24 August 2016

The EU referendum result left some big unanswered questions for English devolution, and the arrival of the new Prime Minister has led to much debate about whether the Government will continue to focus on devolution deals and directly-elected Mayors. But, as Jo Casebourne explains, summer rumours reporting the death of English devolution may well have been exaggerated.

Reasons to be cheerful

In the last few weeks we’ve learned more about what the new government thinks about English devolution and there are four reasons to think that devolution remains a priority.

First, there is a new devolution team in place. Sajid Javid, the new Communities and Local Government Secretary, has form from past ministerial jobs as a devolution champion, whilst arch-decentraliser Greg Clark has moved to a new position as the Secretary of State for Business, Energy and Industrial Strategy (BEIS), which is likely to ensure that devolution of economic powers is also a priority for this new department.

Almost as important as the top-level leadership is the support that remains in place from junior ministers, who play a key role in the day-to-day work of government. The new Secretaries of State retain the services of Jim O’Neill as Commercial Secretary to the Treasury – a great advocate for devolution, and a former chair of the Cities Growth Commission. He will be responsible for city devolution, including the Northern Powerhouse and industrial strategy. The role of Minister for the Northern Powerhouse in the Department for Communities and Local Government (DCLG) has been maintained and is now held by Andrew Percy. Gavin Barwell, the new Minister of State for Housing and Planning in DCLG, has also been appointed the Minister for London – a positive sign that this administration will be taking cities seriously. Also in DCLG is Marcus Jones, one of whose responsibilities is the ‘Midlands Engine’. Meanwhile in BEIS, Margot James has a stated responsibility for local growth. BEIS have also announced that each of their ministers will have specific areas for which they are responsible as ‘local growth champions’.

Second, there’s an opportunity for powerful English cities and regions to be at the heart of the new government’s Industrial Strategy. Greg Clark’s appointment to Secretary of State at BEIS, the department leading its development, and the move of Neil O’Brien (often credited with convincing George Osborne of the case for devolution) to be the industrial strategy special adviser in No. 10, may together mean English devolution becomes a key pillar of the new industrial strategy.

Third, the process for implementing the current devolution deals has continued and it’s been business as usual for the introduction of new directly-elected mayors in places where devolution deals had already been agreed. We’ve seen orders being laid in Parliament to enable mayors to be elected in May 2017 and Mayoral candidates have begun to be selected – Andy Burnham, Steve Rotheram and Siôn Simon are already in place as Labour’s mayoral candidates in Greater Manchester, Liverpool City Region, and the West Midlands respectively.

Finally, a number of summer rumours have not come to pass. First we heard it was the death of the ‘Northern Powerhouse’; but the Ministerial title remained, Andrew Percy went on a tour of the Northern Powerhouse area in July and the Prime Minister used the phrase in setting out her vision for Yorkshire on Yorkshire Day last week. Jim O’Neill was rumoured to be on his way out of government but stayed, and this week reports that the requirement for cities to adopt mayors would be abolished were quickly denied by DCLG.

Challenges ahead

This doesn’t mean, however, that it’s plain sailing ahead for English devolution. There is no doubt that losing the strong political leadership of George Osborne puts devolution at risk. We’ve argued before that the Treasury’s backing was crucial in getting deals done and ensuring that departments play ball. We don’t yet know what new Chancellor Philip Hammond thinks about the agenda.

We have also had conflicting messages about how committed the new Prime Minister is to the current model of English devolution. Theresa May had previously spoken positively about the opportunity to bring together local services under directly elected mayors, but when launching her campaign to be Conservative leader said that the country needed ‘a plan to help not one or even two of our great regional cities but every single one of them’. It’s unclear whether this will herald the return of regions, or a different approach to that of area-by-area deal-making.

Conflicting messages could undermine the negotiation process for new areas looking for deals. As the leader of a local area, it’s hard to know what to negotiate on if you don’t know what’s really on and off the table and you don’t have a sense of the new government’s priorities. And while it looks like some areas’ deals are locked in, rowing back now on the need for a mayor could destabilise the process for other areas that have already agreed deals in principle. For instance, we know that the deal being done on the condition of having a mayor was highly controversial in many areas where deals are still being finalised – such as East Anglia and the West of England. These pending deals have taken much time and investment already, and the process may well be undermined if it turns out that other areas will be able to proceed without a mayor after all.

What next for English devolution?

As we’ve argued before, both the deals themselves and the process for agreeing them have been far from perfect. The emphasis on a negotiation-driven, bottom-up process means it’s been inherently ad hoc and asymmetric. But when compared to the long list of central government commitments to devolving power in recent decades, this is the best chance to date of real progress in decentralising power within England – and this process has led to more power being devolved to city-regions than we’ve seen before. Mayors are an integral component of this approach, as they ensure visible, accountable local leadership – vital for enabling the kind of sustainable devolution that has been achieved in London.

After a summer of rumours, the Government needs to present a coherent policy when Parliament returns in September, so that local areas know what the process is and what’s on the table going forward. Without the clear commitment of the new Prime Minister and Chancellor, there’s a risk that the real progress made on English devolution to date may stall.

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