Wayne Rooney, Steven Gerrard and Joe Hart might soon be on a plane home from the World Cup, but the Chancellor backed England’s chances if the best players from each of the Premiership teams in the north were brought together. In fighting for “a share in the global economy”, the Chancellor said in his speech in Manchester yesterday we “need to bring the cities of the north together as a team – that’s how Britain will beat the rest.”
He’s already learning from the RSA City Growth Commission, which he credited alongside our chair, Jim O’Neill. US academic Bruce Katz, one of our Commissioners, described our problem using a similar analogy: the UK tries to win with just a single striker (Greater London) against China’s full team of 11. We need to harness the power of the 80% of economic activity that takes place outside the capital.
To achieve this, the City Growth Commission emphasises three main things: connectivity, skills and the role of universities, and governance and finance. The Chancellor recognised each of these in turn:
1. Connectivity: ‘Phase 3’ of the HS2 project need not be ‘high speed’ per se, but speed and ease of travel between northern cities, especially Manchester and Leeds, is critical. Agglomeration of economic activity that drives up productivity and competitiveness, hinges on efficient links between places, people and markets. Jim O’Neill has spoken previously about the need to create a ‘tube system for the north’ and the Chancellor agreed that “step one in building the Northern Powerhouse is a radical transport plan so that travelling between cities feels like travelling within one big city.” We’re publishing more on this in our Connected Cities report in mid-July.
2. Skills and innovation: agglomeration effects also rely upon “deep pools of human capital” and the Commission will report next week on how we can deepen the UK’s skills base by improving in-work progression and, later how we can encourage graduates to stay in the cities they studied in. The UK has world class universities across the country – from Exeter to Aberdeen – and the Centre for Cities showed yet thousands flock to London each year, taking their skills and enterprising talent with them.
3. Power and money: Currently the UK has the most centralised fiscal system in the democratic world, constrained further by tight ringfencing and programme specific budgets. To meet the twin challenges of austerity and rising demands on public service, cities need to have the flexibility to manage their resources over time and across agencies. This will involve transferring risk from the centre, extending schemes like Greater Manchester’s Earn Back. Heseltine’s Single Growth Fund is a start and Ed Miliband has promised to double its size from £2bn to £4bn so that city-regions can drive UK growth. But the Commission is pushing for something more ambitious, and the Chancellor gave a promising sign that we might see “serious devolution of powers and budgets for any city” on the proviso it “wants to move to a new model of city government - and have an elected Mayor.” We’ll set out our vision for fiscal devolution and governance in September and October, respectively.
The RSA City Growth Commission is a year-long inquiry into how we enable UK cities to thrive in our global, urbanising economy. When we report at in the autumn, it’ll be only be a few months before the General Election campaign begins in earnest and just a matter of weeks after the Scottish referendum. Both of these events present a huge, once-in-a-generation opportunity to revitalise our economic and constitutional geography.
Success in the global economy is not a matter of recreating 1966 glory or getting stuck in the group stages, but by enabling our cities to thrive we let all our players onto the pitch. Then and only then can we start to all contribute to, and share, the winnings.
This article was originally published on the City Growth Commission website. You can follow the Commission @citygrowthcom