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16.11.15

‘Unwritten rules’ on devolution could block fruitful deals – IPPR

Despite the government’s rhetoric around locally tailored deals, devolution deals come with a set of ‘unwritten rules’ that hinder successful agreements for counties, the IPPR has said today (16 November).

When Whitehall opened up devolution proposals to any region willing to submit a workable plan by 4 September, guidance around how deals would proceed was “consciously avoided”. Central government argued that local areas needed to work together to devise their own proposals to negotiate a deal with the chancellor.

As a result, county proposals that have been considered too small have been challenged and, in almost all cases when there is “anything other than modest ambition”, Whitehall insists on introducing an elected mayor – even though this governance model might not work in complex, multi-tiered counties.

In a report highlighting the difficulties counties face in the recent wave of devolutions, the IPPR claimed there is significant variation in the approach taken by different departments towards proposals put forward by county areas.

Regardless of the potential the Cities and Local Growth Unit holds for county stakeholders, several government departments require “intensive bilateral negotiations” and hand the Treasury the final say. These difficulties are exacerbated by the fact that central government itself was not prepared for the sheer number of devolution proposals it received in September, the IPPR claimed.

The lack of any guidance around devolution bids also brought to the surface a series of “fundamental tensions” around the real purpose of Whitehall’s strategy. Although the original intention was to spark economic development, the “permissive nature of the bill” opened up opportunities in public service reform – an aspect particularly interesting for counties.

“In many respects, economic development and public service reform are two sides of the same coin, but outside of cities they can have quite different implications for the scale and nature of proposed governance arrangements,” the report continued.

Several other tensions worsen the county-level outlook amid the wave of city region deals. Whitehall’s enthusiasm for bigger geographies, for example, may be logical in terms of strategic planning, but makes little sense when considering the adoption of an elected mayor or a single combined authority.

The report added: “And in all these deliberations, the democratic dimensions of devolution seem to be secondary to the expediency of getting a quick deal done. In truth, there is significant risk that unless there is greater public deliberation, more business involvement, and greater clarity of process, many people will treat English devolution as a cynical transfer of powers between national and local political elites.”

The obstacles placed between county areas and workable devolution arrangements are highlighted even further when considering that counties cover 86% of England’s landmass, represent half of the country’s population and have seen a 26% rise in new businesses.

Ed Cox, director of IPPR North, said: “Counties need devolution every bit as much as the big cities and, with the right support and empowerment, there is a massive opportunity to unleash their economic potential.

“Devolution deals can drive economic development, but the process needs far more understanding and flexibility from government to work for the counties, who have different needs and organisational structures.

“The danger otherwise is a one-size-fits-all approach to mayors means huge swathes of the country are cut off from the benefits of devolution, stymieing their potential to grow and reform public services.”

Recommendations

To ensure that counties do not miss out as a result of a lack of guidance, and steer clear from a one-size-fits-all approach, the IPPR recommended a series of changes to how deals are made.

There should be greater clarification of the purpose, process and timescale for devolution deal-making, for example, with more cohesion and collaboration between central government departments.

Whitehall should also establish a “principle of coterminosity” with local enterprise partnerships (LEPs) for economic development deals, including examples where combined authorities work together within a LEP footprint.

Other models of accountability beyond a directly-elected mayor should also be explicitly accepted, since they could be more appropriate for county areas – including the potential for an elected county mayor.

And there should be a greater emphasis on sharing good practice between areas working on devolution deals in order to build local capacity to implement changes.

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