City Deal could generate £1bn a year by 2025
The new £1.2bn City Deal agreed for Greater Manchester in last week’s budget could deliver a short-term boost to demand of more than £2bn by 2016 and eventually lead to an improvement in the economy worth over £1bn a year by 2025, according to a new report.
The report, which is set to be considered by Greater Manchester’s Local Economic Partnership tomorrow, describes the City Deal as a “substantial and innovative” package that will support the city-region’s bid to stimulate growth and create more jobs.
The City Deal allows for the biggest use of tax increment financing outside of London, where £1.2bn of infrastructure improvements can be funded from the increased future tax take likely to be generated as a result of the growth generated by the investment.
Greater Manchester’s agreement with Government allows for £30m a year to be retained by its combined authority over a 30-year period which can then be reinvested in further projects to create an ongoing, permanent fund.
“The Greater Manchester Deal will create conditions to maximise growth, impacting at national level as well as on the economy of the north,” the report states.
“The Deal reflects the maturity of Greater Manchester’s civic and business leadership, ambition and ability to deliver and sets the framework for a rebalanced relationship with central Government.”
Funds and assets – including Homes & Communities Agency assets – will be prioritised so that projects providing the greatest potential economic growth will be given the most attention. In total, a pipeline of 70–80 projects has been identified, spanning investment in commercial and physical developments, transport and broadband infrastructure, business growth, housing and low carbon schemes.
Mainstream skills funding will be controlled by the city-region, and two skills pilots that will lead to almost 6,000 apprenticeships being created via incentives for small and medium-sized businesses to take on staff.
The Business Growth Hub has also been given a three-year transitional funding package from the Regional Growth Fund, but once this expires revenues brought in from the new Enterprise Zones is expected to fund initiatives such as providing more mentoring and access to finance.
The city will also target BRIC countries for inward investment and look at ways of leveraging the new £45m Graphene Institute to attract overseas investors.
Moreover, a 50/50 joint venture will be formed with the new Green Investment Bank to fund new low carbon projects.
It concludes that the City Deal “will contribute towards meeting our potential to create over 70,000 private sector jobs over the next few years and play our full potential in driving the economy of the North, with the benefits that this brings for the UK as a whole”.
