It's time for Osborne to act on devolution

Written by Paul Watson on 20 November 2015 in Opinion
Ministers may talk a good game on devolution, but the government is refusing to let regions to stand on their own two feet

Next week’s Autumn Statement represents a significant opportunity for George Osborne to reduce the financial burden on Whitehall and at the same time kick-start growth across the country. But if his track record thus far is anything to go by, the opportunity will once again slip by without even being referred to, let alone grasped.

Devolution is something this Government likes to talk a lot about, but it sees devolution through a very limited prism.

As the Cities and Local Government Devolution Bill makes clear, it only really sees power as something that can be centralised in large city regions outside of the capital, not spread around all our city centres. This is why you see devolution deals between cities that don’t normally hold much in common – from the recently signed West Midlands deal through to the North East. And, importantly, Whitehall stubbornly refuses to devolve fiscal powers allowing these regions to stand on their own two feet.

As chair of Key Cities – a group representing 26 mid-sized cities across England and Wales – I can’t help but be saddened by the missed opportunity. We have campaigned vigorously for the Government to truly devolve power. For us, that means taking devolution to all cities and letting those cities become self-sufficient by devolving tax-raising powers.

We have been calling for agreed five year funding settlements options based on a core package of economic powers and the option for individual cities to agree devolved funding for employment, skills, business support, housing and transport.

Our joint report with the think-tank ResPublica, - The Missing Multipliers: Devolution to Britain's Mid-sized Cities -  which called for greater powers to be awarded to our cities was welcomed by Greg Clark as an important contribution to the debate.

While Greg Clark might have an enthusiasm for the devolution debate, this is not matched across Whitehall. While we have had some positive words on business rates, we are yet to see sufficient detail to give us confidence that this will have a meaningful impact for our cities.

Certainly the flagship Cities and Local Government Devolution Bill does not devolve tax powers from Westminster to local authorities.

An amendment has been put forward that would provide for devolution of fiscal powers including the setting and revaluating local tax rates, banding and discounts. This would mean real devolution.

But if it is rejected, as I suspect it will, the ability of local authorities to find new ways to deliver on behalf of local people and businesses would be severely hindered, as would the Government’s desire to free itself of unnecessary and costly bureaucracy. There are those of course who feel that devolution is not about empowering local areas but rather reducing the size of Local Government.

So we go into the Autumn Statement and the Spending Review, hoping that we might finally see a full commitment to devolution from the Chancellor, offering a devolution settlement that includes fiscal powers and isn’t just limited to the big, established cities.  The arguments are clear - doing so benefits both our economy and democracy, strengthening the accountability of local government for the delivery and quality of services they provide.

The Prime Minister has said: “If we devolve the power and the money, we have to devolve the trust and the accountability as well.”

Local authorities are up for that challenge and we’ll take that bet anytime. If taxpayers believe councils are not meeting their needs, then they can express that at the next set of local elections. That’s how it should work.

Unfortunately, the current settlement means that we have all the accountability with little of the responsibility. But this is something the Chancellor can change – and I hope he seizes the opportunity.


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