The Hull Commission Final Report - Emap
The Hull CommissionFinal report13th January 2016
The Hull CommissionFinal reportContentsForeword by Tom Martin, chair of the Hull Commission . iExecutive Summary. 1Introduction and terms of reference (Paragraphs 1-7) . 1Initial analysis (Paragraphs 8-57) . 1Interviews (Paragraphs 58-68) . 2Boundary reviews (Paragraphs 69-74) . 2The Commission’s interim report and the response to it (Paragraphs 75-92) . 2Devolution, business rates and other developments (Paragraphs 93-131) . 2Discussion and Conclusion (Paragraphs 132-175) . 3Recommendations (Paragraphs 176-178) . 4Introduction and terms of reference . 6Initial analysis . 7Analysis of local economic and financial statistics . 11Map 1: Joint Key Principles diagram . 12Map 2 & 3 Hull functional economic area, and the Hull (HU) postcode area . 13Political realities. 14Council finances . 15The LEP’s contribution . 17Financial and economic conclusions. 17Interviews. 18Boundary reviews . 20The Commission’s interim report and the response to it . 21Responses on boundaries and relationships . 22Responses on economic issues . 22Devolution, business rates and other developments . 23Background to devolution in England generally . 24Devolution state of play . 26The situation in Yorkshire . 27Hull devolution proposal and Centre for Cities report . 28Business rates . 29Autumn Statement . 30Discussion and Conclusion . 30Starting point – overcoming history . 32Taking a positive, outward-looking stance . 32Reflecting on the Commission’s terms of reference . 33Options we have discounted . 34Options that we believe should be considered. 34The Commission’s Conclusions . 35Principles for a positive path . 37Recommendations . 38Appendix 1 – The Commission and its members . 40Appendix 2 – Maps . 41
The Hull CommissionFinal reportMap A: Yorkshire and the Humber Local Government area . 41Map B: Humber LEP Strategic Economic Plan . 41Map C: Hull functional economic area and populations . 42Appendix 3 - Interviewees . 44Appendix 4 – Combined Authorities . 45Legal basis . 45Combined Authorities comparator table . 45Appendix 5: Call for evidence and hearing in public. 46Appendix 6 – LEP press release on Humber Enterprise Zone extension . 52
The Hull CommissionFinal reportForeword by Tom Martin, chair of the Hull CommissionHull City Council set us a task, more complex than originally perceived and one which evolved rapidlyin unexpected directions during the 18 month course of our enquiries. Our Interim Report in May2015 coincided with an apparent tectonic shift in relations and perception of reality within the ranksof Local Politicians. Sadly, after this apparent movement there seemed to be little progress.Since then the Chancellor of the Exchequer has introduced the Summer Budget and the AutumnStatement. The Northern Powerhouse concept is to be pursued vigorously.It will happen.In these developments Local Authorities have been invited to submit their ideas for combiningresources to achieve better mass and the immeasurably greater chance of benefit from thedevolution of powers, responsibility and funding. An initial deadline of 4th September 2015 was setfor this, with the aim of inclusion of announcements in the Chancellor’s Autumn Statement andComprehensive Spending Review.An agreement for Sheffield City Region was reached, but so far there has been no agreement on abid either proposed by or involving Hull. A proposal for a Greater Yorkshire set out by Hull at theeleventh hour received some interest, but arguably required much deeper roots of supportelsewhere to thrive.In the Autumn Statement there is provision for:1. 13bn spend in this parliament on Transport in the North.2.The establishment of Enterprise Zones.3.A Local Growth Fund of 12bn between 2015/16 and 2020/21 (this new LGF will be twice thecombined size of the previous Growth Fund, Growing Places Fund and City Deals Funds of thelast parliament).4. 7m to fund the Northern Powerhouse Task Force.5.There are to be five Northern Mayors covering 54% of the population of the North backed by 4bn of new funding.6.The Northern Powerhouse will get 150bn in health spending and a further 46bn forschools.The Devolution Programme encourages and expects cities to pool strengths to make themcollectively stronger than the sum of their collective parts.The resources are there for the taking.All of this is a challenge to local politicians—a challenge to which they will have to respond withenthusiasm or see their areas lose out and stagnate—to the disadvantage, disappointment anddisaffection of their voters.It will be disastrous for the area of Hull and the East Riding of Yorkshire if they miss out on thisexcellent opportunity because of historical problems of local animosity.i
