News & Blog
English City-Regions Devo Max
Posted on September 17, 2014
Whether Scotland votes ‘yes’ or ‘no’ the genie is well and truly out of the bottle on the issues of democracy and local devolution. As the Prime Minister said in June 2014 there is “political consensus” across the main parties that “devolving power and money from Whitehall to the cities […] is the future. The debate now is about how far and fast it can go”.
We are supportive of the work of the LEPs and the emerging Combined Authorities based on the functional economic geography and the role of cities as centres of economic growth. We set out below 10 observations based upon pragmatic responses and our extensive involvement in property regeneration and investment:
1. Overlap and confusion – We have private sector investor and developer clients who are currently confused about the role of the LEPs (i.e. the unelected public-private partnerships) and the role of the city-regions (i.e. the elected Leaders Boards/Combined Authorities).
2. Certainty and transparency – One of the key requirements for business investment is certainty and transparency, and it is currently unclear to many businesses what is the role of the LEP and what is the role of the City-Region (e.g. Combined Authority). The risk is that investors will not know where to turn to access key services and investment funds which could be detrimental to economic growth.
3. Functional economic geography – The LEPs and City Regions have the potential to be very effective because they are based on functional economic geography. However, the public sector must have the appropriate budgets and powers to be aligned with their geographical jurisdiction. For example the West Yorkshire Combined Authority currently does not cover all of the Leeds City Region LEP area and Harrogate, York, Craven, Selby and Barnsley are all missing.
4. Transport – By definition the city-regions are generally based upon travel-to-work patterns. Therefore the LEPs and city-regions need to have control of the transport infrastructure and budgets. The model is already established with the Greater London Authority / Transport for London and this could be applied across all our city-regions.
5. Healthy Competition – By devolving power to the city-regions we need to encourage healthy competition between them – for example, when competing for a significant inward investment from overseas or a central government department relocation from Whitehall, it is quite legitimate and healthy for the city-regions (e.g. Leeds, Sheffield, Manchester etc.) to compete for this investment. Contrast this with the previous situation where the RDA’s were often compromised and conflicted by their wider remit spanning multiple cities e.g. Leeds and Sheffield; Manchester and Liverpool.
6. Governance – Fiscal devolution requires good governance and direct accountability to the electorate. A recent House of Commons CLG Committee report, Devolution in England: the case for local government (30 June 2014) states that, “fiscal powers should be devolved to groups of local authorities, covering a recognisable large scale area, that can demonstrate how they share, and work together as, a functioning economy” (our emphasis). And, “a strong, locally agreed governance model will also be required. We do not prescribe a particular governance model, but any arrangements must be detailed and transparent, with a clear means of scrutinising decisions and holding those with power to account. If more significant and meaningful decisions are made locally about how money is raised and invested, local people should have a better opportunity to identify and hold those making such decisions to account” (our emphasis).
7. City Regional Combined Authorities – The LEPs and the emerging Combined Authorities should be empowered to evolve into democratic bodies. These should NOT be large bureaucratic ‘County’ Authorities, rather the ‘city-region authorities’ should be nimble organisations governing strategic and fiscal issues, and the Local Authorities would still be the primary delivery agents.
8. Mayors – The City Regional Authorities could have directly elected Mayor and Members in order to provide the democratic accountability for full fiscal devolution. The challenge is to encourage Local Authority leaders to cede power to the Combined Authority and this process has already begun. Whitehall Civic Servants also have to cede control and political leaders should impose this on Whitehall to encourage and support Local politicians. Mayors are best placed to represent cities in a global context. Such a ‘metro mayor’ has been called for by Greater Manchester – see Devo Max – Devo Manc:Place-based public services.
9. Duty to Cooperate – The city-regions should cooperate when considering the major issues. Again the model has already been demonstrated in the past with organisations such as The Northern Way (which was a collaboration between Yorkshire Forward, NWDA and ONE). There is no reason why Sheffield City Region, Leeds City Region and Manchester City Region etc. cannot come together to converse with central government on issues such as HS2 or the Northern Hub/HS3.
10. False Start – Note that the previous proposals for mayors were not well presented and the benefits were unclear. For example, the proposal for Mayors in Wakefield, Bradford and Leeds was not the appropriate geography and, unsurprisingly, local people could not see the benefits. Ministers should not see this as a lack of appetite or ambition for local devolution.
It is important that leaders communicate precisely what is proposed in terms of devolution in England – is this to be simply further decentralisation of spending or full fiscal devolution? What governance arrangements and accountability will be in place? The answers to these questions should enable the benefits of devolution to be clear for all.
Links and useful references
City Growth Commission, Powers to Grow: City Finance and Governance (September 2014)
“Cameron sees devolution to England’s cities as ‘the future’”, Financial Times, 9 June 2014