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Dr Charlotte Hoole and Professor Anne Green discuss how Birmingham can use the West Midlands Trailblazer Devolution Deal to reform public funding allocation.
Birmingham, as one of the UK’s largest urban economies, is central to national growth and renewal. The city has faced persistent challenges in accessing and deploying public funding in ways that fully support its strategic potential – stemming from fragmented funding streams, short-term competitive bidding processes, centralised decision-making, and compounded by Birmingham City Council issuing a Section 114 notice in September 2023. However, the policy and funding landscape is seeing some change. The West Midlands Trailblazer Devolution Deal is an opportunity to reform how funding is allocated and utilised locally. With new powers for the West Midlands Combined Authority, a consolidated single funding pot, and long-term financial arrangements, Birmingham is better positioned to align public investment with its strategic priorities.
Principles for Better Public Funding Allocation
Recent research led by the University of Birmingham proposes ten guiding principles to inform more effective public funding allocation:
- Economy, Efficiency and Effectiveness – ensuring resources are spent wisely and deliver intended outcomes.
- Equity – promoting fairness in treatment and distribution across places and populations.
- Devolution and Subsidiarity – empowering local authorities to make decisions closest to the communities they serve.
- Geographical Scale – recognising that different challenges require responses at different spatial levels.
- Accountability – clarifying responsibilities and enabling scrutiny across all levels of government.
- Inter-governmental Cooperation – fostering alignment and collaboration between national, regional, and local actors.
- Responsiveness and Place-based Tailoring – adapting funding to reflect local needs and opportunities.
- Stability – providing predictable and long-term funding to support strategic planning.
- Participation – involving a wider range of stakeholders in funding decisions.
- Monitoring and Evaluation – using data and evidence to assess impact and inform future decisions.
These principles offer a framework for reforming public funding allocation to better support cities like Birmingham, particularly in light of its evolving governance landscape.
Opportunities for Birmingham under the Trailblazer Devolution Deal
The West Midlands Trailblazer Devolution Deal, announced in the Spring Budget of 2023, marks a shift in power and resources from Whitehall to the West Midlands metropolitan region. This deal presents a unique opportunity to operationalise many of the funding principles outlined above.
The deal includes:
- A departmental-style single funding pot, giving local leaders control over spending across devolved areas
- 100% business rates retention for 10 years, worth £450 million
- A £500 million housing deal to accelerate brownfield regeneration and affordable housing delivery
- Up to six levelling-up zones, backed by 25-year business rate retention, targeting investment and job creation
- New powers over transport, digital inclusion, careers advice, and retrofit funding
These developments support the principles of devolution, stability, and place-based tailoring of policies to tackle local needs, enabling Birmingham to design and deliver funding programmes that reflect its specific challenges and opportunities. The single pot arrangement, in particular, allows for greater flexibility and strategic alignment across policy domains, reducing fragmentation and enabling more efficient use of resources.
Implications for Policy and Investment
Improving public funding allocation is not simply a matter of administrative reform, it is a strategic imperative with potentially wide-ranging implications for policy and investment.
First, the move toward longer-term, multi-year funding settlements, now possible under the West Midlands Trailblazer Deal, will enable Birmingham and other local authorities which are part of the Combined Authority area to develop and deliver strategic programmes more in line with its growth ambitions, including major infrastructure projects, regeneration schemes and innovation programmes that require sustained investment and cross-sector collaboration. Delivering these ambitions requires robust governance, data capabilities, and monitoring and evaluation systems to help Birmingham manage funding effectively and demonstrate impact.
Second, aligning funding more closely with local needs and priorities will enhance the effectiveness of public spending. Birmingham’s scale and diversity mean that a one-size-fits-all approach is rarely appropriate. More locally responsive funding will allow the city to address specific challenges – such as transport connectivity, housing affordability, and workforce development – while capitalising on its economic strengths. The recent launch of the West Midlands Mayoral Development Corporation in September 2025, established by Mayor Richard Parker and Birmingham City Council marks a step forward in enabling more tailored investment. It is designed to bring together planning powers, land, funding, and delivery, and aims to bring speed, scale and certainty to investors to deliver transformative development, create jobs, and improve lives across the region.
Third, improving transparency and accountability in funding decisions will foster greater public trust and civic engagement. Clearer communication of funding sources, decision-making processes, and outcomes enables residents, businesses, and stakeholders to better understand and influence how public money is spent in their city.
Finally, a more enabling funding system will enhance Birmingham’s attractiveness to private and institutional investors. Stability and clarity in public funding can de-risk investment, support blended finance models, and unlock co-investment opportunities in areas such as housing, clean energy, and digital infrastructure.
This blog was written by Dr Charlotte Hoole, Research Fellow and Anne Green, Professor of Regional Economic Development and Co-Director, City-REDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.