29 April 2015

Commentators often point out that politicians are good at promising to decentralise power as an election approaches – but less good at delivering on those promises in office. True to form, in this General Election, the parties have set out their positions on sub-national devolution. Joe Randall takes readers through the parties’ proposals for decentralising power within England, and looks at some of the issues that will determine whether or not they are able to deliver.

Given the impact of Scottish Independence referendum last year, it is hardly surprising that devolution features heavily in the manifestos. But while most of the parties agree that the next steps for devolving power to Scotland (and to a lesser extent, Wales) start with the package of measures agreed through the cross-party Smith Commission on devolution, which reported in November. Their proposals about the regions, counties and cities of England are however much more varied.

Conservative

The Conservative manifesto argues that that there is no ‘one size fits all’ solution to devolving powers to the nations, regions and cities of the UK. It proposes – unsurprisingly – continuing much of the last Government’s place-by-place, bespoke deal-making approach to devolving power. Some of this is about delivering on commitments made during the last parliament – for example legislating to give effect to the ‘devolution deal’ agreed with Greater Manchester in 2014, and implementing pilots in Cambridgeshire, Greater Manchester and Cheshire East that will allow those councils to retain 100 percent of growth in business rates. But the manifesto also proposes extending the deal-making into the next parliament – they intend to continue creating ‘growth deals’ with local authorities and will offer ‘far-reaching powers’ over economic development, transport and social care to larger cities that – like Manchester – choose to introduce directly-elected ‘metro’ mayors. One move that might encourage other cities to take up this challenge is a manifesto commitment to devolve further powers over skills spending and planning to London – the only other city with a metro mayor.

Labour

The Labour manifesto puts legislation at the heart of its proposals, claiming that their proposed English Devolution Act would begin ‘the biggest devolution of power to our English city and county regions in a hundred years’. Labour promise to transfer £30bn of funding to ‘city and county regions’, as well as offering those areas additional powers over economic development, skills, employment, housing, transport and business support. There are also pledges to create multi-year budget settlements for local authorities and to allow them to retain 100 percent of growth in business rates.

The manifesto itself doesn’t mention this, but the more detailed plans published by Labour in February clarify two things. First, the £30bn promised is to be allocated across the whole parliament – not £30bn in every year. Second, to qualify for this additional funding, local areas will have to reform their governance by organising themselves into the combined authority model, reforming their local enterprise partnerships to be ‘coterminous’ with these new structures, and introducing local Public Accounts Committees to hold local decision-makers to account for how they spend public money.

As well as implementing structural changes at the local level, Labour is promising to push devolution on by changing things at the centre of government. The main changes they propose are replacing the House of Lords with an elected ‘Senate of the Nations and Regions’, and creating an English Regional Cabinet Committee, chaired by the Prime Minister and attended by Secretaries of State and leaders of ‘major’ city and county regions.

Liberal Democrat

The Liberal Democrats promise in their manifesto to continue some features of the deal-making approach of the last government. Unlike the Conservatives, their vision isn’t for more Manchester-style deals, but a new ‘devolution on demand’ offer. The manifesto itself is light on details of what this might entail, describing it as a way of ‘enabling even greater devolution of powers from Westminster to Councils or groups of Councils working together’. But previous plans set out in more detail how under this approach, groups of local authorities representing a population of over one million could approach central government to ask for a bespoke package of powers, and would be met with a presumption in favour of devolving.

However the Liberal Democrats propose to supplement these bespoke deals with some unconditional freedoms for local areas: work programme commissioning powers, the ability to create integrated transport ticketing, additional housing and planning powers – including full local control of right to buy, and transferring youth custody budgets. These proposals also include – significantly – additional fiscal freedoms, such as increased borrowing (for house-building purposes) and lifting the requirement for local authorities to hold a referendum if they wish to increase council tax.

Finally, like Labour, the Liberal Democrats propose some changes at the centre of government to supplement those at the local level. Significant questions remain about the details of these changes – as well as the question of how they would be implemented – but the intent is at least clear. In addition to creating a presumption within Whitehall in favour of devolution, the manifesto also includes a somewhat vague proposal to “establish a government process to deliver greater devolution of financial responsibility to English local authorities” and another to “reduce the powers of ministers to interfere in democratically elected local government”.

