Conclusions from Mayors' Think Tank 2012


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The Mayors’ Think Tank 2012 at MIPIM attracted a high-powered group of city leaders, including Mayors, Deputy Mayors, Council Leaders, and City CEOs from around 80 different cities, enabling city leaders to exchange insights and innovations in a private discussion. Get exclusive access to the conclusions made during this closed door event.

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Conclusions from Mayors' Think Tank 2012

  1. 1. MIPIM Mayors’ Meeting Climbs Infrastructure Mountain Greg Clark, Moderator of the MIPIM Mayor’s Think Tank 2012.The 4th Annual Mayors’ Think Tank at MIPIM was held Wednesday March 7th2012 at MIPIM inCannes, France. 1. City mayors with ambitionMore than 60 Mayors, Deputy Mayors, and other City leaders attended the MIPIM Mayor’s ThinkTank from more than 30 countries. For the first time, the largest group of Mayors came fromCanada, with Russia and UK not far behind. From Sao Paulo and Moscow through to Manchester,Barcelona, Lisbon, Montreal, Toronto, Copenhagen, Stuttgart, and Oslo, a large number of majorcities were present, and their voices were heard.The Think Tank is a conversation between the City Leaders, focussed on table based discussions insmall groups of 10-20. It is a confidential meeting, with no media present, where Mayors and cityleaders can exchange insights and experiences, away from the cameras. 2. Cities and Infrastructure: the essential linkThe themes of this year’s Think Tank was infrastructure. Six tables debated different dimensions ofthe issue: including: The social return on infrastructure investment, The role of utilities, How to finance infrastructure, Making transport options available, Combining ambitious projects with ageing infrastructure, Working out who pays for new connectivity.The first observation for the city leaders is that the Mayors regard Infrastructure as a specialdimension of city success. It is the key common ingredient between quality of life, sustainability, andcompetitiveness. Infrastructure plays a unique role in how cities function. It integrates land use andproperty with public services, commercial professional activities, and leisure and life style activities. 1
  2. 2. Infrastructure is a spatial asset but it supports many different kinds of sectoral activities. For thesereasons, the cities take a special interest in infrastructure, even if very few cities have control of allof the infrastructure systems directly. 3. Adjusting to the future is about infrastructureFor cities in Europe and North America that are competing with faster growing economies,infrastructure deficits are the major drag on exploiting their advantages of quality of life, advancedentrepreneurship, knowledge economy, and sustainability. Without infrastructure growth andrenewal, Europe and N America cannot play their new niche roles in a global economy in which theyare becoming less dominant, and must adjust to providing high value niches. Infrastructure deficitsin Europe and North America are preventing the full and effective adjustment to new economic,environmental, and social imperatives. 4. Cities must lead infrastructure integrationInfrastructure is also a special ingredient because it requires something different from usual citymanagement to make it work. Much infrastructure is locally based, but is regulated or overseen bynational rules, laws, and systems, or by States, Provinces, and Regional Governments. Despite thefact that cities and metropolitan areas are increasingly the units of competition and the hubs ofemployment and social relations, as well as the core of eco-systems, there have not been systematicreforms that give city governments more authority on infrastructure issues. There are essential localimperatives but they addressed within national frameworks, and often the national frameworks areineffective or backward looking. So infrastructure is an issue on which Mayors have lots of interestbut also limited power. They have to make the case for what their cities need and find ways to bebecome influential and play co-ordinating roles.At the same time as being both local and national, infrastructure often straddles the public andprivate sectors, where different countries have adopted distinctive patterns of privatisation andcontracting out. This further reduces the authority of city leaders and often leads to a co-ordinationfailure between different infrastructure providers. These co-ordination failures involves big issuessuch the failure to integrate transports systems with one ticket approaches and they also includenuisances like different utilities digging up the same roads at different times!These systemic co-ordination failures around infrastructure run directly against the need to fostersmart cities, which are based on the idea of intelligent management of a system of systems using asingle set of guiding principles and intelligent networks to achieve optimum integration. Fragmentedinfrastructure leadership across public and private sectors in the enemy of progress and must betackled. System integration around cities and metropolitan areas is central to the task of combatingclimate change, achieving greater investment, and organising around the needs of the mobilecitizen. 2
