1. Government
July 10, 2015

Britain's cities have only five months to secure a significant devolution deal

By Ben Harrison

Chancellor George Osborne has come under increasing pressure in the last fortnight regarding his re-balancing and devolution agendas. Many people identified Network Rail’s announcement of “pauses” to the electrification of a number of northern rail lines as evidence that the Northern Powerhouse in particular was dead before it had even got started.

Given the extent to which his own political fortunes are now bound up with the delivery of these initiatives, it was no surprise that Osborne mounted somewhat of a fightback in this week’s Budget statement. Framed as a “One Nation Budget”, the chancellor announced further details on the creation of Transport for the North, and critically, the transfer of yet more powers to Greater Manchester. He also referenced possible further deals for West Yorkshire, South Yorkshire and Merseyside, subject to those areas accepting an elected Mayor.

These announcements represent a welcome escalation and expansion of the devolution agenda to potentially include more places and more powers. But they should also bring renewed urgency for those city-regions not cited – including the North East, West Midlands and West of England – that there is no time to waste in getting a deal done.

That’s because the Budget reminds us that, in the six months since the Greater Manchester Devolution Deal was announced, the gap between it and other cities across the country in terms of the powers it will wield has grown considerably. Come 2017, Greater Manchester will now have new powers over transport, housing, land, planning, police, fire, and children’s services.

Meanwhile, other city regions – even those in which real political and administrative progress has been made – have not yet decided either whether they are prepared to do a deal, or the basis on which they would do it.

Now it seems that Liverpool, Leeds and Sheffield, together with their neighbouring councils, have jumped ahead in the queue to follow Manchester’s lead. Given that practically there will be a limit on the number of substantial devolution deals the government can oversee during the coming Parliament, these announcements have further upped the pressure on leaders in Newcastle, Birmingham and Bristol to secure a deal quickly.

It’s also becoming clear that the window within which to secure a substantial deal is closing. The Treasury’s red book sets out an expectation that devolution deals will be finalised in advance of the Spending Review in the Autumn, reflecting a need to ensure the devolution of budgets can be included in the government’s long term spending plans. That indicates cities have, at best, five months to agree and deliver a significant devolution deal for their area, or they risk missing out for the remainder of this parliament.

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Nobody should underestimate the political difficulties that the chancellor’s devolution agenda – particularly his insistence on a city-region mayor – presents in some parts of the country, nor the progress being made across city-regions in that regard. But equally, nobody can afford to be complacent that they will receive a significant deal come what may. The chancellor has been clear in what he expects from city-regions if they are to receive new powers over things like transport, housing, police and health; now we also have more clarity on the kind of additional powers that could be available, and when deals will need to be done by.

The powers currently on offer may not reflect everything that city regions across the country would, in an ideal world, like control over – and there remains an absence of any fiscal powers even within the Greater Manchester Deal. But the fact is that the devolution train is preparing to leave the station, and some city-regions risk being stranded on the platform. It’s time for leaders in those places to act.

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

This article was originally published on the think tank’s blog.

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