Comment on Tory Mayor’s Recovery Plan | Liam Byrne MP for Metro Mayor

Comment on the Tory Mayor’s Recovery Plan, Liam Byrne, Labour’s Shadow Mayor for the West Midlands said: 

‘This is a plan for limping out of lockdown when we need a plan for liftoff. 

‘Bizarrely, our Tory Mayor says absolutely nothing about how much we need in emergency investment from ministers next year to stop the West Midlands going from lock-down to meltdown. This is recipe for a terrible deal.  Ask for peanuts, and peanuts is what we’ll get. 

‘The Government promised to do whatever it takes and frankly, what it’s going to take to save lives and livelihoods is lot more than the Mayor is asking for. Most forecasters say our region will be hardest hit in Britain. That’s why we need an emergency capital kickstart of up to £3 billion next year. That’s thirty times the size of the regional transport fund for next year that the Mayor has asked for. 

‘What we need now is a plan that’s big, bold and green to save lives, save livelihoods and crucially, put people first. That means an emergency capital kickstart of upto £3 billion, a jobs guarantee scheme to save the livelihoods of furloughed workers, and a real living wage for at least £10 an hour for the heroic key workers who have kept our communities together. That is what we as a Labour team will be demanding in Parliament.’ 

Notes to Editors 

Please view the tables on a large screen

  1. The blackhole in the Mayor’s current budget, according to WMCA, stands at around £1.2 billion. 
  1. Liam Byrne’s article in the Times can be found here: https://www.thetimes.co.uk/edition/comment/we-want-to-reform-our-economy...
  1. These notes contain two three key appendices:
  • Unemployment projects
  • Modelling of the scale of the Economic Stimulus
  • A Breakdown of the Funding Gaps in the Metro-Mayor’s Budget, based on data supplied by WMCA before the election was postponed

W Midlands Fiscal Stimulus: Orders of Magnitude

 

 

 

 

 

 

 

Forecast (UK)

Oxford Economics

Resolution Foundation

NIESR

HM Treasury

1

NAIRU

4%

4%

4%

4%

 

Forecast Unemployment (2021)

5.5%

5.4%

6.5%

5.5%

2

Output Gap

0.75%

0.7%

1.25%

0.75%

3

Fiscal Multiplier of Capital Spend

1

1

1

1

 

Capital stimulus required (as % of GDP) (Output Gap X Multiplier)

0.75%

0.7%

1.25%

0.75%

 

UK Nominal GDP (2019) (£M)

£2,215,000,000,000

£2,215,000,000,000

£2,215,000,000,000

£2,215,000,000,000

 

Total capital stimulus (Stimulus Required X GDP)

£16,612,500,000

£15,505,000,000

£27,687,500,000

£16,612,500,000

 

W Mids as share of UK unemployment

10.4%

10.4%

10.4%

10.4%

 

W Mids share of stimulus

£1,727,700,000

£1,612,520,000

£2,879,500,000

£1,727,700,000

 

 

 

 

 

 

 

Notes

 

 

 

 

 

1

The non-accelerating inflation rate of unemployment (NAIRU) is the specific level of unemployment that is evident in an economy that does not cause inflation to increase. The UK NAIRU is estimated by the OBR at just over 4%. https://obr.uk/box/the-equilibrium-unemployment-rate/

 

2

The relationship between the output gap and elevated unemployment is, as a rule of thumb, estimated to be between 0.5 and 1. For longer discussion see: https://www.imf.org/external/pubs/ft/fandd/2013/09/basics.htm

 

3

The fiscal multiplier defines the relationship between £1 of fiscal spending and an impact on GDP growth. The latest fiscal multipliers the OBR uses are provided in the table, taken from their December 2019 Forecast Evaluation Report (Box 2.2). These show different multipliers depending on the type of tax or spending policy implemented. Capital DEL (CDEL) has the highest multiplier, on these estimates, of 1.0 in the first year. Resource DEL (RDEL) is marginally lower at 0.9. This means that a CDEL policy measure worth 1.0% of GDP results in a boost to GDP of 1.0% in year one.

