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New powers and £1.5 billion investment to level up West Midlands

Published: Wednesday 15 Mar 2023

The West Midlands Combined Authority (WMCA) has negotiated a new Deeper Devolution Deal securing wide ranging new powers and a budget windfall in excess of £1.5 billion to level up the region.

Under the Deeper Devolution Deal – announced by Government in today’s Spring Budget – the WMCA has secured new and significant longer-term funding agreements including 100% business rates retention for 10 years, worth £450 million.

Highlights of the devolution deal.

It has also been confirmed the West Midlands will, from the next spending review, have a departmental-style arrangement with a single pot of funding negotiated with Government. This will give local leaders unparalleled control over spending on devolved areas, marking a seismic shift in power and influence from Whitehall to the West Midlands.

This financial certainty will enable local authorities and the WMCA to better plan and fund transformative investment in our region to create a fairer, greener and better-connected West Midlands.

On transport infrastructure, there is a welcome future funding commitment for round 2 of the City Region Sustainable Transport Settlements, which will come online in 2027 and support major projects such as an expansion of the Metro network, new railway stations, and more dedicated bus and cycle lanes. There is good news in the immediate term as well, with an additional £60 million which is expected to act as a springboard for delivery of the Metro extension between Dudley town centre and Brierley Hill, subject to approval of further funding by the WMCA Board.

After yesterday’s announcement that the West Midlands will be home to one of the 12 Investment Zones, the WMCA has also been able to negotiate new, locally designed Levelling Up Zones with 25-year business rates retention to drive further investment, innovation and economic growth in targeted areas.

West Midlands Metro blue tram at a stop

As well as new funding, the deal offers the West Midlands further influence over key policy areas such as skills, careers, employment support and digital inclusion. This will give local decision makers more freedom and flexibility to support people into work, attain better skills and improve their quality of life.

The WMCA has also secured greater influence over business and innovation policy. This includes areas such as inward investment and international trade, the next round of British Business Bank UK investment funds and the formation of a unique Strategic Productivity Partnership with Government.

There is good news on efforts to enhance the natural environment, as the Deeper Devolution Deal includes unique new measures to tackle climate change in critical areas such as the retrofit of older properties, cleaner and cheaper production methods, and smarter energy systems.

Highlights of the devolution deal include:

  • A landmark housing deal worth up to £500 million, offering greater flexibility to drive brownfield regeneration and unique powers and funding to deliver affordable housing at pace.
  • Fiscal devolution, including retention of business rates for the next 10 years – worth an estimated £45 million a year to the WMCA and local authorities.
  • A new departmental-style budget arrangement with a single pot of funding.
  • Up to six levelling up zones, backed by 25-year business rate retention, with an expected total value to the region of at least £500 million, to target investment and encourage jobs and regeneration in areas agreed between the WMCA and Government.
  • Measures to tackle digital exclusion including greater influence over high speed broadband investment across the region and a £4 million fund for devices and data to get more people online.
  • Greater local responsibility for developing and delivering careers advice and a partnership with Department for Work and Pensions to target employment support.
  • Devolution of the bus service operators grant and a new partnership with Great British Railways to offer greater local oversight and control of public transport services.
  • The UK’s first formally designated transport sandbox to deliver cleaner and safer vehicles and innovative transport services to our streets faster while supporting new jobs and investment.
  • A commitment to devolve retrofit funding from 2025, to allow the WMCA, and partners, to set priorities for investment in insulation and green energy for homes.
  • A commitment to a new partnership with national arts and culture organisations to shape their investment in regional cultural priorities.
Deeper Devolution Deal logo featuring working people

Andy Street, Mayor of the West Midlands and WMCA chair, said: “This announcement is a major step forward for the West Midlands with significant new powers and funding secured.

“We’re deepening devolution by building on previous deals and further empowering local leadership with the financial autonomy and decision making authority that they are best placed to deploy. No one in Whitehall can understand the West Midlands better than local leaders, and so there is no doubt in my mind that we should be empowered to shape our future – which is exactly what this new deal will allow us to do.

“I recently called for an end to the ‘begging bowl culture’ which confined us to regularly submitting bids for various pots of money in competition with other regions. I’m pleased to see that this new devolution deal goes some way to addressing that - giving us guaranteed devolved funding to spend how we choose, akin to what Government departments have currently, and doing away with Whitehall micromanagement.

“Since 2017, we’ve demonstrated a solid track record in building more homes whilst protecting the green belt, improving peoples’ skills to help them find quality work, increasing transport investment sevenfold and tackling the climate emergency. This is why the Government is trusting us and granting us greater responsibility - and accountability - to deliver even more.

“Today is a milestone day for the West Midlands, and I am delighted we have been able to work together as a team to get this Deeper Devolution Deal over the line.”

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