City Deals and sustainable cities

Summer 2012

IntroductionIn this paper we look back at some of the key themes in our Sustainable Cities report and look forward to the landscape starting to be sketched out by cities, as part of the ‘City Deals’ agreed by the government.

There is a hunger for Sustainable Cities / Smart Cities concepts to start to translate into real outcomes – economic growth, investment in infrastructure, behavioural change. Twelve months later we are examining the first City Deals, and it feels as if we could be at the start of a journey towards a future of Sustainable Cities in the UK. City Deals should be a major step along the way to delivering sustainable cities, but how do the proposals shape up to the vision?

Contents

Introduction 1

City Deals 4

Conclusions 6

What does the City Deal mean to Birmingham? 7

What does the City Deal mean to Bristol? 8

What does the City Deal mean to Leeds? 9

What does the City Deal mean to Liverpool? 11

What does the City Deal mean to Manchester? 12

What does the City Deal mean to Newcastle? 13

What does the City Deal mean to Nottingham? 14

What does the City Deal mean to Sheffield? 15

We identified three key themes that needed to mesh together effectively to deliver the future for cities:• governance – creating the right contractual /

collaborative partnerships

• finance – creating the right funding mechanisms to make cities investable

• investment appraisal – using appropriate frameworks to measure the benefits of investment and over the right timescales.

Governance

We said that a key element was the creation of effective relationships between different levels (global, European, national, regional, city) and between the different stakeholders. We commented that models for public-private co-operation are in a state of evolution. In talking to leading cities, we observed a recognition that city authorities do not have the capability to deliver long term sustainability agendas on their own.

We saw the relationship between strategy and delivery at a city and city region level as key. We argued the case for separation between the two, with the creation of Infrastructure Investment Boards (IIB), which would be at arm’s length from the city authorities, although the latter would have shaped the vision and remain an influential (but not necessarily controlling) presence on the Board. There is a balancing act here, but achieving this balance, in the multi-stakeholder world that is the modern United Kingdom, is probably vital. In our report, we described this balancing act as follows:

‘The IIB needs to be capable of surviving a change of administration, while fully accountable and democratically responsive in its constitution, and of pursuing its agenda without policy interference while remaining transparent and accountable in its actions.’

We identified the need for a wide mix of funding sources – the need for retail investors as well as global institutions, as well as the need to avoid the ‘bureaucratisation of finance’ where funding provided through state or supra-national sources such as the EU can end up shaping the investment proposition in order to meet the rules laid down, so the tail ends up wagging the dog.

While public sector finance has a role in pump-priming projects that ultimately will be commercially financed, we see the need to create commercial development funds (perhaps with cornerstone public sector investors or where the public sector gets a carried equity stake for performing an enabling role) that approach development risk in a commercial way – as in, for example, the onshore wind sector.

There is an acute need just now for finance to bridge development risk in order to get projects to a stage where they are capable of being invested in by institutions or infrastructure funds and of being institutionalised to the point where they can safely be offered to retail investors.

We were fortunate to be involved in Bristol’s ground-breaking ‘Building a Better Bristol’ project [Building a Better Bristol] earlier this year. As part of this, we sketched out the trajectory for institutionalizing finance for a city region based finance mechanism, as per the diagram shown.

Over the past 12 months, we have started to see elements of the finance and governance themes identified in our Sustainable Cities report

coming together, although progress has been slow. City authorities are resource-constrained and have focused their finance raising efforts on public pots of money such as ELENA, Nesta and TSB funding.

If this sounded complex, it was with plenty of existing and emerging role models in mind, such as KfW or Stadtwerk Munchen in Germany, or the Green Investment Bank here in the UK.

Finance

Early Adopters Pilots

InfrastructureFunds

Programs

Capital Markets

Portfolios

Retail Institution

Programme - scaling the opportunity

Public-private collaboration has generally been exploratory and either remains high level or has got stalled as stakeholders struggle to reconcile commercial objectives and public vision.

