Not if you establish new employers or move government departments to the new towns.
Dispersing government departments like that has definite costs, especially in terms of loss of experienced personnel and disruption.
In my view, this might work if we move the entire civil service out of London to a new administrative capital, but dispersing it is not going to do much beyond wrecking the remaining productivity of the civil service apparatus.
As for new private sector employers, it probably won't work without massive ongoing subsidies.
Small towns really don't have an economic raison d'etre in the modern world.
The existing ones we have are dying on their feet, we probably shouldn't try creating more.
Ok, forgive the brevity inherent with an internet forum post. When I say ring fenced for capital spend what I would mean is that a council can't take windfall cash an use it to spend on basic services which should be funded from other means. It would be reasonable for example to spend it on transport and a certain amount of running costs for a fixed period of time, the argument being that once bedded in it will need less support and also grow the tax base over that time. A better term would be "ring fence the money for economic development and civic infrastructure".
The problem is once you annualise running costs into a lump sum you won't get that much from the £15bn for Manchester.
It probably won't be enough to overawe politicians or the public.
A lot of public services don't really exhibit a bedding in effect, a library costs more or less what it costs - indeed costs will likely increase over time.
The only systems that really see bedding in are transport systems, and £15bn with annualised running costs probably won't get you
that much.
At the moment local councils have negligible incentives to sell residential development to local people, give them more incentives and you will get more of it. If the impact of being a NIMBY wrecker is to drop half the money they have to play with in the bin I don't think most parties or councils will take that option, the whole skill of being a politician is to get the public to accept or ignore things that don't benefit them and to notice the things that the politcal group has done for them.
Politicians overall are not really more highly skilled than the general population. The realities of party politics leads to a desire not to rock the boat, and in local government there is always the threat that a new party can appear to crush you (as residents association candidates often do).
Proposing wholesale demolition and massive reconstruction of half of the city to pack in more people will not fly with the electorate.
The other part of the argument is that doing some of these changes actually stuffs silver into the mouths of existing residents. If you sit on a low density semi it would likely fit two 4 story town houses that could be subdivided into two properties each. There are policies that could unlock this opportunity such as street votes or local development orders.
It will take a lot of silver to stuff the mouths of the bulk of the residents, indeed an impractical number.
Additionally, individual demolitions or reconstructions into high density accomodation is going to consume a lot of tradespeople.
Tradespeople that simply don't exist.
We can throw up production line built manufactured bungalows an order of magnitude faster than we can demolish and stick build townhouses.
The key point is that density creates value because people want to be near services and amenities which are created by other people and sustained by lots of people being able to access them (inc public transport). That value is captured by increasing the land price which can then be captured partially or wholly by local authorities to spend on further economic or civic development. If we're sensible we also have a long term wealth tax to get some of the value captured by the super wealthy from doing this!
So you are hoping that people will volunteer to demolish their houses and replace them with high density construction, despite that you also propose to use a wealth tax to seize the value uplift that they gain from them?
Why would they go in for this disruption for a lump sum that will be rapidly taxed away from them and indeed will likely leave them worse off in the long term since their tax liability will have exploded?
Additionally, I live in a high density housing development - it is utterly miserable. I would give anything to be allowed to live in a low density semi. This is also why low density semis remain far more expensive than comparable high density housing units - because people actually like them rather than being forced to live in them for want of better options.