UK ParliamentDeputy Prime Minister Nick Clegg has announced that another 20 cities will be given additional economic powers as part of the City Deals programme. As this press release sets out, each city has its own distinctive focus, whether manufacturing or maritime, the knowledge economy or green technologies. Having said it would be a competition without any limit on who gets through, the Government has been true to its word – but the Deals will be developed in phases. The ‘flotilla’ of Deals (apparently how it’s being described) will involve the first few Deals being developed in the next few months, the next phase being completed in Autumn, and the final phase of Deals being signed off towards the end of the year or early next year.

Overall it’s a welcome announcement and good to see that the Government is pushing ahead with devolution – you wouldn’t expect the Centre for Cities to say anything else – but it raises a number of interesting questions about what next, not only for City Deals, but for the Heseltine Review recommendations and for devolution as a whole. Five key questions spring to mind for me.

First, does Whitehall have the capacity to deliver the Deals? This is a lot of Deals for a relatively small Cities Unit, which will be going out to bat against some heavy-hitting Whitehall departments. The Unit not only needs to support these 20 cities, but also the original eight core cities (which are hoping to extend their Deals further). A lot of the Deals are also very big asks for departments traditionally very sceptical about the need for or desirability of any devolution. Nick Clegg and Greg Clark have been instrumental in pushing through a lot of change; they and other senior ministers and officials will need to work very hard to ensure Whitehall is ambitious, open to change and able to deliver.

Second, do cities have the capacity to deliver the Deals? A lot of work will be needed to turn the expressions of interest into the level of detailed policy that will get through Whitehall, and all areas are facing the strain of reduced budgets and reduced staff. If Deals are to be successful then cities will need to ensure they invest in the appropriate levels of resource to shape the Deal, that they are both ambitious and realistic about what their city can achieve, and that they are astute in the way they ‘sell’ their Deal to national officials and to ministers. 

Third, will the core package deliver? The menu of additional options that places can draw on once they have signed a bespoke Deal – due to be announced in March – matters, as many cities were encouraged to focus on just one issue relevant to their local economy in their bespoke Deal, and told that other policy options would be in the core package. From my perspective, this core package should also be a trailblazer for other places, whether cities or not, to access powers, given they can satisfy some basic criteria such as strong governance and accountability.

And that’s my fourth question: is enough being done to ensure that local governance is strong enough? With Local Enterprise Partnerships, Combined Authorities, Joint Boards and an array of options in-between, governance is always going to be diverse. Yet, given that City Deals are partly about ensuring economic development takes place at a more practical level – i.e. the level of the functional economy – it will be important to ensure that governance is sufficiently strong to encourage places to take the tough decisions required in a climate of limited spending.

And that brings me on to my final question, what about Heseltine? Are City Deals laying the ground for Heseltine, or something separate? We would argue that there needs to be links made across these two agendas, so that City Deals can help to pave the way for Heseltine but also encourage further ambition in how Heseltine’s recommendations, particularly around the single pot, are implemented. We’ll be writing more on this in the run-up to the Budget.