Following the publication of the Core Cities' new "Magna Carta" demanding freedom from Whitehall, here are three lessons for how to make decentralisation a reality.
Last week, the Core Cities Group convened a major event in Glasgow to call for a new Magna Carta that could set UK cities free to grow, innovate and invest in their futures. The event attracted widespread support and added further momentum to the long-running debate around giving UK cities more power to take the big decisions that can boost their economies.
Even those cynical that talk of decentralisation always peaks in a pre-election period concede that the momentum behind the urban agenda means that further progress is now likely in the new Parliament.
So, with 12 weeks to go until polling day, what lessons can we glean from the last five years to make sure that come 2020, far more cities have been empowered to drive their economies?
The Coalition Government has made several attempts at decentralising power to localities – from the 2011 Localism Act, through two rounds of City Deals, and finally the Local Growth Deal process. And yet, regardless of whether it was only possible due to the aforementioned interventions earlier in the Parliament, only the Greater Manchester Deal agreed in late 2014 appears likely to succeed in pushing substantial power down from Whitehall.
That’s primarily because the process was driven from the very centre of Government. Those with reservations about “DevoManc” frequently cite the ‘imposition’ of a Mayor for the city-region at the behest of George Osborne. The locally elected leaders of Greater Manchester did not, at least initially, want a city-region Mayor; the people of Greater Manchester have never been asked.
Yet Simon Jenkins’ fascinating account of the negotiations that led to the Greater Manchester devolution deal clearly demonstrate the importance of Central Government setting the pace for progress on devolution; being clear with the criteria that must be met to achieve it; and, perhaps most importantly, the decisiveness of the Chancellor’s personal and political commitment to prising control away from Whitehall departments.
That’s why it is not contradictory for the process of decentralisation to be set out and driven from the centre – in fact, in a country where Central Government holds almost all the power, it is necessary if we are to see tangible progress made.
Compared to the proposals in the Core Cities latest report for fiscal devolution, the terms of the Greater Manchester deal are relatively modest, yet those holding power at the centre recognise and fear the setting of precedents that, however small, could erode their authority in the future. The dominance of Whitehall departments, coupled with the lack of power held by UK cities, means that only the authority of the highest offices in the land can drive the devolution of real power to cities and city-regions across the country.
Over the course of the last five years, localism has represented a double-edged sword for UK cities. A key plank of the Coalition Agreement between the Conservatives and the Liberal Democrats, the Localism Agenda established the principle that national policies should be tailored to local circumstances, and put the prospect of decentralisation to cities and city-regions on the table. But all too often, the spirit of localism has been invoked to justify pushing the responsibility for making city devolution work back on to local councils.
Against a backdrop of significant reductions in council budgets, ‘a lack of local capacity’ or ‘strategic leadership’ has been cited as the primary reason why power and funding cannot be decentralised through the various City and Local Growth Deal negotiations that have taken place. For this reason, most have ended up resembling traditional project funding agreements, rather than delivering on their promise to hand over power to local leaders.
While city leaders taking the initiative locally will be fundamental to making a success of city devolution once delivered, the responsibility to achieve such a transfer of power should not solely rest on their shoulders – as we have seen, a process whereby Government simply sits in judgement of local proposals is unlikely to lead to significant change.
We recommend the next Government adopts a presumption in favour of devolution to cities and city regions, unless it can be demonstrated that power would be better held at the centre. To help facilitate this, the Core Cities Group advocates establishing an independent commission to review and support the delivery of proposals for city devolution.
Whatever the mechanics, given the broad range of political support for city devolution, it should be incumbent upon Central Government to actively support cities to accept more responsibility over their economies, and to help them make new arrangements work locally.
The vast majority of those arguing for more power to be devolved to UK cities and city regions are all too aware that such a transfer will not, in and of itself, meet all of the challenges that UK cities face over the coming years.
The scale of funding cuts to come in the next Parliament, increased pressure within key local services like social care, health and education, as well as the continued polarisation of local job markets, all require urgent attention and management.
Allowing cities to retain the benefits of growth, to flex policy to their specific circumstances, and to drive forward innovations at the local level, will all be necessary but not sufficient to tackle these issues – and they will be more helpful in some parts of the country than others.
Alongside devolution, a whole host of national investments and reforms, together with local interventions, will be required if UK cities are to fulfil their potential. Given the difficulty associated with empowering UK cities to succeed it is important that the urban agenda does not become a case of ‘devolution or bust’.
Director of Communications and Development
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