The investment appraisal theme we identified alongside finance and governance has slowly evolved within investment communities. Whilst far from being mainstream, a better understanding of the wider benefits in investing in social outcomes and social entrepreneurship is beginning to permeate – probably helped by obstinately low returns in much mainstream investment which help to narrow the apparent gap between standard investment criteria and those based on a broader set of outcomes.

Credit Suisse, for example, published a report entitled ‘Investing for impact – How social entrepreneurship is redefining the meaning of return’ in January 2012, exploring this developing space that mixes commercial and non-commercial outcomes. All of this is encouraging, but largely untested at scale – and there is no evidence to suggest that in the UK developers and the public sector are taking a consistently longer term view. Payback remains a major challenge for much of the low carbon sector, for example. The City Deals represent an opportunity for English cities to rewrite the rules of the game, and some have seized the opportunity. So how do the first City Deals out of the blocks look? How sustainable (in its broadest sense) is the path mapped out for the cities?

City DealsCity Deals have thrown wide open the debate about the balance of power between central, regional and local government.

Challenging cities to take charge of their own destinies, the Coalition said in ‘Unlocking Growth in Cities’, published in December 2011, that there was a deal to be done – if cities deliver more effective, accountable government, central government will transfer more powers and provide incentives for cities to apply their own solutions. The proposals were definitely pitched as something transformative – ‘game-changing’, to use a cliché.

How have cities responded so far?

There will be a tendency for commentators to focus on the projects proposed by each of the cities, but in fact what is probably most interesting in these proposals is how the governance and delivery mechanisms are articulated, as these will set the pathway for future investment and development.

These are some of the themes that are starting to emerge:

• Unsurprisingly,jobsfeaturehighontheagendaofeverycity.Faced with today’s growth challenge, every city authority has seen a role for itself in addressing this problem. There is a mix of supported programmes, reskilling and training initiatives, alongside enterprise initiatives and proposals to develop or build clusters. It is, of course, impossible to predict how successful these will be; quality and flexibility of delivery will have a major impact. It is clear that cities perceive a major misalignment in existing skills and training with the opportunities of the future.

• Everycityhaspresentedthebalanceofcityandregionslightly differently. The clearest city-regional strategies come from Manchester, Leeds and Bristol, with Greater Manchester having the benefit of building on a number of years of collaborative working and Bristol’s deal establishing ‘enterprise areas’ in places outside the core city such as Bath, where full retention of business rate growth will apply.

• Alongside‘traditional’economicdevelopmentinitiativessuch as housing and place-based regeneration are initiatives about physical and virtual connectivity, with powers on transport and superfast broadband.

• TheroleoftheprivatesectorindevelopingtheCityDealsthemselves varies from city to city. The Birmingham LEP, for example, seems to have played a significant role, while in Liverpool, with the transition from Council leader to mayor, the Council appears to have a firm grip on the process. However, there are some major corporate players currently involved in the development of Liverpool’s future, so perhaps there is more of a public / private mix than at first appears.

With the exceptions of Manchester, with its innovative ‘earnback model’ and Birmingham, with its pitch for the life sciences sector, a long term, cross-generational vision is not very much in evidence. Perhaps this takes time to develop. So far it is unclear how strong the appetite is for meeting with tomorrow’s, as well as today’s, challenges and opportunities.

There is considerable variation in how prominent the low carbon agenda is in the City Deals. Six cities refer to it, while Manchester, Liverpool, Birmingham and Newcastle ostensibly place it at the centre of their proposals. In some cases it seems like an afterthought, if it’s mentioned at all.

This suggests that there is a real tension between pitching for growth today, using current resource models and planning for a radically different paradigm in the future.

The specific projects proposed just now are in most cases sketched out at a high level, and probably subject to the usual rigorous value for money and benefits analysis that accompanies public sector projects. This may in itself present problems later on; there is no guarantee that old-style investment appraisals are flexible enough to provide the right evaluation framework for long term city strategies. One city was even rash enough to promise to apply the Treasury Green Book rules.

