Do we want a share of £20 billion? If so, we’ve got until February 2016 to get our act together.
That’s the deadline for the West Midlands to put together a plan explaining how it would use the cash to create private sector jobs, according to a letter sent by Labour leader Ed Miliband and Shadow Chancellor Ed Balls to local authorities and Local Enterprise Partnerships.
They want to hear from councils within the first nine months of a Labour Government (which means February 2016, if an election takes place in May 2015 as expected) in order for their ideas to be included in the first spending review of a new Labour government.
But there’s a catch. Councils also need to need to meet conditions in order to qualify for the money - and that includes forming a “combined authority” with their neighbours, so that funding bids come from “city regions” or “county regions”.
Individual local councils won’t be eligible for the funds.
For some parts of the country, that won’t be a challenge. Greater Manchester, Greater Liverpool, South Yorkshire (Barnsley, Doncaster, Rotherham and Sheffield) and West Yorkshire (Bradford, Calderdale, Kirklees, Leeds and Wakefield) already have combined authorities. The North East will launch its own combined authority any day now.
But for the West Midlands, it means the race is on to carry out a revolution in the way the region’s councils work together – and to re-organise our local enterprise partnerships too.
Failure to get our act together will mean the region misses out in the first wave of funding when something like half a billion pounds over five years is likely to be on offer.
The devolution proposals set out by Ed Miliband are an effective answer to critics who have accused him of having little to say about regional policy.
In the past, local government leaders – many of them Labour – complained that the Coalition was more committed to devolving money and power to local level.
But those days are gone, after Mr Miliband announced Labour would divert £20 billion from Whitehall to local councils.
It wasn’t a new idea. Labour has adopted proposals from Michael Heseltine, the Conservative peer, who published a report suggesting £50 billion could be placed in a “single pot” for local enterprise partnerships to bid from.
George Osborne, the Chancellor, responded by creating a Local Growth Fund worth £2 billion in every year of the next parliament (so £10 billion in total).
And Labour is to double this by promising £20 billion over a five year period, or £4 billion a year.
But Labour is also imposing strict conditions on who gets the money.
In order to qualify, councils must form combined authorities. And each combined authority must have a single local enterprise partnership covering the same area.
Greg Clark, the Conservative Minister for the Cities, is also a fan of combined authorities (or “city region” authorities if you prefer). But the Coalition government hasn’t gone as far as ordering councils to form them before they can apply for funding.
If the West Midlands created a combined authority, it wouldn’t replace existing councils. These would carry on more or less as they do now, but the new body would become responsible for major transport and economic development issues which affected more than one council.
And we wouldn’t need new elections. The existing councils would each appoint one person to join the new council (presumably they’d all just send their council leaders), while the local enterprise partnership would also get one seat.
Clearly, a question facing the West Midlands is which councils should be included in which combined authority.
Birmingham, Solihull and the Black Country would probably want to work together. But should they also include Coventry? But if so, what happens to Warwickshire? And would places like Lichfield, in Staffordshire, be included?
There’s also the issue of the name, but that can probably be solved easily enough with a little diplomacy. If “Greater Birmingham” isn’t a popular concept then it can be called something else.
More difficult is the issue of the local enterprise partnership (LEP), the business-led body that the combined authority is expected to work closely with.
At the moment, the Greater Birmingham and Solihull LEP includes parts of Staffordshire, while there are separate Black Country and Coventry & Warwickshire LEPs.
Mr Miliband wants LEP borders and combined authority borders to match. That could mean some major re-organisation is needed.
Perhaps February 2016 isn’t so far away – not when you consider how much work is required.
But here’s another thought. We don’t know who’s going to win the next election.
Mr Miliband is asking the West Midlands to change the way it governs itself – and to start now. In return he’s offering a share of £20 billion, but who knows whether he’ll ever be in a position to deliver it?