To unlock potential of UK's under-performing cities, we must think internationally - West Midlands Mayor Andy Street

Posted On: 
5th October 2017

Making UK cities internationally competitive in key sectors is the best way to end productivity gap, argues West Midlands Mayor, Andy Street.

Being obsessed about our relative position within the UK is old-fashioned thinking. It is about competing internationally, said Andy Street.
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The Policy Exchange event, sponsored by KPMG, saw a panel of Metro Mayors, business leaders and policy experts come together to discuss how the new Mayoral roles could help unlock the potential of Britain’s cities.

The panel highlighted how many UK cities have lower productivity levels than the national average, an unusual situation for an advanced economy, and a critical challenge for the new Metro Mayors.

Andy Street, Mayor of the West Midlands, believes that taking an international focus is a critical step in improving the prospects of cities throughout the UK.

“Being obsessed about our relative position within the UK is old-fashioned thinking. It is about competing internationally.

“The Government is thinking for the first time about how it can enable our cities to compete. The industrial strategy is about identifying the competitive advantages of our city regions. This can’t be something we like to think is a competitive advantage… this has to be where there is genuinely an advantage on an international scale.”

He sought to explain the current disparity in productivity between regions of the UK by criticising the previous Government’s distributive approach to regional growth.

“Historically, the Government have distributed the spoils from the regions around the country. What the current Government have got to do in the new areas is concentrate support in the winning places… There has to be a concentrated rather than a distributive approach.”

Chris Hearld, Chairman of KPMG’s Northern Region, agreed that advancing an international focus for UK cities was a critical responsibility for the newly elected Mayors.

“It would be a disaster if devolution and the elected mayors resulted in a feud across the borders, where Birmingham is trying to outdo Manchester trying to outdo Leeds. That really wouldn’t do anything for anybody.”

“The challenge for the Metro Mayors is to turn their role into an external one. Taking their region onto the international stage is going to be a really important step in the next couple of years.”

The panel agreed that one of the universal advantages of the creation of the Metro Mayors was their ability to drive forward regional deals for infrastructure projects.

Andy Street highlighted how the devolution settlement had provided an opportunity for these bespoke regional deals to unlock new sources of investment.

“For the first time in the West Midlands, we have won about £4bn for transport infrastructure projects by working as a region, not by working as an individual local authority. It is a huge opportunity that devolution has provided.

“On housing, local authorities had previously been locked in a fatal embrace, seeing who would blink first on the supply of land and the use of public money.

“What the combined authority allows us to do is develop a plan of cooperation…and this has already unlocked new cash to develop previously unviable sites.”

In addition to their formal powers, Metro Mayors can have significant impact by utilising their soft powers, says Naomi Clayton, policy and research manner at Centre for Cities. She argued that being able to bring together businesses, public sector and other organisations to work together on projects was an essential part of the role.

Indeed, Mayor of the Tees Valley Ben Houchen explained how this soft power had allowed him to influence several policy issues that he doesn’t have formal legislative power over.

“I don’t think people realise the strength of the soft power that Metro Mayors have.”

“What people see is a sub-regional leader standing up and saying, ‘this is not right, and something must be done.’”

“It is about expanding into that space and finding areas away from my devolution deal where I can add value to the region, that drives economic growth, that helps economic regeneration, and puts more money in people’s pockets.”

For Chris Hearld, this is familiar approach for business, but one that could bring significant opportunities for the devolved areas.

“I think that the concept of soft power is a familiar one in business. When you appoint a leader then it provides a focal point, and that is going to create opportunity.

“Particularly for small and medium businesses, the mayors provide a focal point into what is often a complex world to try and navigate when you are trying to engage with public sector bodies, councils, educational authorities and others.”

With the second round of devolution deals already underway, Ben Houchen concluded that new deals may focus more on consolidation current powers rather than granting new competencies.

“Personally, I think the new deals may be less exciting, but are potentially much more important than the first deal. Rather than a devolution deal 2.0 it’ll be more of a devolution deal 1.5 to strengthen areas that we already have existing powers in, and provide a few new powers to bolster that.”