See: https://obr.uk/docs/dlm_uploads/Forecast_evaluation_report_December_2019-1.pdf#page=20

 

 

 

 

Unemployment Scenarios

Forecaster

Oxford Economics

Resolution Foundation

NIESR**

1. Forecast UK Unemployment in 2020

1,860,000

1,900,000

2,900,000

2. W Mids current share of UK unemployment *

10.4%

10.4%

10.4%

3. Implied W Mids unemployment 2020 (1 X 2)

182,000

197,600

301,600

4. Current West Midlands unemployment

134000

134000

134000

Potential rise

48,000

63,600

167,600

 

 

 

 

Jobs Guarantee

 

 

 

Cost per place***

£3,100

£3,100

£3,100

Total cost

£148,800,000

£197,160,000

£519,560,000

 

 

 

 

 

Note: West Midlands unemployment in 1988 was 231,000

 

Note: the Oxford Economics assessment is not for external use

 

*Source: House of Commons Library

 

** National Institute for Economic and Social Research

 

*** Source: TUC

 

 

APPENDIX 3: WMCA Investment Programme

Source: WM

 

Forecast

 

Spending to date

 

                        Project Status

 

 

 

 

 

 

 

Green

Amber

Red

Investment Programme

£M

 

£M

 

£m

£m

£m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coventry UKC plus

               710

 

               69

 

 

               641

 

 

 

 

 

 

 

 

 

Coventry City Centre Regen

               374

 

               27

 

               347

 

 

 

 

 

 

 

 

 

 

UK Central Infrastructure

                1,387

 

               24

 

 

                1,363

 

 

 

 

 

 

 

 

 

High Speed supply chain and support

               350

 

               11

 

               339

 

 

 

 

 

 

 

 

 

 

Innovation Programme

               195

 

               15

 

 

               180

 

 

 

 

 

 

 

 

 

Land Reclamation and Remediation

               200

 

               34

 

 

               166

 

 

 

 

 

 

 

 

 

Commonwealth Games

               25

 

 

 

               25

 

 

 

 

 

 

 

 

 

 

Employment Education and Skills

               20

 

               1

 

 

               20

 

 

 

 

 

 

 

 

 

Collective Investment Fund

                1,000

 

               50

 

               950

 

 

 

 

 

 

 

 

 

 

Enterprise Zone Expansion

               20

 

 

 

               20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TRANSPORT PROGRAMMES

 

 

 

 

 

 

 

Sprint Programme

               298

 

               16

 

 

               282

 

 

 

 

 

 

 

 

 

Rail Programme

               188

 

               8

 

 

               180

 

 

 

 

 

 

 

 

 

Metro Programme

                1,591

 

                282

 

 

 

                1,309

UK Central HS2 Interchange

               529

 

               19

 

 

 

               510

 

 

 

 

 

 

 

 

Curzon Street Masterplan

               554

 

               7

 

               547

 

 

 

 

 

 

 

 

 

 

National College for HS2

               25

 

               25

 

               -  

 

 

 

 

 

 

 

 

 

 

Devolved Transport

                1,299

 

 

 

                1,299

 

 

 

 

 

 

 

 

 

 

Totals

                4,281

 

                231

 

                1,681

                2,832

                1,819

Percentage of total programme

 

 

5%

 

39%

66%

42%

CA investment Board paper of 17 Feb 2020 , App 3

 

 

 

APPENDIX 4: Funding Gaps on Core WMCA budget  

Source: WMCA

 

 

 

 

 

APPENDIX 5: WMCA Transport Programme Inves

 
   

tment Gaps (Pre Budget 2020)Source: WMCA

 

 

APPENDIX 6: Project Breakdown of Funding Gaps   

Source: WMCA

 

 

£m

C = A + B

 

A

B

 

D

 

Programme (£m)

Project

Total Expected WMCA Funding Into Programme

 

WMCA Funding Secured

WMCA Funding to be Secured

 

WMCA Funding Spend to Date

 

 

HS2 Parallel Design Process

9.80

 

9.80

0.00

 

7.39

 

 

UK Central HS2 Interchange - UGC Utilities, Car Parking and Valuation of Land & Property

30.24

0.24

30.00

0.18

 

 

