Building a ‘northern powerhouse’

For some observers of the back-and-forth of policy on city-level governance, George Osborne’s announcement on mayors today might sound like a rehash of old, failed policies. The Conservative Manifesto in 2010 promised ‘give people the chance to have a powerful, elected mayor in England’s largest cities’ and this commitment was carried through into the Coalition Agreement. But as other commentators immediately pointed out, when asked in 2012 voters roundly rejected the idea of mayors in every city apart from Bristol.

It is fair to say that directly elected mayors in the UK do have a mixed history. Of the 51 referendums since mayors were first introduced for councils in 2001, only 16 have passed. In two of these areas – Hartlepool and Stoke-on-Trent – the mayoral system has since been abolished. Whether the public will accept these proposals should rightly be a concern for the Chancellor, and it does not simply follow that a model that has delivered for London is well-suited for other parts of the country.

However, mayors can offer significant benefits to cities – delivering greater visibility, stability, and city-wide strategic leadership. So the lesson we draw from the 2012 referendums is not that elected mayors are a bad idea, rather that voters rejected the particular model that was on offer – for some valid reasons. For example, the 2012 mayoral model did not present a sufficiently marked difference from the status quo.

The Chancellor claimed today that he was only “starting the conversation”, but the offer he sets out does seem to be very different from the 2012 offer – so it is not simply a case of having another go. The key differences in the approach appear to be:

• City-region mayors: as our case study of the 2012 referendums makes clear, the 2012 proposals did not create pan-city mayors, but confined them to existing local authority areas. By focusing initially on creating city-region mayors, Osborne is recognising that devolving powers to bigger, more economically relevant geographies is more likely to have an impact on growth.
• A bottom-up process, offering ‘real powers’: unlike the uniform process, with set terms and conditions for mayors imposed by central government on the major cities in 2012, Osborne is this time talking about a “serious devolution of powers and budgets for any city that wants to move to a new model of city government – and have an elected mayor”. Such a quid pro quo, bespoke approach to reform could well deliver results because those areas ready to take on new responsibilities, such as Greater Manchester, can do so quickly – rather than having to make do with small-scale changes until other areas demonstrate their ability to step up.
• Leadership: it is highly significant that in a speech about the revitalisation of the northern cities’ economies, George Osborne has recognised the importance of strong, visible and democratically accountable governance structures. Not known as a particular proponent of the 2012 reforms, the Chancellor of the Exchequer could be a new, powerful ally for those who support real and accountable decentralisation of power.

So what is the outlook for mayors? On the one hand, positive. These proposals – if delivered – would be genuinely different to those offered to cities in the 2012 referendums. Osborne’s praise for Labour city leaders such as Richard Leese, and his stated commitment to work with “anyone across political divides in any of these great cities” is important. We argued in our latest report on decentralisation that the political control of cities is a major barrier to governance reform. The clear indication from a Conservative chancellor that he is willing to bridge this gap may well help ease the political tensions across cities whose constituent local authorities are currently under divided political control.

On the other hand there are a number of issues that at first glance the Chancellor has yet to address. The most important of these are coordination and commitment. We argue that the clear commitment of the party leadership is necessary to creating meaningful decentralisation – otherwise other ministers/shadow ministers will inevitably make commitments that clash with the reform.

It is definitely important that the Chancellor is in favour of reforming city governance arrangements, but questions about his colleagues remain. Is the Home Secretary (assuming she stays in post after the next election) on board with the idea that city mayors might have more control over local policing? Would the Business Secretary be happy to hand over powers over the skills agenda to city leaders? And does the Work and Pensions Secretary agree that the back-to-work agenda could be better coordinated by a mayor with greater knowledge of the city’s labour force than civil servants in Whitehall? Again and again we’ve seen bold decentralising measures watered down because those leading them lack the power, the political will, or the inclination to scale the high walls of siloed Whitehall fiefdoms.

These and other challenges are the focus of our most recent report in this area: Achieving Political Decentralisation. George Osborne today took a bold step in the right direction, however it remains to be seen if his decentralising vision will produce the ‘Northern Powerhouse’ he desires, or if it will join the long list of other reforms we analyse that have at best, only mixed results.