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29th November 2015

Spending Review: What does it mean for Greater Manchester?

The combined spending review and autumn statement devolves further powers and responsibilities to Greater Manchester

As part of the joint post-election Spending Review and Autumn Statement, the Chancellor of the Exchequer George Osborne has announced more devolution measures for Greater Manchester.

The further devolution to the Greater Manchester Combined Authority and directly-elected Mayor is certainly more evolution than the revolutions we have previously reported on. Though substantially less than the £7 billion devolution wishlist submitted by council leaders before the deadline in September, there are key changes to Devo Manc.

Sir Richard Leese, Vice-Chair of Greater Manchester Combined Authority and Leader of Manchester City Council, said: “Devolution to Greater Manchester’s is about shifting influence and decision-making to local Leaders better placed to respond to the city-region’s priorities and needs, delivering better outcomes and better value for our residents and businesses.

“Whether that’s investing in the services or infrastructure we need to drive improvements and ensure that Greater Manchester have the skills which match the jobs being created—benefiting employees and employers alike—the measures announced today are another step in that incremental journey.”

Devo Manc arrived a little over a year ago and much has changed since, with additions such as the devolution of the £6 billion in health spending and the awarding of the right to retain 100 per cent of growth in business rates that has been in place since April.

This comes in the week after a ComRes poll commissioned by BBC local radio found that 44 per cent of Northerners said they have never heard of the ‘Northern Powerhouse’ and a further one in five said they had heard of it, but know nothing about it. The poll did, though, show strong support for devolution in the North; 82 per cent agreed the North should have more control over transport, health, and other services.

The announcements on the 25th of November were formally endorsed by the Greater Manchester Combined Authority (GMCA) on Friday 27th. Tony Lloyd, interim Mayor of Greater Manchester, said: “I strongly welcome the recommitment from both sides to deliver real change to how decisions about Greater Manchester are taken. Decisions about people in Manchester and Greater Manchester are best made here and today’s announcement is another step in that journey.

“We are bound to continue to press government on resourcing so that we can ensure that communities across Greater Manchester get the services and investment they deserve.”

Osborne announced that the Greater Manchester Earn Back deal, announced in November 2014, will be continued subject to a gateway review in 2019. This includes £30 million per annum for 30 years to enable the delivery of the Trafford Park Metrolink extension, connecting the Trafford Centre to the Metrolink network, and the SEMMS road link, which will ease congestion around Manchester airport.

The Chancellor also confirmed £9 million a year from 2018/19 in the Spending Review; this came on the same day as the plans for the multi-million pound creative hub that will house the Manchester International Festival were released. It is expected that The Factory will create 2500 jobs and contribute millions of pounds to Manchester’s economy.

The largest financial package agreed is the devolution of control over European funding. The GMCA will become an Intermediate Body for European Regional Development Funds and European Social Funds in Greater Manchester. With respect to 2014 – 2020, this amounts to €413.8 million, over which the GMCA will have greater influence and decision making powers.

In planning policy, Osborne has given the Mayor the power to implement a Community Infrastructure Levy, subject to the unanimous approval of his cabinet, the GMCA. This levy will permit extra spending on development and regeneration across Greater Manchester. In the short term, the GMCA has been asked to develop a business case for a Land Programme, which will ensure strategic sites for housing and employment are developed faster—though in order to activate the Land Programme, the case will have to demonstrate that it expedites development.

Beginning on the 1st of April 2017, the government has committed to the full transfer of resources to support bus franchising. The government will work closely with the GMCA to ensure this timetable is met and that bus related payments will become part of the Mayor’s multi-year transport settlement.

There was disappointment as only £300 million was budgeted for cycling outside of London, whilst London alone has £1 billion earmarked. The non-London cycling funding average is now £1.39 per person per annum, which is set to disappoint the citizens of Greater Manchester who asked for £25 per person per annum in a Sustrans Greater Manchester survey about cycling earlier this month.

The GMCA and the British Business Banks will now agree a Memorandum of Understanding setting out how they will support small and medium-sized enterprise businesses, ensuring access to support and financing for better growth.

Subject to legislation, the GMCA will also be able to introduce a Business Rates supplement to support local investment.

In children’s and young people’s services, the government will support the GMCA to develop an integrated Greater Manchester approach by April 2017. This comes too with increased focus on skills, seen as key to Greater Manchester’s success.

The government has asked the GMCA to complete analysis into post-19 skills provision and how it can better meet the needs of the local economy by the end of the financial year so that the process of devolving this skills provision can begin.

The GMCA and Osborne have agreed that subsequent to the Spending Review, discussions will take place to allow Greater Manchester full control of the commissioning process of Employment Support. These discussions will be finalised by the end of the financial year.

Councillor Sean Anstee, Vice-Chair of GMCA and Leader of Trafford Council, said: “The announcement today of further devolution of powers is welcome and demonstrates the on-going commitment of Government to this cause and enables Greater Manchester to look at new areas where local decision-making will make a positive difference.

“Whether it is enhanced transport, energy and science commitments, integrated services for children or a joined-up skills and employment system, this announcement, coupled with those over the last year, mean the foundations have been laid for stronger, more prosperous Greater Manchester to benefit our residents and businesses across the city-region.”

Councillor Sue Derbyshire, Vice Chair of GMCA and Leader of Stockport Council, said: “While local government is facing the challenge of further spending reductions, the 10 Greater Manchester councils are working together to make sure we can maintain growth and services to residents. The devolution agreements with government are a major step towards this and these extra announcements take us further.”

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