Devolution: the five key tests

27 May 15

Today’s confirmation of a City Devolution Bill should be the starting point for devolution go both further and wider across the country. The government should set out a roadmap to turn devolution from something granted by Whitehall into a starting assumption.

Today’s Queen’s speech will contain a City Devolution bill which will promising new devolution settlements that will give cities greater control over transport, housing, skills and healthcare provision in return for establishing elected mayors.

Chancellor George Osborne has made it clear that he sees this as a key task for the next Parliament and has argued that devolution offers the opportunity to ‘create a balanced, more healthy economy for working people across our United Kingdom’. The appointment of Greg Clark as Secretary of State for Communities and Local Government underlines the strategic importance of this approach, and brings the department to the forefront of it for the first time.

This is welcome news for those of us who have long argued that effective growth and sustainable public service reform both require a relocalisation of British politics.

It is clear though that this devolution must operate within some formal parameters set by central government, specifically the creation of an elected mayor.

‘It’s right people have a single point of accountability: someone they elect, who takes the decisions and carries the can,’ the chancellor argued in his first major speech after the election. ‘So with these new powers for cities must come new city-wide elected mayors who work with local councils.’

Mayors certainly provide a clear way of ensuring accountability, but will be interesting to see how this idea is sold in cities that rejected mayors as recently as 2012. In places like West Yorkshire it is being flagged up as a red line, though they were also saying that in Manchester until the 11th hour

We also need to see exactly what is on offer, are we talking about real fiscal devolution, for example, or simply devolving budgets? Before the election, Osborne told The Observer that he was ‘not closed off to the idea’ of councils setting business rates: it will be interesting to see whether that concept has any real traction.

For non-metropolitan areas the offer looks more limited with an extension of the City Deals programme. It remains to be seen whether this will placate Conservative county leaders who have been complaining increasingly publicly about the fact that devolution to date has been too northern, too metropolitan and too focused on Labour authorities.

At LGiU, we’d like to see devolution go further and go wider. And we want to make sure it is not limited by the processing power of DCLG and the Treasury.

As George Osborne himself said, getting Manchester through the Whitehall machinery and overcoming the political divide was difficult enough. So if we want to make real progress in this parliament we need local authorities and groups of local authorities in the cities and the counties to come forward with detailed and realistic proposals on how they plan to grow their local economies and improve local services and what powers they need to achieve this.

We suggest five key tests that central government needs to apply to these proposals:

 • Benefit: can it be demonstrated that the ‘Local Deal’ proposed will deliver real value for local people through economic growth and development, better or more sustainable public services, pooling of resources across services, improved infrastructure, or in some other way driven by local requirements?

 • Financial probity: can central government be confident that public money will be spent legally, honestly and transparently?

 • Financial management: how will councils ensure that return on spending is at least as effective as under the current system?

 • Ethical Standards: can it be demonstrated that the benefits of the local deal will be fairly distributed throughout the population?

 • Governance: are there adequate structures in place to make any new arrangements under the local deal properly accountable to local people? Accountability through the ballot box is an important part of this, but not all of it: local deals must also demonstrate how they will inform local people of progress and get continual feedback from them. 

Unless there is good reason to believe that these tests will not be met the default position of the government should be to agree these proposals. Thus we shift from devolution granted by government to devolution as the starting assumption. Only then can we fulfil the important promise set out in the Queen’s speech today.

 

Jonathan Carr-West is chief executive of the Local Government Information Unit

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