How to do decentralisation better

By:
10 Jun 16

The aims of the government’s devolution drive have multiplied, while the limits of centralised public finances are being exposed. More transparent ways of doing decentralisation are needed

How we are governed makes a difference to many of the things that matter in our lives. Dissatisfaction with the UK’s highly centralised system and its shortcomings has prompted a further episode of decentralisation of the governance system. Yet decentralisation in England since 2010 by both the coalition government and now the Conservatives is ad hoc, piecemeal and rapid. As 2016 rolls by, it is timely to take stock of where the current episode of decentralisation has got to, consider what issues it faces and where it is heading. A number thorny issues are troubling the current decentralisation agenda and ways need to be found to address them.

The purposes of decentralisation have multiplied and widened. It is unclear now what decentralisation is trying to achieve: unlocking local growth? Spatially rebalancing the national economy? Savings and public sector reform? Addressing societal challenges like climate change and ageing locally? Improving public accountability? All of the above? There is a lack of clarity about exactly what decentralisation is for, where it is heading, when, how and with whom. Clarifying the rationales and principles of decentralisation is a priority. Some kind of decentralisation ‘road map’ and process can provide some clarity to the vision, direction, purpose, principles and strategy to guide the practitioners and process of decentralisation in England.

‘Deals’ and ‘deal-making’ are the preferred methods of formulating public policy and allocating resources in the current episode of decentralisation. This kind of ‘informal governance’ is novel in the UK. It is good at empowering local actors, giving them a channel to talk to the centre, and it has encouraged strategic thinking, innovation, and governance reform. On the downside, deal-making is marked by a host of issues: uneven information and power between central and local actors; the centre’s ambiguous roles as supporter, appraiser and authoriser of the plans of local actors; limited capacity nationally and centrally under austerity; a lack of transparency; highly uneven resource allocation outcomes; slippage and prolonged timescales from announcement to implementation; and, limited evaluation of progress to date. Reforming deals and deal-making could be achieved through clarifying the principles, rationales, frameworks, criteria and timetables for deals; incorporating independent appraisal and approval and strengthening monitoring and assessment of delivery; sharing knowledge, experience and practice; and, enabling local actors to enforce, adapt and amend deals.

The ad hoc and piecemeal way in which decentralisation has unfolded in England has created complex, messy and inconsistent geographies that are proving hard to make sense of, untangle and make workable. The technical jargon of ‘asymmetry’ doesn’t quite capture the evolving picture. With a few exceptions, there is a distinct lack of geographical alignment and co-ordination between functional policy areas and institutions across local authorities, Combined Authorities, LEPs, education, health, police, transport and other partners and sectors. Deals and emergent pan-/regional ‘powerhouses’ and ‘engines’ are further complicating the geographies involved. Perhaps some kind of institutional innovation is needed to help align, co-ordinate and simplify decentralisation geographies. Some kind of ‘Decentralisation Commission’ might work if it had independence and authority to develop and appraise models and propositions of intermediate governance arrangements in England with variable functions and geographies, powers, resources and accountabilities.

The limits of the UK’s highly centralised public finance system are being exposed in the current episode of decentralisation. The national centre wants local government to find and stimulate new sources of revenue and reduce its financial dependence. Local government is keen to reduce its reliance upon reduced transfers from the national centre and to get meaningful powers, funding and taxes at the local level to deliver its public policy aspirations. But difficult issues and inertia prevent any more than modest and limited reforms. The national centre is nervous about meaningful decentralisation of fiscal powers because of its potential risks for the national priority of deficit reduction and aspiration for fiscal surplus and its enduring lack of trust in the capacity and competence of local government to take on further powers and responsibilities. As a legacy of working in a highly centralised public finance system, local actors lack knowledge, capacity, experience and confidence and are worried about future revenue sources especially in a context of reductions in public expenditure and the uncertainties and risks involved. The time is ripe for a rebalancing of the public finance system by reviewing the balance and nature of taxing, spending and redistribution between the central national and local levels, learning the lessons from evaluations of the place-based and multi-year funding pilots ‘Total Place’ and ‘Community Budgets’, and setting out transitional arrangements to reform the current system.

The new institutional landscape is raising serious questions of accountability, transparency and scrutiny. For some, it is the ‘Achilles heel’ of decentralisation. Decisions are being made by a narrow of cadre of actors behind closed doors, involving a mix of elected politicians, appointed officials and external advisors. Deals and deal-making are being conducted, negotiated and agreed in private by a small number of selected participants in closed and opaque circumstances and in a technocratic way. Many institutions and interests in the wider public, private and civic realms feel left out: business and their representative associations (alongside the uneven involvement of LEPs), environmental organisations, further and higher education, trade unions, and the voluntary and community sector. The wider public too appears little involved and is becoming increasingly disengaged and lacking faith in the ability of politics, public policy and institutions to make their lives better. More inclusive, transparent and accountable ways of doing decentralisation need to be found, developed and adapted to local circumstances. Means need to be explored to allow and enable a wider set of voices to be heard and more interests and opinions considered in order to make decentralisation more accountable, transparent and sustainable. Decentralisation must not be seen as an end in itself but as a means to better economic, social and environmental outcomes for people and places across England and the UK.

 

 • CURDS report Decentralisation: Issues, Principles and Practice is available here.

 

  • Andy Pike is the Henry Daysh Professor of Regional Development Studies at the Centre for Urban and Regional Development Studies (CURDS), Newcastle University
    Andy Pike

    Andy Pike is the Henry Daysh Professor of Regional Development Studies at the Centre for Urban and Regional Development Studies (CURDS), Newcastle University

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