Tuesday, 26 July 2016

Brexit: and devolution: "Devolution is a great opportunity after years of oppressive centralisation"

The issue of devolution is still very much on people's and politicians' minds:
Futures Forum: Devolution for Devon and Somerset? >>> a call for public consultation and more concrete facts

The referendum has focussed minds in particular:
Futures Forum: Brexit: and devolution >>> this will not include a Devon-and-Cornwall entity
Futures Forum: Brexit: and local democracy ... of devolution and cuts in local government
Futures Forum: Brexit: and devolution in the South West

And things are hotting up:
Mayor asks London Finance Commission to bring forward proposals for post-Brexit devolution — MayorWatch
Brexit: What are Scotland's options? - BBC News
Brexit prompts First minister to call 'one of the most important cabinet meetings since devolution' - Daily Post

This piece has a 'city' perspective - but is of interest to those of us in the country:

“Osborne’s legacy is arguably one of centralisation”: so what would real devolution look like?

By Craig Berry 3 hours ago

One of the less discussed side-effects of Brexit has been the complete collapse in the market for photographs of George Osborne in high-vis jackets. Sad. Image: Getty.

Devolution is a great opportunity. After years of oppressive centralisation, devolution deals offer local authorities a chance to break free and forge their own approaches to economic development.

As it stands, however, the devolution agenda encompasses myriad risks and challenges for local authorities, with city deals characterised by unnecessarily conservative ambitions, a series of policy missteps and, at root, a flawed economic philosophy.

George Osborne was right to push for devolution as forcefully as he did – but his “my way or no way” approach to city deals seriously jeopardised the agenda’s credibility. If new prime minister Theresa May means it when she preaches inclusion and rebalancing, then Osborne’s departure is an opportunity to reset regional policy in a more sustainable direction.

But if devolution is to succeed, several things will have to change, and quickly.

Where Osborne went wrong

Above all, local authorities need to be unshackled from austerity. As I argue in Austerity Politics and UK Economic Policy, local government is perhaps the one area where austerity really has meant austerity, with local public services having been cut to the bone. Devolving depleted budgets is self-defeating.

City deals have to date also focused rather too much on devolving the responsibility to deliver national policy, rather than the responsibility to decide on how best to support local economies. And too often, delivery requires local authorities to outsource the actual administration of, for example, employment support programmes, relying on many of the same firms hitherto contracted by central government.

Osborne’s legacy is arguably one of centralisation rather than decentralisation, especially in relation to fiscal policy. Councils have been permitted to raise the largely regressive council tax – but only if they intend to spend the proceeds on replenishing squeezed adult social care budgets.

Similarly, the government has outlined plans to allow councils to retain all of the business rates revenue raised in their area, but offered very little freedom to redesign the tax, even though rates revenue is intended to replace central grants to local authorities over the medium term. The result will inevitably be greater inequality between areas with a highly developed private sector, and those looking to build one. All the while, much-needed additional borrowing powers for local authorities are nowhere to be seen.

A generous interpretation is that city deals have encompassed the devolution of micro-economic policy. Of course, macro-economic policy, almost by definition, cannot be devolved – and there is no evidence that national policy-makers take the needs and interests of different localities into account within making macro-economic policy.

In other words, the devolution agenda remains indebted to neoclassical ideas around “agglomeration” and self-sustaining markets, which implore government (at all levels) to simply get out of the way. It is a perspective which chimes with “Treasury view” traditions, and it is revealing that the Treasury has been almost solely responsible for the devolution agenda within central government. It has led to a deal-making process typical of Treasury statecraft, not least because the Treasury, insofar as it controls all public expenditure, always holds the strongest hand.

The configuration of devolution deals around city-regions is, in general, the correct approach, insofar as city-regions represent meaningful economic spaces. Yet it has been too rigidly applied, with some incredibly messy results, with too many square pegs have been forced into metro-shaped holes. Officials have paid insufficient attention to the risk that devolution done badly can increase geographical inequality, or to the opportunities inherent in enabling large cities with different strengths to work together.

We need a real deal for progressive devolution. Given the extent to which the growth plans in operation in almost every Local Enterprise Partnership area depend – often just implicitly – on increased exports to Europe, and the extent to which public investment in deprived areas was underpinned by EU structural and investment funds, Brexit underlines this imperative.

How to fix it

My report The Real Deal: Pushing the Parameters of Devolution Deals, co-authored with colleagues at the Sheffield Political Economy Research Institute and the Centre for Local Economic Strategies, argues that it’s a mistake to focus on what local government needs to do, or how local government needs to change. Rather, the first step to devolution is reforming the centre.

The current devolution agenda answers the question, “What should be devolved?” A progressive approach to devolution would instead ask, “Where should power reside?” Let’s rethink from first principles the powers that central government has, rather than simply gobbling up the ones it is willing to give away.

It needs to be underpinned by a new constitutional settlement on centre-local relations. We also need a meaningful industrial strategy – something else May is promising – informed by the local, but led by the centre. Industrial policy involves the mobilisation of economy-wide resources in support of strategically important industries; by definition, local economies cannot do industrial policy alone.

Our report goes on to outline 11 sets of ideas around specific areas of policy relevant to the devolution debate (housing, transport, local banking and so forth). We seek to go with the grain of existing devolution deals, but broaden out their scope.

The devolution of employment support programmes, for instance, should see local authorities allowed to use these programmes strategically to support local economies, and not to force individuals into “any old job”. Councils should also be given more powers – including over tax – to shape how land within their jurisdiction is used, and see planning veto powers supplemented by the ability to shape local housing markets.

