With the General Election just around the corner, the future of key regional cities is becoming increasingly more debated. In line with George Osborne’s Northern Powerhouse initiative last year, Greater Manchester was granted the Devolution Deal, which in essence is an agreement of powers being transferred from the capital directly to Greater Manchester in key sectors such as transport, planning, housing, skills and business support.
In effect, the powers are being reassigned to the Greater Manchester Combined Authority (GMCA) which in 2017 will be led by an elected Mayor who will have to consult a cabinet of the leaders of its boroughs and cities. Over the years, the GMCA has become an overarching governing body for the successful collaboration of the eight local boroughs, along with the two cities Manchester and Salford, dealing with issues which concern the local economy and population.
It is argued that the UK has become over-centralised; meaning that cities such as Manchester – which can easily be compared to second cities Munich and Barcelona, as it contributes around £51billion to the country’s overall economy – have been stifled by London, negatively affecting the development of the country’s other major cities. The negative side effects are particularly visible through the local deficit between public spending and generated tax in Greater Manchester, currently as high as £5billion every year. George Osborne and supporters believe that targeted city-centric incentives, like Manchester’s Devolution Deal, will help rebalance the national economy and directly address specific local priorities, such as the housing market and transportation issues.
The housing market in particular is an important concern in the Greater Manchester area, as a population growth of more than 20% since 2001 has led to a chronic housing shortage. Additionally, ever-growing property prices tend to prevent Mancunians from getting onto the property ladder, meaning that a quarter of people in the area now rent within the private rented sector (PRS). Investors in the Greater Manchester property market are reporting that the market is strong, displaying high demand, excellent take-up levels and low void periods. On average they also received average gross yields of 7.6% in the last quarter of 2014.
Transferring such powers to local governments who have the necessary knowledge and local expertise, allows their decisions to be more profound and targeted. In return, these choices will allow Greater Manchester to not only enhance its local economy but also to contribute even more to the overall UK economy. Greater Manchester has already taken massive steps to regenerate and overall enhance its areas to become a more attractive destination for Foreign Direct Investment (FDI) – in fact, thanks to its rigorous regeneration programmes and successful collaborations with companies from abroad, it has already become the UK’s most popular destination for FDI outside of London. And this is only the beginning of Manchester’s bright future as an excellent investment opportunity: through the Devolution Deal and all supporting programmes within Osborne’s Northern Powerhouse scheme, the city will lead the way into the future – a future in which other key cities such as Liverpool and Sheffield will follow the footsteps of Manchester and help rebalance the British economy by closing the gap between the north and south of the country.
Article Courtesy of: Knight Knox International