Independent City Growth Commission launched by RSA

A new independent City Growth Commission is to investigate how England’s cities can become engines for growth, ensuring that all regions are part of the UK’s economic recovery.

Launched by RSA 2020 Public Services, with support from Core Cities Group, the Mayor of London and London Councils, the Commission will be chaired by Jim O’Neill, retiring Chairman of Goldman Sachs Asset Group.

The Commission will build on recent progress towards devolution such as City Deals and the London Finance Commission to develop a practical plan for enabling our cities to succeed in the global race for urban growth.

Globally, growth is increasingly driven by cities. But in England too many cities outside London are failing to achieve their growth potential. Very few are at the forefront of the nation’s economy and many are overly dependent on public sector funding – measured by public expenditure exceeding GVA in these same cities.

The commission will ask how growth in other English cities can complement London’s economic success; how public service reform can help with this; and how the practical, organisational, cultural and systemic barriers to a ‘multi-city growth model’ might be removed.

It will engage with Whitehall, business, local and national leaders and political parties to develop proposals for substantial city devolution that are ready to be implemented by the post 2015 Government.

“Urbanisation drives growth globally. The UK has the 7th largest economy in the world but we face huge international competition. Our cities will need to be able to compete in this race for growth. They can’t do this with their hands tied behind their backs. Despite huge strides forwards many of our cities are still not paying their way, let alone achieving their potential. Our Commission will examine what mix of powers, incentives and responsibilities will give our cities the critical mass they need to succeed.”

Commenting on the launch, Principal Partner of RSA 2020 Public Services Ben Lucas said:

“It is increasingly clear that our centralised political economy is no longer fit for purpose. Britain needs an alternative that enables our cities to succeed by combining public service reform with growth. Freeing up our cities to drive skills and employment policy and to reform their labour markets will be key. The hurdles that stand in the way of shifting economic power to our major cities should not be underestimated. The City Growth Commission will provide the Government of 2015 with a road map for making this happen.”

Members of the City Growth Commission include:

• Jim O’Neill – Chair, retiring Chair of Goldman Sachs asset management (Chair of the Commission)

• Diane Coyle OBE – Economist and BBC Trustee

• Greg Clark – Chairman of the OECD Forum of Development Agencies and Investment Strategies 

• Bridget Rosewell OBE – Chair Volterra Economics, former Chief Economist to GLA

• Professor Tony Travers – Leading British Government academic and Chair of London Finance Commission 

• Bruce Katz – vice president at the Brookings Institution and founding director of the Brookings Metropolitan Policy Program

• Peter Vernon MRICS –  Chief Executive of Grosvenor Britain & Ireland and previously Partner at IBM Business Consulting Services and PricewaterhouseCoopers

• Rohan Silva – Entrepreneur in Residence at Index Ventures and previously Senior Policy Adviser to the Prime Minister

• John Van Reenen – Professor in the Department of Economics and Director of the Centre for Economic Performance at the London School of Economics

• Ben Lucas – Principal Partner, RSA 2020 Public Services

The key questions that the Commission will address are:

• What are the key benefits – for the economy, investment, innovation, productivity and public finances – of shifting to a multi-polar growth model, in which our major cities are key players in the nations’ economy? 

• What does the international evidence show about the role of cities in driving growth and catalysing innovation and what are the key success factors that we can learn from?

• What is the relationship between public service reform and economic growth at city level? How can more effective demand management through public service reconfiguration and integration help to drive social and economic productivity and enable our cities to become financially sustainable?

• How can decision making and responsibility be better aligned with the reality of local labour markets, so that employment support, childcare, skills policy, welfare strategy and economic development are integrated around the needs of local people and businesses?

• How can growth in other English cities complement London’s economic success, and what should be the interrelationship between devolution, growth and reform strategies in London and in our other major cities?

• What needs to change between Whitehall and our cities to make multi-polar growth a reality? What does the Centre need to do to enable this and what economic and revenue levers do cities require?

• What are the practical, organisational, cultural and systemic barriers that stand in the way of a fundamental shift in economic power to our cities and how can these be overcome?

The Commission has commenced an open call for evidence from businesses, the investor community, business groups, local government, think tanks and civil society organisations.

Commenting on the launch, Boris Johnson, Mayor of London, said:

“I welcome the City Growth Commission as an important next step in pursuing the arguments regarding fiscal reform for larger English cities. London has already joined with the Core Cities to call for modest devolution in line with powers that have already been granted by the UK Parliament to Scotland. London’s own examination of this issue led by Professor Tony Travers demonstrated the huge benefits this could deliver, driving economic growth in line with local needs. Jim O Neill has brought together a fantastic team and I look forward with interest to their exploration of this vital issue.”

Sir Richard Leese, Leader, Manchester City Council and Chair of Core Cities Group, said:

“The eight Core Cities urban areas between them already account for 27 percent of England’s economic output, and with greater local financial control could deliver much more.  In other developed countries its normal for all their top cities to outperform the national economy, but here only London consistently does so. If all our Core Cities performed just at the national economic average, that would put £1.3 billion into the economy every year.  We think we can do even better than this, outperforming the economy and becoming financially self-sustaining in years to come. But cities need the tools to drive growth, support business and boost jobs and skills. This Commission comes at a critical time and asks vital questions about the future of our cities, in whose hands lie the future of the national economy. That’s why this Commission is supported by all the Core Cities and I look forward to its findings.”

Jules Pipe, Chair of London Councils said:

“The real terms cut in public sector resource expenditure across the UK during the current spending review period is estimated at £43 billion (or 12 percent). Over the same period, core funding to local government will fall by over 30 per cent. The London boroughs are meeting this challenge by pointing the way developing new models of public service delivery based on local integration and partnership. Most importantly, we need devolution of power and resources to allow local innovative solutions to the very real challenges of providing enough school places for London’s school children, meeting the housing needs of the capital, and caring for elderly Londoners.”

Notes to editors

• For more information contact RSA Head of Media Luke Robinson on 020 7451 6893 or 07799 737 970 or luke.robinson@rsa.org.uk 

• The Commission can be contacted via Claire Coulier, Claire.coulier@rsa.org.uk or 0207 451 6897.

• The Commission will be launched in October 2013. Its research and engagement will take place from autumn of 2013 to summer of 2014. The Commission’s final report will be published in autumn of 2014.

• The Commission will complement recent positive developments in relation to devolution to our cities, including: the Heseltine report; City Deals; Community Budgets; the Single Growth Fund; the London Finance Commission; and the Manchester and North East Independent Economic Reviews.

• Jim O'Neill coined the acronym ‘BRICs’ in a 2001 paper entitled "Building Better Global Economic BRICs".

• London Councils represents London’s 32 boroughs and the City of London. London Councils also provides some services directly including the Freedom Pass scheme, which enables free travel on public transport for older adults and people living with a disability or long-term health condition. London’s boroughs are responsible for hundreds of services including children’s and adult social care, housing the homeless, libraries, planning, waste collection, licensing and regulatory services such as environmental health. They also deal with parking enforcement as well as repairing and maintaining 95 percent of London's roads.