In the last few years of George Osborne’s time in government, it was a fairly safe bet that any major speech by the Chancellor would bring significant announcements on the devolution agenda. His last budget in March, for example, included new devolution deals for the West of England and Solent city regions, and the key moment of his final speech to Conservative Party Conference as Chancellor brought the landmark announcement on the devolution of business rates.
However, predictions for the first Autumn Statement under Theresa May’s still relatively new administration are harder to make. While the new Chancellor Philip Hammond has made it clear that Britain has “passed a tipping point in devolution”, it remains to be seen whether his enthusiasm for the devolution agenda will match that of his predecessor.
What does seem certain, however, is this Autumn Statement is likely to mark the cut-off point for any places hoping to secure and implement devolution deals in the foreseeable future. Here are four reasons why:
1. Time constraints
Electoral Commission guidance on the metro mayor elections stipulates that legislation for new devolution deals which include a mayor should be introduced in Parliament at least six months before elections take place. But with the first metro mayor elections scheduled for May 2017, places currently without a deal are running out of time to secure one in time to meet the Commission’s deadline.
And with the second mayoral elections due to take place in 2020 (to bring them in line with London’s mayoral elections), it’s unlikely that the Government would countenance the idea of holding separate mayoral elections before that point (in 2018, for example) for places which fail to agree a deal for next year. A two year term would not give new mayors nearly enough time to build their institutions, raise their profile, and demonstrate results to voters before second elections in 2020 – indeed, this will be a difficult enough job for the 2017 cohort of mayors in the three years they have in office.
2. The Government’s commitment to devolution beyond current deals is unclear
While the Government has emphasised its commitment to the existing devolution deals for major city-regions, it has shown little indication that it will pursue more deals for other places, or that it is open to renegotiating the terms of current deals. When local leaders in the North East failed to reach agreement on how to progress with their deal in September, the Government did not step in to salvage the agreement – instead telling local leaders that the £900 million deal they turned down in September was now “off the table”. While that deal may be resurrected on a smaller geographical basis and for a smaller financial settlement, it won’t be as a result of active Government intervention.
Beyond 2017 the government’s devolution priorities, if they have any, are as likely to be about ‘doubling down’ on places with established deals such as Greater Manchester and the West Midlands, as they will about extending devolution deals to a whole raft of new places. Andrew Percy, the Northern Powerhouse Minister, has already said that a greater share of Local Growth Funding will be allocated to those places with a Mayor than those without. This doubling down approach is even more likely if the Conservatives win a couple of the Mayoral contests – West Midlands, West of England.
3. Other issues will consume the Government’s attention
With Brexit negotiations likely to drag on for the next two years at least, and the current Business Secretary Greg Clark (who has been pivotal in driving the devolution agenda) now focused on delivering the Government’s new industrial strategy, the reality is that devolution will come some way down the Government’s priorities list in comparison. Places which hope to open negotiations on a new or revised deal are therefore likely to be disappointed.
4. Leaders in many places don’t want a devolution deal on the Government’s terms
Communities Secretary Sajid Javid has been clear that in order for places to gain a devolution deal, they will need to introduce a metro mayor. This proved the sticking point for local leaders in the North East, and in recent weeks has also led to the collapse of tentative agreements for places such as Greater Lincoln and Norfolk and Suffolk. It is also likely to deter leaders in other parts of the country from putting forward proposals for a deal in their area.
So while all bets are off on what devolution announcements might feature in the Autumn Statement, it seems unlikely that new or revised deals for more places will be high on the Chancellor’s priority-list, either now or in the years to come. Watch this space for more coverage and analysis of the Autumn Statement – and what it means for city economies – in the coming days.