Time for county and district councils to jump on the devolution bandwagon

8 Jul 15

Devolution in England is gathering pace. In the Budget, the chancellor made it clear that he considered that the process of shifting power away from Westminster has only just begun.

Following on from the landmark announcement of the new devolution deal for Greater Manchester, incorporating the £6bn Health and Social Care budget, he announced that progress was being made on similar settlements for Sheffield, Liverpool, Leeds, as well as the county of Cornwall.

This final addition is particularly noteworthy, because, while much of the devolution agenda so far has been focused upon the largest cities. But towns and smaller cities, as well as county regions, are a crucial part of the UK economy, and it would be foolhardy, not to mention unfair, to prevent them from hopping on the devolution bandwagon.

However, extending devolution to other areas beyond the vore cities may require some flexible footwork from Whitehall. Cornwall was arguably chosen as the first county to gain wider powers because it is a self-contained area, with coterminous borders for healthcare, policing and economic development. It is also a unitary council and has a strong regional identity. Many other areas do not have it so easy.

Partly, this means that county and district councils need to ‘step up’, to put aside parochial differences and work together, alongside the Treasury and Whitehall, to overcome obstacles to devolution. The Cities and Local Government Devolution Bill, which is currently making its way through Parliament, allows for a wide range of powers to be handed down to combined authorities, and the government has made it clear that it is open to all proposals. The onus should now be on local authorities to work together to seize the opportunities of devolution available to then.

At the same time, there is still a distinct lack of due process for new and emerging combined authorities to follow. The government should set out in greater clarity the procedure for new and emerging combined authorities to follow to bid for greater powers, in order to encourage other areas to come forward with their own plans and to ensure that the devolution of powers from Whitehall proceeds smoothly.

Ultimately, however, the greatest obstacle to further devolution in England may be the precarious state of local government finances. The chancellor confirmed £37bn spending cuts are coming during the course of the Parliament, a move which is likely to have profound consequences for local government, who are unprotected from the pain.

To deliver a truly One Nation recovery, devolution must deliver for people living and working in the North. Among the key tests will be whether local authorities are able to boost wages and household incomes, reduce unemployment and poverty and promote investment.

But at present their hands are tied by their inability to raise revenue and reinvest the proceeds of growth. One first step to make progress on this would be greater local control over business rates, which is currently being explored by the government. The ultimate danger is that there is nothing left to devolve to.

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