This time last year, I spoke to the former Goldman Sachs economist Jim O’Neill, shortly after he’d launched the independent City Growth Commission, of which he was chair, and which publishes its final report today. “If you look at some of the most successful economies in the world,” he said, “where many cities play a critical role, they enjoy some degree of independence over their finances and policy choices.”
Cities, O’Neill argued, are the engines of economic growth the world over, and the UK is no exception. Between them, eight urban areas—Birmingham, Bristol, Liverpool, Leeds, Manchester, Newcastle, Nottingham and Sheffield—generate a significant chunk of this country’s GDP. But in his view they could be doing even better if they had more control over their spending choices. O’Neill pointed out that there is a great deal of academic research which shows not only that cities benefit economically from the effects of “agglomeration” (the physical proximity of firms, workers and consumers), but that fiscal autonomy—the ability of cities and metropolitan regions to raise their own taxes—matters too.