1. Governance
July 29, 2015

How city leaders can put pressure on the government to boost their devolution deals

By Ben Harrison

Last week the Government confirmed that UK cities keen to secure big devolution deals have until 4 September to submit their proposals.

Negotiations will therefore intensify throughout the summer as politicians debate plans for places to work together as combined authorities, the Chancellor’s insistence that they accept a metro mayor as part of any deal, and the desire from a number of cities to see fiscal powers explicitly included as part of any devolution offer.

As we reach decision time, how much pressure is on the Government to secure more big devolution deals, and how can city leaders ensure they get the most ambitious agreements possible for their place?

For 18 months now, the Chancellor has elevated city-region devolution to be a key political, economic and financial priority for the Conservative Party. Working closely with long-standing advocate Greg Clark MP (now promoted to CLG Secretary), devolution has become a central part of the “Osborne brand” as he seeks to position himself to move next door to Number 10 later in the Parliament. The Chancellor has staked a significant amount of his own political credibility and capital on delivering the “Northern Powerhouse”, and most significantly, substantial devolution to Greater Manchester.

More broadly, these initiatives have become political shorthand for the Government’s aim of “rebalancing the economy”, and their attempts to recapture the politics of “One Nation” back from the Labour Party. More specifically, they are at the heart of Osborne’s strategy to extend and enshrine the Tories’ slim Parliamentary majority by allow the Party to re-build and once again win elections in parts of the country now dominated by Labour.

Failure to deliver meaningful change in these areas would therefore be damaging to the Conservatives and to Osborne himself. Already, voices from across the political spectrum have attempted to exploit the risk of not fulfilling these ambitions – with rural Conservative MPs pushing for devolution to non-city areas, local and national Labour politicians characterising the scrapping of rail electrification works as a “Northern Powercut”, and Lib Dem Peers successfully pushing for amendments to the Cities and Local Government Devolution Bill.

Yet the truth is that in many respects, Osborne has already secured his prize in the shape of the Greater Manchester Deal – an arrangement that he continues to expand with new powers and responsibilities being pledged earlier this month. In agreeing that Deal in the last Parliament, and setting such an aggressive pace of change early in the new, Osborne has ensured the Government is the one dictating the devolution agenda, not responding to it. And by deliberately avoiding setting benchmarks for success (such as a target for the number of big devolution deals or the kind of growth desired across the Northern Powerhouse) it is entirely conceivable that even if Osborne and Clark are forced to concede on the detail of the Cities Devolution Bill, the Government will still choose to reject all other devolution propositions, and channel resources into making the Greater Manchester Deal a success.

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These factors, together with the fact that political, economic and financial power is overwhelmingly concentrated in central government, mean that local leaders within UK city-regions have virtually no way of leveraging the political risks facing the Chancellor into the kind of pressure that could force him to change course on the conditions of the deals that they are resisting – most notably the introduction of city-region mayors. After all, if negotiations for their city-region fail, then they stand to be the biggest losers, not the Chancellor, Clark or wider Government.

The best way that local leaders can hope to regain the initiative is to move beyond trying to tackle Osborne on their own terms – “we don’t want a mayor” or “we would like a deal based on a different geography” – and instead challenge him directly on his terms. That means embracing the city-region mayoral model, enshrining combined authorities for their area, and then putting pressure on the Government to go much further during the remainder of this Parliament.

Specifically, city leaders should insist that the strategic powers currently on offer be supplemented with fiscal powers over local revenue raising and retention. That would be a big challenge to the Chancellor to put his money where his mouth is on devolution.

This piece originally appeared on the Centre for Cities blog. You can read the original post here

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