Devolution: hardwired in or handbrake still on?

I remember Andy Street, the former Mayor of the West Midlands saying this after getting the devolution trailblazer deal for the region and I had these words echoing in my head when reading the Government’s English Devolution White Paper.

Yes, it’s undoubtedly one of the biggest changes in local government in many years but this is not the radical shift of resources and powers that tackles the UK’s highly centralised political system. That was never really on the cards at this stage because the view from many is that England’s local government needs to be simplified first.

So while there are lots of references to ‘hardwiring’ devolution into politics in the document, there are also reports that some mayors feel a bit underwhelmed with some parts of the negotiations.

There’s lots to unpack and here’s a very initial take on just a few of the elements and some personal views.

Mayors are getting a lot more but this is not fiscal devolution

Mayors will get new powers for transport infrastructure and strategic planning with the ability to over turn a council decision. They will be able to further influence affordable housing spending and will have investment for retrofit programmes.

What is also important is that there will no longer be the need for unanimous support for mayoral policies from member councils. This has often stifled mayors even when they have argued for the interests of place over politics.

The White Paper is quick to talk about ‘unprecedented powers’. However, this devolution proposal does not give mayors the autonomy to unlock local assets and collect local taxes. Mayors wanted the ability to generate money from local tourism taxes but this was apparently quashed for now.

The reality is that true devolution rests on fiscal devolution but this is not going to happen in a UK where taxes are collected nationally. This was never going to be the gift of this next part of the devolution journey which really started a decade ago.

What the White Paper does propose is the ability for mayors of established mayoral strategic authorities to move funding between policy areas. Integrated Settlements will mean that the West Midlands, Greater Manchester, Liverpool City Region, North East, South Yorkshire and West Yorkshire Combined Authorities receive a consolidated budget across housing, regeneration, local growth, local transport, skills, retrofit, and employment support.

Is this more about delivering objectives that are national rather than local?

Writing in the FT recently, Bruce Katz talked about his fears of ‘how national leaders have defined devolution in exceedingly narrow terms, focusing on the delivery of objectives set by national government and funding divided by departmental area.’

When you look at the detail of the white paper particularly for new Integrated Settlements, you can see that fear being played out because it feels that these do rest upon what it calls an ‘outcomes framework’ monitored over a Spending Review period.

Local Growth Plans must be about cities competing on a global stage

One criticism that I have of the White Paper is that it doesn’t talk enough about how with changes cities in the UK can and must compete with peers across the world. It feels like a domestically orientated government programme and the reality is that competition is global. To fire up our cities like Birmingham and Manchester we need to be more aware of a changing world and investment landscape.

Because of this it will be really important that Local Growth Plans developed by combined authorities reflect the strengths of a particular location and map out how to tackle global competition. The plans need to be able to compete on the world stage.

And with this comes a requirement for mayors to have the gravitas, profile and communications skills to present at a global investment summit as well as at a local chambers of commerce event.

Full devolution is work in progress

The journey to full devolution in England is a long one. But the rationale for it is incredibly strong because the nation remains one of the most centralised in the OECD.

The US and Germany have successful city economies because of their decentralised economic systems. In these countries you would struggle to name the main economic centre because there are more than one.

There will be more mayors in time for all parts of England and with that the shift of power from local authority to mayor. But in my view mayors will still be acting largely within the constraints of a largely centralised government system. Until that changes, the devolution handbrake will still be on.