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News - 17 December 2006
What does the future hold?

City Development Companies - the future?

The Local Government White Paper set out plans for City Development Companies (CDCs), which are intended to deliver more jobs and increased growth in cities. How will they work and how will they be funded?

City Development Companies would bring together expertise from the private and public sectors to improve economic development delivery across cities and wider “city regions”. The Government has launched a consultation on the role of CDCs.

CDCs would be established on a voluntary basis to oversee a city-wide strategy coordinating economic development priorities and could even include those of neighbouring local authorities. They could also pool existing functions, simplify delivery and reduce bureaucracy.

However, Government would also expect them to have clear lines of accountability to local government and to operate in line with the local community strategy (in Brighton & Hove the 2020 Community Strategy) and the regional economic strategy.

In theory City Development Companies could:

  • produce 'economic masterplans' for a city or city region
  • coordinate a range of economic activities in one place e.g. housing, economic development, inward investment and marketing
  • attract and retain specialist skills that are key to economic development
  • act as a focal point for engaging with business on economic development issues
  • operate across multiple local authority areas, increasing the impact of economic development delivery

Secretary of State - Ruth Kelly said; - "The inspiration behind CDCs - as with all good ideas - is a simple one. By using a special purpose vehicle, responsibility for economic development in a place can be more clearly defined, longer-term objectives more easily pursued, and the energies and resources of a wide range of public and private sector partners better levered in and brought together. Together these factors tend to increase business confidence and speed up decision making, leading to better and higher levels of investment overall"

However, CDCs will not have any planning powers and, perhaps more significantly, they will not have any additional funding from central government, which expects them to be funded by local authorities and regional development agencies.

A basic model for CDCs already exists with Creative Sheffield which was established in 2005 (with a time limited lifespan of 15 years) and draws together destination marketing, inward investment, city centre management and economic regeneration functions into a single body.

The Brighton & Hove Economic Partnership will be investigating the potential for CDCs for the city.

Anyone interested in giving their views should send responses to: City Development Company Consultation, Communities and Local Government, Zone 4 / G10, Eland House, Bressenden Place, London SW1E 5DU.

Read related items on:
City Regions
Community Strategy
Regional Economic Strategy
Brighton & Hove Economic Partnership
Local Strategic Partnership
Kelly, Ruth

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