“Devo met” could help boost UK’s productivity

"Devo met" would mean more powers for cities like Manchester (pictured) and Birmingham. Picture: PA

ALLOWING CITIES to set their own tax, immigration and planning policies alongside “devo max” for Scotland could boost UK productivity by 5%, according to a social improvement body.

The UK needs “devo met” - devolution of power to metropolitan areas - to accompany maximum devolution north of the border, the Royal Society for the encouragement of Arts, Manufactures and Commerce (RCS) City Growth Commission said.

The north of England should also see greater connectivity to create “One North”, particularly the North West region it has dubbed “ManSheffLeedsPool” which has a combined population greater than Scotland.

This could include an “Oyster card for the north”, similar to London’s integrated transport card, a high-speed tube system and superfast broadband, it said.

The UK’s centralised political economy is “not fit for purpose” and centralised attempts to manage down the deficit and national debt “will be futile and unsustainable in the long term”.

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Businesses “struggle to meet their recruitment needs through immigration because the system is costly and complex”.

If the UK persists in restricting immigration to meet its “growth-inhibiting” net migration target, there is “a risk that households in all metros will suffer in the long term as GDP and GDP per person falls and average incomes are squeezed”, it added.

The Commission recommended reforming national immigration policies in favour of taking a metro-led approach, including lifting the cap on skilled immigration.

Cities should also be allowed to align their housing and transport planning across their travel to work areas, with the power to reclassify “poor quality Green Belt” areas for development, it added.

The final report from the RSA City Growth Commission concluded that devolution has the potential to boost economic output in the UK’s 15 largest metros by £79 billion per year - worth approximately 5% of current GDP - by 2030.

But the scale of the challenge “is huge”, according to RSA, with Greater Manchester, the UK’s second largest metro area, in an annual £4-5 billion fiscal deficit to the Treasury.

Jim O Neill, chair of the RSA City Growth Commission, said: “Bolder efforts to improve our infrastructure, both digitally but especially physically, are crucial for creating agglomeration.

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“As I have become fond of saying, greater connectivity between ‘ManSheffLeedsPool’ and this seven million person region could start to see the level of scale we need for change.

“We argue all 15 metro areas should be able to take on different packages of devolved powers over time, and there’s no reason why other places could not come together to take on policy and budget flexibilities too.

“The current five metro areas that have combined authorities seem to be the best placed, along with London for warranting earlier steps towards full ‘devolved status’.”

Ben Lucas, chair of public services, RSA and city growth commissioner, said: “With Devo Max being negotiated for Scotland, we need to see Devo Met for our British cities on a similar timescale.

“In a world in which cities are the new drivers of growth, decentralising our political economy will boost GDP and enable our major metros to achieve their social and economic potential.”

Charlotte Alldritt, secretary to the RSA City Growth Commission, said: “During the 19th century, metropolitan industrial growth drove our national economic success and established a strong industrial heritage, of which many of our city-regions can be proud.

“The challenge is now to ensure these places have the capacity to fulfil their economic potential in the 21st century - whether through better connectivity, leveraging the power of data in public service reform, or by fostering their creative, innovative economies.”