For City Deals policy to be genuinely transformative, we believe the powers transferred must be embedded in a robust governance framework, underpinned by access to sustainable finance for investment in projects, as we outline above.

These two key pillars are critical determinants of success or failure.

However, as well as providing governance, the city authority must also be a catalyst for change and provide for an effective working relationship between local and national government, business and communities. Part of the governance challenge is to allow the ‘white space’ to be created where trust can be nurtured and the alignment of objectives achieved. In some places, LEPs appear to be stepping into this role, but without access to significant financial resources, and they do not appear to be well constituted to adopt a direct delivery role.

In respect of both governance and financing frameworks, Manchester’s City Deal appears to capture the spirit of Unlocking Growth in Cities. Founded on the long-established governance framework of the Association of Greater Manchester Authorities (“AGMA”), their ‘earnback model’, aligns investment resources and economic development returns for reinvestment in strategic priorities.

The model allows retention of additional business rates over and above those allowed by the forthcoming reform of local government finance, benefiting the city region to the tune of £30m per year. Not that substantial in isolation, but bigger ambitions underpin this and, used effectively as enabling finance, this could unlock substantially more private investment.

Manchester has avoided too much granularity in its infrastructure proposals, which we think makes sense. The ‘earnback model’ could offer a genuinely sustainable source of finance through which Greater Manchester is rewarded for good investment decisions made locally – being region wide and non sector specific, it is broader in scope and potential than those funding elements more narrowly defined and tied to specific spatial (enterprise zones) or economic policy areas (skills, apprenticeships etc.), and to that end it marks a more substantive devolution of powers and resource.

ConclusionsIt is tempting to say that UK cities are at the beginning of a journey, but the future is more complex than that. A journey implies a route and a destination, and potentially a time-table. In this case, none of these are certain. An expedition might be a more appropriate analogy.

Flexibility seems to us to be the first watchword - flexibility in how the detail of how these City Deals is implemented and how the key delivery partners are engaged.

Sustainability is the second watchword - these programmes should not be unduly focused on short term outcomes or take the current resource model as a consistent baseline. All of these cities have in recent years started to address the difficult and complex question of how cities should evolve in the future against a potentially radical contextual shift. These City Deals shouldn’t pretend that nothing has changed. This is an exciting opportunity, but to capitalise on it, cities need to think, plan and govern differently and for the long term.

More comments on each of the City Deals are provided in the pages that follow.

What does the City Deal mean to Birmingham?The Greater Birmingham City Deal is entitled “A city region powered by technological innovation” and it sets out a bold agenda for change designed to create the conditions necessary for long term sustainable growth. It reflects a shared vision of the private and public sector partners that form the Local Enterprise Partnership (LEP) to become a globally competitive city region.

Its City Deal tackles the greatest perceived constraint to local economic action, namely the ability to effectively flex, prioritise and leverage public funds to its area. It aims to aggregate, manage recycle and invest public funds to deliver LEP priorities with an emphasis on local priorities and private sector co-investment to create a more sustainable form of public funding. The business-led LEP has selected four other economic themes where specific action can accelerate its productive capacity to address its toughest economic challenges and to target new growth sectors where it has emerging strengths and assets:

• skills – tackle the long-standing skills deficit that weakens our economy, by implementing a Skills for Growth Compact

• housing – kick start housing and mixed-use development on public land to address the long-term housing and employment site needs by investing council land and creating a new fund to prepare sites

• life sciences – capitalise on Birmingham’s leading position in life sciences and launch a match-funded Institute for Translational Medicine, which will co-locate state of the art clinical facilities with a hub for firms to engage with clinicians and academics

• low carbon economy – accelerate carbon savings and create green jobs by expanding its landmark green deal programme. Birmingham Energy Savers is currently at the forefront of the domestic energy efficiency agenda and plans to pilot new green deal solutions in the hardest to treat properties

The Birmingham City Deal proposes to integrate economic, environmental and social objectives that will need a robust governance model and funding structures to support its development. One area not addressed by the City Deal is its transport infrastructure, which remains a major challenge for the City and the West Midlands. It has shown it is one of the early adopters of new initiative with its Energy Savers Programme so has a strong appetite for meeting tomorrow’s, as well as today’s, challenges and opportunities.