The Hull CommissionFinal reportOur report seeks to provide Hull and the East Riding with a springboard for action and anacceleration and deepening of co-operation between the two councils. Hull has huge potential foreconomic development, the East Riding currently provides much of the space for this to happen andin turn Hull provides the key urban facilities for much of the whole area.We consider that the two areas are in fact an interlocking single system and should develop as such.In effect they have one heart but are of two minds, yet it is clear that one cannot exist without theother.We therefore consider that significant change is needed to develop single policies, strategies andoperational management plans for the whole of the Hull and East Riding area. This would requirebravery on the part of politicians and communities in both areas, but we believe that the end prizewould be well worth the effort, giving them a significant single voice in the Northern Powerhouse.In doing this there is a need to look beyond the minutiae of local politics to the larger regional ,national and indeed international stage, it being noted that the Humber’s future lies as much acrossthe North and Baltic seas as it does in the sub region.Tom Martin OBE JP DL MAChair of Commissionii
The Hull CommissionFinal reportExecutive SummaryIntroduction and terms of reference (Paragraphs 1-7)i.ii.The Hull Commission was asked to consider the effects of Hull’s boundaries on thedevelopment and regeneration of the city and sub-region. It was also asked to advise onways in which local government in Hull and the East Riding might meet the goals of beingeffective, efficient and accountable. We were then asked to consider a range of options forthe future, including merger of the two authorities, a Combined Authority for certainfunctions, extending the city boundary and merger of the officer administrations of the twocouncils.The Commission has noted concerns from local people about the time taken to report, aconcern we share. There were three reasons for this delay: avoiding the 2015 GeneralElection, allowing a suitable period for consultation, and the rapidly changing devolutionlandscape nationally. We believe that Hull and the East Riding are now at a significantcrossroads and the time is right for this report to inform debate.Initial analysis (Paragraphs 8-57)iii.iv.v.vi.vii.Hull and the East Riding are both significant local authority areas. They have collaboratedwith varying levels of success on strategic planning, including key infrastructure documents.However the split of responsibilities provides significant challenges which must be overcomeif progress is to be made.Hull in particular is not performing as well as it could compared to other Northern cities. Atrack record in achievement is increasingly important because economic developmentfunding is now based mainly on bids and ‘deals’ rather than allocations of grant fromgovernment.Hull and the Humber are seen as an important focus for economic growth and a key part ofthe Northern Powerhouse.There is significant interdependence between Hull and the East Riding, and it is clear thatthey and the LEP have had success in attracting support from multinational businesses andfrom the Government. Yet it is also clear that there remains much untapped potential andthat significant challenges are still to be addressed. We think it is significant that, of the fourlocal authorities in the Humber, Hull is the only one which is engaged solely with the HumberLEP, with the other three looking ‘two ways’ having membership of two LEPs. We considerthat this dilutes their focus and the common cause. Many of these opportunities are ‘scaledependent’, the larger the authority, the more likely are these opportunities to be realised.We found wide disparities in key statistics between Hull and the East Riding. In 2015, Hullwas ranked 8th most deprived local authority area in England yet the East Riding was 165th(out of 326). There are also significant differences in life expectancy, employment and skillsrates. However as research by Dr Mike Nolan at Hull University shows, Hull’s statistics reflectits boundary, which is more tightly drawn than most cities, resulting in the exclusion of manymore wealthy and privileged neighbourhoods that are within its functional economic area. DrNolan demonstrated that if Hull’s boundary reflected what we will call ‘Greater Hull’, thenthe differences would be far less stark. This is also borne out in a recent DEMOS report whichcompared ‘satellite’ towns with their neighbouring city. Beverley was the second mostprosperous town examined in comparison with its city, and third most prosperous inabsolute terms. It far outstripped Hull on a range of indicators, against a national trendwhere neighbouring cities tend to do much better than their satellite towns. We concur withDr Nolan’s view. Our own research shows that 50% of the East Riding’s businesses are withinthis ‘Greater Hull’ area and this is the greatest area of potential if Hull achieves goodeconomic growth.1
