West Midlands counts huge cost of City Region snub

Apr 22 2009 by Nick McCarthy, Birmingham Post

The status would also have made vital funds available for the long-awaited extension of the Midlands Metro light rail system, M5 improvements and a light rail service between central Birmingham and Birmingham International Airport, which will cost an estimated £1 billion.

Earlier this week Birmingham’s council leader, Mike Whitby, made a final plea to the chancellor to back the project saying that it would also create up to 44,000 jobs.

The seven metropolitan authorities, led by Birmingham, were among 14 partnerships across England that asked for the new powers.

The scheme would have allowed the West Midlands to set up AccelerateDevelopment Zones – defined areas in cities and towns where councils are allowed to keep business rates from firms moving into the area for a period of 25 years.

They would have been able to borrow money for major projects producing millions of pounds to boost economic development.

Once the schemes are completedthey would claw in the extra business rates to pay back the loans. Forexample, by extending the BlackCountry Metro from Wednesbury to Brierley Hill and Stourbridge, they would attract new employers into the area, leading to an increase in the business rates paid.

Under the current arrangements local councils pay the rates back to the Treasury and cannot use the money on local schemes.

The City Region board would have also assumed control of skills training and employment strategy.

There was backing from councillors and business leaders.

Letters of support from Chambers of Commerce and CBI in the WestMidlands also went to the chancellor, business secretary Lord Mandelsonand Hazel Blears, the communities and local government secretary.