By Richard Johnstone | 20 January 2015
Relaxing the rules governing the formation of combined authorities will remove barriers to fiscal devolution across England, the chair of the Commons communities and local government select committee has told Public Finance.
Clive Betts, Labour MP for Sheffield Southeast, said plans for greater flexibility in membership of combined authorities – ending the need for member councils to share boundaries and allowing different functions to operate in different areas – matched the committee’s view of how they could reflect local priorities.
Under Department for Communities and Local Government plans, county councils will be able to join combined authorities and delegate powers over services such as transport, even if not all districts are represented.
‘Both of these particular recommendations – allowing councils to join that don’t have a physical link to other authorities and sorting out the problem of transport arrangements in two-tier areas – we made [in the committee’s report on devolution in England last July],’ Betts said. ‘I’m pleased the government has acted on both those issues.’
The committee wanted these restrictions removed to ensure authorities match functional economic areas. As these are formed, they should then become the level to which powers could be devolved from Whitehall.
The so-called ‘super councils’ – which currently exist in the Northeast, West Yorkshire, Sheffield and Liverpool city regions – show the way forward as they reflect ‘economic realities’, Betts said.
With others now being planned in Derbyshire, Nottinghamshire, Cambridgeshire and the West Midlands, the new flexibility will ensure they match functional economic areas.
‘The issue of an authority that isn’t attached to another authority in a combined authority area is particularly related to York, and their desire to join the Leeds city region,’ he added.
‘In the end, these boundaries should be local decisions. It shouldn’t be for central government to say what the boundaries of combined authorities are. That is what government has listened to.’
The decision to loosen the regulations around combined authorities could help more be created as a staging post to further devolution across the country, Betts said. ‘We’ve still got to convince politicians in the centre that devolution is anything more than allowing people to spend money in a slightly more flexible way. I think there is degree of change of attitude that we still need to achieve.’
So far, deals to increase local control over transport, skills and housing have been agreed with Manchester and Sheffield, with Manchester also creating an elected mayor. The next step is to convince Whitehall politicians to devolve revenue-raising powers, Betts said.
‘The prime minister and the chancellor have completely ruled out this government doing any fiscal devolution, while Labour is committed to a bit but not a lot,’ he said. ‘There is still some way to go to recognise that you can’t get real devolution unless you also have the ability to decide on taxes at a local level, as well as spending.’
Paul Watson, leader of Sunderland City Council and chair of the Key Cities group of 24 ‘mid-sized’ English cities, told PF the DCLG’s changes will allow authorities that share economic interest, such as tourism, to work together on economic development plans. ‘We understand that in the 21st century, governance for certain things on a bigger geographical footprint is sensible and the way to go.’
Frances Foster, treasurer of the Special Interest Group of Metropolitan Authorities (Sigoma) said: ‘With 30 Sigoma members already a part of combined authorities, we welcome the ability for authorities who do not share boundaries to collaborate more, as long as it remains voluntary.
‘That said, the new authorities do not address the fundamental issue of inadequate local government funding, which is undermining their ability to deliver vital services. Without confronting this it will be harder to see genuine gains made by simply increasing the number of combined authorities.’