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What does the City Deal mean to Bristol?Bristol and the West of England have placed a regional governance framework at the heart of their proposals. The four local authorities of Bristol, Bath & NE Somerset, South Gloucestershire and North Somerset, with a legally binding commitment to pool business rates for investment alongside the formal establishment of the West of England Local Enterprise Partnership (LEP) in 2011 have the potential to enhance existing governance arrangements by developing a model for effective business engagement.

The UK Government’s Unlocking Growth in Cities document, published in December 2011, says: “where cities want to take on significant new powers and funding streams, they will need to demonstrate strong, accountable leadership, an ambitious agenda for the economic future of their area, effective decision-making structures, and private sector involvement and leadership” Bristol have responded to this challenge by voting for an elected mayor.

This City Deal is intended to unlock significant economic growth for the region and the Bristol City Deal is made up of five main elements:

1 Growth Incentive Proposition – allowing the retention of 100% of the growth in business rates raised in the city region’s network of Enterprise Areas, over a 25 year period

2 The Transport Devolution Agreement – to allow investment in major transport schemes, the most ambitious being the Greater Bristol Metro, through a 10 year transport funding allocation Other schemes include the delivery of the Bus Rapid Transit network and new powers over rail planning and delivery

3 The People & Skills Programme – aiming to give the business community real influence over skills provision in the city region working with Further Education colleges for post-16 provision and the LEP Skills Group

4 The City Growth Hub in Temple Quarter Enterprise Zone – providing an enhanced inward investment service for

inward investors to help grow their businesses and find the right skills locally to match their needs

5 The Bristol Public Property Board - to manage up to £1 billion of Bristol City Council assets and an estimated 180 land and property assets in the ownership of a range of other public sector partners

This is a programme with a strong project feel to it, focused around a small number of big ticket activities. There is a strong public sector collaborative feel to it, but less visibility about how the private sector will engage just yet. There are some key questions are how all of these projects will be bound together into an effective operational structure and how will it integrate with the city’s other agendas, such as low carbon energy, which is not explicitly referenced in the City Deal.

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What does the City Deal mean to Leeds?Leeds are building on the emerging Leeds City Region concept which is already a strong part of the region’s identity, by looking at forming a combined West Yorkshire authority. The Leeds City Region LEP is wider than the four Authorities named in the grouping for this City Deal as it also includes areas of North Yorkshire including York and Harrogate which are geographically more remote.

A combined authority will also need to consider other regional initiatives such as the active Aire Valley Enterprise Zone as well as a Homes and Communities Agency Board. So it is clear further work will be needed to integrate across the City region.

The City Deal proposal aims to transform the city region’s job market with progress on two headline objectives: a long-term ambition to move to a ‘NEET-free’ Leeds City Region and to shape the skills investments of Government, employers and individuals to align with the real growth sectors in our economy. This will require close collaboration with higher and further education bodies in the region and matching skills to demands from the private sector.

Finance will be provided by a pool of up to £200m from partners within the city region – if it is matched by central government – in a Leeds City Region Investment Fund for the benefit of the entire area using a common appraisal framework. It also aims to deliver a much more business-friendly planning system with the aim of becoming an exemplar UK low carbon city region in non-domestic retrofit, low carbon business and sustainable, low carbon design. This will need to align to the Green Infrastructure Strategy and the recent launch of the City Region’s mini-Stern review.

The focus is on reducing the region’s £6bn imbalance between tax revenues and government spend, and using some of the fiscal benefits arising from the economic growth package to recycle into the Region rather than being paid back to Central Government.

