Anthony Hilton: National politicians should let the locals do their own thing
Saturday 13 October 2012
The efforts by the City's financial institutions to fill the lending gap left by banks have at times seemed rather like the picture from a hundred westerns where the US Cavalry rides to the rescue. They look heroic, they sound keen and some of them look moderately respectable. But they are so slow that they arrive on the scene too late to save the wagon train.
But this is changing and the City is beginning to come up with serious money for an ever-wider range of interesting projects which previously would have been the province of bankers. Hence, one of the most interesting events this week was the successful launch by the University of Cambridge of a bond issue under which it will borrow £350m for 30 years at an interest rate of just 3.75 per cent. Given that the UK inflation rate even on the consumer price index is around 2.5 per cent that is astonishingly cheap money which the university is going to use to upgrade its facilities and infrastructure.
It is great news for the academic world that the City is prepared to open its coffers for something besides student housing, though it must be said that Cambridge is a better credit risk than most, so the rest of the country's academic institutions should not get over excited. London Metropolitan University – where I am a visiting professor – would find it a lot harder to persuade investing institutions to cough up the money. That, unfortunately, would also be the case with many other of Britain's cash-strapped educational institutions.
This fund-raising success does highlight an issue raised by the former leader of Birmingham council, Mike Whitby, at a fringe meeting I chaired at the Tory party conference last Sunday. This is that if Cambridge University can raise money in the markets to fund the upgrading of its infrastructure, why can't our big provincial cities – Manchester, Leeds, Birmingham and Newcastle – do likewise? Why, when the council wants to modernise New Street station in Birmingham, for example, does it have to spend years trying to line up private capital to help pay for it? Why can they not follow the example of US cities – and now Cambridge University – and borrow money on the open market?
The answer, of course, is that Whitehall and our national politicians want to control everything from the centre, and are terrified that they would lose their grip on the cities if they had access to their own funds. But at the same time they profess to support localism and devolution, and even if there is a financial risk that some cities would borrow too much there are surely offsetting benefits.
For instance, local politicians know far better than Whitehall what their cities need. Also, voters would engage more with local politics if they thought it could make a difference to the infrastructure in the region, be it the quality of the local train service or the availability of high-speed broadband. And if the Government is serious about rebalancing the economy, then it ought to be doing all it can to encourage the regions, not keep them under its thumb.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...