Government must set clear timetable for devolution to cities

An ambitious new time-table for the clear and transparent devolution of power away from Whitehall to UK cities must quickly be put in place by the next government in order that agreements are made with all major UK metros by spring 2020, according to the latest report from the independent RSA think-tank.

Published today, with the support of Core Cities, the report calls on the government to establish an Independent City Devolution Commission (the equivalent of the Smith Commission on Scottish devolution), in order to quickly work up policy detail and guide draft legislation.

The report suggested that the Independent City Devolution Commission (ICDC) could be responsible for holding government to account for the pace and degree of progress on devolution, reporting annually to Parliament. The Commission would also evaluate ‘devolution bids’ from combined authorities, providing a comprehensive assessment as to whether they were ready for the additional risk and responsibility.

The RSA and Core Cities said that a clear framework for sub-national devolution is needed to bring transparency and legitimacy to what has so far been an evolving series of ad hoc deals and closed door arrangements, particularly in the context of a more variegated Union where the question ‘what binds us?’ is becoming more practically and conceptually profound.

The report warned that despite significant moves to support devolution to cities, no political party has so far committed to rethinking the processes and principles of local government finance, or how current and future devolution deals will feature in the next comprehensive spending review. Multi-year financial settlements are a pre-condition for genuine autonomy over local spending and investment, the report said.

The report follows the landmark RSA City Growth Commission report, published in October 2014, which called for the establishment of an Independent City Devolution Commission (ICDC) so that Devo Met could be delivered quickly for our major urban areas.

An ICDC would ensure that city-regions which can demonstrate competence, accountability and collaboration, and have the economic platform and potential to shoulder financial risks, should be able to enter into devolution negotiations with central government, the report said. Taking this process outside the political arena means that these negotiations would be based on independent assessment of the evidence, along clear and open criteria.

Suggested time-table for City Devolution

May 2015
Establish the new ICDC to work up the policy detail and guide draft legislation including:

• Enabling provision for metro mayors and other governance models designed to support strategic economic development and public service reform at the scale of the city-region;

• Specific powers to direct, spend or commission (jointly or solely) available for city-regions, subject to meeting certain criteria.

• Multi-year funding deals for combined authorities (or their constituent local authorities, as appropriate).

• Greater fiscal autonomy for Devolved Status city-regions recognised as having sufficiently mature integrated governance arrangements and robust track record in economic development and financial management.

June/July 2015
Queen’s Speech announces City-Region Devolution Bill with powers available for combined authorities, subject to their fulfilling economic and governance criteria set out by the ICDC. City-regions ‘metros’ would lead this process, given their weight and reach of economic activity. In time other places (e.g. county-based combined authorities) might also apply for Devolved Status, providing they can meet the eligibility criteria.

October 2015
RSA City Growth Commissioners publish independent assessment of devolution to cities, 12 months on since final recommendations, ‘Unleashing Metro Growth’.

Autumn/Spring 2015-16
Comprehensive Spending Review including provision for place-based multi-year commissioning and investment agreements.

Spring 2016
City-devolution legislation gets Royal Assent and puts Standing Devolution Commission on a statutory footing. The ICDC would continue to recommend to the PM/Chancellor whether individual metros should proceed to negotiate the specifics
of their Devolved Status (within a specified time period).

June 2016
ICDC publishes first annual report to Parliament evaluating Government’s progress on city devolution, including analysis of: which city-regions have received (or not) devolution agreements; specific powers that have been devolved, where and the principles underlying these (e.g. competence, accountability); and, how devolved powers have been used and to what effect. The report will also include a summary of the Committee’s advice on how cities’ bids might be improved (where applicable) and identify lessons for central and local leaders and policy makers.

Spring 2020
By 2020 Devolution agreements with major UK metros–including Belfast, Cardiff Capital Region, Edinburgh, and Tyne and Wear (Sunderland, Newcastle and Tyne Valley).

Commenting on the report, RSA Director of Public Services and Communities, Charlotte Alldritt said:

“While Greater Manchester’s devolution deal is a game-changing step towards integrated economic and social policy, major questions still remain. Are all places entitled to receive the same powers? How will these be determined and enabled? And what are the implications for central government, MPs and Parliament? It’s important that whoever forms the next government considers the barriers still in place and the current limits of the political party’s commitment to devolution. The creation of an Independent City Devolution Commission would help give both city regions and Whitehall a clear and transparent framework to worth with, so they’re no longer kept in the dark about the path ahead.”

Chairman and leader of Manchester City Council Sir Richard Leese, said:

"This excellent report from the RSA sets out some some clear and defined tasks for whoever is in Downing Street after the General Election. Step one is to create an independent devolution commission, a panel of experts who can decide what powers should be granted to which cities and their regions. The RSA report says that we are now at a moment of profound constitutional uncertainty. This report aims to give some clarity and transparency to the process. It also underlines the great potential of devolution to transform the fortunes of our great cities and the lives of the millions of people that live in them."

Issues that need to be addressed by Westminster, Whitehall and the Cities themselves

The report argued that the following issues need addressing if the UK is to resume a sense of stable and coherent political economy:

• Legislative: This is needed to make provision for new metro mayors, and will need to be drafted ahead of the 2015 Queen’s Speech to ensure inclusion in the first Parliamentary session. Ministers should seek to bring transparency and a sense of structure to a complex series of asymmetric governance arrangements.

• Public Service Reform: This is needed to improve outcomes and drive down costs, and in many instances this is proving more effective to design and deliver at a local level. National policy reform needs to support locally tailored and integrated public services, rather than – as at present – complicate devolution arrangements.

• Fiscal Devolution: The recently announced review into business rates and full retention of revenues for Greater Manchester and Cambridge suggests there are real opportunities for fiscal devolution. The most mature city-regions should be able to borrow more flexibly, leveraging private finance and the value of their public sector assets.

• Deficit reduction and a place-based Spending Review: Multi-year Local Government Finance settlements will be essential to enable places to invest strategically over five – 10 year periods, helping to manage down the deficit and enabling places, where they wish it, to become more financially self-sustainable.

• Capacity and Collaboration: Capacity for risk management, policy delivery and data analysis/evaluation varies between city-regions and some, whether for historic, structural of personal reasons, have yet to establish consistent collaboration between neighbouring authorities. Major metros across the UK will have to show they have – or are fast developing – the ability to deliver against new powers, responsibilities and risk sharing.

Notes to editors

1. For more information contact RSA Head of Media Luke Robinson on 020 7451 6893 or 07799 737 970 or luke.robinson@rsa.org.uk

2. Will Mapplebeck, Strategic Communications Manager, Core Cities UK 07932 568571