Last week the Government confirmed that UK cities keen to secure big devolution deals have until the 4th September to submit their proposals. Negotiations will therefore intensify throughout...
Last week the Government confirmed that UK cities keen to secure big devolution deals have until the 4th September to submit their proposals.
Negotiations will therefore intensify throughout the summer as politicians debate plans for places to work together as combined authorities, the Chancellor’s insistence that they accept a metro mayor as part of any deal, and the desire from a number of cities to see fiscal powers explicitly included as part of any devolution offer.
As we reach decision time, how much pressure is on the Government to secure more big devolution deals, and how can city leaders ensure they get the most ambitious agreements possible for their place?
For 18 months now, the Chancellor has elevated city-region devolution to be a key political, economic and financial priority for the Conservative Party. Working closely with long-standing advocate Greg Clark MP (now promoted to CLG Secretary), devolution has become a central part of the ‘Osborne brand’ as he seeks to position himself to move next door to Number 10 later in the Parliament. The Chancellor has staked a significant amount of his own political credibility and capital on delivering the “Northern Powerhouse”, and most significantly, substantial devolution to Greater Manchester.
More broadly, these initiatives have become political shorthand for the Government’s aim of ‘rebalancing the economy’, and their attempts to recapture the politics of ‘One Nation’ back from the Labour Party. More specifically, they are at the heart of Osborne’s strategy to extend and enshrine the Tories’ slim Parliamentary majority by enabling the Party to re-build and once again win elections in parts of the country now dominated by Labour.
Failure to deliver meaningful change in these areas would therefore be damaging to the Conservatives and to Osborne himself. Already, voices from across the political spectrum have attempted to exploit the risk of not fulfilling these ambitions – with rural Conservative MPs pushing for devolution to non-city areas, local and national Labour politicians characterising the scrapping of rail electrification works as a ‘Northern Powercut’, and Lib Dem Peers successfully pushing for amendments to the Cities and Local Government Devolution Bill.
Yet the truth is that in many respects, Osborne has already secured his prize in the shape of the Greater Manchester Deal – an arrangement that he continues to expand with new powers and responsibilities being pledged earlier this month. In agreeing that Deal in the last Parliament, and setting such an aggressive pace of change early in the new, Osborne has ensured the Government is the one dictating the devolution agenda, not responding to it. And by deliberately avoiding setting benchmarks for success (such as a target for the number of big devolution deals or the kind of growth desired across the Northern Powerhouse) it is entirely conceivable that even if Osborne and Clark are forced to concede on the detail of the Cities Devolution Bill, the Government will still choose to reject all other devolution propositions, and channel resources into making the Greater Manchester Deal a success.
These factors, together with the fact that political, economic and financial power is overwhelmingly concentrated in central government, mean that local leaders within UK city-regions have virtually no way of leveraging the political risks facing the Chancellor into the kind of pressure that could force him to change course on the conditions of the deals that they are resisting – most notably the introduction of city-region mayors. After all, if negotiations for their city-region fail, then they stand to be the biggest losers, not the Chancellor, Clark or wider Government.
The best way that local leaders can hope to regain the initiative is to move beyond trying to tackle Osborne on their own terms – “we don’t want a mayor” or “we would like a deal based on a different geography” – and instead challenge him directly on his terms. That means embracing the city-region mayoral model, enshrining combined authorities for their area, and then putting pressure on the Government to go much further during the remainder of this Parliament.
Specifically, city leaders should insist that the strategic powers currently on offer be supplemented with fiscal powers over local revenue raising and retention. That would be a big challenge to the Chancellor to put his money where his mouth is on devolution.
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Strong, perceptive piece – but not sure about the ‘conclusion’ on the demand for fiscal devolution. Hasn’t one of the ingredients of GMCAs progress been that it has been ENTIRELY on Osborne’s terms, with considerable ‘long-grassing’ of any GMCA fiscal ambitions – even including the apparently agreed city deal ‘EarnBack’?
For other metros, with even more challenges than GMCA in terms of agreeing propositions and delivering them effectively in partnership, to seek a new fiscal dimension, seems a stretch too far.
The real pressure on central government can only come when, say, half a dozen cohesive city-region leadership teams, including GMCA, agree a joint agenda for negotiation with government. This will diminish the overwhelming powers of national government holding ‘all the cards’ in divide and rule haggles over individual deals to pick and choose what crumbs of patronage they are prepared to hand out…
Ben, you mention lack of benchmarks for Chancellor’s plans. Ultimately though there is the ballot box and presumably Mr Osborne wants to avoid the turnout fiasco of PCC process? Would really like a higher turnout for mayors elections than for council elections? This maybe requires local council leaders to use boots on ground to get voters to the poll ( which is in their interest as they will have backed the mayors too). Maybe delivering a vote for mayors, saving Osborne’s blushes just as he is (?) about to ascend to Prime Minister, does give some further leverage?
Thanks for the comment. I’m not sure the prospect of low turnout is substantial enough to be used as leverage with the Chancellor today, but it may be that if people don’t turnout to vote in 2017 in Greater Manchester that we see a renewed call for more powers to be devolved in order to persuade people of the value of city-region governance and Mayors.
But the question as to whether more powerful local leaders could lead to higher turnout is also interesting.
When you look at the turnout in the London Mayoral Election in 2012 it was 38%, just 3% higher than the local elections in 2014, and 5% higher than the average for European elections.
Clearly it is substantially higher than the PCC turnout levels, but in comparison to local elections generally, it seems the chances are introducing Mayors, even with more powers, is unlikely to lead to an increase in turnout in and of itself.
Hi Ben – on slightly related theme note that municipal/mayoral elections in France in 2014 had unprecedentedly low turn out- at about 60%
Where would you forecast turnout for mayor in Manchester in 2017 as falling?