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Autumn Statement: Devolution damp squib for West Midlands

Chancellor accused of delivering warm words but hot air on devolution - but said his “door is open” to cities and towns which want to follow the example set by Manchester

Mike Steventon, Midlands regional chairman at KPMG
Mike Steventon, Midlands regional chairman at KPMG

The Chancellor was accused of delivering warm words but hot air on devolution after failing to announce powers being given to regions in his Autumn Statement.

George Osborne insisted his “door is open” to cities and towns which want to follow the example set by Manchester and claim greater powers and funding for themselves.

But there was disappointment that his speech contained no hint of any specific measures to devolve funding to Birmingham or the West Midlands.

Michael Steventon, Midlands regional chairman at KPMG, said: “City leaders across the country will be drowning their sorrows tonight after the Chancellor offered warm words but nothing of substance on devolution.

“It is deeply disappointing that the Government has failed to bring forward any proposals for fiscal devolution to England’s major city regions, including Birmingham, as many had hoped.

“Compared to other countries, the buying power in the hands of UK local government is almost pointlessly small.”

Delivering his Autumn Statement to the Commons, George Osborne repeatedly highlighted his plan to promote an economic powerhouse in the North, including the North East, North West, Yorkshire and Humberside.

There were six mentions of Manchester, following the announcement in November that the ten Greater Manchester councils are to receive a £1.2 billion package of investment after they agreed to create a directly-elected mayor.

The Chancellor announced a quarter of a billion pound investment in a new institute for advanced material science in Manchester, with branches in Leeds, Liverpool and Sheffield, and a major new theatre space in the city.

He turned his attention to Birmingham and the West Midlands only when he was later urged by Black Country MP Adrian Bailey (Lab West Bromwich East) to talk to council leaders in the region, “to ensure Birmingham and the Black Country become the powerhouse of the West Midlands”.

Mr Osborne insisted: “I am absolutely ready to engage with authorities in Birmingham and the West Midlands on what more we can do... to invest in the West Midlands.”

Greater Birmingham Chambers of Commerce urged local council leaders to speed up their attempts to create a local combined authority, to enable them to put their case to the Chancellor.

Chamber president Greg Lowson said: “The Chancellor repeatedly mentioned the ‘Northern Powerhouse’ as a brand and commended the ten local authorities of Greater Manchester for the level of co-operation with each other over devolution.

“Here in the West Midlands, we have not yet joined the devolution party, and there is an increasingly urgent need for us to do so.

“Birmingham and Black Country have begun moves to join forces on this issue, but an invitation extended to other West Midlands councils, such as Coventry, has yet to be answered.”

He added: “We desperately need to put aside parochial politics and join forces to restore the ‘Midlands Powerhouse’, in order to put the case to Westminster to devolve to us the right to set our own taxes in this region, including business rates – the Chancellor made it clear that his door was open to other councils who want to follow Manchester’s example.”

Documents published alongside the Autumn Statement highlighted the importance Mr Osborne attaches to the creation of directly-elected mayors to run combined authorities.

It was stated: “Studies have shown that innovators and entrepreneurs are attracted to work in creative and cultural areas which offer a high quality of life. Strong civic leadership is instrumental in enabling this.

“In addition, research by the Organisation for Economic Co-operation and Development shows that cities around the world with fragmented governance structures have lower levels of productivity than those that do not.”

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