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So the question about whether Ed Miliband’s Labour really will commit to greater devolution, stirred up by the Guardian letter a few weeks ago, seems to be answered by today’s speech, which commits to “the biggest economic devolution of power to England’s great towns and cities in a hundred years”.
Unsurprisingly, I’m delighted to see Labour putting cities and city regions unambiguously at the heart of its future economic growth strategy. Centre for Cities has long argued that, if cities are to fulfil their potential and deliver the jobs, housing, skills and growth the country needs, they need more money, powers and autonomy to take the big decisions that affect the lives of those who live there. The Coalition has done more on this agenda in the last four years than Labour did when it was in power: now Labour is raising the bar.
Devolution of the Work Programme, skills funding and doubling the growth funding allocated to city regions are particularly significant announcements, and go beyond what the Coalition is doing. The announcement that Labour plan to reintroduce regional ministers is intended to complement the city regions and join-up thinking across them.
It was also good to see the speech today echo some of the findings in our recent report, Breaking Boundaries. This noted that about 50 per cent of urban workers live and work in different local authorities (a statistic quoted today in the Guardian) and emphasised the importance of strong governance structures for cities and counties, in the form of combined authorities and economic prosperity boards.
But the next challenge is ensuring that this translates into real change. As one cynic said to me this morning: “all opposition governments promise devolution. And then they get into power.” So how does Labour, or any political party, make sure it happens?
There is a growing consensus across all political parties that cities hold the key to future job and growth. Yet despite the current government’s significant efforts to push funding and powers down from central government to cities, progress has been patchy.
Part of the reason for this is lack of public interest. Not many people necessarily know or care about ‘localism’ or ‘city regions. Our Think Cities campaign argues that, in practice, cities are a route to achieving doorstep issues: more jobs, better housing, a more effective bus service and improved public services – and we’ll be working with cities and businesses to raise this up the public and political agenda.
But another major part of the reason for patchy progress in this government has been Whitehall. It has been hugely resistant to greater devolution, and very successful at identifying a wide range of reasons why letting go would not work. It’s been fascinating (and fairly disheartening) to see how hard fought each individual component of City Deals has been.
So it’s interesting to see that Labour, despite promising more than the Coalition on some significant areas, may well be on course to experience some of the pitfalls that have made it so challenging for the Coalition to achieve its aims on devolution.
Labour will have a single pot too, but it will be doubled – although still not the £49bn Lord Heseltine recommended. And Labour will also be encouraging local areas to develop economic strategies (like the Strategic Economic Plans?) that will then (I assume) be assessed by Whitehall to see if they’re effective.
At Centre for Cities we’re entirely in favour of both the Coalition’s current approach and Labour’s proposed approach demanding that cities can demonstrate their ability to take effective decisions to spend money, and have the governance structures to take on risk and be accountable. We’ve argued elsewhere that cities need to raise the quality of their ‘asks’, that there are lessons to be learned from Wave 1 of City Deals about how to bid for money and that governance structures need to be robust. So from that perspective ‘bidding’ or ‘earned autonomy’ make sense.
But in practice a ‘bidding’ approach has often meant places having to jump through Whitehall-created hoops (that can move without warning), with questions about whether the gains at the end have been worth the investment of time by cash-strapped, time-poor local areas. Some cities privately grumble that they’re not sure how well Whitehall would do if civil servants had to prove why they should keep powers, rather than devolve them.
So the challenge for Labour, and for the Coalition, as it assesses the Strategic Economic Plans submitted by LEPs last month, is to ensure that the bidding approach will achieve the radical kind of devolution that both have talked about, and that’s no easy task. It means ensuring that the process adopted by civil servants is one that supports cities to make the most of their local economies, rather than finds reasons why city decisions are not as good as the ones central government would have made.
The devil is always in the detail. Making devolution to cities a reality requires a combination of incentives for local government, imposition from Whitehall and local councils’ initiative. This is the only way to support long term funding certainty and the freedom for cities to truly set their own priorities and make their own investments to support jobs and growth.
But what’s most encouraging about Ed Miliband’s announcement today is that it lays down the gauntlet to the Coalition. So in its last year of this Parliament, what more will the Coalition do, beyond Local Growth Deals, to demonstrate its ongoing commitment to cities and city regions? Given that some places, such as London and Greater Manchester, have already demonstrated they can work together, could there be a large-scale devolution of powers that go beyond what Labour has announced today? Could somewhere like Greater Manchester be a first stage pilot to demonstrate how combined authorities outside London might manage funding for economic growth and public services in a place-based way?
My hope is that this will start a race to the top around cities policy and devolution. All Centre for Cities’ evidence shows cities and surrounding areas will be critical to the health of the UK economy, and tailoring certain policies more to local areas, such as transport, housing and skills, makes a difference to economic growth and to day-to-day lives. All politicians need to be making the most of the urban opportunity.
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