Treasury announces £180m for West Midlands densification
Financial support for region housing, regeneration, and transport-linked projects were just the start of chancellor Rachel Reeves’ announcements on Tuesday for reshaping the economy of the Midlands – she also teased additional fiscal devolution measures that would provide mayors with control of some of the national tax income.
City Investment Funds
A mixture of grant, loan, and patient capital funding, the £2.3bn City Investment Funds will be given out to the mayors of West Midlands, Liverpool City Region, Greater Manchester, West Yorkshire, South Yorkshire, and the North East.
The money is geared towards addressing viability challenges surrounding regeneration, housing, and transport-linked projects.
City Investment Funds are in addition to the £500m Mayoral Revolving Growth Funds announced last year.
The CIF programme breaks down to £1.5bn through a new Housing Acceleration Fund – which all mayoral strategic authorities, including East Midlands Combined Authority, will be able to bid for cash from. Funds from the HAF will come via financial transactions. Exact allocations from HAF are still be decided.
The remaining £800m is the City Densification Fund, which seeks to do exactly what its name says, backing projects for housing, offices, and transport.
West Midlands secured the most CDF cash, with £180m going to the combined authority.
GMCA earned the second most, with £175m allocated. West Yorkshire was awarded £145m. The North East claimed £120m. Liverpool City Region won £95m and South Yorkshire has received £120m.
More details are due to be announced in the Autumn Budget.
Keeping taxes in the Midlands
The national tax changes will be detailed in the Autumn Budget. However, Reeves did reveal that income tax would be among those explored for deployment to mayors. She clarified that this would not mean higher taxes, but simply reshaping who controls the funds.
“Reforms will be fiscally neutral, focused on sharing and retaining a portion of existing revenues, with the proceeds of growth benefiting the places that generated that growth, while managing volatile receipts both for local areas and for the Exchequer,” she said.
“These reforms will represent a permanent transfer of power and resources – not another exercise in local ambition frustrated by central government control – with taxpayers able to see what is being delivered with their money, and to hold local leaders to account for the results.”
Reeves added: “What I am describing is a genuine break with the past.
“A generational opportunity for Britain’s regions to make their own future.”
