Selling cities by the pound

Originally posted on Centre for London blog 26 June 2015

The Cole Commission on UK Exports has published its report at a time when the Government’s target of achieving £1 trillion in exports by 2020 seems as distant as ever, with export levels stalled at around half that value, and a widening trade gap.

The Commission, originally set up by the Labour Party, recommends some sensible streamlining, including a new cabinet committee and the merger of UK Trade and Investment and UK Export Finance, and also recommend a more locally tailored ‘one stop shop’ service for small businesses wanting to expand through exporting, delivered through chambers of commerce.

But they seem to miss a trick in ignoring the potential role for the UK’s cities. Indeed, the report hardly seems aware of the gradual programme of negotiated devolution overseen by this government and the coalition, nor of the active role being played by cities like Sheffield, Manchester, Leeds and London in pushing exports promotion at a metropolitan level.

These cities have been learning from the experience of their US competitors (and potential partners). Research by the Brookings Institution, as part of a join initiative with JPMorgan, identified that the 100 largest US cities accounted for 75 per cent of exports of goods and services, and that export growth accounted for 50 per cent of their output growth following the 2008 recession.

Centre for London worked with JPMorgan and Brookings to review London’s exports strategy (our report Trading Places was published in November), and convened a meeting with the UK’s ten core cities to discuss how cities could play a more active role, using city-to-city partnerships, sharing experience with US cities with the same economic profile, and working locally to create the business environment that international trade requires.

We found huge enthusiasm for more active engagement among city governments, but also some frustration. Statistics don’t allow the detailed breakdown of data (especially on service sector exports) that would allow cities to identify priorities, set targets and monitor performance. Performance targets for UKTI don’t reflect the diverse make up of different local economies. And the task of planning for export growth is not within the remits of local authorities or local enterprise partnerships.

With continuing austerity, the UK’s cities are facing huge challenges, but are also rediscovering the civic entrepreneurialism that created many of our great city centres, and which can recreate thriving economies. Cities will never supplant the international infrastructure of embassies and trade missions, but they should become partners, not just bystanders, as we seek to regain our eminence in global trade.

Are we not Devo?

[Originally posted on Centre for London blog on 18 March 2015 – I realise I should have been cross-posting, not least to keep a record.]

A devolutionary ‘city deal’ was announced in the budget this morning for West Yorkshire, adding to those already in place for Glasgow, Sheffield and Greater Manchester. More are promised, for Cardiff, Aberdeen, Inverness and Cambridge. But like kids covetously eyeing each other’s toys, the other cities are asking, ‘How do we get what Manchester has?’

Manchester (or rather the Greater Manchester Combined Authority, which will comprise the leaders of the ten Greater Manchester councils, plus a directly-elected mayor) is setting the standard. It will have devolved powers over transport, housing, policing and crime, skills, international promotion and – following a surprise announcement last month – NHS spending. The Chancellor’s budget added full retention of growth in business rates (other cities get 50 per cent). Other cities deals announced so far have been far more modest in scope, covering skills, specified infrastructure schemes, business support and some international promotion coordination.

And London is lagging too. The Chancellor’s speech alluded to announcements about devolved funding for skills, more planning powers and a London Land Commission, all of which were made last month when the Mayor and Chancellor launched their Long Term Economic Plan for London. But neither the Greater London Authority nor the boroughs have any control over London’s health service.

To be fair, taking on the NHS in London (which employs 200,000 people, more than the construction industry) could be seen as a poisoned chalice (eve a hospital pass), as institutions (most recently Barts Health NHS Trust) teeter on the brink of failure. But the failure to join up health and social care has become one of the NHS’ big problems, with old people whose care has been neglected ending up in A&E, and hospital beds occupied by patients who are ready for discharge, but can’t access social care services to enable them to leave. The short-term incentives are to dump costs between local government and the NHS, but both parties have an interest in tackling a problem that is leading to unnecessary suffering and huge wastes of money. This may mean some tough choices, but the past few years have certainly given London local government the experience it will need in taking tough choices.

So why can’t London look after its own health services? Other cities have been told that they can’t go ‘The Full Manc’ unless they accept a directly-elected Mayor rather the relying on a congress of council leaders (thereby opening a new front in the war of attrition over elected mayors that has been running for the best part of 20 years). But London has plenty of mayors: Boris Johnson as Mayor of (Greater) London, as well as mayors Bullock, Pipe and Wales of Lewisham, Hackney and Newham respectively.

