Jonathan Reed: Rivals who should have banked on co-operation

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THERE are few things the Government seems to like more than a competition.

Companies wanting finance for projects which will create private sector jobs bid for funding from the Regional Growth Fund, with £2.4bn of taxpayers’ money available to help boost economies like in Yorkshire.

Transport authorities and councils wanting the green light for significant local schemes having apply to Whitehall for funding.

And remote areas of North Yorkshire only hooking up to superfast broadband after the area fought off competition from other rural areas to pilot the use of the public money made available to extend the network.

This week, civil servants began wading through 32 bids from the latest competition, which invited towns and cities to apply to host the new £3bn Green Investment Bank.

The Government hopes it will fund eco-friendly energy infrastructure and low carbon projects.

The bank itself will bring with it only 50 to 75 jobs, but the choice of its location is being seen as a test of the Government’s pledge to rebalance the economy. London is among the 32 bidders, but basing it in the capital would surely undermine the oft-quoted pledge to move away from the economy being so reliant on the South East. The bidders include the country’s major cities, plus unlikely applications from Bicester to the Eden Project in Cornwall.

It’s a dog eat dog process, and each applicant believes they have a compelling case as to why they should be chosen. No one wants to miss out, but that means among the bidders are three from Yorkshire – Leeds, Sheffield and a joint bid from Hull and the East Riding.

On one hand, why shouldn’t they each apply? None has a divine right to host the institution so let each make their case and may the strongest bid win.

But is that really the best approach for Yorkshire? Wouldn’t the region have been better served by uniting behind a single bid?

I may win few friends elsewhere in the region, but I can’t help but think the Leeds bid makes the most sense in this case.

The city already lays claim to be the UK’s second financial centre and the wider city region is pioneering a green economy, including the largest clean-coal technology pilot plant and a string of firms manufacturing components for renewable energy generation.

More than that, the bid has been most actively promoted – including meetings with Ministers and a House of Commons debate to demonstrate the strength of the case. It has been backed by businesses and MPs from across the region.

In contrast, the Hull and the East Riding bid was not even publicised until after the deadline passed and Sheffield’s submission has also been kept largely under wraps.

If the whole is greater than the sum of its parts, surely the region would have been better served by getting behind the Leeds bid to host the bank? That doesn’t mean setting a precedent for other areas to defer to Leeds. Balanced economic growth across the whole of Yorkshire is crucial, so in return for the support of rival cities this time Leeds could have offered Sheffield or Hull support for a project of equal importance to them.

With Yorkshire Forward in its dying days and the role of a regional Minister abolished, the race for the Green Investment Bank highlights an opportunity missed for using the powerful Yorkshire brand.

It also raises questions about whether the absence of a co-ordinated region-wide approach – tourism aside – misses a trick when it comes to opportunities like this.

Local rivalry is nothing new – just consider the fury in Sheffield when Yorkshire Forward decided to offer millions of pounds towards the construction of Leeds Arena, and plenty of areas still feel they failed to get their fair share of regeneration funding from the agency over the past decade.

Worryingly, tensions between Leeds and Bradford have already emerged in the business and council-led Local Enterprise Partnership which the Government is banking on to lead a private sector recovery in the absence of the development agency.

However local squabbles must not be allowed to hold the region back in an age of austerity, and the ability for different areas to work together may soon face an even bigger challenge.

This week the Government revealed early details of its plan to scrap the current bidding process and devolve decision-making over significant local transport projects to consortia involving councils and Local Enterprise Partnerships. Each would have its own pot of funding to spend as it wishes.

If the Government goes ahead with its favoured option of dividing up money according to population, it could mean – based on the £1.7bn earmarked for schemes between 2011 and 2015 – less than £100m for Leeds city region, £60m for Sheffield city region and under £20m for the Humber over the following four years.

Given the Leeds trolleybus scheme – still awaiting a decision from Ministers whether it can go ahead in the current spending round – would swallow up £163m of Government funding on its own, the pressure on those pots of gold is clear.

Only by different towns and cities working constructively together to decide how it is spent will the whole region receive the best possible return.

Encouraging competition is no bad thing. But it must not come at the expense of co-operation when it serves Yorkshire better.