Northern Metro Mayors – Funding, Frustrations and the Future

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Greater Manchester, Liverpool, Tees Valley, and Sheffield; these city regions have their own sets of unique hurdles to overcome on the road to devolution, but there are some problems that affect them all.

Only together, can they overcome these challenges and keep the lights on at the Northern Powerhouse.

In all my conversations with Northern politicians, academics, interest groups, think tanks, and ordinary people, there is one theme that has come up more than any other; funding.

Specifically, a lack of funding from central government.

There is a concern that whilst the phrase ‘Northern Powerhouse’ sounds good, and the idea of having devolution to the North is welcome, there is not enough money to back-up the talk.

Tees Valley

Tom Blenkinsop. Credit: Office of Tom Blenkinsop MP

“If there’s no money coming through, there’s not much anybody with any title can do, unless they have got cash to invest with or resources to draw upon”, said Tom Blenkinsop, former MP for Middlesbrough South and East Cleveland.

Mr Blenkinsop is now ‘Project Manager for the Tees Valley combined authority area and Northern Powerhouse Region’ for the trade union Community.

He added: “It doesn’t matter what their position is, it doesn’t matter if you’ve got a mayor, it doesn’t matter how many baubles you’ve got, what’s the tree like that its hanging on?”

As Mr Blenkinsop comes from the Tees Valley region, let’s look at the ‘tree’ that the government has given them.

Each combined authority is given a certain amount of money to invest through a 30-year investment fund.

In the case of the Tees Valley region, they have been given £450m to invest in the region over the next 30 years.

However, it isn’t as simple as that.

SONY DSC

Infinity Bridge at Stockton-on-Tees. Credit: Stuart Grout. Under License.

The money is not given to city regions in a lump sum, it’s spread over the whole 30-year period, so in the case of Tees Valley, they will have £15m a year to spend on investment.

Also, when you read the fine print, there are some strings attached, and central government is holding those strings.

Each year’s £15m must be unlocked by central government, and the Tees Valley Combined Authority must pass five-yearly assessments if they want to keep receiving that funding.

They will be judged on several criteria, including whether the project was delivered on time and under-budget, and, according to the text of the devolution deal: “The government would expect the assessment to show the activity funded through the Tees Valley Investment Fund represents better value for money than comparable projects, defined in terms of a Benefit to Cost ratio”.

With stipulations like these, it is not surprising to hear Mr Blenkinsop say that the region is being ‘held hostage’ over its promised funding.

However, to be fair to the government, they have suggested other funding sources.

eu-1473958_1920They said that they would work with the Combined Authorities to give them control over the money their regions are awarded through the ‘European Regional Development Fund’ and ‘European Social Fund’, instead of that money being spent by central government.

However, this money will come to an end once we leave the EU.

Another suggestion was for their regions to access the Local Growth Fund, but, this money can only be awarded to Local Enterprise Partnerships, not metro mayors or combined authorities, and they need to bid for it.

So, this funding side-steps the very people that the government created to make devolution more accountable.

Professor Michael Parkinson

Prof. Michael Parkinson. Credit: Gareth Jones

Someone who has a more pragmatic view to this lack of funding than Tom Blenkinsop is Professor Michael Parkinson, Pro Vice Chancellor at the University of Liverpool.

Professor Parkinson said: “Well, we are where we are.

“Is there ever enough? No.

“Do these numbers seem very very big in the greater scale? No.

“Do these figures sound big enough to solve the problem? I wouldn’t have thought so, but they’ve got them, so let’s use them as best we can.”

However, many of the people I talked to, viewed a lack of funding as part of a wider issue.

They believe that the Theresa May government has less interest in northern devolution than the David Cameron government, and that they are preoccupied with Brexit.

Even Cllr. Sean Anstee, the Conservative leader of Trafford Council, commented on the decline in interest from the May government.

Andy Burnham – The Greater Manchester Trailblazer

Cllr. Sean Anstee. Credit: Trafford Council

Cllr. Anstee said: “I think they are committed to the concept and principle.

“Whether they are as driven to act as quickly as George Osborne and David Cameron were doing, I think is questionable, which is a shame really.”

Cllr. Anstee went on to say that the Greater Manchester Combined Authority should ask itself: “What are the things that we can do that we don’t need permission from government to do?”

He added: “We can think about the wonderful days when George and David were around, but they are not anymore, so we have to deal with this new reality.”

Andy Burnham – The Greater Manchester Trailblazer

Tony Lloyd MP. Credit: UK Parliament. Under licence.

Tony Lloyd, the MP for Rochdale and the interim Mayor of Greater Manchester from May 2015 to May 2017, shares Cllr. Anstee’s frustration, saying: “It seems to be a reality, doesn’t it, that Theresa May shows no great enthusiasm for it [northern devolution].

“We have a government that is not helpful on this at the moment, but the direction of travel most certainly is towards devolved structures, and my own view is we’ve got to make a pan-northern case.”

From what I’ve seen, Mr Lloyd is right.

The North is not waiting for orders from central government, it is taking matters into its own hands.

In fact, the lack of direction from Westminster has made devolution more organic, with northern leaders making their own arrangements.

Liverpool City Region

Cllr. Liam Robinson. Credit: Merseytravel

Cllr Liam Robinson, the Chair of the Liverpool City Region Combined Authority Transport Committee, mentioned the importance of central government funding, but added: “I think there are also ways that we can raise money locally.

“For example, to buy the brand-new fleet of trains we are buying for the Merseyrail network, we’ve actually borrowed the money ourselves, locally, as a combined authority, because the interest rates we are being charged are very, very low, as a public-sector body.”

However, this autonomy goes beyond economics.

At a summit in Leeds, northern leaders agreed that a ‘Council of the North’ should be set-up.

This body would represent northern political and businesses leaders, and would allow the north to speak with unity on the national stage.

Despite having a larger population than Scotland, Wales, and Northern Ireland combined, the North does not have a Parliament or a First Minister.

The council seeks to redress the balance, and become the vanguard of the North.

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