Perhaps the two-tier local government system makes London too complex? London certainly is complicated, sometimes Byzantine, though the Greater London Authority and London councils are working quietly behind the scenes, including on a shared bid for further devolution. And in any case, the governance arrangements proposed for Manchester, which include a Greater Manchester Strategic Health and Social Care Partnership Board, and a Greater Manchester Joint Commissioning Board comprising NHS England, clinical commissioning groups and boroughs, are hardly straightforward.

Perhaps the real problem is one of government, not governance. Perhaps, as they look over the River at St Thomas’s Hospital, MPs consider that handing over the NHS in the capital to London’s elected leaders is a step too far, as is the case with the Met Police. Perhaps, as in Washington DC, some capital city services are seen as too important for local accountability.

This fear of letting go should not be determining public policy in London. But if it is, Londoners may start to wonder whether the presence of Parliament and Government is a boon to the capital, or a millstone.

Your city\’s a sucker?

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It\’s been a busy week for citittude.  Bruce Katz has been in town, showcasing his latest data on how US cities are leading the economy out of recession.  And Benjamin Barber joined him for a Centre for London debate, arguing that, as nation states flounder, mayors are the most dynamic and pragmatic leaders, and that international alliances of cities are the powerful organisational structure.
Work has irritatingly stopped me attending several of the events but what I\’ve seen from Twitter feeds and blogs suggest an almost evangelical level of excitement; that as the world turns increasingly urban, cities are asserting themselves, seizing power and initiative from the drab and clumsy nation states that hold them back.  We have come a long way from the sixties or even the eighties, when cities were viewed a crime-ridden and corrupt rat holes, best avoided by upright citizens or treated as a problem, a target for initiatives, by well-meaning politicians.
Now, if this is a new religion, I\’m a worshipper.  The vitality and variety of London continues to astonish me, and the two mayors I have worked for are far more impressive than the national politicians I have come across.  Similarly, I broadly sign up to the \’Mayoral Manifesto\’, the programme of policies that pretty well every mayor pushes, whether nominally from the left of the right.  This manifesto (which I will write more about another time) promotes open borders and global capitalism, but is also concerned about housing, about social equity and about climate change.  It embraces minority groups and marginal lifestyles, invests in public transport and public space, but also endorses a tough law and order regime, with low tolerance for anything that could be seen as civic unrest or even dissent.
So, to borrow from Edward Glaeser, cities have triumphed. But there\’s another side to this story too; one that would caution against too much triumphalism, would whisper warnings against hubris like a Roman senator’s attendant whispering a memento mori.  As cities become more like each other – with the same Mayoral Manifesto, the same coffee franchises and the same bus rapid transit systems – they drift further and further away from their rural hinterlands.  Some would argue, and in the case of London have done so – that this process should be followed through, that cities should be granted proper autonomy, controlling their own tax, welfare and regulatory systems. 
Absent that solution – and modern city states are a pretty motley collection, including Singapore, Hong Kong, the Vatican and Monte Carlo – and cities will continue to have to live with their sprawling green neighbours. Cracks are showing: in England, the tension between London and the rest (including regional cities) is becoming a leitmotif of debate: on house prices, on High Speed 2, on funding for the arts . But in the west (where the vast majority of the population already lives in urban communities), the urban elite has tended to stay in control, though the Tea Party movement in the US and UKIP in the UK can be seen as rural/provincial reactions to metropolitan values. 
In the developing world, where urbanization rates remain below 50 per cent, and urban values are perhaps less widespread, rural champions have been elected and tensions have been more clearly manifested. In Istanbul, the Taksim Square demonstrations brutally repressed by the police were the actions of a beleaguered urban liberal class fighting against destruction of a public space (one of the gravest sins in the urban catechism) by a President elected by a more religious, more conservative hinterland that is even more remote from Istanbul than rural Arkansas is from New York.
Similarly, India\’s urban, secular Congress Party is perpetually locked in battle with the more sectarian rural politics of the BJP. In Sri Lanka, a recent profile of President Rajapaska argued that the urban elites of Colombo regard their president, elected on a rural buddhist ticket, with embarrassment.
I\’m not sure where all this leads us.  Personally, I am clear where my loyalties lie, and I don\’t think cities should be in the business of kow-towing to rural conservatives.  But even in their moment of greatest triumph, cities should tread softly in proclaiming inherent superiority and denouncing their rural opponents as bigots and hicks.  Those singing hosannas to the greater glory of the urban inside the church should be aware of those outside, many of whom are indifferent or actively hostile to their creed.