Mayors to score wins in the budget after PM intervenes – but fears remain over councils facing bankruptcy
Mayors are set to be one of the big winners in the budget after Sir Keir Starmer personally intervened to ensure they have more freedom to spend cash and boost growth, Sky News understands.
England’s dozen metro mayors have been working together to push the prime minister, Rachel Reeves and Angela Rayner for more powers and cash after years of frustration at the way the Treasury allocates money for projects and salaries.
But there is deep concern that Ms Reeves, the chancellor, may only allocate money to some key areas but not others.
There is agreement among all the mayors who spoke to Sky News that the squeeze on local government budgets – which metro mayors work alongside – will cause further councils to go bankrupt and hamper their ability to regenerate their local regions.
In the budget on Wednesday mayors believe they will get:
- A so-called “single pot” of money allowing them much greater freedom to allocate funds where they deem most necessary;
- Greater flexibility to raise local taxes. In Liverpool City Region, metro mayor Steve Rotherham is pushing a “tourist tax” of £1 per night on the city’s hotels to fund local tourist projects. There are hopes among some mayors they will get more flexibility in the way they can spend locally raised taxes, known as precepts;
- Multi-year budget settlements to allow for longer-term planning.
- The mayors are pushing for more powers in a range of areas from transport, where they are hopeful of some success, to skills, where they see the Department for Education reluctant to release their grip.
Sky News understands that Sir Keir has repeatedly said in meetings that he believes metro mayors, who have planning powers and work with clusters of local authorities, must be put at the heart of the push for growth across England.
‘Massively frustrating’ Treasury
Mayor of Teesside Ben Houchen. Pic: PA
Liverpool City Mayor Mr Rotherham told Sky News that he has been told that mayors “can become the delivery arm of national government” across a whole range of projects, including retrofitting homes, improving transport and productivity and skills.
However, several mayors who spoke to Sky News sounded a warning that they need to break free from the Treasury’s way of deciding what should get funded if growth is as big a priority as the government says.
Liverpool City Mayor Steve Rotherham. Pic: PA
Mr Rotherham said the Treasury has been “massively frustrating to date” and “we are pushing to see changes.”
He called for urgent reform to the Treasury manual for evaluating the value for money of big projects – known as the Treasury Green Book.
He claimed that this way of measuring value is biased against more long-term projects, making true reform impossible.
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Sam Coates looks ahead to Westminster’s oddest budget tradition
Councils ‘on the brink of bankruptcy’
Meanwhile, Ben Houchen, the Conservative mayor of Teesside, said: “The Treasury is a very difficult department to deal with.
“The officials, I think, have a very narrow view – they know the cost of everything and the value of nothing.”
He warned the chancellor that if, as expected, she announces lots of big infrastructure and growth projects on Wednesday but also squeezes on the day-to-day running costs of government, then the initiatives unveiled next week may never happen.
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“If you allocate money for big projects like train stations or roads, or whatever it might be, big infrastructure – that’s one thing,” he said.
“But to deliver that, you’ve got to have the day-to-day spending to employ people, get through planning – all of that stuff in the background that takes money, revenue, day-to-day spending.
“So allocating a big cheque is one thing. That doesn’t necessarily mean that we’re going to see those projects come into fruition if the money isn’t there to develop those projects in the first place.”
Earlier this month Sir Keir Starmer met Tees Valley Mayor Mr Houchen (second right) and other regional leaders during the inaugural Council of the Nations and Regions in Edinburgh. Pic: PA
Mr Houchen said local councils in the Tees Valley were in a bad financial situation.
“You’ve got local councils, which is what most people interact with on a daily basis, in a very difficult situation.
“The quality and experience of the staff aren’t there. Money is extremely tight.
“Things like adult and children social services in Tees Valley for instance usually accounts for about 80% of a council’s entire budget, just on adult and children’s social services. So it’s in a very difficult state. I’m acutely aware, not just across the Tees Valley but across the country, there are lots of councils on the brink of bankruptcy.
“You’ve seen a couple of those already under the previous government. Without more revenue funding and funding for the types of departments like local government, that’s not going to change that outcome, and we could still see loads of capital spending, but we could still see governments going bust, services not improving and actually continuing to deteriorate.”
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If councils fail, communities ‘fall over’
Richard Parker, the new Labour mayor of the West Midlands, also agreed funding was squeezed for councils.
