Budget & spending
The WMCA finance structure can be separated into two elements being Revenue and Capital.
Revenue
The WMCA revenue account has three primary elements
- The Mayoral budget
- The Transport budget
- The WMCA operational budget
Mayoral budget
The mayoral budget is new and came into effect following the mayoral election on 4 May 2017. For the 2017/18 year an allocation has been provided from overall WMCA funding. For future years the mayor is able to set a precept to fund their office. This precept is charged to the residents of the seven constituent members alongside their council tax in the same way that the Fire and Police set a precept.
Transport budget
The transport element in Policy terms covers the English National Concessions (ENCTS), the extension of the concession to the local rail and tram networks, subsidised bus network, Ring and Ride and Child concessions. In 2017/18 these concessions account for 67.27% of the expenditure budget with finance and debt commitments a further 15.24% with the balance on managing and maintaining the network, policy and strategy and organisational support. It should be noted that the ENCTS is a national scheme and so effectively 43.21% of the budget is not within local control.
The Transport Budget is funded by a levy from the seven metropolitan councils. In January 2017 the West Midlands Combined Authority set a levy of £121.54m for the 2017/18 year, a 2.63% reduction from 2016/17. The levy is allocated to each district based upon published population figures. Details of the Transport Budget and Levy can be found in the Transport for West Midlands (TfWM) Transport Plan on the TfWM website and also the annual expenditure leaflet.
WMCA Operational Budget
The WMCA approved the budget for 2017/18 on17 February 2017. Each constituent member paid a membership fee of £250,000 and non-constituent and observer members paid a fee of £25,000. This provides a fund of approximately £2m. In addition to this the seven metropolitan councils have provided staff and resources on a pro-bono basis. These fees were agreed on an equal 1/7th basis across the metropolitan councils. Details of what this budget is delivering can be found in the WMCA Annual Plan available on this site.
Capital Investment
An £8bn Capital investment programme was highlighted as being a significant benefit of devolution and provided a 30 year investment programme as follows:
| Work Stream Name | Investment Programme Expenditure £bn | |
| 1 | HS2 Growth Strategy comprising: | |
| Growth around the 2 station sites, Curzon Street and Interchange | 2.0 | |
| Metro extensions in Birmingham City Centre, Dudley and between the 2 HS2 stations | 1.1 | |
| HS2 Supply Chain Investment Programme | 0.4 | |
| High Speed College | 0.03 | |
| West Midlands Wide HS2 Connectivity/Transport Schemes | 0.9 | |
| 2 | Coventry to HS2 Improved Connection | 0.4 |
| 3 | Devolved Transport Schemes | 1.3 |
| 4 | Collective Investment Funds – Industrial and Commercial | 1.0 |
| 6 | Land Reclamation Fund | 0.2 |
| 7 | Coventry City Centre Regeneration | 0.2 |
| 8 | Revolving Housing Fund * | 0.5 |
| 9 | Other Smaller Programmes | 0.1 |
| Total Investment Programme Expenditure | 8.0 | |
* Note: The revolving housing fund was not included in the final version of the Devolution Deal Investment Programme but is included above for completeness regarding the £8bn figure. The housing fund or a similar alternative does, however, remain an ambition of the Combined Authority going forward.
The funding for these programmes comes from a number of sources some of which are already agreed; others agreed in principle and some dependent upon third parties e.g. Network Rail and Housing funds; and finally others assumed to come from future business rate growth assumptions. Key to this is the £36.5m annual devolution grant from government which provides funding for £1.1billion of this programme.
In summary the funding cocktail is:
| Funding provider | Source | Detail £bn | Total £bn | |
|---|---|---|---|---|
| Devolution Deal | WMCA Debt | Supplementary Business Rates | 1.0 | |
| Mayoral Precept | 0.2 | |||
| Annual Devolution Grant | 1.1 | |||
| Share of business rate growth previously returned to Government | 0.7 | 2.0 | ||
| Investment Fund Earnings (From Rolling Fund) | 0.02 | |||
| Less : Interest on Borrowing | (1.0) | |||
| Department For Transport Grants | Devolved Transport Investment (ITB / Highways Block) | 1.3 | 2.5 | |
| DFT / HS2 Grants | 1.2 | |||
| Birmingham City Council | Enterprise Zone | 0.8 | 0.8 | |
| Partner Funding | Local Contributions from Business | 0.2 | 0.2 | |
| Major Partner Contributions (Highways England) | 0.4 | 0.4 | ||
| Major Partner Contributions (Network Rail) | 0.3 | 0.3 | ||
| European Structural Investment Fund | 0.01 | 0.01 | ||
| Investment Funds | Revolving Housing Fund * | 0.5 | 0.5 | |
| Constituent Members Rolling Fund | 1.0 | 1.0 | ||
| Productivity Investment Fund (Loans to Business by Banks) | 0.3 | 0.3 | ||
| Total Investment Programme Expenditure | 8.0 | 8.0 | ||
* Note: The revolving housing fund was not included in the final version of the Devolution Deal Investment Programme but is included above for completeness regarding the £8bn figure. The housing fund or a similar alternative does, however, remain an ambition of the Combined Authority going forward.
This package demonstrates the wide nature of the devolution deal and the fact that local residents, LEP’s, businesses, councils and government were all contributing. Part of the Devolved Transport Funding finances the separate Tfwm Capital Investment programme contained within the Tfwm Transport Plan.
Financial Monitoring is undertaken throughout the year and reported through to the WMCA Board. Annual Accounts and monthly financial disclosures can be found in this section.