The Budget: further devolved powers for Greater Manchester: Greater Manchester are one of only two regions to be given the right to keep 100% of their business growth, in further devolved powers for the Northern region which will come into effect from April.
‘Symbolic’, so believes Pennine Business News’ Reuben Cutts, after a six-month period that has already seen the region be able to elect a mayor from 2017, and has hailed the announcement of a £6bn NHS health and social care plan.
Lord Peter Smith, chair of the Greater Manchester Combined Authority agrees, saying: “This is another significant step in the right direction and is another example of Greater Manchester being at the heart of innovation. It comes on top of November’s ground-breaking devolution deal and last month’s agreement to devolve the health and social care to Greater Manchester.”
Chancellor Osborne said: “With the devolution of power, skills, transport and now health I can now announce we have reached provisional agreement to allow Greater Manchester to keep 100 per cent of the additional growth in local business rates as we build up the Northern Powerhouse.”
‘Local areas will see full benefits of policy decisions that increase local growth rate and business rate revenues, sharing incentives to boost jobs and growth.’
There are questions over how much money these measures will raise, though. Extra cash depends on continued growth, because the region will only be able to retain cash that is surplus to forecasted revenue.
In 2013/14, the Greater Manchester and Cheshire East council collected around £1bn in interest rates, but this was £149m less than was expected.
On Salford collect more than was forecasted, with a surplus of £6.6m.
Philip Bond, who has compiled the study ‘Devo Max – Devo Manc’ for think-tank ResPublica, explained that the income of extra money would depend on how forecasts were compiled.
Lord Smith continued: “Stimulating growth, and helping our residents benefit from it, is already a key priority for GMCA. This announcement means we will be able to keep more of the proceeds of growth within the area – rather than handing them over to central government – and reinvest them in measures designed to encourage further growth here.
“It will be a virtuous circle and we can only gain and not lose funding through this new arrangement.”
The Budget failed to bring a commitment for proposals for a HS3, however, which would connect Liverpool to Hull, via Manchester and Leeds.
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