Today’s most interesting election announcement comes from Labour, which is promising to deliver “the biggest devolution of economic power and funding to England’s city and county regions for generations”.
Plans to devolve £30 billion of funding over five years – including funding for housing, transport, business support, employment and adult skills – will be at the heart of the next Labour government’s Spending Review, if elected in May.
A Labour Treasury will allow city and county regions which come together in combined authorities to keep 100 per cent of extra business rates revenue generated by additional growth. They will then be able to invest this to support further business growth in their regions.
All areas will be able to access these freedoms and areas which choose not to have an elected Mayor will not get a second-class deal.
It’s a clear attack on George Osborne’s plan for a “northern powerhouse” – Labour is asking, why just concentrate on ‘The North’ when so many other areas outside London need help due to Tory economic mismanagement?
It is to be hoped that Labour has not forgotten its support base in this business-friendly frenzy. Will this funding be used to promote the Living Wage, for example? Will it be used to create the new work demanded by its jobs guarantee – and will they be permanent, well-paying careers?
“Local areas will be in the driving seat on key decisions affecting their local economies – with new powers over back-to-work schemes, to drive house building, and to integrate, invest in and plan transport infrastructure,” said shadow chancellor Ed Balls, ahead of today’s announcement. It seems Labour has picked up a trick from the Tories – if this scheme fails anywhere, they will be able to blame it on local government. Hmm.
“And we will also let city and county regions keep all the additional business rates revenue generated by growth… We will not only back our great cities, but our towns and county regions too. Not just urban areas, but also rural areas.”
So there is much to recommend this plan – if a Labour government in Westminster can co-ordinate successfully with local authorities, of all colours, in the regions.
Or is this building castles in the air?
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