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As city-regions finalise devolution proposals ahead of the Government’s 4th September deadline, much of the debate in town halls across the country is focused on whether the powers on offer from the Government are sufficient to sugar the mayoral pill they need to swallow to agree a deal. But weighing this decision solely against what is currently on offer would be a big mistake. The devolution settlements that have been struck in the UK over the last fifteen years have not remained static – the prize for city-regions vying for devolution is not just what is on offer in 2015, but what could end up being on the table in the decade to come.
To illustrate this point, it is worth considering the evolution of the Greater London Authority since it was formally established in 2000. Although still relatively weak when compared to other city governments across the world, in the 15 years since its inception, the remit, functions and powers of the Mayor, the GLA and other bodies like Transport for London have expanded considerably.
In large part this reflects the fact that London has, for over a decade, had a directly elected advocate, backed by a well resourced administrative body, to make the case to Government that when policies are being designed or reforms passed, a bespoke approach should be taken in London. And because these bodies have built up capacity during this time, they have been able to make a credible case that when bodies like the London Development Agency or the Homes and Communities Agency are folded or downsized, the functions and funding be transferred to the Mayor, instead of reverting to the Government (as they have in other places).
Rather than being evidence of some kind of Whitehall favouritism or political game-playing, these decisions ultimately illustrate the fact that the presence of strong, democratically accountable institutions, at the right geographic scale, makes a significant difference when it comes to decisions on where and how funding and functions are allocated.
Indeed, a similar process can now be observed in Greater Manchester. The announcement this week that the Government plans to hand a significant amount of EU funding directly to the city-region, but will resist doing so for other places across the country, is a further reminder of the clear blue water that can open up between cities in terms of the powers they wield, and the funding they control, when they get their governance right. Come 2017, Greater Manchester will have new powers over transport, housing, land, planning, police, fire, and children’s services, while other city-regions – even those in which real political and administrative progress has been made – have not yet decided either whether they are prepared to do a deal, or the basis on which they would do it.
If we imagine the worst case scenario – that no other city-regions are able to agree a deal with the Government in the Autumn – then history tells us the gap between those that do have devolved functions and the rest will continue to grow in the years that follow, with potentially big implications for their ability to create jobs, raise wages and improve transport infrastructure.
That’s why those who have argued that their city-regions should not take part in the devolution race as it stands, let alone try to win a deal for their place, should pause and reflect what that could mean over the longer term.
For example, a sticking point for many places has been the lack of fiscal powers currently on offer from Government – the argument running that ‘we will only accept a city-region mayor in exchange for the ability to retain and raise more of our own money’. Government has so far signalled that this is unlikely to form part of the current deal-making process. Yet if that position were to change in the future, it is overwhelmingly likely that fiscal devolution will be pioneered in places with strong and directly accountable city-region governance already in place. Which begs the question – does rejecting the chance to do a deal now make it more or less likely that, in five years’ time, those city-region leaders will have more control of the money that is raised and spent in their area?
Of course it is right that city leaders negotiate hard for the best deal they can agree with their local counterparts, and for the broadest range of powers that they can extract from Government. And no one should underestimate the political difficulties that adopting a combined authority and directly elected mayor presents in some parts of the country, nor the progress that is being made on the ground.
But city-regions are not just playing for the prizes that are on offer today. Establishing strong city-region governance, with directly accountable leadership, will not only allow cities to gain more power in the current Parliament, but also to credibly push the Government to go further in the years ahead, and to ensure that their places are well-positioned to benefit.
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