  3. 3. 5. Investment in InfrastructureThe mayors also discussed the need to increase the investment rate as well as the co-ordination ofinfrastructure within cities. There are many different means now available to finance infrastructureand to re-finance existing infrastructure. The current challenges in public finance require that morefinancial innovation is embraced but the National Finance Ministries and Treasuries are slow torecognise the infrastructure investment requirements.The financing suite for infrastructure includes at least: Transfer payments from higher tiers of Government which is hard to secure. Local taxation which is constrained in many countries, and is also now limited by weaker local economies in many places. Debt financing for local government and infrastructure companies. Institutional and Sovereign Investment in infrastructure which is growing. PPPs with tolls, user charges, taxes/levies. ‘Value capture’ tools such as Tax Increment Financing, Betterment Levies, and land value shares. Joint ventures including property/ capital partnerships between public and private sectors. Project bonds, which can raise both equity investments and structure debt finance outside of public debt, and are now on the increase in Europe.The mayors commented that whilst there is some successful experience amongst the cities of usingeach of these tools, Cities vary enormously on what is allowed or permitted within their ownconstitutions. Essentially, very few cities are empowered to use many of these tools, as nationalgovernments regulate their financial activities very closely in many countries. 6. The age of cities needs new financial empowermentThese differences produce competitive advantages for some and disadvantages for others. On thewhole, cities in Asia and North America have more self financing powers than those in Europe andLatin America. Within Europe, cities in Germany, Switzerland, Austria, and Scandinavia have moreself financing powers than cities in UK, Ireland, Spain, France, and Italy. This latter group are moredependent on their national and regional governments. Cities that have more self-financing powerstend to have larger roles in infrastructure provision, and are thus better equipped to lead thesystems integration required to progress towards becoming smarter cities.Cities that are growing or adapting their activities towards a new future want to use value capturetechniques more often because they need to meet demand with up-front investment, and pay for itwith the value created later. City leaders see each of these models as having some merits but theMayors stressed the need for more cities to have more choices about how they financeinfrastructure. Each approach will work well for some investments rather than others, so a range oftools is needed. 3
  4. 4. 7. Cities will lead innovation in infrastructure management and integration.The overall conclusions from the 2012 MIPIM Mayors’ Think Tank were: Cities are leading the innovation process of infrastructure. Continued local innovation by cities in all aspects of local infrastructure are essential to drive reforms in markets, and to win greater freedom for manouver. The Mayors Think Tank heard many examples of innovation from the cities present in making progress with infrastructure and these are recorded in the White Paper. Active city leadership is required to demonstrate the ambition to use infrastructure to manage and shape future growth in cities, to integrate systems of infrastructure and local level and to secure good pubic outcomes for citizens and environment. City leaders have to co-ordinate and integrate different systems if the citizen and environment is to benefit. Flexibility in financing tools, regulatory frameworks, and land uses will be essential if infrastructure is going to move from being a dormant to an active asset in many cities. the biggest barrier is the lack of a ‘guiding mind’ that oversees infrastructure integration and cities want to take this role, but are frequently hindered from doing so. As well as expanding the range of financial tools used by cities, a long term, ‘whole of cycle’, approach is needed if the right financial tools are to be adopted, and if ambition is going to meet with resources and implementation capability. Infrastructure funding cycles need to be 50 years plus and the financial system and tools need to recognise that. More than ever, infrastructure systems must be seen as a ‘joint venture’ between city and metropolitan authorities and those who provide and finance infrastructures. Whilst individual providers may remain responsible for their section of the infrastructure platform, it is increasingly cities and metropolitan authorities who must provide the integration and coordination required to foster innovation and to build smarter, more efficient, and resilient cities.In all of these tasks city leaders will play a lead role, making new proposals and seeking a newagreement about the future of infrastructure in our cities. The governments that respond best willwin the advantages of our new era of smart and integrated cities. 4