Common ground

While the three parties’ proposals for devolving powers within England are quite varied, there are some important areas of common ground:

  • Each recognises the importance of scale. There is a justifiable concern that many existing subnational authorities do not operate at the right scale to perform some tasks held by Whitehall. As we have shown in the past, this has frustrated previous governments’ attempts to decentralise. All three parties propose ways to bring local authorities together to exercise additional powers over wider economic and physical geographies than they do at present.
  • Each recognises that not all areas will want, or be able to, progress at the same pace. A differential approach enables tailored devolution settlements that work with the grain of local political dynamics, assuaging local politicians who have resisted imposed, uniform changes in the past. Both the Conservative and Liberal Democrat manifestos argue that there is no ‘one-size-fits-all’ solution and advocate a bespoke, place-by-place deal-making process. Labour’s proposals are more universalist, but nevertheless establish certain criteria that areas wanting additional powers and funding must meet.
  • Each recognises the importance of improved governance arrangements in creating a meaningful, lasting settlement. The Conservatives’ demands are the most explicit: city regions that want to follow in Greater Manchester’s footsteps and gain additional powers will need to adopt strong governance arrangements, including an elected mayor, that cover entire the entire metro area. Labour is committed to extending the use of the combined authority model that extends beyond cities and into county regions. The Liberal Democrats make the fewest demands on this front, but do advocate stronger joint-working models for local authorities to be able to come together and demand additional powers. All these are positive steps – the stronger the local governance models, the more likely it is that central government will have an appetite for meaningful decentralisation.

It is an extremely promising sign that each of these major parties have clearly thought through some of the practicalities involved in putting their plans into action. Given the uncertainty surrounding this election, and the likely need for some agreement between at least two of the three parties on the next programme for government, this common ground may bode well for those interested in seeing further decentralisation after May. However there are still uncertainties in all of the parties’ plans, and significant challenges will need to be overcome if the next government is to be a decentralising one.

Future challenges

  • Political leadership. In our previous work, we have emphasised the importance of strong leadership and clear aims for decentralisation to be successful. In the previous government, the Chancellor of the Exchequer pushed strongly for the Greater Manchester deal. Without this kind of leadership from the top, it is more likely that Cabinet ministers defend their own ‘territory’ and resist attempts to empower local areas. While manifesto pledges are a good start, it remains to be seen how far English devolution will remain a political priority for those at the top, once a government has been formed. And even if it is a priority, the Prime Minister’s and Chancellor’s time is likely to be at a premium. It may therefore be necessary to empower a respected figure to push decentralisation forward; crucially, they will need the backing of senior figures in debates with ministerial colleagues.
  • Whitehall leadership. Which department will lead the overall decentralising drive? – will it be the Treasury, the Cabinet Office or the Department for Communities and Local Government? And how will decentralising activity be coordinated – will it be through direct dealings between a single city and senior officials within the Treasury (as in Greater Manchester) or a cross-departmental team (like City and Growth Deals). This may seem like a technical point, but in the past the way that this responsibility has been divided has greatly affect reforms’ prospects for success. Partly this depends on the aims of a reform – standing cross-departmental teams are likely to be good at developing external relationships (or capitalising on the ones that exist already) and co-ordinating extended processes with several local areas; but high-profile senior-led approaches may have greater impetus and momentum for rapid, single-place negotiations.
  • Funding. The delivery mechanisms for additional local funding are important – are new budgets (such as Labour’s £30bn) going to take the form of a ‘single pot’ that local areas can bid for, or will they be a new way of bringing together a number of existing funding streams? And how will local areas’ voices be represented when these funding decisions are made? During the spending review process, Whitehall has traditionally operated as something of a closed shop. While the Labour manifesto has proposed one mechanism – a Cabinet Committee – for bringing local voices directly into the centre of government (with echoes of the last government’s ‘Mayors’ Cabinet’), we have in the past raised the need for better or more direct representation of local areas during spending review negotiations.
  • Changing Whitehall ‘business as usual’. As our work on relations between the four governments of the UK has shown, Whitehall is not always adept at understanding what is happening on the ground, or how to deal with asymmetric distributions of power and authority. Since greater asymmetry and reduced direct authority would be the consequence of all the parties’ proposals, Whitehall will need to come to terms with its new role. Where powers have been directly transferred away this might simply mean doing less. However, in other areas this may mean building capability and procedures to match this new reality – for example developing central ‘backstop’ capabilities for where decentralised services are seen to be failing. And there is an important question about how a new devolved settlement is maintained and protected. None of the parties are proposing to ‘lock in’ new local powers and structures through referendums, so there will be a need for strong cultural leadership within central government so that central control does not creep back.

The test of whether the parties are serious about delivering the pledges in their manifestos will come quite quickly in the next parliament, once the spending review gets underway and we know who will be visibly fronting the decentralisation agenda. But given that the parties broadly agree on the need for decentralisation, there is grounds for optimism that – for once – the agenda won’t fade into the background as soon as the election is behind us.

Each recognises the importance of scale. There is a justifiable concern that many existing subnational authorities do not operate at the right scale to perform some tasks held by Whitehall. As we have shown in the past, this has frustrated previous governments’ attempts to decentralise. All three parties propose ways to bring local authorities together to exercise additional powers over wider economic and physical geographies than they do at present.

