By Richard Johnstone | 27 June 2012
The government is set to offer greater devolution to English councils later this year in a move that will signal a ‘very radical’ extension of economic powers to local authorities.
In an exclusive interview, local government minister Greg Clark told Public Finance he would outline a proposal for greater devolution to town halls once the first round of bespoke ‘city deals’ are completed.
Two city deals – with Manchester and Liverpool – have already been struck and the Local Government Association has called for counties to also be able to negotiate such pacts.
Clark, the minister for decentralisation and cities, said the agreements, which offer councils greater control over local economic development, would mark a permanent shift in the ‘effective constitutional settlement’ of the country.
‘When we reach the point where we’ve concluded our work with the eight core cities, which I hope won’t be too long now, I will make a proposal for how other places can then engage,’ he told PF.
Deals with the remaining core cities of Birmingham, Bristol, Leeds, Newcastle, Nottingham and Sheffield will be concluded ‘in the months ahead’, Clark said, confirming that negotiations are advanced and ‘good progress’ was being made in all cases.
An extension to Liverpool’s deal is also likely, following the election of the city’s first mayor Joe Anderson on May 3. An agreement has already been reached over what Clark called phase one, which gave Liverpool City Council greater local control over the Work Programme and created a Mayoral Development Corporation. ‘We’re already negotiating with the mayor of Liverpool the second stage of the city deal, and are well advanced.’
Clark told PF that the fact authorities other than cities wanted to agree such deals showed ‘what a powerful policy this has been’ since negotiations began last November.
‘I think you’ll see that the city deals, only nine months in the gestation so far, are going to be extended very radically across the country.
‘I’m someone who passionately believes in greater decentralisation of powers, greater localism, and I would like this approach to be extended far and wide. There is a particular interest in securing the future of urban Britain, given the powerful contribution to growth that cities can make, but there isn’t a part of the country that couldn’t benefit from greater powers if they’ve got the leadership capacity and strength to take those powers on.’
Andy Sawford, chief executive of the Local Government Information Unit, welcomed the move saying it would create a ‘level playing field’. Extra powers would help authorities maximise the benefits of business rates localisation from next April, he added.
‘One of the things we have been saying is that we want to see the sort of discussions that have been happening with the cities extended to all local authorities,’ Sawford said. ‘Any opportunities to discuss this with the Department for Communities and Local Government is great.’
Labour’s shadow local government secretary Hilary Benn also urged the government to open up its ‘narrow approach’ to devolving powers.
Benn told PF: ‘Both Ed Miliband and I have been calling for far bolder devolution from Whitehall and that means a radical new offer – an English New Deal – that would be open to all authorities. A deal in which powers on transport, housing, skills, and ways of boosting economic development are devolved but with local government deciding the basis on which it wishes to receive them.
‘Government shouldn’t be poring over a selection of approved cities and deciding which councils to add on to the bottom of this list. All local councils – big cities, small cities, counties and districts – should be empowered so that places can take far greater control of their own future.’
Clark also shook off suggestions that the government’s mayoral policy had been a failure after voters in nine out of ten core cities rejected elected mayors in local referendums. He said he was ‘a big fan of mayors’, adding that an increase in the number of cities being run by mayors represented ‘progress’. The mayor would ‘make a big difference’ to Liverpool (where the council voted to adopt a mayoral system) and Bristol, he predicted.
‘At the beginning of 2011, there was only one mayor of a big city in the whole of Britain, in London. By the end of 2012, we will have a mayor of London, a mayor of Bristol, a mayor of Liverpool, a mayor of Leicester [who took office last May].
‘So in terms of the 12 cities that were part of the coalition agreement to have these referenda, a quarter of them will have directly elected mayors. The mould has been broken.’
The creation of mayors and city deals represented permanent devolution from Whitehall, he added.
Citing the example of the capital, Clark said it ‘would now be virtually impossible for any government to deprive London of a mayor’.
He said: ‘Even though obviously an Act of Parliament could be passed by any government to abolish the mayoralty of London, the real consequences of that would make it simply unthinkable. So there has been an effective constitutional settlement between national government and London, which is palpably there.
‘The powers that we devolve in the city deals, would be impossible to take back, practically, because the people in the cities would just not stand for it.’
However, Clark stopped short of backing calls for the introduction of a formal constitutional agreement between local and central government. The Commons political and constitutional reform select committee, chaired by Labour MP Graham Allen, is examining the need for a such an arrangement between Whitehall and town halls.
Clark said this was a ‘reasonable debate’ to have, and said he had not yet ‘reached a final view’. He added that Whitehall was embracing localism ‘more rapidly than I would have thought was possible two years ago’.
