Decentralisation is no longer a question of ‘if’ – it’s a question of ‘how’

Last week in Greater Manchester, the City Growth Commission welcomed a dozen individuals from academia, businesses and local authorities to publicly share their thoughts on the role of cities in stimulating economic growth. On the heels of the Commission’s first report, Metro Growth: The UK’s Economic Opportunity, the Commission is seeking to identify the main factors limiting cities’ growth and the policy levers needed to maximise growth potential.

Those providing evidence were incredibly forthcoming in their analysis of what was holding cities back, but also optimistic about the ability of cities to overcome these barriers in future. The consensus in the room was that while there may be specific issues with skills, connectivity, and housing for example, problems in these areas continue to persist because ‘one-size-fits-all’ policies are rolled out across the nation to address differing needs locally. Autonomy at a local level is denied because, as Lewis Atter (who leads on Infrastructure Strategy at KPMG) explained, “Central government doesn’t have a view at all on local growth. There is only a cost side, scorecard and resource capture. There is no sense of how interventions contribute incrementally to national growth.” For instance, cities would be better equipped to raise qualification levels and tackle worklessness if they could oversee skills provision, which is a prospect the Commission will be exploring in our next report.

Where efforts have been made to decentralise power, government should still be cautious about claiming success. Eammon Boylan, Chief Executive of Stockport Council, warned that there is danger in seeing combined authorities and elected mayors as a panacea. What may work for one city is not necessarily right for another, a point which also clearly emerged from a retrospective of the past 30 years of attempts to devolve power to the UK. The Institute of Government categorised the success of combined authorities and elected mayors as ‘mixed’, concluding that the limited adoption of such evolutionary or ‘opt-in’ models of reform signals that the shift in power has yet to be embedded.

It’s not that Whitehall is oblivious to calls for decentralisation. When Lord Heseltine proposed devolution of funding from central government to Local Enterprise Partnerships (LEPs) in 2012, heads in government were quick to nod along in harmony, although hands unfortunately didn’t loosen up on the purse strings of the Treasury – fiscal devolution creates anxiety at the centre. Drawing on her experience from local government, Lorna Fitzsimons of The Alliance Project and former MP of Rochdale, explained to the Commission that while central and local government may agree on the outcomes they want to achieve and roles they each play, but the centre often has difficulty letting go. The Treasury in particular needs to feel that the risk of relinquishing control is minimal, which is why phases or pilots should be seriously considered as devolution is pursued.

The feeling in the room was that in spite of previous setbacks, devolution of political power to the local level is inevitable. Sir Richard Leese, leader of Manchester City Council, highlighted the recent lecture given by Ed Miliband, committing to a reimagining of public services which aims to put power back in the hands of people and their local government. Leese felt that Miliband made it clear that politicians had not only been listening to arguments in favour of devolution, but are now ready to respond in a meaningful way. If the next election hinges on who can be the most radical on this front devolution will certainly be back on the table. The most pressing question is how powers should be best distributed at different scales. In making the rhetoric a reality, the economic outlook for cities will improve as cities are allowed new freedoms to pursue their growth agendas.

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