All the main political parties support greater devolution, but governments often don’t deliver on these promises. What is needed is a culture change that sets local control as the default option
Whatever the result of Scotland’s independence referendum, greater devolution would seem to be inevitable across the UK.
As Iain Macwhirter points out in Public Finance’s cover feature this month, a ‘No’ vote on September 18 will trigger a number of compromise measures extending Holyrood’s powers. A ‘Yes’ vote would obviously take us into a whole new world.
Meanwhile, the Wales Bill should get Royal Assent later this year, allowing the Welsh government to borrow money and control some taxes. And in Northern Ireland, elections take place in May to 11 super councils with additional powers.
But it’s not just the UK’s nations that are seeking to take control from the centre. Cities across the four countries are eager to capture the economic and political powers that have made London such a vibrant and productive capital.
Some progress has been made with the coalition’s embrace of ‘City Deals’ and ministers’ acceptance – in principle if not hard cash – of Lord Heseltine’s No stone unturned review into stimulating economic growth.
More recently, Ed Miliband committed a Labour government to the ‘biggest economic devolution of power’ in 100 years, outlining plans to transfer £20bn from Whitehall budgets to city regions.
The direction of travel is clear, but there has to be doubt as to whether the journey will be a swift one. Labour, like the Conservatives and LibDems when they were in opposition, talks a good talk on devolution. But election tends to adjust priorities.
Labour in power was reluctant to cede control and took away many of local government’s responsibilities. Under the coalition, the current local government secretary has adopted a policy of ‘muscular localism’ – dictating both a council tax freeze and the frequency of bin collections.
What is needed is a culture change that sets local control as the default option. As Graham Allen, chair of the Committee on Political and Constitutional Reform, suggests in PF, the relationship should be one of peer-to-peer rather than father-to-son.
The Treasury ’s well-rehearsed argument – that growth in cities is a zero-sum game with gains in one area offset by lower activity elsewhere – needs to be challenged.
Perhaps Jim O’Neill, economist and former Goldman Sachs Asset Management chair, could be the person to do this. Now heading the City Growth Commission, O’Neill tells PF that increased fiscal devolution to cities is a ‘necessity’ and should be ‘top of the agenda’.
His is a powerful voice to add to the growing devolution consensus.
This article first appeared in the May issue of Public Finance magazine
