Regional devolution deals will be "messy" warns Treasury official

A SENIOR Treasury official has warned that the era of austerity is here to stay and that regional devolution deals will be “messy” and may not happen quickly.
 
Geoffrey Spence, chief executive of Infrastructure UK, the government body which is overseeing £466bn of investments over the next decade, also said spending on transport and energy and other schemes “don’t automatically give you growth” as he cited the need for city regions to have the right mix of education, skills, culture and entrepreneurial spirit too.
 
He said the Northern Powerhouse initiative championed by David Cameron, Nick Clegg and George Osborne, around better connectivity of northern cities, was very much a focus for the Treasury and its officials because: “we see that growth comes from cities,”.
 
While London is a global city and an asset for the economy, in both international and European terms, the other regional cities are “relatively small”, he stated.
 
“We need bigger cities and because of this there has to be greater devolution. The government is seeking opportunities to devolve but within the right frameworks and the right governance. Not all parts of the UK are ready for this.”
 
He said devolution is going to be a theme that would continue after the election, regardless of which party or parties are in government.
 
“We have to realistic – we have a spending review and the degree of fiscal tightening is not over, in some respects it’s going to get worse.
 
“Some people confuse devolution and think this is about the centre giving more money. Where devolution really gets going is the argument that it’s far better for the people in the North West or Yorkshire to decide on where money is spent, than a 29-year-old in the Treasury. (He revealed the average age of people working in the Treasury is 29).
 
“Devolution does not mean more money – it’s more local decision making and more funding potentially being raised locally.
 
“I think where it does happen it’ll be incremental and messy in that things will happen in different ways in different region Some areas will be quicker than others – I don’t think this is necessarily the case in the North West, because it’s got its act together. It is fiendishly complicated and from a fiscal point of view it’s a nightmare.”

Mr Spence was speaking at a conference on The Way Ahead for Northern Infrastructure in Manchester hosted by accountants KPMG.

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