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After decades of oppressive centralisation, many of us have welcomed the promise of a ‘devolution revolution’ for our cities and local authorities. We have been expectant that this will herald a new local municipalism of economic success and social inclusion. However, with ongoing global economic issues, Brexit, the Treasury’s economic model and the endless yoke of local authority austerity, we may need to seriously downgrade our expectations.
Of course, there are positives to devolution: new powers over planning, hard infrastructure, and skills, for example. Greater Manchester now controls its health and social care budget. Several regions across England will elect metro mayors in a few months. There is hope and promise in all of this.
However, for most local authorities, devolution will do little to ease austerity and cuts, with a 40% reduction in local authority spending far outweighing any financial benefits. No other area of government has been hammered like local government.
The Brexit referendum increased the recognition that too many people are being left behind, with a change in tone around ‘an economy for all’ and a ‘shared society’. However, (as yet), this has not resulted in a commensurate change in the economic model or the fiscal basis to devolution. Philip Hammond has reversed none of the previous Chancellor’s cuts. The Northern Powerhouse branded infrastructural investment still talks more than it financially punches. And the aspirations could be swamped by the costs of withdrawal from EU and loss of the EU structural funds. We can place some hope in the ‘inclusive growth’ agenda. However, this hope could be limiting itself to standard economic development practice where jobs and the labour market are the main focus.
To advance a true ‘devolution revolution’ and inclusion agenda, we need to start by acknowledging that devolution (as its stands) has little prospect of tackling the scale of the problems the country faces. As a start, the newly elected metro mayors in May could ride an electoral mandate which forges a different path, where they seek to transform what is on offer. There is a new progressive deal to strike and CLES continues to make the case for a progressive devolution (here and here). This includes:
- a new constitutional conversation and settlement, rather than an asymmetric pattern of deal making (where Whitehall holds most of the cards).
- a devolution which actively coordinates regional imbalances, and not just leave them to the market.
- true fiscal devolution to local government but framed by national fairness, redistribution and reorganisation.
- greater devolution of the social inputs to economic and social success, including employment, education, welfare and funding for the Community and voluntary sector
The devolution ‘genie is out of the bottle’ and it can be transformed into a true ‘devolution revolution’. However, it is no good accepting the devolution as it is. The key is to confront the flaws and agitate for something a whole lot better. We have a lot of work to do.
Fog on the Tyne: the view on the North East
by John Armstrong, DevoConnect Network
As we know, the North East rejected the devolution deal offered by government due to issues surrounding governance. While a ‘North of the Tyneside’ deal may well emerge (read below), involving the three councils who supported the devolution deal originally; Newcastle, Northumberland and North Tyneside; the Tees Valley deal is quietly advancing, with the Combined Authority finalising arrangements at a meeting on the 16th January, and several candidates for Mayor recently being announced.
It will now be for the people to decide the future priorities of Tees Valley through the election of a mayor on the 4th of May. The candidates currently selected to stand for ‘Teesside Metro Mayor’ include: Ben Houchen for the Conservatives, who is currently councillor for Yarm and Conservative group leader; Sue Jeffrey for Labour, who has been on Redcar and Cleveland Council since 2015 and is vice-chair of Tees Valley Combined Authority; and John Tait for the North East Party.
Since gaining power in 2010, further devolution to the English regions has been one of the core policies for the Conservatives. Such a transfer of power to the regions will be the greatest in our constitutional history. However, will other constitutional change such as Brexit and the changing face of international politics slow down devolution, due to new and urgent priorities for government?
It has become well known that Theresa May is not as committed to Metro Mayors as Mr Osborne. Downing Street have stated that areas without elected mayors will not have one forced upon them. This is despite it being a condition of all the devolution deals agreed to date. Committing to this would demonstrate a real commitment from Number 10, which could in turn reduce local hostility to adopting governments decentralisation agenda.
Is it now time to ask new questions? How will devolved nations and regions engage with Europe and the world? In light of the fact that regions will have responsibility for their economic futures, should aspects of the devolution deals be renegotiated to allow greater flexibility in how they engage internationally to drive investment and growth?
Following Theresa May’s Brexit speech on the 17th January, businesses and investors now have more clarity on the direction government will take when negotiating UK’s exit from the EU. However, the devil is in the detail, which may put a strain on regional economic development not only in terms of attracting investment, but also maintaining it. To maintain stability and promote growth, regional leaders will need flexibility to incentivise business. To achieve this outcome regions may need greater autonomy to strike individual deals responsive to their economy and demography, supporting the needs of businesses and communities in their areas?
While there appears to be a commitment to devolution as part of the Government’s growth strategy, there are questions to be asked. Businesses and local government need clarity and guarantees that the Government has an industrial and economic strategy for the UK. This will need to include a plan for Brexit and beyond which is fit for purpose at a regional and national level.
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