Birmingham International Station - Integrated Transport Hub

159.27

9.27

150.00

2.59

 

 

Urban Growth Company (UGC) Business Plan

9.95

9.95

0.00

4.32

 

 

UK Central HS2 Interchange - BIS CEF Match Funded

0.57

0.57

0.00

0.57

 

 

HS2 Parallel Designs - Roundabout Over-Trace

19.95

19.95

0.00

0.15

 

 

HS2 Parallel Designs - Highway Pinchpoint Improvements (NEC Longabout)

2.15

2.15

0.00

0.08

 

UK Central HS2 Interchange

Approved SOCs, OBCs and FBCs

231.92

 

51.92

180.00

 

15.29

 

 

HS2 Parallel Designs - Automated People Mover Alignment and Capacity Upgrade

15.00

 

0.00

15.00

 

0.00

 

 

HS2 Parallel Designs - Multi-Storey Car Park & Balancing Ponds

60.00

0.00

60.00

0.00

 

 

HS2 Parallel Designs - Metro / Sprint / Cycle Bridge Over M42

15.00

0.00

15.00

0.00

 

 

HS2 Parallel Designs - Highway Pinchpoint Improvements

32.85

0.00

32.85

0.00

 

 

Priority Projects

122.85

 

0.00

122.85

 

0.00

 

 

Future Projects to be scoped

43.22

 

0.00

43.22

 

0.00

 

 

UK Central HS2 Interchange - Programme Total

398.00

 

51.92

346.08

 

15.29

 

 

UK Central Infrastructure - 2016/17 UKC PMO Expenditure

0.57

 

0.44

0.13

 

0.44

 

 

UK Central Infrastructure - A45 Damson Parkway Junction Improvements

69.12

2.22

66.91

0.15

 

 

UK Central Infrastructure - A34 Stratford Road Enhancements Study

20.01

0.89

19.12

0.20

 

 

UK Central Infrastructure - A452 Chester Road Corridor Enhancement

25.01

0.99

24.02

0.12

 

 

UK Central Infrastructure - Wildlife Ways (A45 to Town Centre Damson Parkway Cycle Link)

2.58

2.58

0.00

0.74

 

 

UK Central Infrastructure - Damson Parkway Corridor Improvements (prev. Solihull Town Centre Access Imp)

1.67

1.21

0.46

0.43

 

 

UK Central Infrastructure - Lode Lane Corridor Improvements

12.12

0.85

11.27

0.00

 

 

UK Central Infrastructure - Birmingham Business Park Southern Access

0.07

0.05

0.02

0.03

 

 

UK Central Infrastructure - Solihull Station New location feasibility study

0.09

0.07

0.02

0.07

 

 

UK Central Infrastructure - Solihull Train Station to Town Centre Accessibility Improvements

2.85

0.92

1.94

0.65

 

 

UK Central Infrastructure - Solihull Town Centre Public Realm Improvement scheme

1.24

0.21

1.03

0.05

 

 

UK Central Infrastructure - Chelmsley Wood Town Centre

20.02

2.97

17.05

2.13

 

 

UK Central Infrastructure - Kingshurst Village Centre

5.91

4.86

1.05

0.83

 

UK Central Infrastructure

UK Central Infrastructure - Accelerating Housing Delivery - Simon Digby

3.26

1.86

1.40

0.32

 

Package

UK Central Infrastructure Package - Phase 1 Subtotal

164.51

 

20.10

144.41

 

6.16

 

 

UK Central Infrastructure - Walking, Cycling & Green Infrastructure Investment Programme

25.42

 

0.28

25.14

 

0.18

 

 

UK Central Infrastructure - UKC Hub Access and Transport Modelling Programme

37.09

0.43

36.67

0.14

 

 

UK Central Infrastructure - Local Strategic Network Resilience Connectivity and Enhancements Programme

16.50

0.32

16.18

0.13

 

 

UK Central Infrastructure - Solihull Station Integrated Transport Hub

11.10

2.11

8.99

0.27

 

 

UK Central Infrastructure - Solihull Town Centre - Development & Investment

6.75

2.03

4.73

1.80

 

 

UK Central Infrastructure - Accelerated Housing Delivery - Utilising Solihull Assets

