England is Changing: led by a Metro Mayor
Metro Mayors are seizing opportunities to reimagine their regions. How? By bringing in sub-national foreign investment. English city-regions have a strong sense of identity: now many have a voice.
What powers do Metro Mayors have?
The first Metro Mayor of the North East, Kim McGuinness, is celebrating Newcastle United Football Club’s (NUFC) first championship win in 56 years. So are the team’s owners. In 2021, the Saudi Arabian Public Investment Fund (PIF) bought the club. SELA, a PIF-owned entertainment company, is its main sponsor. Their logo was omnipresent on a lightshow on London’s Millbank Tower, 32,000 scarves handed out to fans, interactive social media.
Labour’s Mayor McGuinness seems pragmatic and joined a trade delegation to Saudi Arabia. The criticism seemed straightforward: ‘What is the point? She should be here locally’. Then, specific: ‘Why Saudi Arabia?’ (KSA). She might answer with her 2024 manifesto theme: ‘creating an infrastructure of opportunity’. Or simply: it is an investor. As it is KSA, it is not simple according to Newcastle United Fans Against Sportswashing. They raise valid human rights concerns. This muddles the role: she does not set foreign policy. Her election is for a strategic regional leader.
An ongoing ‘devolution revolution’
Directly elected mayors now represent over half of England. Ten Labour, one Conservative. Three women. It is slow going to engage voters; with average turnout in 2024’s local elections, 30%: in the General Election, 60%. In the decade since Osborne’s ‘devolution revolution’, the role continues to grow. Members of Parliament choose to leave Westminster to run for City Halls. Mayors are keen on the foundational economy over big schemes. Disconcertingly, the Labour Government’s number one mission requires big schemes, to “kickstart economic growth”.
Mayors have different and timely levers to improve their constituents’ opportunities and build a brand through place-making. Cities have a strong sense of identity: now they need a voice to tell their story. A thriving Manchester follows its exemplary duo Cllr Richard Leese and Chief Executive Howard Bernstein. They developed an economic centre and told its story under ‘City Pride’. Their consistency attracted capital.
New Prime Minister, new era
At the Global Innovation Summit 2024, then Mayor Andy Burnham outlined Manchester’s place-first approach: one team comprising the council leaders, himself the captain. An end to the nasty Thatcherite belief that competition will drive growth. Now, it is collaboration.
Collaboration with local councils
Collaboration makes logical sense. Council budgets rarely stretch to multi-year projects. Significant schemes need external funds, increasingly from foreign direct investment (FDI). In 2023 The Harrington Review of Foreign Direct Investment detailed a hotchpotch of departments deterring investors. Its solution is a government ‘one-stop shop’. According to Crescenzi et al, 2021, this is most effective as a sub-national Investment Promotion Agency (IPA). In less developed regions, IPAs can increase FDI by up to 71%. Mayor Steve Rotherham has ambitions here and diverted budget to create Invest Liverpool City Region.
London created clusters: the Knowledge Quarter, Sutton Life Sciences, Tech City. Clusters only work with an efficient planning system. Developers lose too many schemes in a council application blackhole. Step up, elected mayors. You can call-in decisions made by local authorities to re-examine the application – Sadiq Khan has 28 times (2016-24). You can form Mayoral Development Corporations to move planning powers and finance to City Hall – Ben Houchen has attempted four. Your plans determine the achievable demands: green spaces, school places.
Place- making also requires confidence. It is hard work marshalling these disparate forces. It takes a politician who wants to leave their stamp on the city. On its skyline, industries, brand, and future. It takes the one-name-only political stars: Hezza, Ken, Boris. They all found themselves in hot water for venturing into foreign policy. Red Ken’s outreach to Hugo Chavez for cheap oil; Boris forfeiting goodwill in Japan with a rugby-tackle.
Mayors should court Foreign Direct Investment
Football Clubs drive FDI
Should Mayor McGuinness have gone to KSA in search of FDI? It was not her plane, nor her delegation. She was part of the Prime Minister’s retinue. In 2021, Newcastle saw extraordinary scenes when the PIF, alongside the philanthropic Reuben Brothers, took over NUFC. An army of fans clad in green Saudi flags and chequered Arab headdress celebrated. Many noted Manchester City and its owner, Abu Dhabi City Football Group. Their investments have won silverware and commercial revenue. Alongside the City Council, it has funded regeneration in Ancoats and New Islington.
The test then is whether this Mayor can convert the PIF investment from sport into regeneration, jobs and homes. Positioning herself as close to the PM helped establish her seniority. For Whitehall, taking her along establishes an elected, distant point person. The Mayor will answer every WhatsApp message – from construction skills shortages to better broadband. The Metro Mayor’s Unique Selling Point is to offer investors continual access in their partnership: any problems, bring them to City Hall. Mayor McGuinness affirmed:
“The North East has never before had an opportunity like this to stand tall on the world stage… We are discussing ways to build on the Saudi investment there has already been, to create new jobs for local people.”
A Metro Mayor’s Unique Selling Point is access
The PM’s patronage may help in battles with the Treasury. Pope, et al, 2022, detail how our centralised tax and grant systems cause inefficiencies and uncertainty. The two more advanced Mayor & Combined Authority regions now have an Integrated Settlement, removing Budget-round bidding battles.
If a Mayor can bring in FDI, the next stop remains the Treasury. For the Malaysian owners of Battersea Power Station, they developed a sukuk (Islamic finance) bond. For the Tees Valley Mayor, a freeport. It is not always harmonious. West Midlands Mayor Andy Street publicly accused “Treasury mandarins and their financial rules,” of working against him. Despite this, after hosting the 2022 Commonwealth Games, he increased FDI by 72% in 2023.
A new Minister for Investment, businesswoman Poppy Gustafsson OBE: the ‘one-stop shop’? The role creates a joint unit from three departments, an Office for Investment Board, an external advisory board, and an obligation on all ministers to ‘support’. This is a lot of shuffling the pack.
No.10 North
Metro Mayors have four-year terms and so need to get moving quickly to demonstrate their value at the next elections. Mayor Burnham, in his third term with almost two-thirds of the vote, encapsulated why the mayors can now change the story:
“The North of England wouldn’t have been able to do this five years ago, ten years ago – we wouldn’t have had the confidence maybe to do it, but we do now.”
With this confidence come arguments for greater devolution. This overlooks unfortunate omissions from the agreements so far: skilled civil service capacity. The Harrington Review proposes a central resource in the Office for Investment; and fixed secondments between City Halls and Whitehall. Metro Mayors deserve appropriate support as they try to change our local opportunities.
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