1. Governance
February 25, 2015

Here's why devolution to Britain's cities will be a top-down process

By Ben Harrison

Earlier this month, the Core Cities Group convened a major event in Glasgow, where it called for a new Magna Carta that’d set UK cities free to grow, innovate and invest in their futures. The event attracted widespread support and added further momentum to the long-running debate around giving UK cities more power to take the big decisions that can boost their economies.

Talk of decentralisation always peaks in a pre-election period, of course. But even the most cynical must concede that the momentum behind the urban agenda means that further progress is now likely in the new parliament.

So, with less than 11 weeks to go until polling day, what lessons can we glean from the last five years to make sure that, come 2020, more cities have been empowered to drive their economies?

1. In the most centralised country in the western world, devolving real power will require a top-down process

The coalition government has made several attempts at decentralising power to localities – from the 2011 Localism Act, through two rounds of City Deals, and finally the Local Growth Deal process. And yet, while it may have only been possible due to the aforementioned interventions, only the Greater Manchester Deal agreed in late 2014 appears likely to succeed in pushing substantial power down from Whitehall.

That’s primarily because this deal was driven from the very centre of government. Those with reservations about “DevoManc” frequently point to the imposition of a mayor for the city-region at the behest of George Osborne. The locally elected leaders of Greater Manchester did not, at least initially, want a city-region mayor; the people of Greater Manchester have never been asked.

Yet Simon Jenkins’ fascinating account of the negotiations that led to the Greater Manchester devolution deal clearly demonstrate the important role central government plays in setting the pace of devolution, and in making clear the criteria that must be met to achieve it. Perhaps most importantly, Jenkins’ article highlighted how decisive the chancellor’s personal and political commitment had been, in prising control away from Whitehall departments.

So, it’s not contradictory for the process of decentralisation to be set out and driven from the centre. In fact, in a country where central government holds almost all the power, it is necessary if we are to see tangible progress made.

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Compared to the proposals for fiscal devolution in the Core Cities’ latest report, the terms of the Greater Manchester deal are relatively modest – yet those holding power at the centre recognise and fear the setting of precedents that, however small, could erode their authority in the future. The dominance of Whitehall departments, coupled with the lack of power held by UK cities, means that only the authority of the highest offices in the land can drive the devolution of real power to cities across the country.

2. A lack of local capacity must not be used as an excuse for stalling

Over the course of the last five years, localism has represented a double-edged sword for UK cities. A key plank of the coalition agreement between the Conservatives and the Liberal Democrats, the Localism Agenda established the principle that national policies should be tailored to local circumstances, and put the prospect of decentralisation to cities and city-regions on the table.

All too often, however, the spirit of localism has been invoked to justify pushing the responsibility for making city devolution work back on to local councils.

Against a backdrop of significant reductions in council budgets, “a lack of local capacity” or “strategic leadership” has been cited as the primary reason why power and funding cannot be decentralised through the various City and Local Growth Deals that have taken place. For this reason, most have ended up resembling traditional project funding agreements, rather than delivering on their promise to hand over power to local leaders.

The ability of city leaders to take the initiative locally will be fundamental to making a success of city devolution once it’s been delivered, of course. But the responsibility to achieve such a transfer of power should not solely rest on their shoulders – as we have seen, a process whereby government simply sits in judgement of local proposals is unlikely to lead to significant change.

We recommend the next Government adopts a presumption in favour of devolution to cities and city regions, unless it can be demonstrated that power would be better held at the centre. To help facilitate this, the Core Cities Group advocates establishing an independent commission to review and support the delivery of proposals for city devolution.

Whatever the mechanics, given the broad range of political support for city devolution, it should be incumbent upon central government to actively support cities to accept more responsibility over their economies, and to help them make new arrangements work locally.

3. Devolution alone will not “rebalance the economy”, or solve all of the challenges facing UK cities

The vast majority of those arguing for more power to be devolved to UK cities and city regions are all too aware that such a transfer will not, in and of itself, meet all of the challenges that UK cities face over the coming years.

The scale of funding cuts to come in the next parliament; increased pressure within key local services like social care, health and education; the continued polarisation of local job markets – all these things will require urgent attention and management.

Allowing cities to retain the benefits of growth, to flex policy to their specific circumstances, and to drive forward innovations at the local level, will all be necessary to tackle these issues, but they won’t be sufficient – and they will be more helpful in some parts of the country than others.

Alongside devolution, a whole host of national investments and reforms, together with local interventions, will be required if UK cities are to fulfil their potential. Given the difficulty associated with empowering UK cities to succeed, it is important that the urban agenda does not become a case of “devolution or bust”.

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

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