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Bold deals to set more cities free for growth

Twenty cities and their wider areas will be given the opportunity to bid for radical new powers to boost local growth, Deputy Prime Minister, Nick Clegg and Minister for Cities, Greg Clark announced yesterday.

The second wave of ‘City Deals’ invites twenty cities and their wider areas to compete for deals that would see Government devolve powers in exchange for responsibility for delivering growth locally. Cities from the successful first wave of deals secured groundbreaking powers including the ability to ‘earn back’ tax from the Treasury, devolved transport budgets and control of the skills budget for their city.

The first wave saw deals struck with England’s eight largest cities, with final sign off by the Deputy Prime Minister, the Minister for Cities and city leaders in July 2012. Yesterday’s announcement is aimed at the next fourteen largest cities and their wider areas and the next six with the highest population growth between 2001 to 2010. These are;

Nick Clegg said:

“In the best English tradition we have witnessed a quiet revolution across the nation’s eight largest cities.

“From control over buses and trains and the freedom to plug skills gaps, to powers to ‘earn back’ tax and set up local investment funds to spend on local projects – the deals are unlocking the huge potential of our cities so they can go for growth.

“Now it’s time to free even more places from Whitehall control. I want these twenty cities and their wider areas to come up with ambitious and innovative proposals to help them make changes that will be felt by everyone across their region.”

City Deals are a key part of the Government’s objectives of rebalancing the economy and boosting private sector growth. The second wave of City Deals will accelerate the pace of decentralisation and unlock new and innovative ways to drive growth. Deals will represent a genuine transaction between cities and Government, with ‘asks’ and ‘offers’ from both sides.

Leaders in the Wave Two cities will be asked to work together across their areas and to put forward proposals designed to unlock the full growth potential of the area. These proposals will need to be ambitious, harness public and private sector resources, and demonstrate strong leadership in the local area.  The cities with the strongest propositions will be invited to negotiate a deal with the Government.

Financial Secretary to the Treasury and Minister for Cities, Greg Clark, said:

“Every British city is unique – in its history, strengths, industries and character. For too long governments treated them as if they were all the same, making them conform to a Whitehall template.

“City Deals put each city in the driving seat. Each city can seize the initiative and show what it needs to prosper and grow, even if it’s new and different. If it’s in the city’s interest and the national interest, we’ll strike a deal and make it happen.”

Notes for Editors

1. The twenty Wave Two cities will be asked to submit their initial proposals by 15 January 2013. There will be an element of competition, not all Cities should expect to be awarded a deal. Each city and their Local Enterprise Partnership will be invited to put forward a proposal to address a significant local economic issue which requires a transformative response that is not currently possible through existing interventions.

2. Cities’ bids will need to:

  1. contain proposals for stronger governance across their functional economic area, so that decisions necessary for the growth of the area as a whole can be taken quickly and effectively;
  2. contain proposals for harnessing significantly greater private sector input, expertise and resources;
  3. demonstrate strong political commitment and readiness to put resources into delivering the deal;
  4. present proposals that are consistent with the need to drive efficiency in the use of public money in the area, doing more with less, in pursuit of our medium term goal to eliminate the deficit; and 
  5. propose reforms for their area which represent the leading edge of the Government’s general economic strategy – to reduce regulation, create well functioning markets, promote an enabling environment for business and boost private sector growth and investment.

3. These individual proposals will be complemented by a ‘core package’, consisting of measures that will devolve significant powers and functions to all cities and their wider areas that go on to negotiate a deal with Government. The Government will work with cities to develop this package over the next five months.

4. This will capitalise on the progress we have made so far in negotiating bespoke deals with the eight Core Cities, demonstrating our commitment to the devolution of powers from central to local government, if local areas are willing to carry out significant reform in return.

5. The second wave of City Deals will be completed by November 2013.

6. Read more about the first wave of city deals.

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