City Region of Birmingham, Coventry and the Black Country prepares business case for an Accelerated Development Zone
by Dave Howl, Regional, European & International Division, Birmingham City Council
The City Region of Birmingham, Coventry and the Black Country (BCBC) has commissioned PricewaterhouseCoopers to develop an initial business case for an Accelerated Development Zone (ADZ) covering a large part of the City Region.
The ADZ mechanism is a proposal arising from the Core Cities / PricewaterhouseCoopers study, “Unlocking City Growth: interim findings on new funding mechanisms”, published in the Autumn of 2008. The ADZ concept is based on that of Tax Increment Financing, pioneered in the United States.
The Core Cities / PwC study used three case studies (in Birmingham, Leeds and Sheffield) to test the ADZ mechanism. All three case studies are major development areas where economic growth could be stimulated by up front investment in public infrastructure. The study shows that the ADZ mechanism could provide the finance for this investment, and that the additional growth generated would repay the costs of the investment and add considerably to employment, housing and GVA compared with the “no ADZ” scenario.
The case studies in the Core Cities/PwC study all relate to a zone in a single local authority. BCBC are, however, taking the concept further in a number of ways. In line with its commitment to the principle of balanced growth, BCBC has made a conscious decision to design an ADZ that will generate private investment, growth and jobs throughout the City Region. Moreover, by combining the package of projects into a single ADZ, this would enable the City Region to include projects that, on their own, might be less attractive financially – again supporting the principle of balanced growth.
The ADZ proposes a range of road and public transport improvements totalling over £1 bn that would stimulate economic and housing growth along a broad west-east axis running through the heart of the City Region and covering Wolverhampton, Walsall, Dudley, Sandwell, Birmingham and Solihull. The package includes improvements to motorway junctions in Walsall and Sandwell; highway infrastructure to open up development areas north of Wolverhampton city centre; highway and related projects in, and east of, Birmingham city centre; a Midland Metro tram line through Dudley and Sandwell in order to stimulate the growth of Brierley Hill as a major new centre in the heart of the Black Country; and a new Midland Metro line from Birmingham city centre to Birmingham International Airport that would open up development opportunities in East Birmingham and North Solihull.
The Core Cities Group strongly believes that the ADZ mechanism should be included in the range of financial tools available to urban areas to stimulate economic growth, jobs and competitiveness, and has developed a positive dialogue with the Government on this issue. The Group fully supports BCBC’s work on a City Region wide ADZ, which would form an important element in this dialogue. The recent announcement in the Budget 2009, committing to explore the potential of this innovative financing mechanism, means that both Birmingham and the Core Cities will be able to develop this dialogue t the next stage.
The proposition has been put to the Prime Minister, and representatives of the city region have recently met with officials from HM Treasury and CLG to discuss the proposition. The proposal also been included in the Regional Funding Advice sent to Government by the West Midland Region Joint Strategy and Investment Board (comprising the Regional Development Agency and local authority leaders from the region).