22 October 2014

Everyone wants a piece of the decentralisation cake - but there are too many cooks and disagreements about who is head chef.

In a Manchester Evening News scoop last week, Nick Clegg criticised his cabinet colleague George Osborne for his approach to decentralising power. He said:

“The Treasury thinks people should jump through hoops and have a prescribed form of government, a metropolitan mayor, before Whitehall lets go.

“If places like Greater Manchester want a metropolitan mayor, they should be free to do so. But the pressure should be on Whitehall to let go, not on Greater Manchester to jump through hoops.”

This statement could simply be seen as another example of the coalition partners seeking to differentiate themselves and their offers to the electorate in the run up to the election. But it is more than that, as it also reveals the fact that government is currently running a worrying number of decentralisation agendas simultaneously.

First, there is the Local Growth Deals process, led by the local growth cabinet committee, which Nick Clegg chairs. This essentially assigns chunks of the ‘Local Growth Fund’ announced in the 2014 spending review to different Local Enterprise Partnerships, the regional leadership bodies comprising local authority and business leaders set up in 2011.

Then, there is the Northern Futures project, which again sees Clegg in a leading role. Last week, he reiterated his view that the process – which calls for wide public input – is of critical importance to decentralisation and economic growth.

At the same time, George Osborne is running his own show. His plans to create a ‘northern powerhouse’ appear to be disconnected from the Clegg-led processes. He has promised a policy announcement in November through a relatively closed policymaking process focused on deals between just a few powerful local leaders and the Treasury. This would appear to cut across the timelines for Clegg’s consultative approach.

Meanwhile, there is still an old show in town. Minister of State for Science, Universities and Cities, Greg Clark appears to be involved in all of the above decentralisation initiatives but is also driving a separate (and ongoing) City Deals process. This is seeking to give cities and the country’s five combined authorities (some of which are not yet fully functional) more powers and greater control over their spending.

And there is another sideshow. At the Liberal Democrat party conference in Glasgow, Stephen Williams, the Liberal Democrat decentralisation minister in the Department for Communities and Local Government (DCLG), argued that two-tier local authority systems should become unitary councils in order to secure more powers from Whitehall. His Conservative colleagues in DCLG meanwhile oppose local government restructuring, with Eric Pickles famously threatening to keep a loaded pearl-handled revolver in his drawer ready for the first official to suggest it.

This plethora of processes and positions does not inspire confidence. Our analysis of decentralising reforms in the past 30 years shows that decentralisation plans often falter precisely because of failures to co-ordinate. At a national level, those leading reforms have struggled to gain the support of colleagues, including those who have to be willing to give away control and funding. Local councillors, meanwhile, mobilise to block nationally-driven reforms that might undermine their interests – or that are perceived as unfair. The public and the media are excited by the offer of more powers, but often resist reforms they see as creating more politicians. And they can’t get excited about the technical changes sometimes required to reassure national government that local tiers will be held accountable for their new responsibilities if things go wrong.

Complex processes will not necessarily be fatal to the current decentralisation drive. Power matters, so a strong chancellor such as George Osborne may well be able to mobilise the support of at least his Conservative colleagues as he develops a decentralisation offer. And a compelling proposal may overcome public disinterest or local hostility.

Nonetheless, the potential problems are relatively obvious. The processes led by Nick Clegg are unlikely to gain the support of Conservative cabinet colleagues when the Chancellor is advocating a different approach. Disagreements might also affect the comprehensiveness of George Osborne’s proposals.  It is hard to envisage George Osborne persuading Vince Cable to give away skills funding pots, for example, unless Nick Clegg is content.

Local support for any proposal could be undermined by the confusion too. Party activists could mobilise against proposals their national party leadership opposes, for example. And there is a clear risk that one of these processes will raise local leaders’ expectations about the decentralisation offer, only for these expectations to be disappointed. Thousands of hours of senior leadership time will have been invested in an abortive process.

Meanwhile, confusion – or more specifically the public show of disunity – could also undermine public support for changes.

These are the reasons that process matters – and why government would do well to address these problems swiftly. Labour, meanwhile, should watch and learn. If that party is elected in 7 months, after all, it will have to deliver on its own decentralisation promises. When it does so, it would do well to remember that co-ordination matters – and it should start at the top.