A top council leader has said regions such as the West Midlands should use their assets to supercharge investment in infrastructure, following reports ministers are planning radical reforms to get pension funds investing in building projects.
John Clancy, leader of Birmingham City Council, wrote on his blog on Sunday that: ‘It is time for cities and city regions to take even more of a leading role in the post-Brexit economy.’
Birmingham City Council leader John Clancy
Describing ideas he has been putting forward for some time as ‘Brummienomics’, he said: ‘We need to use the great assets in the region to back up a much wider regional wealth fund over which we have control and which we do not have to go cap in hand to London for.’
Last week, chancellor Philip Hammond revealed that the Government was working with the West Midlands Combined Authority on a second devolution deal to include new powers on transport and other areas.
Mr Clancy said a 'dynamic West Midlands triangle of wealth' made up of publicly-owned assets, ‘mighty regional pension funds’ and the wealth of the private sector in the region ‘should not be seen as some sideshow in a combined authority: it should be its engine’.
He added: 'We’re not asking for powers as such to do this (especially as, to coin a phrase, “we’re going to do it anyway!”).'
Mr Clancy was responding to a report in the Financial Times that ministers across the Government are working on schemes to get pension funds investing in building projects ahead of the Mr Hammond’s Autumn Statement.
The paper said one idea being considered by the Government is to give regional mayors powers to create “city bonds", raising up to £1bn that would be underwritten by the Treasury.
The FT quoted a Government source as saying: ‘If you’ve got a long-term infrastructure need why wouldn’t we be looking to put sensible money into that?’
It said ministers had privately admitted surprise at how much foreign funds such as Canada’s Ontario Teachers’ Pension Plan had invested in British building projects.