Liverpool first to strike new City Deal with Government

9 Feb 2012 12:31 PM

Liverpool has become the first city to agree new powers through the City Deals programme, the Deputy Prime Minister, Nick Clegg and Cities Minister Greg Clark announced recently.

A range of transformative powers will be devolved to Liverpool to give the city what it needs to attract private investment, close skills gaps and create new jobs.

This landmark deal will create a new enterprise zone near the city centre, provide powers to help get young unemployed people into work and give greater control over land for redevelopment and help build twelve new secondary schools.

The deal will help the city compete in the wider economy, driving growth and creating opportunities that will benefit the wider Merseyside area.

City Deals are being negotiated with a number of England's cities. Instead of being presented with a set menu of measures decided in Whitehall, each city is now able to specify the particular powers they need to meet local needs and priorities.

Deputy Prime Minister, Nick Clegg said:

"This first city deal heralds an unprecedented transfer of power from central government to local communities, with new powers and funding for Liverpool to do things its own way. I congratulate Liverpool on blazing a trail we look forward to seeing others follow.

"I firmly believe one size doesn't fit all - whether it's a Mayor or whether it is a Council Leader, what Cities have to show in return for a City Deal is that there is strong clear leadership. This deal puts Liverpool back in the driving seat to create jobs and boost skills with greater economic and political freedom. It empowers Liverpool to go for growth that will benefit everyone who lives there.

"Our cities are Britain's economic heartbeat and their success is absolutely vital to getting the whole country's economy growing again. I want to see more cities take us up on our offer and I'm looking forward to announcing more city deals across the country in the coming months."

Cities Minister, Greg Clark said:

"We've said to each City 'make us an offer'. Tell us how you can drive growth, and I promise that the Government will respond positively.

"Liverpool has risen to the challenge with alacrity.

"It is fantastic to see Liverpool become the first city in Britain to seize the opportunity on offer. This deal will be a major boost to the standing of this great city - both within Britain and on the world stage. Liverpool has seized the chance to attract private investment, create jobs and build a prosperous future.

"This is, I hope, the first of many such deals with our cities. For Britain to prosper our cities must prosper. I am determined to devolve power from Whitehall and give local leaders what they need to take their cities forward into a confident and prosperous future."

The key elements of Liverpool's proposals are:

• A new Enterprise Zone, that will create a 'City Fringe Buffer Zone' to the north of the city centre and Central Business District. This means that for the next 25 years increases in Business Rate income, would be invested in regeneration. The Government will also be prepared to support economic development backed by a strong business case by up to £75 million during the spending review period.
• Creation of a joint Mayoral Investment Board to oversee the city's economic and housing strategy, pooling local assets including those of the Homes and Communities Agency to drive economic growth.
• Launch Welfare Pilots to reduce welfare dependency. The city will work closely with the Government on local schemes including a 'youth contract' to increase the number of claimants moving to work and to reduce fraud and error.
• A Secondary School Investment Plan to build 12 new secondary schools including at least six new academies to help support the local skills agenda and the local economy. The Council will work with the schools, private companies and local universities to develop specialisms to meet local skills shortages.

Notes to Editors

The Deputy Prime Minister and Cities Minister launched the City Deals in Leeds on the 08 December 2012.

• www.dpm.cabinetoffice.gov.uk/news/do-it-your-way-deputy-prime-minister-launches-new-city-deals (External link).
• www.dpm.cabinetoffice.gov.uk/news/do-it-your-way-deputy-prime-minister-launches-new-city-deals-speech-transcript (External link).

Copy of Written Ministerial Statement: Unlocking Growth in Cities - Liverpool City Deal: 

The Minister of State for Decentralisation and Cities (Greg Clark): On 8 December the Government launched Unlocking Growth in Cities, which set out the terms for a programme of city deals - binding agreements which enable cities to negotiate the devolution of the specific powers, resources and responsibilities required to meet locally-determined economic and social objectives. We have been clear that we are determined to work flexibly to promote growth, to encourage local initiative and willing to transfer significant powers to cities.

