Chris Murray on Core Cities, devolution & City Deals

Chris Murray has been director of Core Cities, the body representing the UK’s eight largest cities outside London, since 2006. Before that he worked in skills, culture and regeneration as well as in local government for a decade, establishing the UK’s first local authority cultural planning unit in Milton Keynes.

Room 151: You have talked about core cities spearheading the new movement in the local government family. What do you mean by that?

Chris Murray: Essentially I mean using the freedoms, powers and resources that come with devolution and decentralisation: to drive growth on the one hand and to drive public sector reform and reduce spending on the other. We all know what the financial future is currently. In our cities it isn’t good, we feel we have got very strong evidence that there is disproportionate impact of the settlements on the core cities.

The cumulative impact of various cuts has been disastrous for core cities so our agenda has largely been about growth but more recently I think we have come to understand how the two agendas of growth and reform fit together.

For cities to continue to provide sustainable landscapes for public services and to continue to provide leadership on economic growth we need a different approach to how we spend public finances. That is largely about devolution, about getting solutions close to the problem and getting your hands on growth at the same time. It’s all of that that makes your city sustainably competitive.

All the additional stuff around growth is important: having the right skills, the right housing market, jobs and so on. But recently everyone has realised that it is also about quality of life and quality of environment. You have a good set of indicators that tell you that from a thriving place that is doing well there is productivity.

Where we are trying to get to in all of this, over the long term, is to see our cities doing what a lot of cities in Europe have traditionally done: perform the same as, or even outperform, the national economy. In this country they don’t do that, they under-perform at the moment. We want them to move toward becoming financially more self-sustaining and contributing toward the fiscal base.

Room 151: How do you feel about the devolution of finances happening, mainly through the City Deals?

CM: Essentially it has been through City Deals although there have been other bits of devolution which have been a double-edged sword like council tax benefits. Devolution isn’t always necessarily what you want and you do have to be careful what you wish for.

How do we feel about it? On the whole pretty good. Where we are now is a massive step forward but it is in the context of significant financial pain. Without that I think we would have a much more positive take on things.

You have got to recognise what the government has done on City Deals and applaud that, we would encourage them to go to the next level through the growth deals over the next spending review period.

Room 151: Each city has got a fairly different deal in terms of finance haven’t they?

CM: Yes and no. I think there are principles which are quite similar. One of the things that we are looking at for the next stage of this is how you scale up, and perhaps even franchise out some of those wave one deals across other core cities so that other cities can enjoy the same freedoms.

So there are differences but also a common set of principles in what people are trying to get to which is to achieve investment of scale, to have flexibility for that investment, to have long term certainty and to share in the dividends of the investment and the risk that you take as a city.

Room 151: Is there a particular financial deal from one of the City Deals that you would see as an exemplary piece of practice?

CM: There is something in all the deals like that. Tax Incremental Financing is something we are particularly pleased with, we worked on that for a very long time – I mean the proper TIF, not the thing that you can do with localised business rates. Earn-back is a terrific model, it’s TIF with brass knobs on, TIF plus. That starts to get you toward the kind of fiscal reforms that really allow big cities with capacity and drive and ambition to do a hell of a lot more for the national economy.

Core cities already deliver 27% of the economy, which is more than London. Put them together with London and it is actually half of the economy. We’ve got massive populations and the opportunity there is huge. You have got to ask yourself what it would look like if core cities did just punch their weight in European or international terms. Models like earn-back are really going to get them to that. These are the sort of figures that cities in most of the rest of the world take for granted.

Room 151: You talked about the divide between the cities and the rest of the country in terms of cuts but how do you feel about counties and other areas complaining that cities are getting unfair advantages?

CM: Everyone has got to fight their corner and I think everyone appreciates that. People talk about the local government family and I think there is a sense of family because at the end of the day people are trying to achieve the same things for their places: jobs, quality of life, decent levels of economic output so people can enjoy and prosper and so on.

What we have been trying to say is Core Cities is there because of the economic role of our core cities. There is a difference in the way that national policy should respond to those cities. That doesn’t mean that everything goes to the cities and nothing anywhere else and it doesn’t mean that other places shouldn’t have those freedoms and powers as well. What Core Cities has achieved by working together in terms of policy shift is something that a lot of other places can eventually benefit from.

We’ve been working together for a long time and we have got a very distinctive economic role. Core cities is a term which is recognised internationally, all countries have got their core cities and unless you are doing that as a nation, unless policy is allowing all of your top cities to succeed together you are actually not realising your economic benefit, not using your resources properly.

Room 151: What is the next big thing for Core Cities?

CM: At the moment we are working toward the next stage of devolution, which is around two things. First we are going back to City Deals and saying ‘what can we franchise, share or scale up to the next level from the wave one deals’. The second thing to do is to look to see what we would like in the growth deals. Both over the spending review period and over the longer term as well.

The first phase of the Core Cities work hasn’t exactly happened but we have moved on a long way from first base. The first phase was about getting the recognition into national thinking of successive governments that cities drive growth. It seems strange but that wasn’t accepted for a long time. I think it is accepted now. So now the work is, having accepted that, how do you allow – as a country – all your top cities to succeed together and how do you make them competitive for the long term? There is some evidence that suggests that we are moving down the rankings of sustainable competitiveness internationally and we need absolutely to do some short term things but we are also thinking about the long term and what we will allow our cities to contribute.