On transport the proposal recognises the urgent need for improved transportation both within the Region and outside.

It aims to create a £1bn ‘West Yorkshire-Plus’ transport fund to unite the Leeds and Manchester City Regions into a single functional £100bn economy which is consistent with the Northern Way initiative which called for closer collaboration along the M62 belt and up to Newcastle. There may be political challenges that come with this approach, but different levels of engagement and collaboration seem to be the emerging model. It is interesting that there is not an obvious symmetry of aspiration on both sides of the Pennines, so decisions may need to be made about prioritising internal over external transport links.

Leeds has six specific proposals, of which there are four main ones:• skill and worklessness• transport• investment• tradeandinwardinvestment.

There are two ‘Supplementary Proposals’: Planning and the Low Carbon Economy, but it is not clear why the Low Carbon Economy in particular is thought of as a second order priority.

Where next? The Combined authority is the governance endgame, with a compelling geographical logic underpinning this. However, this doesn’t cover the whole LEP region yet, so is a two-speed integration in prospect for the Region?

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What does the City Deal mean to Liverpool?Liverpool City Region sees its core economic strengths as: the SuperPort; Advanced Manufacturing; the Low Carbon economy, and Knowledge and Visitor economies.

The UK Government’s Unlocking Growth in Cities document, published in December 2011, says: “where cities want to take on significant new powers and funding streams, they will need to demonstrate strong, accountable leadership, an ambitious agenda for the economic future of their area, effective decision-making structures, and private sector involvement and leadership” Liverpool have responded to this challenge by becoming one of the first two cities outside London to elect a mayor.

This City Deal aims to unlock significant economic growth for the region and the Liverpool City Region Deal includes the following elements:

• low carbon investment – a streamlined planning process to accelerate over £100m worth of investment in offshore wind infrastructure in the City Region and create 3,000 jobs

• employment – increase employment by combining up to £80m public and private employment and skills investments and empowering businesses to create more jobs, tackle skills gaps and raise productivity; supporting 17,400 people into work and creating 6,000 apprenticeships

• transport – creation of a joint investment fund of £800m supporting the creation of 15,000 jobs

• technology – utilise existing assets and attract new science investment to increase GVA and generate 2,000 high value jobs

Supporting this will be the development of a wider Liverpool City Region Investment Framework to bring together public funding streams and private sector investments aligned to our strategic priorities. As part of this Deal Liverpool are looking for Government to devolve the management of European

funding for 2014-2020 to the City Region to deliver against agreed investment priorities and support local decision making.

By integrating its economic, environmental and social objectives underpinned by a robust governance model and a funding structure to support development, Liverpool aims to deliver a much more business-friendly planning system with the aim of becoming an exemplar UK sustainable city.

Where next? Liverpool has some powerful corporate players who are central to the delivery of the strategy, a number of whom are already heavily involved. The success of the ensuing public-private partnership(s) in delivering the agenda is key.

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What does the City Deal mean to Manchester?If a robust governance structure to underpin City Deal is a prerequisite, then few cities start with a stronger legacy than Greater Manchester. The deal is founded on the partnership between the ten local authorities of the city region and the standout feature is an ‘earnback model’, which seeks to capture the financial returns from economic growth, for reinvestment in key strategic infrastructure projects.

It is interesting that Greater Manchester had the confidence in its existing governance structures to push back against the desire expressed by government for an elected mayor, with the May referendum result subsequently supporting that viewpoint. This was in large measure due to the city having possibly the most successful Chief Executive / Council Leader partnership in the UK as well as a stable city region structure (AGMA). However, while personal leadership is a key ingredient, all successful businesses need succession planning and that may be something Greater Manchester needs to address in the years to come.