The Government has now considered the proposals brought forward by Liverpool for a 'City Deal' in response to this challenge. The Government recognises it represents an ambitious economic package aimed at driving growth in Liverpool, and that it is an important part of the City's response to Lord Heseltine and Sir Terry Leahy's "Rebalancing Britain" report on the Liverpool economy.

I am therefore pleased to inform the House that the Government has approved the following proposals from Liverpool as a 'City Deal':

1. Subject to HM Treasury clearance of a business case and agreement with the Local Enterprise Partnership, the Government will designate a new Enterprise Zone covering the City Fringe Buffer Zone and Central Business District. The growth in Business Rates income from the Enterprise Zone will go to the Liverpool City Region Local Enterprise Partnership, in line with the Government's wider Enterprise Zone policy and our ambition to see a city-region wide approach to growth and regeneration. The Government recognises that Liverpool has ambitious plans to develop five further priority economic development areas (proposed Mayoral Development Zones) in the city, and their ambition to reinvest rates retained from this new Enterprise Zone within the city. Any retention of Enterprise Zone business rates by the city council will need to be negotiated between Liverpool and the Local Enterprise Partnership.

2. The creation of what Liverpool propose to term a Mayoral Investment Board that will oversee the city's economic and housing strategy as well as oversight of the development of Home and Communities Agency's land assets and other economic development priorities including those linked to the Enterprise and proposed Mayoral Development Zones. This arrangement will be based on the principle that the Home and Communities Agency will retain legal ownership and accountable body status for current Home and Communities Agency assets.

3. The Department for Work and Pensions will work with Liverpool to develop welfare pilots to deliver a localised programme of support for people leaving the Work Programme and in particular include a 'youth contract' pathfinder. It is expected that this will improve the benefit claims experience for customers while making efficiency savings for both the City and the Department for Work and Pensions; increase the numbers of claimants moving into work; and reduce benefit fraud and error.

4. A Secondary School Investment Plan funded by the Council for up to twelve new build secondary schools, including at least six new academies. These schools will be subject to the normal Academy converter application process and once in place, the Council will not be part of their ongoing governance or financial management. Liverpool have made clear their commitment to ensure that the schools in the city support the local skills agenda and the local economy. The Government therefore expects the Council to be proactive and work with the schools, the private sector and the universities in Liverpool to help them develop specialisms and identify and attract appropriate sponsors.

5. The Government is prepared to support initiatives that boost economic growth and development. The Department for Communities and Local Government (DCLG) already supports economic development in local authorities and is therefore prepared to work closely with the City as Liverpool implements its vision for economic development. As part of that close working, the Department for Communities and Local Government will contribute £75 million over the remaining years of the spending review period, subject to a strong, robust business case, to be cleared by HM Treasury, demonstrating clear value for money.

6. The Government set out in 'Unlocking Growth in Cities', that where cities want to take on significant new powers and funding streams, they will need to demonstrate strong, accountable leadership, an ambitious agenda for the economic future of their area, effective decision-making structures, and private sector involvement and leadership. The appropriate governance structure may be different for each city, and no city deal is conditional on having any particular governance arrangement. However, the Government believes that directly elected mayors are one way of providing the strong, visible and accountable leadership so, subject to approval by the Council, the Government can confirm that a move towards a directly elected mayor and the creation of a Mayoral Development Corporation would satisfy its requirements as regards governance arrangements to strengthen leadership and accountability in Liverpool City Council.

The Government places great importance on Local Enterprise Partnerships to drive economic development, and therefore expect Liverpool to continue to work closely with the Liverpool City Region Local Enterprise Partnership and neighbouring authorities to ensure their support for this 'City Deal' and to take it forward as well as future decentralisation packages covering the Local Enterprise Partnership area.

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