George Osborne's budget yesterday rightly focussed on some of the issues vital to improving the economic performance of our cities, including increased access to housing, new infrastructure investment, and empowering our urban areas to take greater direct control of their economies themselves. But many of the policies announced will be implemented from 2015, meaning that this is a budget which more about growth tomorrow than growth today.
In truth, few people would have been keen to swap places with George Osborne yesterday afternoon. Facing continued economic difficulties at home and in Europe, yet under political pressure from both sides to change course and either provide a significant economic stimulus on the one hand, or major tax cuts to boost growth on the other, expectations were always likely to exceed his scope to deliver.
He began by conceding that the economy will likely grow by just 0.6% this year - half the rate forecast just three months ago - and that his target for debt-as-percentage of GDP will now not fall until 2017/18 - two years later than he had hoped when he came to office in May 2010. So with this backdrop in mind, what were the big new initiatives with the potential to boost economic growth in our cities?
Housing featured heavily, with shared equity schemes extended, and interest-free loans up to 20% of value of new-build properties, as well as bank guarantees to underpin £130bn of new mortgage lending for three years from 2014. It's good that government recognises the extent to which many people are struggling to buy their own homes, and getting the housing market moving does stand to deliver some economic benefits.
But the real short term economic prize on housing would be to significantly increase the supply of new homes in those cities where growth is strong, demand high and affordability constrained. By building an extra 100,000 homes we could generate up to an extra 1% of GDP, and support up to 150,000 jobs, so an opportunity to boost growth in the short term by directly supporting more new build has been missed.
Increasing investment in infrastructure was also prominent in the Chancellor's statement. An extra £15bn was committed for new road, rail and construction projects by 2020, starting with £3bn in 2015-16. These funds could make a big difference to cities across the UK, especially where a lack of infrastructure has been identified as a major barrier to growth. But by holding back this investment to 2015, it will do nothing to boost growth now.
Since many of the 'shovel-ready' infrastructure projects are relatively local, here at the Centre we believe more needs to be done to loosen Whitehall's control on the purse strings, so that cities can reallocate money towards infrastructure projects (or even other projects, if locally appropriate) that they know will kickstart local growth.
Perhaps with this in mind, the Chancellor confirmed his intention to implement the main reforms recommended by Lord Heseltine in his local growth review. Particularly welcome was his endorsement of a Single Local Growth Fund, alongside a range of other commitments to devolve more control of economic policy to local areas. Yet the impact of these policies will depend upon how much is in the Fund, and this won't be confirmed until the 26 June Spending Review. Even when it is confirmed, it won't make a difference in the short term as, again, it won't happen until 2015.
So what can be done in the meantime to promote local economic growth? It's vital that government and cities make use of City Deals as a way to devolve powers and funding more quickly (and considering how to extend the 'core package' to all other LEPs as a way into the Single Local Growth Fund negotiations in 2015).
Looking ahead it is vital that policies on infrastructure, housing and business can be delivered in a way that helps cities grow - only then will we achieve the kind of uplift in economic performance that the OBR is forecasting for 2014 and beyond.