Paradox: 4 Truth: 1-understanding the current devolution debate
The Scottish Referendum changed politics across the UK for good. UKIP’s successes were further proof of the rejection of “establishment politics.” English politics must now be different and devolution has now returned to the Parliamentary agenda.
Of course, getting all three parties signed up to some kind of devolution also represents a return on years of lobbying. Greater Manchester, Centre for Cities, IPPR North, the All Party Parliamentary Group for Yorkshire and Northern Lincolnshire and many, many more all deserve mention. As Sir Richard Leese, leader of Manchester City Council, recently said: “It has taken us 28 years to get where we are.”
But where exactly are we? At the heart of the current devolution debate are four key paradoxes – and one simple truth.
What is on offer is very much devolution on the Government’s terms. That of course is a contradiction in terms but it is clear from George Osborne’s Autumn Statement that he is wedded to the Metro-Mayor model. Of course Councillors on the ground, for example in Leeds and Sheffield City regions, would rather agree their own governance arrangements.
This kind of devolution is not actually devolution at all – the proper descriptive noun would be delegation. Control of most of the £13billion public expenditure that is to be devolved to Greater Manchester as part of its deal will be shared with Government. With only little genuine discretion over spending and without fiscal devolution – the power to raise some kind of taxes beyond the capped council tax, such as business rates – this “devolution” is somewhat limited.
However the fact that devolution is happening at all is a very significant first step. And fiscal devolution will inevitably come to be part of this agenda but only after the General Election and only for those areas who have taken the first step currently on offer.
Labour has offered its new English deal to all areas , not just cities. This means Hilary Benn’s offer should appeal to local, rural – mostly Conservative controlled – shires as well as its own heartlands. Meanwhile George has set out to woo the northern – and midland – predominantly Labour cities.
There is clearly a large dose of opportunism in George’s conversion to devolution – there is after all an election 6 months away and northern votes are pretty important. There is also a nod towards the old adage that for UK plc to succeed the northern economies must succeed (first coined as part of John Prescott’s Northern Way initiative precisely ten years ago). His commitment to real economic rebalancing maybe questionable but certainly the prospect of devolving responsibilty for cuts must appeal to a Chancellor of a party that is not half way through its deficit reduction programme.
The problem for organisations who may prefer Hilary Benn’s new deal vision, and are inclined to wait until May 8th – putting to one side that the result of the forthcoming General Election is the most uncertain in a generation – is that it is not crystal clear what it is. There has been a commitment to fewer Local Enterprise Partnerships (LEPs) with tighter boundaries and more democratic control . But there is a lack of policy detail and the lingering suspicion that like in the ‘noughties’ the whole Labour leadership is not 100% behind devolution.
At the same time as giving local authorities who join together more power, those self same individual local authorities remain at the cutting edge of reduced budgets from the Government. The National Audit Office has already highlighted a looming medium term financial crisis in the middle of the next spending review. With local government definitely in the “not protected” category for public expenditure, councils’ capacity to deliver the devolution agenda has to be questioned however laudable it is and however enthusiastic they are to do so.
There is just one inescapable truth. The devolution bandwagon is rolling. Getting on it is imperative. This is not an era of nationwide solutions and “levelling up”, it’s about pushing your area forward, forging local alliances and securing Government attention. Asymmetrical decentralisation is the name of the game. Those who want to play will need to take hard decisions. Questions for example about boundaries and governance as well as whether there is actually the appetite to accept the challenge in such uncertain times. They will also need to lobby hard.
Some may argue that whether Devo Manc or a New English Deal it is all too little too late and that the cuts will make it impossible to deliver. But when Greater Manchester joins London as one of the “city states” – with powers on transport, housing and skills and a status akin to Scotland, Wales and Northern Ireland – more are certain to want to join the queue.