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Liverpool's city deal

Liverpool City Council has negotiated a new 'City Deal' with the government, which will bring new investment and decision-making powers to the city.

The deal is not dependent on the city having an elected mayor but central government has given a clear signal that moving to a mayoral model will provide the accountability it needs before the funds and new powers are handed over.

A range of transformative powers will be devolved to Liverpool, to give the city what it needs to attract private investment, close skills gaps and create new jobs.

This landmark deal will create a new enterprise zone near the city centre, provide powers to help get young unemployed people into work and give greater control over land for redevelopment and help build twelve new secondary schools.

The deal will help the city compete in the wider economy, driving growth and creating opportunities that will benefit the wider Merseyside area.

£130m for the City Deal

The City Deal aims to boost growth in Liverpool by making it a place where businesses can grow and flourish, creating jobs and housing for people in the city and providing support to help people off benefits and into work.

The deal will create a single investment pot of public and private funds to help achieve this, initially worth £130m, but with the potential to grow to £500m - £1bn. The initial pot will include £75 million of new money from government.

Investment in businesses and homes

The deal will see the establishment of the first Mayoral Development Corporation outside London, supported by a Local Finance for Growth package.

This package will include:

  • A new Enterprise Zone for North Liverpool and the Central Business District which will offer incentives for companies to set up business in Liverpool and encourage existing city-based business to grow.
  • The potential to capture the entire benefit of any growth in business rates from the Enterprise Zone for use in five other key economic areas of the city – North Liverpool, the Knowledge Quarter in the city centre, Stonebridge Cross, the Eastern Approaches and Speke-Garston (referred to as Mayoral Development Zones).

The deal will also see the new mayor acting as the chair of an investment board which will oversee:

  • The Local Finance for Growth package.
  • All of the land, commercial and residential buildings including the assets that were previously owned by the North West Development Agency.

As well as encouraging business growth, the board will use its funds and assets to improve the quality of housing choice open to people in Liverpool.

Investment in employment and skills

The deal will provide funding for new schools and to develop local skills to match the employment opportunities in Liverpool.

The council will work with schools, the private sector and the universities to develop specialisms to meet local skills shortages.

A Secondary School Investment Plan will see 12 new secondary schools built, including at least six new academies.

In addition, the deal will also provide a programme of support for people to help them off benefits and into work.

Liverpool will also be one of the first places to work with government to pilot the new Universal Credit scheme.

Background to the deal

Liverpool was the fastest growing city in the country over the last 10 years. But there is still much to be done to fulfil the city’s potential. This was the finding of a 2011 report by Lord Heseltine and Sir Terry Leahy.

One of the report’s recommendations was that the city be led by a mayor, elected to represent the City Region with the powers and controls to get things done. While the report was welcomed, not all political leaders in the City Region’s local authorities wanted to act on this recommendation, so it wasn’t taken any further.

New powers for cities

The Prime Minister and Deputy Prime Minister said in their coalition agreement that, “the time has come to disperse power more widely in Britain today”.

Changes introduced through the Localism Act 2011 and the updated Local Government Act 2000 allow local authorities to hold a referendum to change their governance arrangements to an elected mayor model.

At the same time, the government has recognised that cities are “engines of growth” and how they perform is critical to the UK’s economic recovery. In 2011 they invited the core cities to come forward and negotiate city deals to realise their own economic potential.

Liverpool is the first city to agree their city deal. On 7 February, the government confirmed that they would provide new money and powers to Liverpool. The same day, the council voted to have an elected mayor to lead the changes.

Useful downloads

Read the report 'Unlocking Growth in Cities – Liverpool'
Report by Chief Executive Ged Fitzgerald to City Council, 7 February, outlining the terms of the City Deal.

Read the report on ’Rebalancing Britain - Policy or Slogan? Liverpool City Region, building on its strengths’ by Sir Terry Leahy and The Right Honourable Lord Heseltine, commissioned by Prime Minister David Cameron.