Jim O’Neill to lead City Growth Commission

A NEW independent City Growth Commission will investigate how England’s cities can become engines for growth, ensuring all regions are part of the UK’s economic recovery.

Launched today by RSA 2020 Public Services, with support from Core Cities Group, the Mayor of London and London Councils, the Commission will be chaired by Manchester-born economist Jim O’Neill, retiring chairman of Goldman Sachs Asset Group.

The Commission will build on recent progress towards devolution such as City Deals and the London Finance Commission to develop a practical plan for enabling cities to succeed in the global race for urban growth.

Globally, growth is increasingly driven by cities. But according to new Commission, in England, too many cities outside London are failing to achieve their growth potential. 

Very few are at the forefront of the nation’s economy and many are overly dependent on public sector funding – measured by public expenditure exceeding GVA in these same cities.

The commission will ask how growth in other English cities can complement London’s economic success; how public service reform can help with this; and how the practical, organisational, cultural and systemic barriers to a ‘multi-city growth model’ might be removed.

It will engage with Whitehall, business, local and national leaders and political parties to develop proposals for substantial city devolution that are ready to be implemented by the post 2015 Government. 

Chair, Jim O’Neill, said: “Urbanisation drives growth globally. The UK has the seventh largest economy in the world but we face huge international competition. Our cities will need to be able to compete in this race for growth. They can’t do this with their hands tied behind their backs. 

“Despite huge strides forwards many of our cities are still not paying their way, let alone achieving their potential. Our Commission will examine what mix of powers, incentives and responsibilities will give our cities the critical mass they need to succeed.”

Principal partner of RSA 2020 Public Services, Ben Lucas, added: “It is increasingly clear that our centralised political economy is no longer fit for purpose. Britain needs an alternative that enables our cities to succeed by combining public service reform with growth. 

“Freeing up our cities to drive skills and employment policy and to reform their labour markets will be key. The hurdles that stand in the way of shifting economic power to our major cities should not be underestimated. The City Growth Commission will provide the Government of 2015 with a road map for making this happen.”

Members of the City Growth Commission also include economist and BBC trustee, Diane Coyle, chairman of the OECD Forum of Development Agencies and Investment Strategies, Greg Clark, chair of Volterra Economics, Bridget Rosewell, British Government academic and chair of London Finance Commission, Professor Tony Travers, former adviser to President Obama Bruce Katz and chief executive of Grosvenor Britain & Ireland and previously partner at IBM Business Consulting Services and PwC, Peter Vernon.

The key questions that the Commission will address include:

• What are the key benefits – for the economy, investment, innovation, productivity and public finances – of shifting to a multi-polar growth model, in which our major cities are key players in the nations’ economy?  

• What does the international evidence show about the role of cities in driving growth and catalysing innovation and what are the key success factors that we can learn from?

• What is the relationship between public service reform and economic growth at city level? How can more effective demand management through public service reconfiguration and integration help to drive social and economic productivity and enable our cities to become financially sustainable?

• How can decision making and responsibility be better aligned with the reality of local labour markets, so that employment support, childcare, skills policy, welfare strategy and economic development are integrated around the needs of local people and businesses?

• How can growth in other English cities complement London’s economic success, and what should be the interrelationship between devolution, growth and reform strategies in London and in our other major cities?

• What needs to change between Whitehall and our cities to make multi-polar growth a reality? What does the Centre need to do to enable this and what economic and revenue levers do cities require?

• What are the practical, organisational, cultural and systemic barriers that stand in the way of a fundamental shift in economic power to our cities and how can these be overcome?

The Commission has begun an open call for evidence from businesses, the investor community, business groups, local government, think tanks and civil society organisations.

Sir Richard Leese, leader of Manchester City Council and chair of Core Cities Group, said: “The eight Core Cities urban areas between them already account for 27% of England’s economic output, and with greater local financial control could deliver much more.  

“In other developed countries its normal for all their top cities to outperform the national economy, but here only London consistently does so. 

“If all our Core Cities performed just at the national economic average, that would put £1.3bn into the economy every year. We think we can do even better than this, outperforming the economy and becoming financially self-sustaining in years to come. But cities need the tools to drive growth, support business and boost jobs and skills. 

“This Commission comes at a critical time and asks vital questions about the future of our cities, in whose hands lie the future of the national economy. That’s why this Commission is supported by all the Core Cities and I look forward to its findings.”