Eight core cities,Manchester among them are to be helped through new “city deals” in which they will get greater control over the money they receive from central Government.
Plans announced this morning by the Deputy Prime Minister Nick Clegg,will allow councils to borrow for the first time against future tax receipts from business rates through a new Tax Increment Financing scheme.
Manchester joins Birmingham, Bristol, Leeds, Liverpool, Newcastle, Nottingham, and Sheffield,in being piloted for this scheme details of which are expected to be published in a new Local Government Finance Bill in the next two weeks, with the powers in place by April 2013.
The new bill is expected to include giving each city a consolidated capital pot to spend "as they see fit" and allowing councils to take out bank loans on future developments - such as shopping centres or business parks that are expected to generate significant revenue - to pay for the investment work.
Commenting on the scheme,Nick Clegg said:
"Cities are the engines of economic growth. Whitehall should not be like an overbearing parent, throwing money at cities but refusing to let them stand on their own two feet. So we will have a bonfire of Whitehall controls to empower our cities to go for growth.
"We need our cities to be economic, social and cultural magnets - places people aspire to live. Firstly, cities will have greater freedom to invest in growth. Secondly, having power over transport, housing, broadband. Finally, the power to boost skills and jobs.
"Our cities have been straining at Whitehall's leash. They now have a once in a generation opportunity. I urge them to seize it and make it count."
However Hilary Benn MP, Labour’s Shadow Communities Secretary has described the scheme as a smokescreen for further big cuts to council funding being announced today by the Tory-led Government.
"These will particularly hit the most disadvantaged communities in England, which have already seen bigger cuts than less deprived areas. With local council jobs going – affecting twice as many women as men - cutting too far and too fast is forcing local authorities around the country to cut frontline services on which both residents and business depend. With all this happening, Nick Clegg's out of touch claim to be giving our big cities the key to their future is so hollow as to be meaningless."