English Devolution – Contradictions and controversies, but a clear direction of travel

UK politics is changing. Further devolution is in George Osborne’s back pocket following a flurry of submissions to the Treasury by last Friday’s deadline. We will now see some clever manoeuvres and deals struck before announcements in the Chancellor’s Spending Review on 25 November. He will get his wish to go beyond Devo-Manc and make huge strides towards not only the creation of the Northern Powerhouse, but also to devolve powers to many county areas and city regions outside the North.

Devolution has been dogged by controversies – not least regarding the imposition of directly-elected ‘Metro Mayors’, which I have blogged about before – but there also remain key debates to be had about geography with, for example, rival overlapping bids for a “Greater Yorkshire”, supported by amongst others former cabinet member Alan Johnson and Jason McCartney, Co-Chair of the Yorkshire and Northern Lincolnshire APPG; and for “Leeds City Region”, supported by the leaders of West Yorkshire councils, North Yorkshire District councils of Craven, Harrogate and Selby, City of York Council and Leeds City Region Enterprise Partnership.

What is becoming clear is that Labour council leaders will take the pain of directly-elected mayors if the gain in terms of cash and policy levers is big enough. And geography will ultimately be resolved too because the prize of devolution is clearly an important priority for local authorities. But what are the imperatives for George Osborne? It is possible to discern four clear political and economic drivers that are pushing this project along from the centre:

1. If the deficit is to be defeated it is true that relying on a reflated Greater South East will not succeed. In that sense balancing the economy geographically and sectorally, ie generating more growth in the north and the midlands and in industries outside financial services, has long been a policy goal of governments of all colours. The Northern Way was set up in 2004 by John Prescott and had the strapline “for UK plc to prosper, the north must prosper”. Unfortunately that view was not shared across the Cabinet including most importantly not in the Treasury. This time the Chancellor is leading the debate, although the decision to delay transport investment in the North has punctured some of the current consensus and rosy rhetoric.

2. If the Conservatives are ever to win in Labour’s traditional heartlands it needs to move to the ‘Metro Mayor’ model. Labour’s hold on councils has increased especially in the North. Therefore in the first instance it is almost certain that in Greater Manchester Labour’s candidate – Richard Leese, Jim McMahon and Tony Lloyd are the frontrunners – will be elected as Mayor in May 2017. But what about in 2021? Will we have the alternation of parties in power that used to be a feature at Westminster?

3. Devolution is also a clever way to deliver local government reform. It helps move on the shared services debate and encourages shared officers. It is clear from the Spending Review background paper – A country that lives within its means – that for the Treasury devolution equals productivity at no extra cost. Most importantly devolution brings new governance arrangements and the introduction of ‘Metro Mayor’ model is likely to in effect make hundreds of councillors ‘redundant’.

4. Devolution is also a back door way for the Chancellor to begin to quietly dispose of three less popular Conservative policies:

  • the Lansley healthcare reforms (including setting up CCGs and Health and Wellbeing Boards) are effectively being ditched in Greater Manchester. There, an all powerful Joint Commissioning Board bringing together 12 CCGs and 10 local authorities, will integrate NHS and social care health through spending £6 billion on services;
  • elected Police and Crime Commissioners were a major initiative of the last Government and there has been no public disavowal despite the derisory turnouts at the first elections in 2012. Now a Metro Mayor is set to have as one of her or his functions the role of PCC. Another failed policy dropped;
  • Bus deregulation, outside of London, has been a longstanding Conservative policy since the 1980s. The arguments against – that the free for all does not work and that what is good for the capital must surely also be good for other large urban areas – had seemed to fall on deaf ears amongst Conservatives. However the new Buses Bill “would provide the option for combined authority areas with directly elected mayors to be responsible for the running of their local bus services.”In other words services run by intervention and regulation not the market.

The motivation  is clearly there for the Chancellor and I think we will see devolution feature more and more over the next five years despite the contradictions and controversies. However devolution will take place at different speeds in different parts of the country and will go ‘deeper’ depending on the capacity of the areas involved and how they align with the Government’s priorities.

Over time, further policy responsibility and control of funding will be devolved including on housing, transport, regeneration, skills and health.  In many areas, the sums to be controlled will not initially be huge but the new arrangements, and in some areas new institutions, with mayors as their new leaders, will have strategic as well as ‘soft’ power – and this power is most likely to increase over time as we have already seen in London.

The key question now is are you ready to lobby in the Northern Powerhouse? Find out more by contacting the Devo-Connect team via devo@connectpa.co.uk or signing up for our training course on 1 December: English Devolution and the Northern Powerhouse? What does it really mean for you?

Lora Shopova