Manchester’s earnback model is based on an enhanced business rate retention model, which will see Manchester retain additional business rates over and above that allowed for by the forthcoming reform of the local government finance regime, and will benefit the city region to the tune of £30m per year. Perhaps not that substantial in isolation, but bigger ambitions underpin this and, used effectively as pump-priming or development finance, this could unlock substantially more private finance.

The City Deal proposal only provides high level information about Manchester’s £1.2bn infrastructure plans, although it refers to the Metrolink extension to Trafford Park. We think this is the right approach – to get the governance and finance structures established, then think about the detail of the key projects the City Deal will deliver.

A rounded package of interventions is proposed for skills and employment, which covers:

• creationofanApprenticeshipandSkillshub

• supporttoSMEs,bothforrecruitmentandbusinessgrowth

• akeyrolefortheSkillsandEmploymentpartnership

• ascienceacademyfor11–18yearolds

• developmentofoutcomemeasuresanddatacollection.

Alongside this is a proposed Business Support Hub, which looks to fund a range of mentoring programmes for SMEs and a programme of ultra-fast broadband for businesses.

In the absence of a programme with dates, the assumption is that Greater Manchester are looking for an early impact, particularly on the jobs and growth agenda.

Also noteworthy is the joint venture arrangement with UK Green Investments which, along with its successor body the Green Investment Bank, is likely to want a limited number of these partnerships to package up and scale up urban low carbon projects.

The timetable for delivery Given Manchester’s track record in innovation and sheer civic ambition as a key UK and world city, we might expect Manchester to push the envelope further in the future, and make the case for further devolution of powers and the retention of resources, but there is no reason why other cities shouldn’t do likewise.

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What does the City Deal mean to Newcastle?Newcastle Council sees the need for a regional approach to regeneration. They are looking to work with the seven authorities across their economic area to take steps towards forming a North East Combined Authority with the support of the North East Local Enterprise Partnership. Lessons can be learned from combined models such as AGMA for the Manchester city region but there are clear challenges around the role of the metropole in driving growth for the region.

The language of the proposal makes it clear that this is a collaboration between local and central government. The City Deal is quite narrowly focused – its cornerstone is a commitment by government to ring-fence business rate income in four growth sites in Newcastle and Gateshead, and to retain them locally. This arrangement will allow both Councils the financial freedom to deliver private sector-led growth, initiating a £90 million infrastructure programme, and over the next 25 years to secure £1 billion of investment and create around 13,000 additional jobs. Other components of the deal include:

• economic development – creation of a Newcastle/Gateshead Accelerated Development Zone (ADZ), unlocking city centre growth

• marine and offshore skills development – work with UKTI and the Centre for Offshore Renewable Engineering to secure a further £500 million in private sector investment into the marine and offshore sector, with the potential to create 8,000 jobs across the North East

• low carbon – establish Newcastle as a low carbon Pioneer City, working in partnership to deliver its smart city ambitions and carbon reduction target of 34% by 2020. The city will demonstrate good practice, and will receive support in accessing national and European funding, including Green Deal and heat network initiatives

• employment and apprenticeships – improve opportunities through more integrated working with private and public sectors such as the Newcastle Skills

Hub and delivering a NEET Youth Contract Pathfinder across Newcastle and Gateshead

• housing – develop and deliver a Joint Investment Plan in partnership with the Homes and Communities Agency (HCA) to deliver 15,000 homes within Newcastle’s urban area, and to improve the functioning of the housing market in Newcastle

• transport – develop an investment programme to reduce congestion on the A1 Western Bypass working with key public and private sector stakeholders

• connectivity – invest in super-connected broadband infrastructure, through £4-6 million investment from the Urban Broadband Fund, matched by a commitment from Newcastle City Council

In the main, these look like fairly discrete programmes and two key interesting questions are what the strategic narrative is that binds these together; and how far into the future the vision goes. The steps towards a combined authority are in evidence, but highly tentative.