9.73

2.92

6.81

0.24

 

 

UK Central Infrastructure - Inclusive Growth - Securing Social Value

2.72

1.07

1.66

0.08

 

 

UK Central Infrastructure - Sustainable Energy - Enabling Clean Growth and Mobility

0.24

0.24

0.00

0.02

 

 

UK Central Infrastructure - Sustainable Energy - UKC Hub Low Carbon Heat Networks

0.09

0.09

0.00

0.04

 

 

UK Central Infrastructure - Sustainable Energy - Solihull Town Centre Low Carbon Heat Networks

10.78

0.87

9.90

0.64

 

 

UK Central Infrastructure - Low Carbon Future Mobility

3.07

0.34

2.74

0.03

 

 

UK Central Infrastructure Package - Phase 2 Subtotal

123.49

 

10.70

112.80

 

3.55

 

 

UK Central Infrastructure Package - Programme Total

288.00

 

30.80

257.20

 

9.71

 

Coventry City Centre South Regeneration

Coventry City Centre South Regeneration - Coventry City Centre South

Coventry City Centre South Regeneration - Coventry Friargate Business District Phase 1

98.75

51.20

 

98.75

51.20

0.00

0.00

 

9.10

1.04

 

 

Coventry South Package - A46 Stoneleigh Junction (A46 Link Road Phase 1)

6.60

 

6.60

0.00

 

0.00

 

 

Coventry South Package - A46 Strategic Link Road (A46 Link Road Phase 2)

27.65

0.10

27.55

0.00

 

 

Coventry South Package - A46 Link Road Phase 3

47.00

0.10

46.90

0.05

 

 

Coventry South Package - Binley and Walsgrave Junction

30.00

0.00

30.00

0.00

 

 

Coventry South Package - Coventry South Interchange

18.00

0.40

17.60

0.03

 

 

Coventry South Package - Tile Hill Station Improvements

7.20

0.20

7.00

0.20

 

Coventry UKC Plus

Coventry UKC Plus - Coventry South Package - Sub-programme Total

136.45

 

7.40

129.05

 

0.28

 

Coventry UKC Plus - UK City of Culture 2021 Regeneration

31.60

 

31.60

0.00

 

1.13

 

 

Coventry City of Culture Trust (2021)

4.00

4.00

0.00

0.00

 

 

Coventry UKC Plus - Coventry Station Masterplan (CSMP)

39.40

39.40

0.00

0.00

 

 

Coventry North Package - A45 to A444 Keresley Link Road

15.00

 

0.10

14.90

 

0.02

 

 

Coventry North Package - M6 Junction 3 Improvement

6.60

0.10

6.50

0.03

 

 

Coventry UKC Plus - Coventry North Package - Sub-programme Total

21.60

 

0.20

21.40

 

0.05

 

 

Coventry UKC Plus - Very Light Rail: ´Transforming Connectivity´

55.00

 

12.20

42.80

 

3.52

 

 

COVENTRY SCHEMES TOTAL

438.00

 

244.76

193.25

 

15.12

 

£m

C = A + B

 

A

B

 

D

 

Programme (£m)

Project

Total Expected WMCA Funding Into Programme

 

WMCA Funding Secured

WMCA Funding to be Secured

 

WMCA Funding Spend to Date

 

 

Metro Centenary Square and Edgbaston Extension

58.90

 

58.90

0.00

 

17.95

 

 

Metro Wolverhampton City Centre Extension

27.40

27.40

0.00

20.10

 

 

Bilston Road Track Replacement Phase 2

15.03

15.03

0.00

13.81

 

Metro programme

Metro Wednesbury to Brierley Hill Extension

103.00

103.00

0.00

0.00

 

 

Metro East Birmingham to Solihull Extension*

10.90

10.90

0.00

0.00

 

 

Metro Birmingham Eastside Extension*

23.80

23.80

0.00

0.00

 

 

METRO TOTAL

239.03

 

239.03

0.00

 

51.86

 

 

Sprint - A45 Birmingham to Airport and Solihull

20.20

 

20.20

0.00

 

0.09

 

 

Sprint - Hagley Road (with Halesowen and Dudley to Birmingham)

