Devolution and the West Midlands combined authority in a post-brexit Britain
23 August 2016It’s been two months since the UK voted to leave the European Union in a referendum result that took many by surprise and has led to a cascade of changes. With an impending exit from the EU, a change in leadership at the top of the government and the introduction of the West Midlands Combined Authority, there is plenty of uncertainty to go around.
Now that the dust – and the value of the pound – is settling, we are in a far better position to take stock and evaluate the potential implications to the real estate sector, particularly as the West Midlands Combined Authority comes into play.
I was fortunate enough to be a part of the Forum for Growth, the official launch event which was sponsored by Bilfinger GVA and which took place in the week following the ‘Brexit’ result.
Understandably, the question of whether the devolution initiative championed by former Prime Minister David Cameron and Chancellor George Osborne would still be so vehemently supported by the new leadership was near the top of the agenda.
In a worst case scenario, the new government could turn turtle and begin to reel back to Westminster those powers that have already been distributed to the regions. This return to a centralized government is highly unlikely though, as it would fly in the face of the wishes of the vast majority of the electorate outside of the south east and there is simply too much momentum behind the devolution process.
While the doomsday scenario may not come to pass, it is more likely that there will be some directional changes under the ownership and sponsorship of Theresa May’s new cabinet. What new boss doesn’t put their mark on things when they take the big chair?
It is therefore imperative that we make the most of this forward motion, properly utilising the newly formed Combined Authority to coordinate and promote investment across a broader logical economic geography.
We can seize on this opportunity, using it as a catalyst to highlight the region’s potential and building on the strong reputation that we have developed over the last decade for a prime inward investment destination. Over three consecutive years, we have seen Deutsche Bank, HSBC and HS2 each commit to space in excess of 100,000 sq ft and for the second year running we have recorded activity in excess of 500,000 sq ft of transactions in the first six months of the year in the Central Birmingham Office market.
We should keep in mind, however, that the success of the region isn’t tied entirely into FDI; it’s also about attracting investment out of the South East, a region where it is becoming increasingly difficult for companies to retain staff due to the difficulty in buying or renting houses at tenable costs, securing school places, or commutes under three hours.
In establishing the Combined Authority, considerable work has been undertaken to understand the growth potential in the region and how best The West Midlands can feed into the Midlands Engine.
The focus within the West Midlands will be on the delivery of key areas of growth that include Life Sciences, Environmental, Creative, Digital and Advanced Manufacturing industries, ensuring that we’re playing to our strengths.
It would be a shame if the fallout from the referendum detracts from the formidable head of steam that has already been built. We must ensure that through the development of assets to support these sectors and the ongoing improvements to key infrastructure, the Midlands continues to be viewed as a genuine alternative to the south east.