Clegg in pledge to take on ‘baronial’ Whitehall

The Deputy Prime Minister told an audience in Leeds that he and Cities Minister Greg Clark will act as the “battering rams” to take on intransigent Government departments and force them to hand vital powers over to council leaders across the North of England and beyond.

Mr Clegg used yesterday’s IPPR North conference on rebalancing the economy to reveal the Government’s heavily-trailed “city deals”, designed to give major urban centres more control over key economic drivers such as transport, apprenticeships, house-building programmes, skills training and job centres.

Individual deals with each of the UK’s largest eight cities – including Leeds and Sheffield – will be hammered out over the coming months, with the Government keen to see the first tranche agreed in time for the Budget on March 21. Similar agreements with other cities are then expected to follow.

Mr Clegg said it is now down to city leaders to be “as radical as possible” as they draw up their proposals to Whitehall, suggesting sufficiently ambitious agreements could pave the way for further decentralisation and prevent future governments from dragging powers back to Westminster.

“We should aim as high as we can in this first wave of deals,” Mr Clegg said. “We can set a precedent which is right at the top of local ambition.

“These deals will not be worth the paper they are written on unless people are feeling really uncomfortable in Whitehall departments. That’s the kind of measure which, internally, I am using.

“There needs to be a real sense doors are being flung open in Whitehall and cities are really drawing down the maximum.

“If we start these deals more modestly, then the danger is that that gives more space and time for all the baronial vested interests in Whitehall departments to close the door again.”

The conference heard that Britain remains “by far” the most centralised society in the Western world, despite repeated efforts by governments to devolve powers.

Baron Frankal of the Manchester Commission for the New Economy said 72 per cent of UK spending is decided centrally – as opposed to just 19 per cent in Germany, or 32 per cent in France.

Mr Clark said this issue must be addressed in order to drive economic growth in the regions.

“When our cities do well, it is clear our country does well,” he said. “In Germany, its core cities are the engines of its growth.”

Individual negotiations are now under way with England’s own “core cities” – a group which includes Birmingham, Manchester, Nottingham, Newcastle, Liverpool and Bristol – over which powers will be handed back to each.

Among the measures up for discussion are the creation of a single pot of money for a city to spend on capital projects, and the powers to borrow money against future income; to create apprenticeship “hubs” that match training with the needs of the local economy; and to take control of transport networks and projects.

“For those saying we should be doing more – this is unprecedented,” Mr Clegg said. “This is an unprecedented act of fiscal devolution of business rates.

“It’s unprecedented to get consolidated pots for capital. It’s unprecedented to get the Department for Transport to say major local projects will be driven by local choice and decision-making.”

Both Mr Clegg and Mr Clark said “strong local leadership” would be required from cities as they make the case to Whitehall for new powers over the coming months.

But the Sheffield Hallam MP said there was “no link” between devolution and the forthcoming referendums on directly-elected Mayors in cities across England.

“You could have these new powers whether you’ve got a Mayor or not,” Mr Clegg said.

Some of the powers cities can bid for

Give cities a single pot of money for local capital projects.

Power to borrow money against future rates income to spend on key local projects.

Power to offer match-funded business rate discounts.

Control over local transport projects and decisions.

Power to commission rail services and manage contracts.

Funding for better broadband.

Make local bus firms more accountable to communities.

Establish city ‘apprenticeship hubs’ using national funds to support small businesses.

Create city ‘skills funds’ to work with colleges and address local skills gaps.

Take control of regeneration and housing investment schemes currently carried out by Whitehall agencies.