Government to shift spending power to UK cities

11 July 2012

Britain's eight biggest cities outside London have been handed more power to make localised decisions on finance, transport and education, the Government has announced.

The shift means that local authorities will decide on how best to spend their budget to help invest in growth, improve local workers' skills, create jobs, support businesses and improve critical infrastructure.

The cities of Birmingham, Bristol, Leeds, Liverpool, Newcastle, Nottingham, Sheffield and Manchester have been chosen for the agreement which will loosen their ties from Whitehall.

Each is to be given a certain amount, taken from national budgets, which the council can directly invest towards local growth.

Deputy Prime Minister Nick Clegg said the 'ground breaking' deals would help support young workers looking for jobs and help businesses expand.

"Over the coming months, we are transferring more and more power from Whitehall to these cities," he said.

"They are the economic powerhouses of England - so it makes sense that the cities decide for themselves how to boost their local economies."

The eight cities, the largest and biggest economic drivers outside London, were invited to set out the powers they needed to drive local growth in December last year.

As part of the deal, the cities have agreed to put in place stronger, more accountable local leadership and to spend their resources more efficiently. Leeds and Sheffield will combine local authorities while Liverpool and Bristol are to have directly elected mayors.

The new deals give cities new powers and tools to boost local growth, including:

• Investment funds to spend on local 'priority' projects
• Capital to create Business Growth Hubs for business support, advice and services
• Devolved transport budgets
• Joint investment programmes between the public and private sectors
• Control of the local skills budget
• The creation of apprenticeships hubs

The Confederation of British Industry's (CBI) director for business environment, Rhian Kelly, said: "Enabling greater influence for businesses on training will help them to plug skills gaps, and hire people who can deliver what their customers need. Measures in the city deals to provide local skills brokerage are especially helpful to smaller firms, who may not have the resources to set up their own schemes."

Cities Minister Greg Clark said the Government is to set out further steps to devolve more powers to other cities across the UK.