Devolution on Trial
On 15th March 2016, we joined forces with the New Local Government Network to hold an event with a new and unique format… we put devolution ‘on trial’. We designed the event to interrogate the current round of devolution deals and investigate whether they really can deliver everything they promise. The question on trial wasn’t: ‘Should we or shouldn’t we devolve?’, but: “Is this the right kind of devolution, done in the right way, at the right time?” Download the full debate.
England’s path to devolution has been a slow one but the momentum is building
The critical question now is how government and local authorities can make that devolution a success and ensure it really does drive economic growth and improvements in services.
The first factor to consider is the need to recognise that fiscal devolution is critical to any real and profound devolution of powers. At the moment devolved localities, such as the Midlands Engine and the Northern Powerhouse, have no real economic power and so cannot compete on a global stage for business investment, talent and high net worth individuals.
The proposals to allow authorities to retain business rates are a start – yet if the assumption that business rates income will be used to offset reductions in Revenue Support Grant is borne out, its influence on local economic growth will be limited. What is needed is more radical thinking about giving devolved regions the power to set their own corporation tax, business rates, income tax and investment incentives so they can meet the particular economic needs of their regions.
Secondly, there needs to be a recognition that to compete globally, economic development needs to be undertaken by these regional groupings rather than being led by individual cities. However, this needs to be accompanied by a relentless focus on reducing and managing complexity to bring together and align incentives and agendas across the region and ensure budget flows enable the necessary changes.
Devolution on Trial
Roundtable event summary
Enabling public services
There then needs to be a rethinking of the way local public services are provided. New technology can offer different ways to reinvigorate local democracy, increase community involvement in decisions and planning and make best use of community resilience and local support.
Further, improved information sharing among different local services will allow the effective use of big data, providing a more precise understanding of local needs – in turn enabling a tailored and aligned approach to planning and provision.
Clarification of what devolution means
At the same time, central government needs to recognise that it has to play its part in making devolution work. That means focusing on simplicity and consistency and avoiding conflicting directions from different departments.
There is also more work to be done to clarify exactly what the government wants from devolution. Is it truly transferring powers or just delegating them? Is the aim to ultimately have consistently and uniformly devolved government across the UK and England? At the moment different government departments and national bodies are taking varying positions, making it difficult to see where the Government really wants devolution to end up.
Leadership and accountability
The final critical factor in devolution’s success will be strong leadership and clear democratic accountability. While the Government’s focus on mayors will give one central point of direction and ownership, top down leadership will not be enough. The multiple local governance arrangements currently in place will need to be aligned to ensure decisions can be made and acted upon. This means creating a strong arrangement of networked leadership with a strong sense of ownership, responsibility and accountability – and will mean reviewing the roles of Districts and Counties.
Devolution is the right path
All this underlines that there are still a number of unanswered questions about devolution, and the journey has just started. Yet despite the open questions, we strongly believe devolution is the right path and presents a 'once in a generation' opportunity to reinvigorate local democracy.
We believe the pace of change will continue to accelerate. The current Government’s approach to devolution is a significant step to enable England, and indeed the wider UK, to remain economically relevant in the global economy and achieve sustainable public finances.
For communities across the UK to benefit from this opportunity local leaders must step up. It is time for local government to take the lead, set out the local vision and make it happen.
Find out more about PA's Devolution agenda.