74.60

2.90

71.70

0.43

 

 

Sprint - Longbridge to Birmingham

38.40

0.30

38.10

0.09

 

Sprint Programme

Sprint - Hall Green to Interchange via Solihull

28.90

0.30

28.60

0.09

 

 

Sprint - A34 Walsall to Birmingham

30.91

22.10

8.81

2.54

 

 

Sprint - Sutton Coldfield to Birmingham (via Langley)

24.40

1.23

23.17

1.21

 

 

SPRINT TOTAL

217.41

 

47.03

170.37

 

4.45

 

 

Rail - Camp Hill Line Local Enhancements (Package 2)

46.96

 

7.35

39.61

 

3.10

 

 

Rail - Water Orton

0.00

0.00

0.00

0.00

 

 

Rail - Water Orton Local Enhancements (Package 4)

0.20

0.20

0.00

0.00

 

 

Rail - Snow Hill Lines

7.00

0.00

7.00

0.00

 

Rail Programme

Rail - Sutton Coldfield Gateway

19.50

0.37

19.13

0.28

 

 

Rail - Walsall to Wolverhampton Local Enhancements (Package 1)

44.33

10.78

33.55

3.66

 

 

Rail - future projects to be scoped

28.62

0.00

28.62

0.00

 

 

Rail -Stourbridge to Round Oak Line Canal St Station (Package 3)

0.08

0.08

0.00

0.07

 

 

RAIL TOTAL

146.68

 

18.77

127.91

 

7.11

 

Commonwealth Games 2022

Commonwealth Games 2022 - Alexander Stadium Redevelopment

25.00

 

25.00

0.00

 

0.00

 

 

Innovation - West Midlands Innovation Programme

40.00

 

3.24

36.77

 

0.39

 

 

Innovation - Urban Challenge

0.20

0.20

0.00

0.20

 

 

Innovation - West Midlands 5G

5.00

5.00

0.00

3.50

 

Innovation Programme

Innovation - West Midlands Growth Company

3.60

3.60

0.00

1.50

 

 

Innovation - Energy Capital (Energy Efficiency and Fuel Poverty)

0.25

0.25

0.00

0.10

 

 

Innovation - Ultra Low Emission Vehicle (ULEV) Strategy

0.25

0.25

0.00

0.05

 

 

Innovation - Other

0.70

0.00

0.70

0.00

 

Land Reclamation and Remediation

Black Country Land and Property Investment Fund (LPIF)

Brownfield Land & Property Development Fund (BLPDF)

150.00

50.00

 

53.04

50.00

96.96

0.00

 

14.07

5.40

 

 

Employment, Education & Skills - HS2 Jobs & Skills Workstream

0.81

 

0.81

0.00

 

0.21

 

Employment, Education & Skills

Employment, Education & Skills - Aspirations for All

2.00

0.50

1.50

0.01

 

 

Employment, Education & Skills - Future Projects

17.19

0.00

17.19

0.00

 

 

OTHER PROGRAMMES TOTAL

295.00

 

141.88

153.12

 

25.43

 

TOTALS                                                                                                                                                                                                                                                                                                                         2,022.12                                     774.20                        1,247.92                                 128.97

 

Future Possible WMCA Investment Programme Approvals (Indicative Only)

Cash flow funding unwound

Metro East Birmingham to Solihull Extension*

(10.90)

 

 

Metro Birmingham Eastside Extension*

(5.30)

 

Future Approvals Expected

UK Central HS2 Interchange programme

9.85

 

 

UK Central Infrastructure Package

14.02

 

 

Rail programme

17.78

 

 

UK Battery Industrialisation Centre**

1.50

 

CURRENT AFFORDABLE LIMIT

 

801.2

 

Projects delivered by TfWM not expected to receive WMCA IP Grant Funding

Programme (£m)

Project

Total Expected Funding Required

 

Funding Secured

Funding to be Secured

 

Project Spend to Date

 

Metro Programme

Metro East Birmingham to Solihull Extension

735.00

10.90

724.10

10.90

 

*Secured against farebox revenue.

** Loan facility agreement being drawn up (See WMCA Board minutes 13 September 2019)