The new Government wants elected Mayors to drive economic growth in the regions. Derby should not fear this form of leadership and the potential economic benefits - including real estate momentum - it could bring, says Stephen Salloway, Managing Director of Salloway Property Consultants.
Last month, Chancellor George Osbourne chose Derby as a strategic post-election venue to announce that the 'Midlands Powerhouse' should be aiming to add £34 billion to its economy. But in an age of austerity how will this be possible? 'Devolution' seems to be the only answer.
The clarity offered by a majority government has given new pace and expanded thought to the process and scale of devolution. It is clear that local politicians need to collaborate in ways rarely seen before in order to create economically fertile regions capable of attracting international investment. But how will the new regional 'powerhouses' benefit the established local economies? From a property point of view, I now have real hope that devolution will lead to decisive intervention in areas such as priority infrastructure and skills investment - adding fuel to our market.
In the past the term 'Mayor' has perhaps been used as a gimmick. To date, outside of London its implementation has ultimately resulted in local responsibilities and budgets moving from a Council's Cabinet to a Mayor's Office. I never saw the point of that in Derby.
However, it has become clear to me the devolved government now proposed has much more substance than a 'Gimmick Mayor'. There could be real benefits for the regional economy and our property industry. I think Derby needs to sign up or risk losing out.
Over recent years Derby has proven its economic resilience and ingenuity. Real estate projects like those delivered with the help of the Derby City Council backed Regeneration Fund, completion of the Inner Ring Road and infrastructure to facilitate the new Infinity Park, welcome as they are, have not been easy wins. But this is no time to bask in the sun; it is time to push on. To compete we will need to look beyond our existing structures, even examining what constitutes 'our' economy.
For our property market, I believe real gains could be made through the devolution of transport and skills budgets. Whilst I accept that this will not be new money, having a devolved ability to prioritise infrastructure projects best able to create an environment for investment in our area would be a major benefit. There could also be budget to intervene on stalled or infrastructure-intensive sites, currently sitting idle as they are low on the national agenda. The Assembly Rooms and Duckworth Square are two obvious examples where locally focused funding could achieve significant improvements for the city.
The next logical step would be our area retaining the Business Rates income we generate to use on local projects. I have no doubt such intervention - including more support for major employers - will led to self-perpetuating growth in Business Rates revenues and therefore budget for investment. It is only right that an area gets to keep revenues generated when policies succeed.
However, I would go further. Local bureaucracy and austerity-led funding restrictions serve only to slow down important decisions. I believe areas such as of planning should be tackled as part of the devotion offer. Powers allowing capacity for innovative approaches such as a simplified planning guidance - allowing an ability to determine major planning applications more quickly - would drive investment.
In my experience if you build infrastructure, you build business. The role of the public sector's limited funds is to encourage as much private sector investment as possible. In an era of limited public resource why not deshackle more of these funds through a 'can do' administration, with sizable clout and decisive stewardship and greater public/private-sector engagement? When you look at what has been achieved previously with the Derby Regeneration Fund and Derby Enterprise Growth Fund it is clear we could achieve more if we had greater control over budgets.
Derbyshire Councils, as enablers, should continue to explore innovate ways of enabling business to thrive but it must be accepted that this might be as a smaller cog in a bigger regional wheel.
In my view, devolution will be critical to delivering conditions for real estate growth, projects with local emphasis, and providing a supporting network for the private sector to succeed. The Super Mayor may be coming to our city and the one next door... but don't fear.