15 January 2016

Devolution will make you happy, Cabinet Office minister Oliver Letwin told the Institute for Government yesterday in a speech on “England’s changing constitutional map”. But, asks Akash Paun, what did Letwin reveal about the Government’s decentralisation agenda and what questions remain unanswered?

A good constitution sets a framework within which government can operate effectively. The UK (England in particular) has been over-centralised, leading to poor performance in some areas of government. Devolution of power within England can therefore create a more balanced constitution that will provide better government and policy outcomes.

In a nutshell, this was the case for devolution made by Oliver Letwin – the first of three cabinet ministers due to address the Institute for Government in early 2016. At the heart of his argument was that devolution will enable better joining up of public services around citizens’ needs. For instance, the Manchester city region is gaining powers to improve integration between health and social care services, where currently elderly patients can be shuttled between the two services in a way that is stressful for the individual and wasteful for the taxpayer.

The aspiration should be to design services around the whole person, since “people don’t come in fragments”. Letwin reflected that committees of officials in Whitehall can reach consensus on how different services should work better together and what each department will do within its own delivery chain to accomplish this. But that is not the same as joining up services from the perspective of citizens, which requires cultural and behavioural change at the frontline. To accomplish that, devolution of power to the locality is necessary. There is plenty to welcome in this vision.

The Institute for Government is itself engaged in a major study of how to improve and better join up local public service delivery and shares much of this analysis. But as my colleagues leading that project highlighted, joining up is no new ambition for politicians at Westminster. There have been, they find, no fewer than 59 separate initiatives by central government alone since 1997 to join up services locally within England. (Taking in an even broader sweep of history, Letwin argued that the English constitution has been evolving at least since the Romans left the country).

One big question is therefore whether the current agenda of “devolution deals” will end up as just another initiative in that lengthy catalogue. Key success factors previously highlighted by the Institute include the need for continued commitment of the Treasury to this agenda, and the development of clear principles to guide the devolution process and the relationship between central and local government. Letwin himself did not mention the role of the Treasury, instead emphasising the bottom-up dynamic of the devolution agenda.

Compared with the case that George Osborne might make, he also spoke less of the economic potential that devolution might unlock than of its effect on people’s happiness and relationship with the state. Taking control of your own life is a key determinant of life satisfaction, he argued, citing research from Switzerland. By turning voters into active citizens this can also help overcome some of the dysfunction and controversy around issues such as housebuilding, creating a healthier relationship between government and people. The example given was neighbourhood plans, where local people develop plans for house building in their area, before putting the plans to a referendum. The first batch of these, Letwin argued, had all been overwhelmingly backed in referendums, and were boosting plans for housebuilding compared to council’s local plans. It may be that this group of plans were concluded first because they were in neighbourhoods where there was an easy consensus to reach. Will there be greater conflict in other localities?

This will be an interesting area to watch as the government pushes on with its ambitious housebuilding targets. Another big issue surrounds the “variable geometry” of English devolution, with each devolution package emerging as a separately negotiated local deal. This is seen by Letwin as a virtue of the system; he wants to avoid the top-down approach at devolution associated with Labour’s regional government initiatives (all now scrapped). But will it make it harder to ensure coherence of public services between (as opposed to within) areas? And how will Whitehall cope with this new complexity, as departments have to build different kinds of relationships with different parts of England, depending on the detail of the devolution deal for that area.

Will the pendulum swing back, with central government seeking new powers to control the chaos? Fiscal questions loom large as well. Local government faces large spending cuts, but fairly minor tax powers are being devolved within England compared with those on their way to Scotland and Wales. This may limit the scope for policy innovation and service transformation. It will also generate scepticism about how much of Whitehall’s taste for devolution is driven by a desire to push tough decisions down the chain. “What’s exciting is that this is just the start” Letwin told us. But the start of what? By encouraging a bottom-up approach, the devolution process (or set of processes) is designed to ensure that the constitutional destination for England is unknown.

There are some positive signs that this is producing a genuine rebalancing of power, but we should remember that plenty of previous similar initiatives have lost momentum or gone into reverse. Our work on the local delivery of public services and English devolution will be examining what happens next.

Further information

Rt Hon Oliver Letwin MP was speaking at an Institute for Government event held on 14 January 2016.

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