Cities

Baroness Eaton Excerpts

Thursday 19th January 2012 Lords Chamber

[Baroness Eaton]

My Lords, I am pleased to contribute to the debate this afternoon, having had the privilege for a number of years of being the leader of a major northern city. I compliment my noble friend Lord Storey on instigating the debate.

Economic analysis shows the dramatic variation in the performance of the UK's cities. Each city has its own economic story. Economic statistics demonstrate that each city's economic performance is complex and nuanced. Once we layer in the city's history and culture on top of the different economic indicators, the picture becomes even more complex. To be effective, economic policy has to respond to local economic complexity. Some parts of government recognise this important point and have moved in this direction. The creation of local enterprise partnerships and city deals are important milestones, but have we moved far enough towards local decision-making to allow the effective targeting of economic policy?

The need for flexibility to develop locally tailored solutions was recognised in an amendment to the Localism Act supported by many in this House. It gave councils the right to ask for powers to be devolved so that they could pursue policies for economic development. The city deals project that the Government are pursuing with cities offers a way to devolve funding pots and give councils and local enterprise partnerships a greater role in skills and investment policy. It is a real opportunity to unlock local growth and increase local accountability. The challenge will be to make sure that city deals offer genuine decentralisation without bureaucracy and red tape, and are available to all local authorities that can make their case. Having been the leader of the fourth-largest metropolitan district in the country, I was somewhat surprised that we were excluded from the special list of eight.

Councils understand and have identified opportunities for local growth, and are working with partners to find investment for infrastructure to unlock ambitious schemes. For example, Kettering has planning permission for 5,000 houses and support for huge investment on renewable energy that will create jobs to stimulate green-growth development. However, it needs funding for road improvements to unlock £2 billion of investment. The Government's focus must be on removing barriers to local decision-making and on how investment is targeted locally. They must champion area-based approaches that enable partners to join up assets and investment locally.

Power should continue to be decentralised to the lowest appropriate level to help local councils tackle their local economic challenges and help them deliver better value-for-money services. In particular, there is a compelling case for further decentralisation of skills and transport services to support economic growth. Many of our major cities and towns underperform on key economic indicators compared to their European equivalents. Part of the reason is the quality of local transport systems that make cities attractive places in which to invest and enable people to get to jobs. I know from experience of my own rural board the problems of young people who cannot access jobs because there is no public transport. We facilitated a wheels-to-work scheme with the voluntary sector that helped many young people access the job market.

UK transport infrastructure problems are estimated to cost every business nearly £20,000 on average each year. Nearly 40 per cent of jobseekers say transport is the key barrier to getting a job. I agree with the Local Government Association, which has long argued that greater local control over decisions about transport investment would improve integrated decision-making to achieve the full economic benefits of public transport investment. London, Merseyside and Scotland demonstrate that local decision-making can lead to improved usage of public transport and higher satisfaction levels, with knock-on effects for the economy.

There is more to town and city centres than shopping, and we should encourage this. City centres can transform into almost anything. They are central and well connected public spaces, and innovative use of them can attract and engage people, creating valuable retail demand in the process. My own city centre is undergoing a major transformation; a new large city park has given the city a new heart.

Councils continue to lead this effort locally, working with local communities and businesses to build on the opportunities for growth and to reshape high streets and shopping centres. Local partnerships are crucial because high streets, unlike shopping centres, represent complex sets of interests. The Government must think about how to further empower local partnerships with the necessary funding and tools, and must shift the policy emphasis away from retail alone.

As my noble friend Lord Storey said, people in cities need decent homes to live in. Councils are playing their part to encourage growth. Through the planning system they are overwhelmingly saying yes to viable and sustainable residential and commercial development. Councils play a key role in facilitating housing supply locally, both through council building schemes and via their leading role in, and facilitation of, partnerships, the de-risking of sites and the provision of land or support in kind.

However, councils could do more if they were provided with genuine self-financing. We welcome recent moves by the Government towards a devolved finance system for council housing, but the system will not be genuinely self-financing unless councils can keep the proceeds from the sale of council housing under the right-to-buy scheme. We need a reversal of the Treasury's position on creaming off the forecast growth in the business rate yield for 2013-14 and 2014-15. The proposals for relocalisation of business rates could be an important step in this direction, provided that councils are able to retain all the proceeds of growth. The presumption that in 2013-14 and 2014-15 the Treasury will cream off a predetermined level of forecast growth will mean that local authorities will only be able to benefit financially from growth over and above the Government’s forecast.

I firmly believe that our major cities will thrive and grow if economic development is devolved to them and if they work with the Government on tailor-made city deals, which I am sure we all thoroughly welcome.