With a host of local authorities rejecting or deferring deals to devolve power from central government, chancellor George Osborne’s “devolution revolution” is starting to look patchy.
Gateshead Council rejected its devolution deal in March, sparking doubts about whether a deal for the North East Combined Authority could be made.
It followed Cambridgeshire, Hampshire and Cumbria county councils, which all turned down deals earlier this year, and more are expected to follow suit.
What’s going wrong?
A lack of certainty about funding was one of the reasons cited by the North East Combined Authority’s leadership for deferring its decision to this month.
The National Audit Office has since called on the government to do more to provide confidence that the deals will achieve their intended benefits.
“Despite several iterations of deals, the government’s approach still has an air of charting undiscovered territory,” said Amyas Morse, head of the NAO. “It is in explorer mode, drawing the map as it goes. Some of the opportunities and obstacles are becoming clearer, but we still do not have a clear view of the landscape or an idea of the destination.”
Meanwhile, the chancellor has faced pressure from some Tory MPs and local authorities not to insist that all areas introduce elected mayors.
Mark Barrow, a partner at Arcadis specialising in regeneration in the Midlands and the North, said it was valid to question whether new mayors were needed.
“A lot of people say they can deliver these things without elected mayors and they probably can,” he said. “The people sitting around combined authorities are well-equipped to move these things forward.”
Steady progress
It might not quite yet be a revolution, but 10 devolution deals have been agreed across the country since the government announced its agenda less than two years ago. This means 30% of the population will be living in devolved regions, with the opportunity to elect new mayors in next year’s elections, according the government.
“We agree there is much to do and we will continue to talk to areas so everywhere that wants to take part in the process can do so,” a Department for Communities and Local Government spokesperson said.
Do political divisions make a difference? It is believed that the Leeds city region deal has been delayed by the predominantly Labour-led authorities over concerns about a deal drawn up by the Tory chancellor. However, Osborne’s devolution beacon, Greater Manchester, has steamed ahead with its devo deal despite the city region’s strong Labour leadership.
Melanie Leech, chief executive of the BPF, said: “What is often lacking in areas that are stalling is a coordinated vision that stretches over the next couple of decades.”
Is it worth fighting for?
There remains strong support for devolution among business communities.
Roger Marsh, chair of Leeds City Region Enterprise Partnership, said devolution was the “economic opportunity of a lifetime”.
He added: “The lack of an agreement for Leeds city region at present is bad news for the vision of an interconnected, globally recognised and economically vibrant northern powerhouse, and it’s bad news for the country.
“This is why the LEP will continue to offer its support in securing the right devolution deal for Leeds city region, one that will enable us to help create a stronger, fairer, more successful UK economy.”
Barrow, who spends his working day travelling between the cities of the Midlands and the North advising on how they can attract investment, said the cities with a clear, strong, devolved leadership would be better at attracting investment.
“The key thing for me is making sure the focus is on growth, investment and development,” he said. “That’s what’s going to move these economies forward.”
10 devolution deals agreed to date
34 devolution proposals received from local areas in England by September 2015
£246.5m additional investment funding per year, as part of devolution deals (£7.4bn over 30 years)
25% reduction in local authorities’ income between 2010-11 and 2015-16, taking account of central government funding and council tax, estimated Nov 2014
16.1m people living in areas subject to devolution deals
9 new mayors of combined authorities to be elected in 2017
155 staff in the Cities and Local Growth Unit
7 HM Treasury staff in its central team supporting devolution deals
