Mayoral development corporations

What are mayoral development corporations and what powers do they have?

Mayoral development corporations (MDCs) are statutory bodies set up by metro mayors in England to deliver regeneration schemes. Each MDC operates over a defined geography and has general powers set out in the Localism Act 2011 to “do anything [the MDC] considers appropriate for the purposes of its object”, including directly constructing buildings and infrastructure or providing funding to partners to do so.

MDCs can also be granted specific powers such as taking on planning duties from the local authority (including to prepare a Local Plan and make decisions on individual planning applications), powers to make compulsory purchases of land or assets, as well as powers to grant discretionary relief from business rates. 

What is the history of development corporations? 

Development corporations were first created in 1946 to enable the construction of ‘new towns’ as part of the government’s post-war housebuilding programme, with more new towns were designated in the 1960s. By 2014, some 4.3% of UK households were living in 32 new towns. ³¹ TCPA, New Towns and Garden Cities: Lessons for tomorrow, 2014, retrieved 3 July 2024, https://tcpa.org.uk/wp-content/uploads/2021/11/NTsGCs_P1_LR.pdf   

Under the Thatcher government, ‘urban development corporations’ were introduced, tasked with the regeneration of inner-city urban areas, such as the London Docklands Development Corporation’s redevelopment of Canary Wharf in the 1980s and ‘90s. Unlike MDCs, which are accountable to mayors, these earlier models were established by and accountable to national government and were criticised at the time for taking power away from local decision makers. ³² Deas I, Robson B and Bradford M, ‘Re-thinking the Urban Development Corporation ‘Experiment’: The Case of Central Manchester, Leeds and Bristol’, Progress in Planning, 2000, vol 54, no. 1, pp. 1-72  

The powers for mayors to be able to establish a development corporation were first given to London in 2011, to enable the creation of the London Legacy Development Corporation (LLDC) and the regeneration of the Olympic site in Stratford. Mayors in other parts of England have been issued with the powers to establish MDCs as part of devolution deals agreed since 2014. 

The Levelling Up and Regeneration Act 2023 also introduced the model of the ‘locally led development corporation’ which can be proposed by any local authority or combination of local authorities in England. In this model, however, the local government secretary retains greater control over the development corporation. So far, none have been announced. 

How are mayoral development corporations created? 

All metro mayors in England have the power to establish MDCs, subject to consultation with stakeholders such as the local authorities whose areas the MDC will operate in, MPs whose constituency is similarly covered and members of the public. In London, the mayor has to consult with the London Assembly; outside London, mayors must seek the consent of combined authority members representing each council that governs any part of the area to fall under an MDC.

Under the Localism Act 2011, once an MDC has been designated by the mayor, the local government secretary is required to formally establish the corporation and its functions using secondary legislation. 

How many mayoral development corporations are there, and what have they achieved?

There are currently six MDCs in England. In London, as well as the LLDC there is the Old Oak and Park Royal Development Corporation (OPDC), established in 2015 to regenerate the area around the site in west London where HS2 was planned to intersect with Crossrail. 
Having delivered 12,000 new homes over 12 years, the LLDC is scaling back its operations and is due to return its planning powers to the four boroughs of Newham, Hackney, Tower Hamlets and Waltham Forest in November 2024. ⁴⁵ https://www.instituteforgovernment.org.uk/explainer/local-elections-2024-mayor-london  

In Tees Valley, Ben Houchen set up South Tees Development Corporation in 2017, the first of its kind outside of London, as part of the broader Teesworks regeneration project. In 2023, Houchen set up the Middlesbrough Development Corporation and Hartlepool Development Corporation.

In Greater Manchester, Andy Burnham set up the Stockport Development Corporation in 2019, with the first phase of development delivering 1,100 new homes and 170,000 sq ft of office space. ⁴⁶ Stockport MDC, Draft Strategic Business Plan, 2023-28,2023, retrieved 3 July 2024, https://democracy.greatermanchester-ca.gov.uk/mgConvert2PDF.aspx?ID=27333   

Which mayors have announced plans to set up new mayoral development corporations?

