Move paves way for £130m ‘city deal’ that will create first Mayoral Development Corporation outside London

Liverpool council has opted for a directly elected mayor in a move that paves the way for a deal between the city and central government that could bring forward a £130m investment pipeline.

Liverpool council voted last night in favour of adopting a directly elected mayor, in a move aimed at fast tracking the city’s move to the mayoral model.

The city had been set to hold a referendum on moving to the mayoral model in May, but the Labour-led council said it wanted to shift to the mayoral model earlier as part of a deal with the government to devolve more powers and funding to the city.

Last night the council voted by 62 votes to three in favour of shifting to a directly elected mayor, with 12 abstentions.

As Building reported last week, the move follows negotiations between the city leaders and government as part of deputy prime minister Nick Clegg’s ‘city deals’ agenda, which aims to devolve new powers, freedoms and financial levers to England’s eight largest urban economies outside London.

Last week Liverpool council said its deal would lead to the creation a single investment programme of public and private funds, initially worth £130m, but with the potential to grow to £500m - £1bn.

The council said the mayoral model would offer the government “the clear accountability and influence required to justify the devolution of the new powers to the city”.

Under the deal, the new mayor’s powers and responsibilities would include a growth package driven by the first Mayoral Development Corporation outside London, the council said.

The council said the package would include:

  • A new enterprise zone for North Liverpool and the Central Business District which would offer incentives for companies to set up business in Liverpool
  • The ability to capture the entire benefit of any growth in business rates across five other key economic areas of the city, which could be used to support further economic development in the city
  • A new investment board which would bring together all of the city’s assets such as land, commercial and residential buildings, including assets formerly owned by regional development agency for the north-west
  • Control over the investment of business rates generated as a result of the new enterprise zone to be reinvested to encourage further economic growth
  • Developing a new approach to welfare reform in Liverpool which includes investment in specific skills that match the jobs that are available in the city.

The council said the move to fast track a mayor for the city was aimed it giving it a “competitive advantage” over the other regional cities, which will hold referendums on 3 May to determine whether they adopt the mayoral model.

Liverpool will now hold an election to choose its mayor on 3 May.