Billion pound devolution deal agreed for West Midlands as Mayor granted more powers
A billion pound devolution deal which will see powers handed to West Midlands Mayor Andy Street has been announced by the Chancellor.
In his Spring Budget, Jeremy Hunt, will hand over more control of key departments like housing, education and transport to the West Midlands Combined Authority as part of a ’trailblazer’ devolution deal, hoped at maximise levelling up opportunities.
Described as a "deeper devolution" the region will now be able to approve its own spending, rather than having to seek agreements with Whitehall.
Insiders hope this marks the "beginning of the end" of the "begging bowl culture" after UK regional leaders voiced annoyance at the process of cash being handed from Central Government upon request.
It's understood calls for powers to raise taxes locally have been rejected, but in the future mayors may be given more control over setting tax rates.
Greater Manchester is also to be given more powers and funding. Both regions are being seen as test cases for devolution being rolled out to other city regions.
As part of the deal money has been set aside for certain infrastructure projects.
A further £60m will act as a "springboard" to the extension of the Midlands Metro Tramline between Dudley and Brierley Hill.
The line currently only has full funding for Wednesbury to Dudley town centre.
"Deeper Devolution Deal"
Housing
As part of the deal, up to £500 million pounds will be granted for building new homes and affordable new homes.
The West Midlands Mayor currently has devolved compulsory purchase powers, and has spoken of wanting to be able to stipulate what proportion of new developments should be affordable housing, similar to the Mayor of London.
Fiscal Devolution
Since 2017 the West Midlands is one of several regions piloting an initiative to retain 100% of its business rates income, with this due to end after this financial year.
As part of the devolution deal, the retention of business rates will continue for another 10 years, worth £450 million.
It is hoped keeping taxes raised in the region gives a more "sustainable income".
Levelling Up Zones
Six "Levelling Up Zones" will be created in the West Midlands, which could include incentives to encourage investment in areas in need of regeneration.
These are separate from "Investment Zones" which the government says the West Midlands is to be one of, bringing £80 million over five years including tax incentives.
The Investment Zones plan has been scaled back from what Liz Truss announced during her time in office.
Tackling digital exclusion
Measures are also being brought in to tackle digital exclusion including greater influence over high speed broadband investment across the region.
There will also be a £4 million fund for devices and data to get more people online.
Employment support
There will be greater local responsibility for developing and delivering careers advice and a partnership with Department for Work and Pensions to target employment support.
Transport
There will be devolution of the bus service operators grant and a new partnership with Great British Railways.
It will offer a greater local oversight and control of public transport services.
Another highlight includes the UK’s first formally designated transport sandbox.
It will deliver cleaner and safer vehicles and innovative transport services to streets faster, while supporting new jobs and investment.
Other highlights
A commitment to devolve retrofit funding from 2025, to allow the WMCA, and partners, to set priorities for investment in insulation and green energy for homes.
A commitment to a new partnership with national arts and culture organisations to shape their investment in regional cultural priorities.
What does Mayor Andy Street say?
Andy Street, Mayor of the West Midlands and WMCA chair, said: “This announcement is a major step forward for the West Midlands with significant new powers and funding secured.
“We’re deepening devolution by building on previous deals and further empowering local leadership with the financial autonomy and decision making authority that they are best placed to deploy.
"No one in Whitehall can understand the West Midlands better than local leaders, and so there is no doubt in my mind that we should be empowered to shape our future – which is exactly what this new deal will allow us to do.
“I recently called for an end to the ‘begging bowl culture’ which confined us to regularly submitting bids for various pots of money in competition with other regions.
"I’m pleased to see that this new devolution deal goes some way to addressing that - giving us guaranteed devolved funding to spend how we choose, akin to what Government departments have currently, and doing away with Whitehall micromanagement.
“Since 2017, we’ve demonstrated a solid track record in building more homes whilst protecting the green belt, improving peoples’ skills to help them find quality work, increasing transport investment sevenfold and tackling the climate emergency.
"This is why the Government is trusting us and granting us greater responsibility - and accountability - to deliver even more.
“Today is a milestone day for the West Midlands, and I am delighted we have been able to work together as a team to get this Deeper Devolution Deal over the line.”