Budget 2012: A Mix of Hits, Misses and Maybes

It's good to see cities at the heart of the Budget, but questions remain about whether the policies announced today - many of them with impacts that will be felt only in the medium to longer term - will make a substantial difference to economic growth and job creation.

As the UK economy staggers towards economic recovery, this year's Budget was a big opportunity to demonstrate that the government has a clear plan to support economic growth as well as manage the deficit. And despite the big news of the Budget being about tax, it's very good news to see that cities, as drivers of the UK economy, were well represented. However, it's also a Budget which missed some real opportunities to tackle the biggest challenges that UK cities face: investing in infrastructure, supporting private sector growth and dealing with rising unemployment.

So what was the good news for cities? Some of the measures announced are policies that the Centre's research suggests will support economic growth. It's great to see that Manchester's City Deal involves devolution of tax to the city, and to hear that the government is committed to City Deals with the remaining six core cities. And we welcome the commitment to invest in the Northern Hub rail scheme and to improve transport links between various northern cities: better transport links, combined with better skills, could have a substantial impact on northern city economies.

Progress on Tax Increment Finance - £150m for the core cities - is positive, as are measures such as £270m extra for the Growing Places fund, ultrafast broadband for 10 large and 10 small cities (which could help the shift from the 'old' to the 'new' economy) and a review of airport capacity in the SE. They all signal that the government recognises the importance of place to economic growth.

There's also some interesting small print stuff about discounting loans from the Public Works Loan Board if local authorities can provide information on their long term borrowing and capital spending plans.

But there are some missed opportunities. We would have liked to see more spending on infrastructure: we know that this boosts economic growth in the short and longer term, and yet capital expenditure is still set to fall significantly over the next few years. We would have liked to see TIF funding extended to smaller fast-growing cities - and we'd like to see more money: even if it's kept to the core cities, £150m won't fund a great deal.

Our Budget submission also highlighted the importance of investing in skills and tackling youth unemployment, and ensuring that policies are place sensitive: while 1 in 100 young people in Cambridge are unemployed, it's one in 10 in Hull. Measures to support job creation, particularly for young people through policies such as further enhancement of the Youth Contract, could help cities tackle a growing problem.

Finally, the Budget also raises some questions. Industrial policy appears to be back on the agenda with announcements of support for life sciences and the digital sector, as well as Lord Heseltine's review of how the public sector can interact more effectively with the private sector. The question of what industrial policy should look like in a 21st century economy will keep recurring - as will local questions about what role LEPs can play.

The government has announced more Enterprise Zones, plus additional capital allowances - but the jury's still out on how much impact this will have, particularly in the short term.

The detail of the National Planning Policy Framework will also remain a question until next Tuesday, although the Chancellor was clear that the presumption in favour of sustainable development would remain. But until we know what that means, it is not clear how the NPPF will change policy in practice.

And it's worth noting that most of the policies announced today are focused on our largest cities. We would agree that large cities make an enormous difference to the UK economy, but government also needs to think about how to support small fast-growing cities such as Milton Keynes to grow, as well as how to help former industrial cities like Hull.

Overall it's good to see cities at the heart of the Budget, but questions remain about whether the policies announced today - many of them with impacts that will be felt only in the medium to longer term - will make a substantial difference to economic growth and job creation.

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