The council leaders of the UK cities of Nottingham and Birmingham joined forces during the Mipim international property show last week in Cannes to make the case for devolution of English regions. Both stressed that business, and FDI promotion efforts, would benefit from greater decision-making powers being granted to local areas in England.

The idea of English devolution is in the political spotlight in the wake of the Scottish referendum on independence. Jon Collins, leader of Nottingham City Council, and Sir Albert Bore, leader of Birmingham City Council, led a panel session to discuss how devolving more powers to cities and their regions can influence and drive the economic growth and the regeneration agenda. Duncan Sutherland, group regeneration director for Sigma Capital and non-executive director to the board of HS2 (the company responsible for developing and promoting the UK's new high-speed rail network), and Nick Ebbs, chief executive of Blueprint, a public-private partnership focused on sustainable mixed-use regeneration projects in the East Midlands, also weighed in.

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“When you look at other European countries, administratively, there is far more devolution, so they are far better able to act in the interest of their cities independent of government,” said Mr Collins. “But also what you find is that they get the opportunity to retain a far larger proportion of the funds that they raise locally, so that in the UK – I think only Albania is more secularised than the UK is in this respect – we retain just 5% of the tax take that is collected locally. That means 95% goes to government.  Obviously, we get some of that back, but largely with strings and rules and regulations. 

“Give us the responsibility; allow us to retain money locally, deliver on those responsibilities. And then what we do is we cut out the bureaucracy and everything going centrally and having to come back. We cut out the second guessing of everything.”

Mr Bore agreed: “For me, devolution is a no-brainer. If you want to see growth, then you have to see that growth driven from the locality, and not driven from the centre... We put this point to [prime minister] David Cameron more than a year ago now. We said that we need a level playing field for England. Not that we were necessarily asking for money. But what we were saying is we need to be able to compete, if you like, with offers that Scotland can put before an investor.

“This is about having a competitive offer. If you look at the English regions, you find that a competitive offer is possibly there, but sometimes decisions don’t go their way because unfortunately, at a particular moment in any decision, that the Scots and the Welsh and the Northern Irish are able to come forward and offer sweeteners which tip the balance.” 

It is still unclear how far the drive towards devolution will go, but it seems inevitable that the current power structures will change regardless of the results of general elections in May. Both the incumbent Tories and challenging Labour party have promised some level of devolution.

Mr Ebbs said private sector investors would benefit from devolution, as and when it is defined properly. “The reason for support for devolution from an investor point of view is we like clarity, certainty and operating in successful cities. Thus, from an investor perspective: is devolution going to include clarity?  Improve certainty? Lead to more successful cities? That is my benchmark,” he said.

“On each of those I think it is a better proposition than what we‘ve got at the moment. The qualification is that I would like to know a lot more about what powers and government structure is going to be created around it, and what geography? For me, I speak for a lot of investors and businesses who are not directly involved in the debate. We would like more clarity about those issues. They are not unresolvable issues, but we just do not know them.”