The scope of progressive devolution, however, goes beyond local authorities. All “anchor” institutions, particularly large public sector employers, could be doing more to support the local economies in which they are situated through procurement. Universities, in particular, should be better integrated into local economic governance – although this would require a decentralisation of research funding.

Underpinning all of this is the need for devolution to be a genuinely democratising moment. To succeed over the long term, the process will require much greater levels of citizen engagement in local politics, so strings-attached city deals have to be suspended while residents are consulted.

Many parts of the UK demanded the right to “take back control” on 23 June. Let’s give it to them where it really matters.

Craig Berry is deputy director of the Sheffield Political Economy Research Institute at the University of Sheffield. He has previously worked at HM Treasury, the International Longevity Centre-UK and the Trades Union Congress.

“Osborne’s legacy is arguably one of centralisation”: so what would real devolution look like? | CityMetric

This is a piece from Cambridge from earlier in the week:

Why devolution must survive the Brexit vote and move power out of London

Public Leaders Network

Theresa May’s government needs to publish a single, clear national policy document explaining the objectives and delivery of English devolution. Fast

Cambridge faces a desperate shortage of affordable housing for rent. Photograph: Alamy

Lewis Herbert

Wednesday 20 July 2016

Devolution is close to the hearts of many councils in English cities and counties committed to genuine reform and greater local powers. But how will this vital policy fare under Theresa May’s government and the economic turbulence following the Brexit vote?

The governance of Britain centralises power in the hands of fewer than 50 people, those in government who in former times had places reserved in nuclear bunkers. The risk in a nation unprepared for Brexit and, with the end of EU led-legislation, is of even more power aggregated in London.

Fortunately, the government has the kernel of a strong policy for English devolution, and I expect it to be a positive legacy of the work of former Chancellor George Osborne’s team, and other devolution architects, nationally and locally. While the first phase has been tightly controlled and managed by Westminster, there is a real prize if future discussions are truly joint. There are opportunities here for linking social service and the NHS, creating more apprenticeships and jobs, a say over unused local government land and working to integrate and improve bus, rail and road transport.

But as I wrote in March, there is also concern that, under devolution, mayors could be more the servants of Whitehall than of their local voters. And too much thinking about devolution has gone on behind closed doors, rather than asking the public for their priorities.

This democratic deficit needs to be addressed and the public will need to be far better engaged in future. Transparency, public scrutiny and clear accountability are central to effective devolution. And let’s not impose mayors: if mayors are still to be a devolution requirement, they should also be subject to local referendums.

There is also a big gap in this initiative that needs to be filled by May’s government. How many other countries starting a major devolution of power from central to local government would do so without a single, clear national policy document? I’d say none. We need that gap filled by Christmas, with a document explaining the objectives and delivery of English devolution.

Why devolution must survive the Brexit vote and move power out of London | Public Leaders Network | The Guardian

Other cities are pushing for more powers:
Devolve schemes for unemployed, says London mayor Sadiq Khan | Politics | The Guardian
Devolution call gathers pace in aftermath of Brexit vote - Yorkshire Post
What does Brexit mean for Manchester and devolution? - Jennifer Williams - Manchester Evening News
Northern powerhouse plans must continue, says Jim O’Neill — FT.com

There are fears, however, that with cash being rather strapped, that devolution will be scrapped:

Devolution failing under 'austerity cosh'

Thomas Bridge 21 July 2016

Devolution deals with councils are being squeezed by ‘narrow negotiations’ with Whitehall that were ‘stacked in favour of the status quo’, a new report has claimed.

A joint study from the Sheffield Political Economy Research Institute and Centre for Local Economic Strategies (CLES) said devolution is failing under the ‘austerity cosh’.

It also said the Government’s approach to decentralising powers had been ‘underpowered’ and ‘too constrained by the Treasury’s economic and social model’.

Chief executive of CLES, Neil McInroy, said: ‘It is increasingly clear that present devolution - whilst a unique opportunity - is flawed. Whilst the deals have started to reverse some of the problems of over-centralisation, devolution has been too constrained by the Treasury’s economic and social model, and cowed by the ongoing austerity, in which the poorest areas have suffered the most.’

Visit The MJ (£) to find out why progress on handing housing powers down to local authorities in the 11 devolution deals is being seen as ‘slow, piecemeal and undermined by centralising tendencies and inappropriate national programmes and targets’.

Devolution failing under 'austerity cosh' - LocalGov

Which is pretty much the message from planning professionals:

Devolution ‘failing’ to address national problems

James Richards 22 Jul 16

Devolution in the UK is failing to address the country’s pressing political, social and economic problems, according to a report.

The Real Deal: Pushing the parameters of devolution explores the current state of devolution in the UK, and urges local authorities to seize the opportunity to forge a distinctive economic and social future.

It puts forward 11 proposals in areas including employment policy, transport, energy and environmental policy, housing and land use, health and procurement. The paper was published in collaboration between the Centre for Local Economic Strategies and the Sheffield Political Economy Research Institute (SPERI).

The authors claim that the recent vote to leave the European Union represents an opportunity to rethink central-local relations in the UK, and urged Theresa May’s new government to reset the devolution agenda. There was now a chance to roll back “oppressive centralisation” whereby local and combined authorities would be able to forge a distinct economic and social destiny.

However, the report warned that when the UK leaves the EU, many local areas will lose a substantial chunk of European structural and investment funding, which the government had yet to confirm it will replace. Also, the fact that the Leave vote was strongly backed in regions that benefit most from European funding, is evidence that voters want to exercise control within their own communities, authors said.

Devolution ‘failing’ to address national problems | Public Finance

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