Birmingham needs new fundraising powers to pursue much-needed local transport improvements, according to a report published today.
The council should be allowed to levy a business rate "top up" to borrow money for projects such as the redevelopment of New Street station, according to the Centre for Cities. A 2p levy would raise £15.4 million per year and support a ten-year loan of about £118 million.
This would eliminate the funding gap for the New Street redevelopment, currently £114 million. The report also warned action to tackle traffic congestion was urgently needed but the debate about congestion charging had become "stalled".
The Government must explain how it would provide funding to improve alternative means of transport such as bus services before it could hope to win widespread support for the idea, the report says.
The Centre for Cities is part of the Institute for Public Policy Research, a centre-left think tank with links to the Labour Party.
It called on the Government to use the forthcoming Road Transport Bill to give England's regional cities the financial freedom to deliver better transport.
But it warned that Britain's economic prosperity is at risk unless transport links are improved.
Dermot Finch, director of the Centre for Cities said: "Birmingham needs more financial freedom to deliver local transport improvements. The city's future economic growth depends on it.
"City leaders, businesses and Ministers must reach agreement on supplementary business rates."
He added: "These will give Birmingham a key tool to invest in transport and support local economic growth."
The report's authors conducted a series of seminars with business leaders, local authority officials and other stakeholders in Birmingham, Newcastle, Liverpool, Bristol and Reading.
As well as concluding that central Government should allow councils to raise extra revenue for transport, they called for the creation of powerful local transport authorities able to make decisions across city regions.
They should be control over bus services and a say in the award of rail franchises, the report said.
There was a consensus that action to tackle traffic congestion was needed but also concern that road charging would be "politically impossible" to introduce.
The West Midlands needed promises of up-front investment in alternative means of transport, particularly buses, before it could agree to introduce congestion charging, the authors concluded.
The report says: "In Birmingham, it was felt that the lack of detail from central government around the implementation of local charging schemes was problematic.
"Despite a range of Whitehall announcements to set out how local schemes could work, many stakeholders remain uncertain about the timetable for road user charging, the scale of incentives available, and a range of practical issues surrounding implementation.
"It was felt that all of these questions must be answered, and a breakdown provided of costs and savings generated by congestion charging, before the support of the private sector could be guaranteed."
The report will be launched today at a London event attended by John Healey, the Financial Secretary to the Treasury.
Richard Lambert, director general of the CBI, wrote in the foreword: "Thanks to decades of under-investment, England's cities and towns do not have the transport infrastructure they need to live up to their full potential. Although the current government has increased transport investment substantially, there is much more still to be done.
"As business leaders, we have long recognised the importance of high-quality transport services to the performance of our cities and towns."
