Latest Public Sector News

08.04.14

Labour pledges power ‘devolution’ to councils

Labour has promised to devolve more powers to local authorities over transport, housing and employment to help close the “productivity gap” with London, if it wins power at the next general election. 

Speaking in Birmingham, Ed Miliband stated that Labour’s objective is for a radical devolution of economic power to unlock the growth potential of all of the country. 

In a letter sent to every local government leader, every Local Enterprise Partnership (LEP) and every university, the Labour leader laid out his party’s plans to “earn” the country’s way out of the “cost-of-living” crisis. 

It reads: “Over the past year Lord Adonis has been developing a roadmap for how we would achieve this and today we are announcing the first conclusions from this review. His conclusion is that we will only develop the middle-income jobs we need to tackle the cost-of-living crisis if many more of our cities and towns are able to become engines of growth.” 

To drive this growth a “radical” devolution of powers must be delivered in return for stronger governance and economic leadership across the country. As part of the deal, every city and county region will have to show it can deliver real economic leadership including by: 

  • Putting in place stronger political governance to drive economic leadership and decision-taking over a functional economic area through Combined Authorities or Economic Prosperity Boards;
  • Strengthening the role of independent LEPs with a single LEP coterminous with the city and county regions, not only providing vision but also with greater powers, resources and a clear role in decision making; and
  • Developing an economic strategy, clearly focused on the creation of well paid jobs and reducing any productivity gap between the city or county region and top performing regions of the UK, so that those jobs can be supported. The city and county region authority and LEP will co-produce and agree the economic plan for the area and back it up with public and private investment. 

Miliband added: “The country that once built its prosperity on the great towns and cities, like Birmingham, Bristol, Liverpool, Leeds, Manchester, Glasgow and Cardiff, has become a country which doesn’t do enough to build prosperity in England outside one great capital city: London. We need a prosperous London. But we need to build prosperity outside it too.” 

Following the proposals outlined by Lord Adonis, city and county region authorities and LEPs will receive powers to directly invest in infrastructure such as transport and housing; have greater control over skills budgets, alongside business control of the funding of apprenticeships through LEPs and sector bodies; they will lead on delivering the Work Programme, with city and county regions able to use local knowledge to decide which providers to use to get people back to work; and ensure that city and county regions benefit directly from the proceeds of growth in their area. 

Miliband added that centralisation has for “too long held back the country’s regions from being able to deliver a coherent vision and plan for future economic success”. 

The coalition government has agreed to deliver 28 City Deals across England, which are based on fostering job creation, deregulation and business growth. Ministers say they have followed through on the recommendations of a 2012 report by former deputy prime minister Lord Heseltine, which called for £49bn in resources to be transferred from Whitehall to the regions. 

But Labour suggested that these actions do not go far enough, and that the transfer of “real powers” to towns and cities is essential to rebalance the economy and stop the output gap between London and the rest of the country widening. 

(Image by Joanna Kiyoné) 

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