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The Chancellor’s announcement that cities in the North will be given “sweeping powers” to manage their own affairs, starting with Manchester and then Leeds and Sheffield, is – in a centralised country like ours – one of the biggest shifts in power from centre to city that we’ve seen in generations. This says a lot about how centralised the UK is, as it’s certainly not all that we would want; there’s far more to be done to devolve more powers, not least tax-raising, and to have greater certainty over funds. But it’s a significant step and one that, in future, I hope will mark a turning point in the performance of these city economies.
Today’s announcement makes clear that Manchester – first to get a Combined Authority and innovative in pushing for greater powers – is first off the mark. In exchange for Greater Manchester setting up a directly elected mayor working in partnership with their existing Combined Authority, a series of London-style powers will be devolved, including:
In addition, Greater Manchester will gain: more powers to help people back into work; greater control of existing health and social care budgets; a revamped, simpler Earn Back deal to give greater certainty about investment; and greater ability to influence skills provision and business support.
Some of these powers will be devolved now; others, such as transport and planning, need legislation, and it’s likely that the first elections for the Mayor will be 2017, with an interim appointed in between. There are still details emerging too about how the governance arrangements will work – it will be different to the London model, with the Mayor required to consult the Combined Authority Cabinet and able to have his/her strategies vetoed if two-thirds of Cabinet members vote against them.
Further specifics are likely to emerge about Leeds and Sheffield in the Autumn Statement, with a call-out for other cities –Northern cities in particular – to come forward with their own plans for devolution. It’s certainly going to add a further boost to the Northern Futures summit we’re hosting on Thursday in partnership with the Deputy Prime Minister’s Office, to talk about what a future for the North could look like.
So, on a historic day for cities and cities policy, where to next from here?
First, devolution to Manchester needs to happen immediately. As much as possible must be devolved now, before the election, with a clear timetable set out for legislation on the rest of the powers, such as transport and planning. Too often in the past, good announcements have fallen at the hurdle of bureaucratic detail. With the backing of the Chancellor and the DPM, this looks less likely, but sustaining the momentum will be vital to ensuring these reforms deliver the economic prosperity and public service reform they promise.
Second, other cities need to set out their claims. Leeds and Sheffield are already in talks; other cities should be taking the opportunity to strike a deal – but they will need to come to the table with a clear understanding that unless they sort out governance arrangements, little is likely to materialise. Our upcoming briefing paper – A Plan for Economic Growth through Devolution – will set out some of the ways in which this could happen.
Third, with all the parties having engaged in a race to the top on cities policy, Labour now needs to set out its position on how it would respond to these commitments. Will it match the coalition’s announcement? Or will it raise the stakes by matching and bettering what’s on offer, for example by looking at more tax-raising powers?
And that’s the fourth point – even if no new money is likely to be on the table for the foreseeable future, new financial powers and guarantees certainty should be. Without more power over revenue, UK cities will continue to struggle to make the most of their economic potential; it has to be a part of the next phase of city devolution.
I’ll be following all of this with great interest but from a slight distance as I go off on maternity leave for six months this week, but Andrew Carter will be running the Centre, and will continue to ensure that we are involved in supporting all parties to develop better policies for stronger city economies. It’s a very exciting time and I will enjoy watching the debates unfold over the months ahead.
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