To 2050: City deals

The Government’s city deal with the West Midlands Combined Authority is over 30 years — so well-nigh two decades past the UN SDGs horizon and up to the 2050 COP 21 Paris Agreement on climate change.

Whether the UN’s Sustainable Development Goals and the COP 21 Paris targets will be met or not, the world will be a very different place in 2050 than it is now.

So a key question for HM Treasury and their city region partners is this:

How well will the chosen infrastructure investment stack up against exogenous impacts on the UK/local economy, including those from the global forces of climate change, population pressures and resource depletion, including the depletion of soils, water and energy which will have transformational impact on our food supplies?

Here’s what the city deals are:

There are eight city regions in the first wave of city deals: Greater Birmingham (the WMCA area), Bristol, Leeds, Liverpool, Greater Manchester, Newcastle, Nottingham and Sheffield.

The nature of the deal, simply put, is this: HM Treasury commits payments of £x per annum for y-years to a region. For the WMCA, this annual payment is ~£36.5M every year for 30 years.

The region’s Mayor, here Andy Street, will use this annual dollop of money to raise funds on the markets for infrastructure investment which, over the y-years (here 30 years) will give HMT a return through additional tax revenues through increased economic activity as a result of that infrastructure investment and/or a decrease in HMT spend on public sector activity such as health and social welfare.

This is known as the ‘gain-share model’, and is well-understood when it comes to getting relevant info and analysis to encourage private sector or inward investment.

As far as the public sector is concerned, the relevant info and analysis about where £-public sector money goes and its impact is less well understood.

One approach is to find organisations doing similar services at lower cost (though under what time-frame?) and either replicate that system or outsource services.

Another approach is to look at the end-to-end costs for a particular population population and model the impact of doing nothing, compared to the cost of doing something; e.g. interventions to prevent birth injuries have significant long-term savings.

Enabling a population to have access to sufficient quantities of nutritious food isn’t just relevant to the UN Sustainable Development Goals across the world. It’s relevant here too; our analysis of data indicates that for every £1 spent on food and drink here in Birmingham, the public sector has to spend £0.90 on dealing with its dietary impact; a figure that excludes the costs of diet-related dental treatment and mental health, and that of recycling or otherwise disposing of food packaging — figures that are probably representative across the UK too.

What’s interesting with this model is that good diet can both lower health care costs and increase economic activity. As the CMO’s 2014 Annual Report cited, a nutritious diet during the first 1000 days of a toddler’s life, starting at conception, has significant, measurable impact on educational achievement and, because of that, on a region’s GDP.

 

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