In the run up to the May 2024 mayoral elections, Burnham announced that he would introduce a MDC for Bolton. However, whether planning powers would be transferred to it remain unclear: the leader of Bolton Council, Nick Peel, has reportedly said that the council will remain in charge and the MDC will just “put a spotlight on Bolton as the number on regeneration target for Greater Manchester” ⁴⁷ Harrigan J, ‘Bolton town centre for be new body’s top regeneration target’, The Bolton News, 11 June 2024, retrieved 3 July 2024, www.theboltonnews.co.uk/news/24374334.bolton-town-centre-new-bodys-top-regeneration-target/ .  In July 2024, a further MDC was granted initial approval to cover the Northern Gateway region – spanning across the local authority boundaries of Bury, Oldham and Rochdale. ⁴⁸ Whelan D, ‘Delivery vehicle set up to push the pace at 300-acre GM growth zone’, North West Place, 16 July 2024, retrieved 17 July 2024, www.placenorthwest.co.uk/delivery-vehicle-set-up-to-push-the-pace-at-300-acre-gm-growth-zone/   

In his most recent manifesto, London mayor Sadiq Khan committed to “set up more Mayoral Development Corporations to boost overall housing supply and drive regeneration” ⁴⁹ Khan S, A fairer, safer, greener London for everyone, Labour, 2024, retrieved 3 July 2024, sadiq.london/wp-content/uploads/2024/04/A-Fairer-Safer-Greener-London-for-everyone-Manifesto-2024.pdf .  Subsequently, in September 2024, Khan announced plans backed by the government to introduce an MDC in order to pedestrianise Oxford Street. ⁵⁰ Greater London Authority, ‘Mayor of London and government announce bold plans to transform Oxford Street’, 17 September 2024, retrieved 2 October 2024, www.london.gov.uk/mayor-london-and-government-announce-bold-plans-transform-oxford-street   

Kim McGuiness, the mayor of the North East, has also said that she will set up an MDC connecting the rivers and ports around Blyth, Tyneside, Sunderland and Seaham. ⁵¹ Holland D, 'Labour pledge to ‘turbocharge’ North East jobs with mayor’s bid to regenerate ports and rivers’, Chronicle Live, 14 May 2024, retrieved 3 July 2024, uk.news.yahoo.com/labour-pledge-turbocharge-north-east-102024035.html   
 

What are the perceived benefits and disadvantages of mayoral development corporations?

MDCs are claimed to offer several advantages compared to other regeneration models. While local authorities have many of the same powers, MDCs benefit from budgets that aren’t subject to the same financial pressures faced by local authorities. They also offer the advantage of being able to operate over several local authority boundaries – in theory allowing them to regenerate sites that might otherwise fall between the gaps.

In announcing the Stockport MDC, Burnham said that “the great attraction of Mayoral Development Corporations is that they simultaneously allow us to tackle two big problems – town centre decline and the housing crisis. It provides an integrated solution.” ⁵² Marketing Stockport, ‘Consultation Closing on Regeneration of Stockport Town Centre West’, 5 March 2019, retrieved 3 July 2024, https://marketingstockport.co.uk/news/consultation-closing-on-regeneration-of-stockport-town-centre-west/  Meanwhile, Houchen has praised the model for “cutting red tape and boosting investment while [enabling him to] keep a hand on the tiller”. ⁵³ BBC, ‘Teesside planning powers transfer to mayor’s new groups’, 2 June 2023, retrieved 3 July 2024, www.bbc.co.uk/news/uk-england-tees-65782095  

However, there have been criticisms of the model – particularly because they can take powers and assets away from local authorities. For example, the local council voted against the proposed Middlesborough MDC despite the area’s independent mayor consenting to the scheme. This led Andy McDonald, the Labour MP for Middlesbrough, to criticise the MDC model in parliament because “decisions about development will be made not by the council, but by an unelected [MDC] board appointed by Ben Houchen”. ⁵⁴ House of Commons, Hansard, ‘Middlesbrough Development Corporation’, 14 March 2023, retrieved 3 July 2024, https://hansard.parliament.uk/Commons/2023-03-14/debates/CED6B9BD-2747-4F96-A244-BEE6E58248EB/MiddlesbroughDevelopmentCorporation    

Concerns have also been raised about the transparency and accountability. Following allegations of corruption, an independent inquiry into South Tees Development corporation was commissioned in 2023. ⁵⁵ Gove M, letter to Ben Houchen - Tees Valley Mayor, House of Commons Library, 24 May 2023, retrieved 3 July 2024, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1158964/SoS_to_Ben_Houchen.pdf  The inquiry found no evidence of corruption in the MDC, but did conclude that there was a need to “strengthen governance and increase transparency”. ⁵⁶ DLUHC, Independent review report: South Tees Development Corporation and Teesworks Joint Venture, 29 January 2024, retrieved 3 July 2024, www.gov.uk/government/publications/independent-review-report-south-tees-development-corporation-and-teesworks-joint-venture