John Bosworth of Ashfords solicitors on why devolving powers to England’s regions is inevitable.
The recent news that a deal has been struck between the Treasury and the Greater Manchester Combined Authority that will lead to devolved powers to the authority may have sounded to some like a knee-jerk reaction to the Scottish independence referendum in September and the promise of further powers to Scotland and Wales, but it represents the first step in a long-term objective of devolving powers to the English city regions.
Ever since the referendum votes in 1997, which decided to devolve powers to the Scottish Parliament and the Welsh Assembly, there has been pressure to achieve a similar devolution of powers to the English regions. However, despite the calls for English devolution the support has not been universal: Labour’s attempt in 2004 to create elected regional assemblies was soon consigned to the waste bin, after an overwhelming “no” vote by the north east, the first region that was asked to consider the question.
It was presumably this democratic rejection that has more recently led the current chancellor to bypass the electorate in his plans for English devolution and instead to deal direct with local government leaders.
Greater Manchester had long argued that the region deserved more powers, and recently its leaders have been pointing out that its population is almost as big as Wales and its economy is bigger, yet it has far less freedom over the region’s funding and spending priorities.
All of this led to the agreement reached at the beginning of November this year between the government and the 10 Councils that comprise the Greater Manchester Combined Authority. The agreement requires that there be a directly elected mayor (from 2017), who will be answerable to the existing council leaders. They will have the power to overrule the mayor if two thirds of them disagree with the mayor’s decisions.
The Treasury has agreed to hand over a total of £1bn of spending decisions on many areas, including a £300m housing investment fund and a devolved multi-year transport budget, to the mayor and certain other spending decisions are being devolved to the Combined Authority, for example in relation to business support, further education, apprenticeships and the integration of health and social care. However, no finance raising powers are proposed, only a freedom to decide how to spend existing budgets, instead of those decisions being taken in Westminster. The elected mayor will also take on the role of police and crime commissioner as well as be given the opportunity to exercise spatial planning powers.
It is understood that hot on Greater Manchester’s heels are Liverpool, Leeds, Sheffield and Newcastle-led local authority groupings while in the east and west midlands town halls are also negotiating agreements. And many more councils are now also asking to follow the Greater Manchester model. Recently more than 100 council leaders in England together asked the government to allow them more powers to run their own affairs. In a recent letter to The Observer, leaders of 119 councils – including 65 Labour, 40 Conservative and 10 of the Liberal Democrat – warned that English voters would not accept greater devolution being given to Scotland unless there was a similar redistribution of power south of the border.
If the Greater Manchester model proves a success then it is not hard to imagine that tax-raising powers may also follow. A report this summer from the House of Commons Communities and Local Government Committee argues powerfully for the giving of tax-raising powers to the English regions. Compared to other nations, it found that central government has far more control over both local tax raising and spending decisions. Accordingly it concluded that it was entirely reasonable for local authorities to aspire to greater control over their money raising and spending decisions.
With greater autonomy being promised to Scotland and there being little political agreement in England for any sort of English Parliament it seems almost inconceivable that Westminster and Whitehall is going to maintain its current controls over regional spending (and tax raising): shifting these powers to the English regions, piece by piece, appears to be the pressure valve that will defuse demands for a more radical political settlement in England.
John Bosworth is a partner at Ashfords solicitors
