A new £25 million medical centre bringing together businesses and academics is to be built in Birmingham after Deputy Prime Minister Nick Clegg agreed to sign a “city deal” that could bring 10,800 jobs to the region.
But plans to improve transport links near Birmingham Airport, to ensure the region can make the most of the economic opportunities offered by high speed rail, have been put on hold.
The transport proposals were included in a bid submitted to the Government by Birmingham City Council and neighbouring authorities, along with Greater Birmingham and Solihull Local Enterprise Partnership, the business organisation chaired by John Lewis managing director Andy Street.
But these plans, which would include creating a new transport authority, have been put on ice and may be included in a “phase two” city dealt to be negotiated in the future.
However, Ministers have given the green light to a range of proposals which are designed to attract more than £15 billion of private sector investment to the region.
It follows months of negotiation between a team of ministers led by Mr Clegg, which also included Local Government Secretary Eric Pickles and Transport Secretary Justine Greening, and Greater Birmingham and Solihull Local Enterprise Partnership, representing Birmingham, Bromsgrove, Cannock Chase, East Staffordshire, Lichfield, Redditch, Solihull, Tamworth and Wyre Forest.
Birmingham City Council leader Sir Albert Bore, and his predecessor Mike Whitby, who led the authority until May this year, also helped lead negotiations.
Measures which have been approved include the creation of an Institute for Translational Medicine, which will have state-of-the-art clinical facilities and provide an international centre of excellence for businesses and academics in the healthcare sector, from small firms to international pharmaceutical companies.
The aim is to capitalise on Birmingham’s leading position in life sciences and its existing status as location for clinical trials.
The £25 million cost of building the institute will be met with a grant of at least £8 million from the government, with further funding from coming from Birmingham University and University Hospital Birmingham, the NHS trust which runs the Queen Elizabeth Hospital in Edgbaston.
Other measures include the creation of a Greater Birmingham and Solihull investment bank, to be named GBS Finance, to manage the variety of government funding streams and grants designed to help the economy.
It is expected to manage public funds of £1.5 billion.
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But under the city deal proposals, it will be expected to use this money to attract private sector investment of £15 billion to the region.
Other measures which have own approval include:
* Tackle the region’s long-standing skills shortage by introducing a “Skills for Growth Compact” in which employers, colleges and schools work together to improve skills and provide students with work experience. The aim is to sign up a quarter of the region’s businesses by 2015.
* Kick start housing and mixed-use development on public land by building of 2,800 additional new homes, using publicly-owned land. This land was purchased by Advantage West Midlands, the former government agency which has now been abolished, and is currently held by the Homes and Communities Agency, a national government body.
* Refurbish 15,000 homes to reduce electricity and gas consumption.
* Establish “Smart Growth Zones” to collect and publish local data, giving residents and businesses access to better information about health, transport and energy.
Mr Street said: “This is evidence that the Government is determined to fulfil its commitment to rebalancing the economy and devolving power locally.
“But they have also said we can’t have everything we have asked for at this first stage. What they have made clear is that the door is open for further discussion.
“I am very pleased that we have go as much as we have.
“One of the most important developments will be the creation of a pot of capital which goes some way to making us masters of our own destiny, instead of having to go asking Whitehall for funding for individual projects.”
The measures were backed by the region’s business leaders.
But Birmingham Chamber chief executive Jerry Blackett said they should just be the start of measures to devolve power from London.
He said: “Civil Servants have proved effective defenders of the status quo and the government has struggled to encourage departments to work together to maximise what powers can be delivered to cities like Birmingham.
“The LEP can draw confidence from recent months and should stand firm on the next wave of ‘asks’. Not least, for example, the powers we expect to be seeking in the autumn over transport.”
“We need to remind the government that the agenda for change is to achieve radical devolution. Today’s announcement is a good start but the job remains unfinished.”