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Our chief executive Alexandra Jones went before the Communities and Local Government (CLG) select committee last week to debate devolution to cities and city-regions. She was joined by governance and government expert, Professor Tony Travers from the LSE, and Jim O’Neill, currently chair of the RSA’s City Growth Commission (the full transcript of the session is here).
The MPs in this first session were asking questions about both ‘why’ devolution and ‘how’ it would work in practice. Fairness and accountability were evident concerns, with questions focused on those likely to miss out, lose out or be passed over as a result of devolution to local areas. Other issues raised were about whether, with big players like London and the Core Cities shouting loudest about the need for greater fiscal and financial autonomy, smaller cities might be at a disadvantage in a devolved scenario. MPs also wondered whether we risk creating two strands of local government financing if some areas are given more powers before others.
One of the thorniest issues discussed is the chicken-and-egg question of political accountability and financial authority. Will a democratic deficit emerge as a result of devolution of powers without having already established democratically accountable institutions to devolve to? Will combined authorities allow local leaders to be held to account? If tailored and incremental devolution is the way forward then how do you ensure that criteria for success and good governance are not simply set centrally or copied from cities like Manchester that have paved the way? And that’s before we even consider the issue of public service reform or the relationship between cities and their hinterlands.
In practice, devolution is complex because cities and their economic, political, geographical and cultural circumstances vary, and they’re starting from different points. In some areas, like Manchester, Leeds, the North East and Sheffield, local authorities across the city region have or are moving towards combined authority models: enabling collective strategic decision-making at the scale of the functional economy and delivering more efficient and effective public services. In Bristol and Liverpool, elected mayors provide a visible, directly accountable figure for the city but not the wider region, whereas in London the mayor covers 33 London boroughs.
Yet, as Alex, Tony and Jim all said, the current highly centralised system has resulted in this variation, so it does not prevent a ‘postcode lottery’ across the country. And the current system also constrains those successful cities from growing faster and growing the local government finance pot as a whole, which can then be redistributed to cities facing more challenging economic circumstances.
This is also the answer to Chair Clive Betts’ question. He asked what evidence there was for greater fiscal and financial devolution leading to greater economic prosperity. The panel unanimously agreed on a very inconclusive answer: we don’t really have much proof but there is evidence to the contrary. Imperfect as the current situation may be, the panel agreed, there are positive steps that would give cities greater control over their finances, generating greater economic growth in the short term, while progressively creating the conditions in which public services and local accountability and responsiveness can be improved in the long-term.
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