The Hull Commissionviii.Final reportWe also noted the political differences between the two councils, which tend to pull them inopposing directions, and the more finely tuned political balance when looking at the area asa whole. We consider that this will inevitably make it very difficult to develop a coherentstrategy for the ‘Greater Hull’ area. However it is all the more important to do so given thefinancial challenges that the two councils face, Hull in particular. Noting the achievements ofthe councils and the LEP, we consider it of vital importance that the strategies for Hull, theEast Riding and the rest of the Humber are properly aligned to ensure that economic growthis optimised, recognising the key role that city regions play in driving economic development.Interviews (Paragraphs 58-68)ix.x.At the start of our work we invited over 40 individuals to be interviewed, of whom 20 tookup our offer. Most of them considered that the Hull boundary is a challenge which warpsHull’s statistical position and causes divisions. They considered that this issue needs to bedepoliticised and that better collaboration is vital. However we did not come across a sharedvision or ambition for the area, indicating that much work needs to be done to engage keyindividuals.Our interviewees voiced differing levels of appreciation of the Hull and Humber LEP, butthere was a common view that debates within the area are highly parochial, where peoplefight with each other rather than for each other. By contrast, the local MPs were seen asworking well together and being a force for good for the Humber area.Boundary reviews (Paragraphs 69-74)xi.We considered the requirements of boundary reviews and noted that if the boundary of Hullwere to be extended there would need to be a significant engagement exercise, of which theBoundary Commission has yet to have experience. However the process would be muchsimpler if Hull and the East Riding local authorities were simply to be merged to form a newbody.The Commission’s interim report and the response to it (Paragraphs 75-92)xii.xiii.We published the information mentioned previously in May 2015 in our interim report andcall for evidence, which noted our regret that the East Riding has to date not felt able toparticipate in our independent review. At our hearing in public in July 2015 we heardsubmissions from ten organisations and individuals and we received 14 written responses.Most respondents recognised the issues that we had identified and set out a wide range ofviews which broadly supported our views on the impact of the boundary and our economicanalysis.Devolution, business rates and other developments (Paragraphs 94-131)xiv.xv.Since the May 2015 election the discussions on devolution in England have accelerated. Theyculminated in a challenge from the Chancellor and the Secretary of State for Communitiesand Local Government to bid for new devolution deals by September 4th 2015, particularlyfocused on the idea of a ‘Northern powerhouse’ of which Yorkshire and the Humber (ouremphasis) are seen as an important part.It is clear that the devolution agenda is an iterative process. This is fortunate because it hasproved difficult for local authorities in Yorkshire, other than in the Sheffield city region, tocome to an agreement about what the arrangements should be. Consequently fourproposals were sent to Whitehall by the given deadline, including three covering the nonSheffield area. The only one of these that proposed a solution for the area as a whole wasfrom Hull for a ‘Greater Yorkshire’ the other two offering only partial solutions. This was thentaken up in a proposal, largely by the non-Leeds Combined Authority council leaders, entitled‘Greater Yorkshire, Greater Ambition’. Interest in this option seems to have since wanedsomewhat. However we are aware that discussions are still ongoing and are watching withinterest.2
The Hull Commissionxvi.xvii.xviii.Final reportCommission members have engaged with many of the key players in these debates and haveconcluded that any arrangement needs to draw Hull and the East Riding, together, into anappropriate devolved arrangement that meets Northern Powerhouse aspirations. There has,however, been far too little involvement with business and the community in suchdiscussions.In parallel with the devolution debate, there has been significant change in local governmentfinance, particularly the announcement that in future councils will retain 100% of businessrates whilst central government grant will be phased out. Business growth thus becomes ofcritical financial importance for any local authority. This is of critical importance to thisdebate because much of business growth generated in Hull is likely to be outside itsadministrative area and in the East Riding.The extension of the Humber Enterprise zone, which will see it more than doubling in size, isan extremely important development which further underpins the national importance ofthe area.Discussion and Conclusion (Paragraphs 132-175)xix.xx.xxi.xxii.xxiii.xxiv.We consider Hull and the East Riding to be one system, but it is being governed by two, oftenopposing, controlling minds. Opportunities for optimal decision making have been lost andhistoric rivalries have been perpetuated. There has also been too little involvement ofbusiness, the community an
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