“Birmingham has lost £1bn worth of funding over the last 10 years… that’s been taken out of some of the poorest and most vulnerable communities, and it’s made those communities even more vulnerable.
“And I can’t afford our councils to fail because if our councils fail, the communities they support fall over.
“So I understand the criticality of the situation.
“I’m hoping the government will start, as they’ve been saying, to make longer plans for funding for local government, so they get an opportunity to plan ahead and plan for the future rather than working to short-term budgetary cycles of a year.”
Sir Keir also met regional mayors, including West Midlands Mayor Richard Parker (left), in July. Pic: PA
Mr Parker made clear that getting more powers over skills – which some other mayors think unlikely at the moment – will be a key driver for growth.
Read more:
Analysis: Growing storm over rumoured budget tax rises
Analysis: Labour’s muddle with messaging
Are Starmer and Reeves on the same page with budget?
‘Too many people in low-paid jobs’
“I actually then need some revenue support, some more powers over particularly post-16 education,” he said.
“We’ve got around a quarter of the workforce in the West Midlands with low skills in those skills, which means that too many people in work are in low-paid jobs.
“And I’ve got twice as many young people out of work than the national average.
“So I’ve got to help these people get access to the skills they need to build careers here and get access to better-paid jobs and indeed the jobs that investors need to fill who are coming into this region.”
Opinion by: Merav Ozair, PhD
Technology is advancing at the speed of light today more than ever. We have surpassed Moore’s law — computational power is doubling every six months rather than every two years — while regulations are, and have been, playing catchup.
The EU Artificial Intelligence Act just came into force in August 2024 and is already falling behind. It did not consider AI agents and is still wrestling with generative AI (GenAI) and foundation models. Article 28b was added to the act in June 2023 after the launch of ChatGPT at the end of 2022 and the flourishing of chatbot deployments. It was not on their radar when lawmakers initially drafted the act in April 2021.
As we move more into robotics and the use of virtual reality devices, a “new paradigm of AI architectures” will be developed, addressing the limitations of GenAI to create robots and virtual devices that can reason the world, unlike GenAI models. Maybe spending time drafting a new article on GenAI was not time well spent.
Furthermore, technology regulations are quite dichotomized. There are regulations on AI, like the EU AI Act; Web3, like Markets in Crypto-Assets; and the security of digital information, like the EU Cybersecurity Act and The Digital Operational Resilience Act.
This dichotomy is cumbersome for users and businesses to follow. Moreover, it does not align with how solutions and products are developed. Every solution integrates many technologies, while each technology component has separate regulations.
It might be time to reconsider the way we regulate technology.
A comprehensive approach
Tech companies have been pushing the boundaries with cutting-edge technologies, including Web3, AI, quantum computing and others yet to emerge. Other industries are following suit in the experimentation and implementation of these technologies.
Everything is digital, and every product integrates several technologies. Think of the Apple Vision Pro or Meta Quest. They have hardware, goggles, AI, biometric technology, cloud computing, cryptography, digital wallets and more, and they will soon be integrated with Web3 technology.
A comprehensive approach to regulation would be the most suitable approach for the following principal reasons.
A full-system solution
Most, if not all, solutions require the integration of several emerging technologies. If we have separate guidelines and regulations for each technology, how could we ensure the product/service is compliant? Where does one rule start and the other end?
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Separate guidelines would probably introduce more complexity, errors and misinterpretations, which eventually might result in more harm than good. If the implementation of technologies is all-encompassing and comprehensive, the approach to regulating it should also be.
Different technologies support each other’s weaknesses
All technologies have strengths and weaknesses, and often, the strengths of one technology can support the shortcomings of the other.
For example, AI can support Web3 by enhancing the accuracy and efficiency of smart contract execution and blockchain security and monitoring. In contrast, blockchain technology can assist in manifesting “responsible AI,” as blockchain is everything that AI is not — transparent, traceable, trustworthy and tamper-free.
When AI supports Web3 and vice versa, we implement a comprehensive, safe, secure and trustworthy solution. Would these solutions be AI-compliant or Web3-compliant? With this solution, it would be challenging to dichotomize compliance. The solution should be compliant and adhere to all guidelines/policies. It would be best if these guidelines/policies encompass all technologies, including their integration.
A proactive approach
We need proactive regulation. Many of the regulation proposals, across all regions, seem to be reactions to changes we know about today and don’t go far enough in thinking about how to provide frameworks for what might come five or 10 years down the line.
