This week the government’s Cities & Local Government Devolution Bill begins its Second Reading in the House of Commons. Following a break over the summer period, this week essentially marks the kick off of the second half of the bill’s journey through parliament.

But after a scrappy first half, in which the bill was met by some tough tackles from all sides in the House of Lords, what are the prospects for the government emerging victorious come the final whistle in December?

Re-capping the first half of a high stakes match

In recent years the devolution agenda has become a key plank of Conservative Party policy, a fact reflected in it being put front and centre of the new government’s legislative programme following the general election in May.

Once again in Manchester last week we were reminded that the chancellor has made devolution, together with the creation of a Northern Powerhouse, a central part of the “Osborne brand” – in the process hitching a significant part of his party’s electoral prospects, and his own future leadership aspirations, to the delivery of both. Securing the passage of the Cities & Local Government Devolution Bill is absolutely fundamental to his plan..

So it’s worth remembering that the government actually suffered its first defeat of the new parliament over the legislation in the Lords, with Labour and Lib Dem peers successfully passing four amendments to the bill. These included a requirement for ministers to report annually on devolution; the introduction of a test regarding the suitability of areas and functions for devolution; and most critically, scrapping the need for cities to have a mayor in order to get devolved powers.

A further significant defeat on the devolution of health powers followed, which would ensure any devolved services adhere to national service standards and are still nationally accountable.

Does this mean that the government went into half time on the Cities and Local Government Devolution Bill essentially 4-0 down? Not quite. Two of the amendments are relatively low impact, administrative amendments relating to increasing the level of transparency on devolution deals themselves, and it is more than probable that they will either be overturned or quietly accepted. But the other two amendments strike more fundamentally at the government’s agenda, and will need to be addressed in the sessions to come.

Looking ahead to the second half

Given the make-up of the House of Lords in the immediate aftermath of the election (where the Conservatives did not have a majority), the government will have expected a tough first half to the process. Now in the Commons where it does have a small working majority, it will seek to overturn and resist any amendments which would remove the need to have a mayor or water down the extent to which key public service provision can be devolved. Yet the bill is unlikely to have an entirely straightforward ride through the Commons.

The new Labour leadership have appeared ambivalent at best to the current devolution agenda, and even pre-election, Labour seemed uncomfortable with the incremental, partial approach to devolution proposed by the coalition and now being advanced by the Conservatives.

Instead if favoured a national constitutional convention to agree on devolved arrangements for all parts of the country. This approach suggests it is likely the party will seek to make the amendments on mayors and health policy stick: both of these seek to diminish the differences that could emerge between places that have deals and those that don’t.

Equally, Labour is concerned that the government’s devolution agenda is nothing but a cunning ploy to pass on ever larger public spending cuts to local councils – in Jeremy Corbyn’s own words, “a cruel deception”. This critique could lead to the Labour leadership attempting to impose a three line whip to oppose the bill full stop.

However, given the political uncertainty playing out within the parliamentary Labour party at present, it remains to be seen whether those Labour MPs with a long-term commitment to delivering devolution – such as Clive Betts MP or Graham Allen MP – would follow such an instruction.

Well at least Sheffield has got a dea. Image: Chemical Engineer/Wikimedia Commons.

At this stage it is more likely that one such MP will introduce an amendment to remove the provision from the bill that prevents new city-region mayors from borrowing additional funds, thus broadening the scope for more financial control to go with the strategic powers currently on offer. Given the detail of the deals agreed with Greater Manchester and the Sheffield City Region – both of which include so-called “gainshare” infrastructure funding measures – and the Chancellor’s recent announcement on the devolution of the business rates, the government may be open to accepting such an amendment.

But the voting intentions of Labour party members are not the only source of uncertainty. Backbench Tory MPs, particularly those hailing from rural constituencies, remain sceptical of what has often been portrayed as an urban agenda, and while the Scottish Nationalists have by convention not voted on matters that don’t relate to Scotland (the bill applies only in England and Wales) it remains possible that their observation of this convention could be used as a bargaining chip in their negotiations with the government on broader devolution to Scotland.

Thinking strategy

To counter this opposition, the government has spent much of the half time break trying to strengthen a sense of momentum on devolution and the Northern Powerhouse. By requesting submissions from local areas across the country, and announcing outline agreement with Cornwall and the Sheffield City Region in the intervening period, the government has continued to bind places in to the success of their agenda.

This matters in terms of votes in the Commons. By doing deals early, the government not only wants to demonstrate its agenda is leading to action on the ground; it also wants to make it as difficult as possible for individual members of Parliament representing those places to vote the legislation down. On the one hand, you could deliver a bloody nose to the government on a priority piece of legislation – but on the other, you’ll potentially prevent your constituents from benefitting from the devolution on offer.

The chancellor’s announcement on business rate devolution has upped the ante again, and all signals suggest the government remains hopeful of striking further substantial deals with major city-regions ahead of the Comprehensive Spending Review, which will further reinforce this dynamic. This is particularly problematic for Labour MPs, who are now presented with a situation whereby opposing the Cities & Local Government Devolution Bill risks severely undermining the work of several Labour-led city-regions: it is likely members will be lobbied hard by their local colleagues not to do so.

As a result, despite the various uncertainties and sources of potential opposition, the government remains in a relatively strong position to overturn the half time score line. And given the importance of the agenda to the chancellor, the Conservative majority in the Commons, and the broad momentum built up around this agenda, it remains likely that the government will emerge victorious come full time.

Ben Harrison is director of partnerships at the Centre for Cities.

This is an edited version of an article originally posted on the think tank’s blog.