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Divided devolution

Sir Merrick Cockell

The MJ

4 December 2014

Praise from the prime minister and chancellor generally goes down well with local government. We have got used to being credited with running the most efficient public services and out-pacing central government and the NHS on service innovation.
But in the lead-up to the Autumn Statement, being lauded for the savings we have made over the past four years while keeping, even increasing, high levels of resident satisfaction, set alarm bells ringing from Smith Square to town halls around the country.

With the deficit reduction figures predicted to show that the national economy had only achieved half the savings it needed to make, the words we wanted to hear from the chancellor were that he accepted that local services couldn’t withstand further reductions beyond the planned £3bn next year.

What the Chancellor announced today was falling borrowing, the deficit at half the level he inherited in 2010, the fastest growing of any major economy, and satisfaction with local government services rising, while hinting at further public spending cuts after the next election.

The announced full review of the structure of business rates is welcome. But with full rate devolution promised to Wales, the future English model must look at all growth staying in local areas, and the level being set in areas and not nationally. Business leaders have long resisted this, but, at least in private, I’ve heard them open to local agreements.
There was plenty of good news for the “Northern Powerhouse” with new rolling stock and a sovereign wealth fund. But County leaders will be dismayed that the “door is open to other cities” while seemingly not to them to agree the devolution of functions from Whitehall.
While all the attention will be on the reform of stamp duty scuppering Labour’s mansion tax plan, the glaring gap in the Autumn Statement that could have greater implications was the English Question.

Corporation tax is going to Northern Ireland, business rate to Wales and income tax to Scotland but there was no mention of any tax raising powers being shifted closer to the 53 million people of England.
If local government is the most efficient, has the highest satisfaction, and is the most innovative why is it not trusted with power devolution that is as fair to the people of Plymouth, Stoke and London as it is to those in Cardiff, Perth or Belfast?

Sir Merrick Cockell is senior adviser, PA Consulting Group 

For thinking and insights on local government, click here or contact us now. 

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