If, for example, we already know that there will be a “new paradigm of AI architectures,” probably in the next five years, then why not start thinking today, not in 5 years, how to regulate it? Or better yet, find a regulatory framework that would apply no matter how technology evolves.
Think about responsible innovation. Responsible innovation, simplistically, means making new technologies work for society without causing more problems than they solve. In other words: “Do good, do no harm.”
Responsible innovation
Responsible innovation principles are designed to span all technologies, not just AI. These principles recognize that all technologies can have unintended consequences on users, bystanders and society, and that it is the responsibility of the companies and developers creating those technologies to identify and mitigate those risks.
Responsible innovation principles are overarching and international and apply to any technology that exists today and will evolve in the future. This could be the basis for technology regulation. Still, companies, regardless of regulation, should understand that innovating responsibly instills trust in users, which will translate to mainstream adoption.
Truth in Technology Act
The Securities Act of 1933, also known as the “truth in securities” law, was created to protect investors from fraud and misrepresentation and restore public confidence in the stock market as a response to the stock market crash of 1929.
At the core of the act lie honesty and transparency, the essential ingredients to instill public trust in the stock market, or in anything for that matter.
This act has withstood the test of time — an “evergreen” law. Securities trading and the financial industry have become more digital and more technological, but the core principles of this act still apply and will continue to.
Based on the principles of responsible innovation, we could design a “Truth in Technology Act,” which would instill public trust in technology, internationally, now and in the future. Fundamentally, we seek these products and services to be safe, secure, ethical, privacy-preserving, accurate, easy to understand, auditable, transparent and accountable. These values are international across regions, industries and technologies, and since technology knows no boundaries, neither should regulations.
Innovation may create value, but it may also extract or destroy it. Regulation helps limit the latter two types of innovation, while well-designed regulation may enable the first kind to survive and flourish. A global collaboration may find ways to incentivize innovation that creates value for the good of the global economy and society.
It might be time for a Truth in Technology Act — an international, comprehensive, evergreen regulation for the good of the citizens of the world.
Opinion by: Merav Ozair, PhD.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Asset manager REX-Osprey is seeking to launch an exchange-traded fund (ETF) designed to hold the Movement Network’s native token, MOVE, according to a March 10 announcement.
The filing comes as Movement, a layer-2 (L2) blockchain network, launches its public mainnet beta, Movement said.
It is the latest example of a fund sponsor filing to list an ETF comprising an alternative cryptocurrency, or “altcoin.”
“Traditional investors have expressed keen interest in gaining regulated exposure to emerging blockchain technologies without directly managing tokens,” Cooper Scanlon, Movement Labs’ co-founder, said in a statement.
Movement is an Ethereum L2 blockchain designed using Move, a Rust-based programming language originally developed by Meta.
Its public mainnet has approximately $250 million in total value locked (TVL), according to Movement.
The MOVE token has a fully diluted value of around $5 billion, according to CoinMarketCap.
The US Securities and Exchange Commission authorized ETFs holding Bitcoin (BTC) and Ether (ETH) to list in the US in 2024 but has not yet approved any altcoin ETFs.
“Breaking the pattern of ETFs limited to long-established cryptocurrencies opens doors for institutional capital to support next-generation blockchain innovation,” Rushi Manche, Movement Labs’ co-founder, said in a statement.
REX-Osprey has filed for a MOVE ETF. Source: SEC
Related: Bitwise files to list a spot Aptos ETF — the 36th largest cryptocurrency
Altcoin ETFs abound
Asset managers are seeking the SEC’s approval to list ETFs for holding upward of half a dozen different altcoins.
On March 5, asset manager Bitwise filed to list a spot Aptos ETF in the US — a token created by a team led by two former Facebook (now Meta) employees in 2022.
On Feb. 25, US securities exchange Nasdaq requested to list a Grayscale ETF holding the Polkadot network’s native token, DOT (DOT).
Other altcoin ETFs awaiting approval include those holding Litecoin (LTC), Solana (SOL) and Official Trump (TRUMP), among others.
US President Donald Trump, who started his second term in January, said he wants America to become the “world’s crypto capital” and has appointed pro-crypto leaders to key regulatory agencies, including the SEC.
Bloomberg Intelligence has set the odds of the SEC approving Solana and Litecoin ETFs at 70% and 90%, respectively.
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