create 9000 jobs and 5,500 apprenticeships, through supporting a wide range of projects, including:

  • £19m for the Newton-le-Willows interchange;
  • £13m for a new station at Maghull North;
  • £20m for a new Cruise Liner Terminal;
  • £2.5m for Blackburne House in Liverpool 8, one of the country’s leading educational centres for women;
  • £3.4 million for Alstom for a state-of-the-art train maintenance and repair facility, creating hundreds of local jobs and apprenticeships;
  • £30m for 40 skills projects in local colleges;
  • £12m for Paddington Village in the Knowledge Quarter;
  • £14million from its Single Investment Fund for the Shakespeare North Playhouse and a Rail Interchange project in Prescot.

In addition to making additional funding available, the new Strategic Investment Fund recognises the need to improve our capacity to develop high-impact investment-ready projects. So we will provide pre-development funding to help expand and improve the pipeline of projects, by providing support to prospective applicants to help analyse markets, identify opportunities and develop projects.

At the last election, Labour’s manifesto committed to a National Transformation Fund, which would increase levels of public investment in much needed infrastructure, R&D and job training.

I believe what we are creating here today is a city region version of that – our own local transformation fund.

It not only shows only the public that devolution and having a metro mayor is delivering significant benefits to our region; but also the difference that Labour in power can make.

Steve Rotheram is Labour mayor of the Liverpool City Region.

 
 
 
 

“Without rent control we can’t hope to solve London’s housing crisis”

You BET! Oh GOD. Image: Getty.

Today, the mayor of London called for new powers to introduce rent controls in London. With ever increasing rents swallowing more of people’s income and driving poverty, the free market has clearly failed to provide affordable homes for Londoners. 

Created in 1988, the modern private rented sector was designed primarily to attract investment, with the balance of power weighted almost entirely in landlords’ favour. As social housing stock has been eroded, with more than 1 million fewer social rented homes today compared to 1980, and as the financialisation of homes has driven up house prices, more and more people are getting trapped private renting. In 1990 just 11 per cent of households in London rented privately, but by 2017 this figure had grown to 27 per cent; it is also home to an increasing number of families and older people. 

When I first moved to London, I spent years spending well over 50 per cent of my income on rent. Even without any dependent to support, after essentials my disposable income was vanishingly small. London has the highest rent to income ratio of any region, and the highest proportion of households spending over a third of their income on rent. High rents limit people’s lives, and in London this has become a major driver of poverty and inequality. In the three years leading up to 2015-16, 960,000 private renters were living in poverty, and over half of children growing up in private rented housing are living in poverty.

So carefully designed rent controls therefore have the potential to reduce poverty and may also contribute over time to the reduction of the housing benefit bill (although any housing bill reductions have to come after an expansion of the system, which has been subject to brutal cuts over the last decade). Rent controls may also support London’s employers, two-thirds of whom are struggling to recruit entry-level staff because of the shortage of affordable homes. 

It’s obvious that London rents are far too high, and now an increasing number of voices are calling for rent controls as part of the solution: 68 per cent of Londoners are in favour, and a growing renters’ movement has emerged. Groups like the London Renters Union have already secured a massive victory in the outlawing of section 21 ‘no fault’ evictions. But without rent control, landlords can still unfairly get rid of tenants by jacking up rents.


At the New Economics Foundation we’ve been working with the Mayor of London and the Greater London Authority to research what kind of rent control would work in London. Rent controls are often polarising in the UK but are commonplace elsewhere. New York controls rents on many properties, and Berlin has just introduced a five year “rental lid”, with the mayor citing a desire to not become “like London” as a motivation for the policy. 

A rent control that helps to solve London’s housing crisis would need to meet several criteria. Since rents have risen three times faster than average wages since 2010, rent control should initially brings rents down. Our research found that a 1 per cent reduction in rents for four years could lead to 20 per cent cheaper rents compared to where they would be otherwise. London also needs a rent control both within and between tenancies because otherwise landlords can just reset rents when tenancies end.

Without rent control we can’t hope to solve London’s housing crisis – but it’s not without risk. Decreases in landlord profits could encourage current landlords to exit the sector and discourage new ones from entering it. And a sharp reduction in the supply of privately rented homes would severely reduce housing options for Londoners, whilst reducing incentives for landlords to maintain and improve their properties.

Rent controls should be introduced in a stepped way to minimise risks for tenants. And we need more information on landlords, rents, and their business models in order to design a rent control which avoids unintended consequences.

Rent controls are also not a silver bullet. They need to be part of a package of solutions to London’s housing affordability crisis, including a large scale increase in social housebuilding and an improvement in housing benefit. However, private renting will be part of London’s housing system for some time to come, and the scale of the affordability crisis in London means that the question of rent controls is no longer “if”, but increasingly “how”. 

Joe Beswick is head of housing & land at the New Economics Foundation.