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Danny Alexander: new wave of City Deals key to local growth

A new wave of City Deals and the Infrastructure Guarantee Scheme are pivotal to the government’s bid to stimulate local growth, according to Danny Alexander, chief secretary to the Treasury

Alexander was speaking at Unlocking Places, Delivering Growth, a conference organised by the British Property Federation and the Local Government Association yesterday (30 October).

The first phase of City Deals announced in July saw the government devolve power over housing, transport and business support to the eight largest cities in England outside London, in return for local councils taking responsibility for delivering growth.

‘City Deals are a key element I want to integrate more closely with our wider growth strategy’

The government is now inviting another 20 cities to compete for a limited number of city deals. Alexander said: ‘Not all 20 cities will be guaranteed a deal. [However] this element of competition in the second wave will aim to increase the quality, level of ambition and innovation in the emerging deals.’

He added: ‘I see City Deals as a key element that I want to integrate more closely with our wider growth strategy.’

Alexander also confirmed that the government’s Infrastructure Guarantee Scheme, originally announced as being for projects of ‘national significance’, can be used to finance local development projects as well.

This move was welcomed by Liz Peace, chief executive of the British Property Federation, who said it ‘could be key in unlocking infrastructure projects across the country.’

Many delegates agreed that infrastructure needed to be developed first in order to stimulate property construction. Philip Simpkins, chief executive of Bedford Council, said: ‘We need to prioritise infrastructure. If you get your infrastructure in place, then housing will follow.’

Kevin Lavery, chief executive of Cornwall Council, added that: ‘We have just issued planning permission for a major town extension in Truro. The next problem is sorting out the Highways Agency who want a load of investment in the upper end of the A30 before a single house is built. If you ran a business like that, you would make huge losses.’

However, other delegates highlighted the continuing cash flow problems which hampered a recovery of the construction industry as the biggest obstacle to property development.

In a presentation on stimulating growth, Tony Travers, director of the Greater London Group, London School of Economics, said: ‘Because of the long period of public sector austerity, public sector capital resources are in decline, a difficult issue given that we need more investment, more Keynesian efforts to boost the economy, yet, as is true of all governments in Britain, as soon as there’s economic decline… they cut capital hardest, and that has happened yet again.’

The sentiment was echoed by Ian Miller, chief executive of Wyre Forest District Council, who said: ‘Planning is not the problem. The problem is getting money to developers to go ahead with developments, or to individual house buyers, the money needed to get a mortgage. That’s the area the government needs to concentrate on.’

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