London plans to spend more on bicycle lanes in the next decade than Greater Manchester has on all public transport infrastructure in the past 10 years. This has to change, argues economist Dr John Ashcroft
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Manchester has the potential to grow on a par with its comparator cities of Amsterdam, Barcelona, Lyon and Munich, the Manchester budget argues. Photograph: Christopher Thomond for the Guardian
We are an economy in recovery, but a slow one. Without growth it will be difficult to reduce the deficit. However, infrastructure spending is crucial to rebalancing the economy towards the regions and Greater Manchester is well equipped to benefit from the process. It is time to drive regional recovery with a more cost-effective allocation of resources. This is why we've produced the Budget for Greater Manchester.
In the budget, we call for a £20bn boost to infrastructure spending with £5bn allocated to the North West and £2.5bn to Greater Manchester. It is time to drive recovery up the M6 to other places as well as London and the South East and create the conditions to rebalance the economy.
Boris Johnson has also pledged to invest more than £900m over the next decade in cycle schemes, including a 15-mile east-west route which the Mayor dubbed 'Crossrail' for the bicycle. This will mean more will be spent on cycling in London over the next ten years than has been spent on all forms of transport in Greater Manchester over the last decade. It is time to put a stick in the London wheel and allocate more to the all the regions of Great Britain.
The Budget for Manchester also calls for additional support for business and commercial real estate lending, with the creation of £100bn SME and CRE (commercial real estate) bonds.
The bonds would offer low coupon five, 10 and 20 year money issued by UK banks, purchased by the Bank of England and guaranteed by HM Treasury. The bonds would be funded by QE gilt redemptions, dividend payments and a modification of the Funding for Lending scheme. This would resolve the issues of capital adequacy and the regulatory burden which inhibits lending by business banks to SMEs and the property sector.
Investment in Greater Manchester offers value for money and high pay back ratios. The challenge to improve travel to work times and to extend the travel to work area continues, with the Northern Hub strategy and the Transport for Greater Manchester Plan.
The proposition to allow local authority pension funds to invest 30% of funds into infrastructure and property is welcome. Additional tools exist to identify medium-term revenue streams to support such schemes, like business rates, new homes bonus, the community infrastructure levy, council tax and schemes including the enterprise zone at Airport City. These can contribute to the blend of funding projects need to make them viable.
Transport and digital connectivity are also crucial elements for growth in Greater Manchester, with too little investment so far in most places. Where the new Metrolink lines have been installed through Tameside, Rochdale and Oldham, complementary planning and investment is needed to realise the potential the trams offer.
Greater Manchester has the potential to become a centre of economic growth in the UK on a par with its comparator cities of Amsterdam, Barcelona, Lyons and Munich. To do this it needs more leverage over the investment made within the city, and for more of that to be spent to generate growth.
Government could do more in terms of business rate retention and discretion, which could be used to further drive investment. The 'Earnback' model, agreed in the 'city deal' is a step in the right direction, as the government agreed in principle that up to £1.2bn invested in infrastructure improvements will be paid back when economic growth is seen. These funds will be reinvested in further infrastructure improvements.
Manchester has significant expertise in the key technologies that will deliver economic growth and jobs and we should capitalise on these to produce the next generation of industrial products across sectors such as electric cars, smart energy networks, mobile phones, medical devices and two-dimensional products led by the rapidly-developing science of graphene.
Greater Manchester needs to capitalise better on the research excellence in its universities and the R&D capabilities of its firms. The national allocation of funding for big science projects in the UK would help this.
The government has largely protected the science budget, but should do more as part of a stimulus package. In Manchester this would mean support for the development of the soon-to-be vacated former UMIST campus and its transition into a world class innovation park adjacent to the planned HS2 terminus.
The government should seek to consolidate existing private sector science investment in the regions.
Government investment in housing has failed to keep pace with demand for decades. Now is an ideal time for the government to address this as part of a stimulus package to unlock large scale housing sites in areas like Manchester. The CBI has called for 50,000 new homes to be built in the UK economy. We argue for 50,000 to be built in Greater Manchester with a target of 10,000 in each of the next five years.
Our aim is to provide an independent and credible assessment of the current state and forecast performance of the national economy and the implications of this for Greater Manchester. The Manchester Budget is intended to provide a robust basis for discussion with government on the role of our city in ensuring national prosperity.