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What does the City Deal mean to Nottingham?The Nottingham City Deal is titled “Connected, Creative, Competitive” and it sets out an agenda for change designed to create the conditions necessary for long term sustainable growth. The City Deal is intended to be the catalyst for change, through enabling the development of the Nottingham Growth Plan’s flagship project: the Creative Quarter.

The Creative Quarter is the focus for a package of business development activity intended to enable entrepreneurship to flourish within the heart of Nottingham’s city centre. This is planned through enabling clustering of businesses in bio-sciences and creative industries. Through the City Deal it will create a package of investment funds to enable businesses in the Creative Quarter to grow. This will be supplemented by business support structures and connections into bespoke apprenticeships. The area will be served by super-fast broadband, low carbon energy supply and improved transport links and includes the following package of measures:

• enterprise funding – provide financial incentives, physical assets and business support structures to enable emerging sectors to further develop including a Venture Capital Fund to help early stage growth businesses, a Generation Y Fund to help young people start in business and a Technology Grant Fund to support the exploitation of intellectual property

• skills development – develop structures to simplify the process of connecting people to jobs by developing strong relationships with education and training providers to ensure that provision and economic need within the Creative Quarter are aligned

• transport – a programme of transport infrastructure and public realm improvements to fully connect the Creative Quarter, part-financed by Tax Increment Financing; This will sit alongside possible national transport upgrades (such as MML electrification or the second phase of HS2) and more immediate investments in innovative network

and demand management to minimise congestion and enable growth

• digital connectivity – develop infrastructure for super-fast digital connectivity within the Creative Quarter and beyond

• energy efficiency – work on the Green Deal, including extending the city district heating system to enable businesses to benefit from a Nottingham energy tariff to achieve significant savings

The Nottingham City Deal integrates its economic, environmental and social objectives with a range of funding models to support development in a number of priority areas. It is interesting that Nottingham’s focus is on its core, reflecting the broader shift towards denser city development that we are seeing globally. At the same time, this programme has less about its City Region. There is a private sector theme and a vision for the growth industries of the future that builds on its core strengths as city with a high quality of life, excellent transport infrastructure, high skills base and accessible location. The City Deal provides Nottingham with the opportunity to address tomorrow’s, as well as today’s, challenges across its growth sectors.

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What does the City Deal mean to Sheffield?Sheffield shows a clear commitment to form a combined South Yorkshire authority that build on the shared ambition of the public and private sectors in the region as evidenced by the Sheffield City Region LEP model.

Key elements of the Sheffield City Region Deal include:

• skills – creating a demand-led skills system which provides employers with a workforce able to meet their growth aspirations, and which secures significant new investment and engagement from employers in return

• funding – creating a £700m Sheffield City Region Investment Fund to invest in growth, develop infrastructure, create jobs and stimulate inward investment

• development – transform the commercial city centre with a £32.8m New Development Deal enabling the city to borrow against projected business rates in order to invest in infrastructure now

• transport – enabling the City Region and LEP to invest confidently in local connectivity priorities, including devolution of the Northern Rail franchise and local management of the trams and ensuring reliable access to the new HS2 station

• procurement – develop a national centre for procurement based around SCR’s Advanced Manufacturing and Nuclear Research Centres. This will presumably build on the existing regional skills in the nuclear sector

By integrating its economic, environmental and social objectives underpinned by a robust governance model and a funding structure to support development, Sheffield aims to deliver a much more business-friendly planning system with the aim of becoming an exemplar UK sustainable city. At the same time, there is a strong theme of central (public-sector controlled?) co-ordination in the funding mechanisms and management of core infrastructure, especially transport.

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Contact us

For further information on this report and its findings please contact:

Nathan GoodePartnerHead of Energy, Environment and SustainabilityT(Edinburgh)01316598513T(London)02077282513E nathan.goode@uk.gt.com

Phillip WoolleyPartnerGovernment Infrastructure and Advisory T (Manchester) 0161 953 6430E phillip.woolley@uk.gt.com

© 2012 Grant Thornton UK LLP. All rights reserved.

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