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Devolution: A practitioner’s perspective

Peter Ware and Angela Konteas, from the government and infrastructure team at Browne Jacobson LLP, highlight the key aspects of devolution from a practitioner’s perspective and try to look ahead to the challenges that may need to be faced.

Chancellor George Osborne is widely seen as responsible for the insistence on metro-mayors

As debate on the Cities and Local Government Devolution Bill continues, the breadth of evidence given to the CLG Select Committee in its inquiry shows the significance of this deceptively short Bill. 

Consisting of just 25 sections, there is no room in the Bill for detailed provisions about how devolution will work. Nevertheless there are a number of surprising gaps, even for a statutory framework. For a start, there are no provisions on fiscal devolution or autonomy, despite increasing calls to devolve local powers to set and raise taxes. Constraints on local authority borrowing remain. The chancellor’s announcement on business rates retention is a good start, but even this is not mentioned in the Bill. 

Innovative, or just confusing? 

The lack of a template or vision of how local government will look encourages innovation, but is potentially also confusing and may inhibit an evolutionary approach to devolution deals. 

One of the great unknowns is how central and local government will cope with the change in culture. The vast majority of local authorities are now on-board and see devolution as a great opportunity. But does Whitehall share that view? Some departments clearly do, and the drive given to this agenda by George Osborne is to be welcomed. However, we will need to see more trust in local government to ‘get on with things’ without needing to micro-manage and intervene if devolution is going to be a true success. 

Making mayors accountable 

A headline-grabbing aspect of the Bill is the imposition of metro-mayors. For some, this is a step too far. But on the whole this seems to be the only route through which Osborne is prepared to offer substantial reform. 

The Bill does not specify how mayors will be accountable, other than the electoral cycle. Scrutiny arrangements for the mayor and the combined authority also divide opinion. The challenge of local and party politics should not be overlooked. Some might say the Bill has missed a vital opportunity to establish a governance framework to increase the general public’s (and taxpayers’) confidence in these new, essentially regional, ‘super-councils’. 

Public buy-in is yet another challenge. The postcode lottery of localism is already showing its face; County Durham is offering a referendum on its devolution deal while Newcastle says it will not follow suit. A recent BBC Local Radio survey shows widespread support for devolution in the northern regions, yet the same survey reported that 44% of adults in the north have never heard of the Northern Powerhouse policy. This is perhaps one of the most disappointing aspects of the current debate, as devolution should be seen as an opportunity to reinvigorate local democracy and the electorate. 

Perhaps success will speak for itself, although nobody is yet sure how success will be measured. One of the problems is that every deal is different. There is general consensus that one size does not fit all, but starting with a ‘baseline deal’ would help both consistency and negotiations for the local government teams. 

Devolution deals are the means, not the end 

It is possible that the limits of what is possible are not yet being tested because of the lack of cohesion between different areas. Having said that, it is clear from the Bill that the devolution deals are just the start, not an end in itself. Other than the ring-fencing of health functions in the current version of the Bill, all public body functions are potentially in scope. It will be for local authorities to prove they can handle the responsibility and build the trust. 

Meanwhile, austerity continues to bite following the Spending Review. As councils look to other ways of making the cuts – shared services, joint chief executives, etc – how will devolution at a combined authority level overlay onto these different responses to funding pressures? The pressure will also be felt by those officers who have a dual role, with one foot in the local authority and one in the combined authority. Conflicts of interest are bound to happen and the role of monitoring officer will be a challenge to say the least. 

The role of the private sector in devolution is another area not addressed by the Bill. Local enterprise partnerships are keen to formalise their seat at the table and the private sector is increasingly trying to find a way to influence local economics, but at the moment are taking very different approaches to their involvement with wider stakeholders, both public and private. 

Greater public engagement, private business involvement and local government reform has the potential to be a heady mix: the devolved future is both bright and uncertain.