  • Each recognises that not all areas will want, or be able to, progress at the same pace. A differential approach enables tailored devolution settlements that work with the grain of local political dynamics, assuaging local politicians who have resisted imposed, uniform changes in the past. Both the Conservative and Liberal Democrat manifestos argue that there is no ‘one-size-fits-all’ solution and advocate a bespoke, place-by-place deal-making process. Labour’s proposals are more universalist, but nevertheless establish certain criteria that areas wanting additional powers and funding must meet.
  • Each recognises the importance of improved governance arrangements in creating a meaningful, lasting settlement. The Conservatives’ demands are the most explicit: city regions that want to follow in Greater Manchester’s footsteps and gain additional powers will need to adopt strong governance arrangements, including an elected mayor, that cover entire the entire metro area. Labour is committed to extending the use of the combined authority model that extends beyond cities and into county regions. The Liberal Democrats make the fewest demands on this front, but do advocate stronger joint-working models for local authorities to be able to come together and demand additional powers. All these are positive steps – the stronger the local governance models, the more likely it is that central government will have an appetite for meaningful decentralisation.

It is an extremely promising sign that each of these major parties have clearly thought through some of the practicalities involved in putting their plans into action. Given the uncertainty surrounding this election, and the likely need for some agreement between at least two of the three parties on the next programme for government, this common ground may bode well for those interested in seeing further decentralisation after May. However there are still uncertainties in all of the parties’ plans, and significant challenges will need to be overcome if the next government is to be a decentralising one. Future challenges

  • Political leadership. In our previous work, we have emphasised the importance of strong leadership and clear aims for decentralisation to be successful. In the previous government, the Chancellor of the Exchequer pushed strongly for the Greater Manchester deal. Without this kind of leadership from the top, it is more likely that Cabinet ministers defend their own ‘territory’ and resist attempts to empower local areas. While manifesto pledges are a good start, it remains to be seen how far English devolution will remain a political priority for those at the top, once a government has been formed. And even if it is a priority, the Prime Minister’s and Chancellor’s time is likely to be at a premium. It may therefore be necessary to empower a respected figure to push decentralisation forward; crucially, they will need the backing of senior figures in debates with ministerial colleagues.
  • Whitehall leadership. Which department will lead the overall decentralising drive? – will it be the Treasury, the Cabinet Office or the Department for Communities and Local Government? And how will decentralising activity be coordinated – will it be through direct dealings between a single city and senior officials within the Treasury (as in Greater Manchester) or a cross-departmental team (like City and Growth Deals). This may seem like a technical point, but in the past the way that this responsibility has been divided has greatly affect reforms’ prospects for success. Partly this depends on the aims of a reform – standing cross-departmental teams are likely to be good at developing external relationships (or capitalising on the ones that exist already) and co-ordinating extended processes with several local areas; but high-profile senior-led approaches may have greater impetus and momentum for rapid, single-place negotiations.
  • Funding. The delivery mechanisms for additional local funding are important – are new budgets (such as Labour’s £30bn) going to take the form of a ‘single pot’ that local areas can bid for, or will they be a new way of bringing together a number of existing funding streams? And how will local areas’ voices be represented when these funding decisions are made? During the spending review process, Whitehall has traditionally operated as something of a closed shop. While the Labour manifesto has proposed one mechanism – a Cabinet Committee – for bringing local voices directly into the centre of government (with echoes of the last government’s ‘Mayors’ Cabinet’), we have in the past raised the need for better or more direct representation of local areas during spending review negotiations.
  • Changing Whitehall ‘business as usual’. As our work on relations between the four governments of the UK has shown, Whitehall is not always adept at understanding what is happening on the ground, or how to deal with asymmetric distributions of power and authority. Since greater asymmetry and reduced direct authority would be the consequence of all the parties’ proposals, Whitehall will need to come to terms with its new role. Where powers have been directly transferred away this might simply mean doing less. However, in other areas this may mean building capability and procedures to match this new reality – for example developing central ‘backstop’ capabilities for where decentralised services are seen to be failing. And there is an important question about how a new devolved settlement is maintained and protected. None of the parties are proposing to ‘lock in’ new local powers and structures through referendums, so there will be a need for strong cultural leadership within central government so that central control does not creep back.

The test of whether the parties are serious about delivering the pledges in their manifestos will come quite quickly in the next parliament, once the spending review gets underway and we know who will be visibly fronting the decentralisation agenda. But given that the parties broadly agree on the need for decentralisation, there is grounds for optimism that – for once – the agenda won’t fade into the background as soon as the election is behind us.

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