Businesses back ‘historic’ Liverpool devo deal

THE government has confirmed a devolution agreement has been agreed with Liverpool City Region, paving the way for more local decision-making and also spending.

Voters will now choose a directly elected Mayor in 2017, who will take on a raft of new powers as part of plans to take power out of Whitehall and hand it back to local people.

The deal includes power over local transport budgets and franchised bus services and increased responsibility over employment support and skills provision.

This deal also includes control over investment worth £30m a year for the next 30 years.  It also includes support for Liverpool’s strengths in attracting major international events, with backing for the city’s International Festival for Business as well as its cultural attractions, with plans to establish a sustainable business model for National Museums Liverpool.

Chancellor George Osborne heralded an “historic day” for the city region, adding: “This revolutionary deal cements the area’s position as a gateway to the north, from North Wales all the way to Newcastle, and gives local people control over their own affairs for the first time.

Communities minister Greg Clark, who was in the city to sign the deal, said: “This Liverpool City Region deal demonstrates how local leaders are embracing this opportunity to have a direct hand in shaping the future of their area, whether in skills, transport or housing.

“It’s vital that the people of the Liverpool city region – and the Northern Powerhouse as a whole – have the best possible representation on the national and international stage.”

The Liverpool City Region Combined Authority, working with the Liverpool City Region Mayor, will receive the following powers:

:: control of a £30m a year funding allocation over 30 years, to be invested in the Liverpool City Region Single Investment Fund, to unlock the economic potential of the River Mersey and Superport as well as maximise the opportunities from HS2

:: responsibility for chairing an area-based review of 16+ skills provision, the outcomes of which will be taken forward in line with the principles of the devolved arrangements, and devolved 19+ adult skills funding from 2018/19

:: joint responsibility with government to co-design employment support for the harder-to-help claimants, many of whom are currently referred to the Work Programme and Work Choice

:: more effective joint working with UKTI to boost trade and investment, and responsibility to work with government to develop and implement a devolved approach to the delivery of national business support programmes from 2017

:: building on the success of International Festival for Business (IFB) 2014 and the proposals for IFB 2016, Liverpool City Region and the government, and in particular UKTI and the GREAT Britain campaign, will continue engagement to establish IFB Liverpool as a vital feature of the international business calendar in 2018 and 2020

Business leaders welcomed the news.  Chair of the Liverpool City Region Local Enterprise Partnership, Robert Hough said: “The private sector support for devolution, in which the Local Enterprise Partnership has played a leading role, is immense. We very much look forward to its successful implementation.”

Victoria Price, partner at professional services firm EY in Merseyside, said: “It’s good news that Merseyside is now in the devolution mix having secured its own agreement, which has the potential to extend new powers to informed, local decision makers. It’s also worth remembering that devolution is a process.

“This deal should perhaps be viewed as a starting point which Merseyside can build on. It will be interesting to see whether, like Manchester, the region’s leaders go back to Government with even more proposals over the short to medium-term.

“Merseyside’s strategic importance for the flow of trade and logistics shouldn’t be understated in the North’s ambition to become an economic powerhouse,  so it’s particularly encouraging that some funds have been earmarked to maximise the impact of the Mersey and the SuperPort development.”

Steve Warren, North West Region Director at EEF, agreed, stating: “This is a positive step towards boosting growth and productivity and a great opportunity to build on the work of Local Enterprise Partnerships.

“This announcement however is just the start – greater efforts must be made to improve relationships between business and local authorities, including embedding the business voice in decisions that will be taken at the local level in the future. This is even more important given that in some areas mayoral combined authorities look set to be given the power to raise taxes on business property without a referendum of businesses.”

Chris Fry, Liverpool office senior partner at KPMG predicted the deal would in future be seen as a “landmark moment” in the development of the city region’s econonmy.
 
He said: “The Chancellor referred to Merseyside as the ‘gateway to the Northern Powerhouse’, and this is our chance to really set our stall out and take a leading role in driving forward the economy in the North. As a member of our business community, I know that we are willing and able to work in partnership with the city region, grasp this opportunity and see Liverpool secure its place on the global economic stage.”

Martin Heath, PwC’s senior partner in Liverpool, said: “Decentralisation is critical to rebalancing the UK’s economy. Too much centralisation leads to unbalanced growth and creates economic issues of its own, as has been demonstrated by the ongoing growth in London and the South East, while the North has lagged behind.

“This devolution deal is therefore a great step towards addressing this issue and will give responsibility to businesses, LEPs and the community to invest in the region. They will enable local decisions to be made about where money can be best put to use, and reduce bureaucracy that often delays projects from happening at the time when they are most needed.”

Mike Thomas, director at Grant Thornton said: “There’s clearly been detailed and hard negotiation with government on this deal and it looks like a very good one for the region with key powers on transport, skills, housing , planning and a capital fund to generate growth and investment being devolved.

“In many ways, the real devolution work begins now as the City Region gets to grips with its new levers of power and begins to implement new governance arrangements.

“Our recent report ‘Making Devolution work’ sets out some practical steps that can help the region as it begins the next stage of its journey. How the deal unfolds in the future will be absorbing to watch.”