Devolution, here we come

Andy Burnham promised “good growth in every postcode” standing on the steps of Downing Street on his first day as the new prime minister in July. He was clearly drawing inspiration from the economic success he oversaw during his near-decade tenure as Manchester mayor. 

Just weeks later, Burnham announced measures to shift power out of Whitehall that could have big ramifications for the construction supply chain. If enacted, an accelerated reorganisation of local and regional authorities with beefed-up powers and more funding will impact on volume and pipeline of work for the sector. Firms will also face changes in areas such as procurement and training and skills across English regions as well. 

So, what does this “good growth” that Burnham articulated look like and what can Manchester teach other regions about successful regional and local regeneration?

While there are questions about some of Burnham’s achievements as mayor and more recently controversy over his previous relationship with the owners of Manchester City Football Club – a significant investor in the city’s regeneration and economy but found guilty in September of breaching Premier League financial regulations between 2009 and 2018 – the overall economic picture for the region in the past decade is unquestionable. 

The wider greater Manchester region saw its Gross Value Added (GVA) grow faster than any other English city region, including London, between 2015 and 2023, averaging 3.1% compared with 1.5% overall for the UK. Greater Manchester’s GVA is currently £89.5bn, significantly surpassing other mayoral regions. Its closest equivalent West Midlands has a GVA of £76.3bn with a similar population. Its recent record on housing is also very strong, in particular compared with London (see box, below).

Success in Manchester has been far from overnight, according to leading players in the region. Tom Bloxham, founder of pioneering regeneration developer Urban Splash, first moved to the city in the early 1980s, but witnessed early green shoots during that decade. He points to the city’s bid for the Olympics in 1985 (eventually won by Barcelona) as one sign where Manchester “put its head above the parapet, had some confidence and realised that it wasn’t competing with Birmingham or Bradford, but… with the great second cities of the world, which was Sydney, Los Angeles and Barcelona”. 

Bloxham also witnessed the start of a growth agenda from “quite a progressive Labour administration” which “realised the way to grow the city was to grow jobs, to grow wealth, to bring more economically active people in [to the city centre], to bring businesses in”, as well as supporting the city’s university and the local arts scene.

Bloxham puts some of the ongoing success from those beginnings to the city’s openness to outside influence and individuals. Many recent local politicians were outsiders, including Burnham himself (from Everton), which Bloxham sees as a positive. “Manchester’s always been open to anybody who has [the city’s] good at heart. [Howard] Bernstein [chief executive of Manchester City Council from 1998 to 2017] always summed it up when he said, ‘What are you going to do for the city, son?’”

Bernstein, who died in 2024, is considered by many as the main architect of regeneration in the city. Later in his tenure, he put in place key bodies that established successful future development. These include the Housing Investment Loans Fund (GMHILF) and the statutory foundation for the Mayoral Combined Authority (GMCA), which Burnham inherited.

CIOB chief executive Victoria Hills puts the success down to political leadership and a consistent vision for the region, with those in charge not “overcomplicating things” and getting too “tied up in overbearing policy”. This preceded Burnham’s tenure, where there was “the courage to ask for more powers and do things slightly differently here and push the boundaries”. 

She adds this included making “difficult choices” and that “at times where perhaps they didn’t get everything they wanted, but they got most of it. But at least in doing so they were able to get building”.

Simon Rawlinson, head of research and insight at consultant Arcadis, sees Manchester as the peak of devolution in England to date and that this is underpinned by what he describes as a “triple helix” effect. This is a combination of some government investment and seed capital with the local academic base and the private sector with the idea “that the three are reinforcing”.

Local firms who have operated in this environment have seen this in effect, with James Ryan, associate partner at Drees & Sommer, saying foreign investment allied to council regeneration has created an environment where “two plus two equals five”. He adds that the real estate market in the city “has moved away from being just locally driven or local capital…to [driven by] national capital. It’s put it on the proper institutional radar.” This is borne out by national names in the professional services sector establishing themselves in the city in recent years as well as the emergence of new start-up companies in the region such as challenger banks. The construction boom has introduced local challenges, Ryan says, such as increased costs for employing local tradespeople. “Manchester is an increasingly expensive place to live and it’s an increasingly expensive place to do business.”

So what can other regions learn from Manchester’s recent growth trajectory? Both Rawlinson and Hills point to the idea of place-based regeneration and planning policy as key. This is where development is matched with need of the area and ensuring there is coordination across building uses and with local infrastructure. Or as Hills who, prior to joining CIOB worked at the Greater London Authority, puts it: “In its simple sense, it’s about joining the dots across different parts of the built environment.” 

Rawlinson points to joined-up thinking in the wider Manchester region, where flats were developed close to transport hubs in nearby towns such as Bolton and Rochdale, which enabled the population to commute to Manchester.

And Bloxham, whose firm’s work now stretches far beyond the North West, sees a focus on establishing a strong brand and identity in a place as key to successful regeneration. “Every place has something of interest such as a building or its topography,” he says, and the trick is “celebrating the strengths of places rather than worrying about the weaknesses”.

Burnham’s vision is to roll out strategic authorities similar to Manchester across England by the end of 2028. These will have direct powers over spatial planning, housing allocations and regional transport infrastructure (more on policy in box, below). In addition, technical education will be devolved aimed at boosting apprenticeships, and firms will need to adhere to new social value rules for procuring work worth more than £2m from January 2027. Arcadis’s Rawlinson thinks that in the longer term there may be even more powers handed over to regional bodies such as for housing delivery and transport.

Rawlinson sees three key challenges for the government in rolling out regeneration: speed of delivery given the time for the Manchester model of regeneration to mature; getting the right skills in place to oversee regional growth; and putting effort and investment into less wealthy places that may not help national economic growth “even though it delivers an improved local and regional impact”.

And one cannot ignore the current environment for property development as not being conducive for rapid delivery on Burnham’s big plan. Bloxham describes it as “probably the hardest time, viability wise” he has experienced in his 40 years in the sector. He says that there is a recognition from the public sector that pump priming for scheme is one necessary element to address this which is “very important”.

In spite of this, Bloxham is positive about Burnham’s start after a “very disappointing” first two years of the Labour administration. “I think the devolution ideas are positive and so I absolutely wish him well. This country needs some optimism and we need some growth.”