1. Governance
May 14, 2015

Osborne, mayors and Jim O'Neill: Is Britain's government really ready to devolve power to cities?

By Jonn Elledge

George Osborne really, really loves cities. He really does. He’s not mucking about.

You can tell this, because he’s using his first speech of his second term as Chancellor to underline his commitment to the things. Later this month, the Queen’s Speech will lay out Britain’s new Conservative-only government’s legislative agenda for this parliament. Top of the list will be a Cities Devolution bill, which will enable other cities to follow in Manchester’s footsteps and take control of their own affairs in areas including planning, policing and transport.

Oh, and he’s also hired Jim O’Neill, economist to the stars, as commercial secretary for city devolution and infrastructure, to front the new policy. (We interviewed O’Neill last year.)

Here’s the key quote from Osborne’s speech today:

The old model of trying to run everything in our country from the centre of London is broken. It’s led to an unbalanced economy. It’s made people feel remote from the decisions that affect their lives. It’s not good for our prosperity or our democracy. It is time for you to take control of your own affairs.

So – city devolution is actually happening. It wasn’t just a pre-election Tory stunt, intended to claw a few seats in the northern cities out of the hands of the Labour party.

In the long term, of course, that’s exactly what it is. The “Northern Powerhouse” policy, of which all this is a part, is largely a response to the fact that many of Britain’s big regional cities have never really recovered from de-industrialisation. Since the blame for de-industrialision gets heaped, rightly or wrongly, on the Thatcher government, many of those cities have spent the last generation turning gradually into no-go areas for the Tory party.

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The result of all this is that reviving those cities fortunes’ wouldn’t just be good for their residents, and for Britain’s national growth rate. It’d be pretty nifty for a Conservative party that wanted to actually, say, win some votes in Liverpool ever again. For Osborne, the “Northern Powerhouse” is that rarest of things: a policy that’s both in his own political interests and very obviously the right thing to do.

But, for all the talk, it’s not clear how much will actually come out of this morning’s speech, or the bill that will follow it. That’s because Osborne also made clear that, like London and Manchester, any city that wants the full range of powers will have to have an elected mayor too. Here’s the other key quote:

I will not impose this model on anyone, but nor will I settle for less. My door now is open to any other major city who wants to take this bold step into the future.

The imposition of a mayor on Greater Manchester – widely, if wrongly, said to have rejected one in a referendum in 2012 – was the most controversial bit of the city’s devolution deal: imposing them elsewhere won’t be popular.

More to the point, in several of the country’s largest urban areas (the West Midlands, Merseyside), the various metropolitan councils are still not ready to acknowledge they’re one big happy city at all. Expecting them to agree to being run by a single individual would be a little, let’s say, optimistic. Indeed the leader of Newcastle city council told delegates at this morning’s Core Cities event that 

..the chancellor’s obsession with just one model risks making 90 per cent of devolution opportunities impossible.”

Nevertheless, in a blog post this morning, Andrew Carter, the acting chief executive of the Centre for Cities, noted that this policy “is offering the clarity and consistency that so many of us who have championed the urban devolution agenda have long called for”. At least cities will, at long last, know what the rules of the game are.

Today is definitely a step forward for the devolution agenda. It’s just not yet clear how big.

You can read our interview with new city devolution minister Jim O’Neill, from August 2014, here.


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