The Chamberlain News

West Midlands metro mayor powers revealed by Treasury

George Osborne was in Coventry today to sign off the West Midlands devolution deal. All that remains now is to convince councillors from across the political divide that a metro mayor is a price worth paying for increased Government investment and greater local control over how the money should be spent, writes Paul Dale.

If the leaders of the seven metropolitan councils, five Labour and two Tory, have read the runes correctly, this should not be a problem. The West Midlands devolution deal has been at negotiation stage for more than two months, plenty of time for the leaders of Birmingham, Coventry, Solihull, Sandwell, Wolverhampton, Dudley and Walsall to secure the political backing they will need from backbench councillors.

It is inevitable now that the West Midlands Combined Authority will be overseen by an elected metro mayor from May 2017, if of course each council votes in favour.

It has also been confirmed that the mayor will be elected in the first instance by voters from the seven metropolitan authorities – a decision that is thought likely to favour Labour.

However, it is possible the electorate may be extended in due course to take in people from the shire districts that have opted to join the combined authority – a move that could favour the Conservatives.

Details of the proposed package have been released by the Treasury.

The mayor will chair the combined authority and have the power to appoint a deputy, who must be one of the seven council leaders.

The mayor will have:

• Responsibility for a consolidated, devolved transport budget to be agreed at the Spending Review.
• Powers over the franchising of bus services in the combined authority area, subject to necessary legislation and local consultation.
• Responsibility for an identified key route network of local authority roads that will be collaboratively managed and maintained at the metropolitan level by the combined authority on behalf of the mayor.

And, crucially, the mayor will be able to levy additional business rates to pay for new infrastructure, with the agreement of the LEPs, up to a cap. WMCA chair Bob Sleigh, leader of Solihull Council, confirmed that the mayor will be able to raise up to a two per cent levy on business rates, subject to the LEPs’ approval. The money must be used for investment purposes.

Planning powers will be conferred on the mayor, to drive housing delivery and improvements in housing stock.

The agreement with the Treasury contains one important caveat, warning that Birmingham city council must deliver in full governance reforms set out in the Kerslake Review.

It warns:

It is essential that Birmingham continues to robustly pursue the implementation of the improvements recommended by the Kerslake Review. This will ensure that the benefits intended from the creation of the proposed West Midlands Combined Authority and through this devolution deal can be fully realised.

The proposed agreement is careful to stress that this is just “the first step” towards local control of economic development, transportation, skills and business support.

The bottom line for this devolution package is that the Government will make an annual contribution worth about £40 million for 30 years to support an overall investment package worth £8 billion. That’s £1.2 billion that the West Midlands wouldn’t otherwise have been given to grow the economy and create jobs.

It’s being stressed that most of the £8 billion can be generated and spent in the first 10 years because the combined authority will be able to borrow against a guaranteed income stream and repay the debt from additional business rate income as the economy grows.

There will also be an additional £97 million to extend the Midland Metro tram line from Birmingham city centre to the airport and NEC, something that is seen as an important economic driver for the UK Central growth corridor.

Other highlights from the proposed deal include:

•  £4.4 billion HS2 Growth Strategy to ensure maximum economic benefit from the HS2 investment. This will include the Curzon Masterplan, expansion of the metro network east and west, from Brierley Hill to the HS2 Interchange station, the UK Central infrastructure package, including new transport links to Coventry and enhancing the HS2 supply chain.  The 20 HS2 Connectivity schemes will ensure that nowhere in the WM is more than 40 mins from an HS2 station.
• The UK Central-Coventry scheme will provide a road and public transport link from the HS2 Interchange station to Coventry as well as further specific investment of £150 million in the regeneration of Coventry city centre.
• A £200 million land remediation fund. This will enable brownfield land to be brought back into use for housing and employment,  and will particularly benefit the Black Country through the redevelopment of brownfield sites.
• A £500 million housing investment fund (mainly locally funded). This will be brought forward to support the development of new homes.
• A £1 billion Collective Investment Vehicle (locally funded) to help companies invest and grow.
• A £30 million employment, education and skills programme for the three LEP area.
• Government will work with the 3 LEPs to develop an integrated business support system linked to the Growth Hubs that joins national and locally funded activity in a seamless manner, making it simpler for business to access and benefit from services
• A devolved approach to delivering national business support schemes will be in place by 2017, linked to support for start-ups, growth companies, and those needing access to finance
• Developing an integrated national and local support structure for businesses wanting to invest in the WMCA area, focused on sectors of national strength such as advanced engineering linked to auto, rail and aerospace. This will be supported by the joint planning and promotion of a portfolio of regeneration sites for future investment
• A jointly agreed West Midlands Export support plan. A devolved approach to business support from 2017, including start-ups and business finance.
• Devolved compulsory purchase powers, to help drive housing delivery.
• A Land Commission to develop ways to make more land available for employment and housing use
• A locally managed housing investment fund. 
• Over £5 billion of transport investment over ten years. Getting back control over buses – controlling fares and ensuring they run when and where people need them.
• One smart ticket, allowing passengers to use any combination of bus and rail across the region and an integrated travel information service.