Written evidence from Cornwall Council (EDE 35)
Public Administration and Constitutional Affairs Committee
The Evolution of Devolution: English Devolution
Cornwall Council is a unitary authority with a resident population of 569,578 [Mid-Year Population Estimates, 2020]. In 2015 Cornwall became the first and only non-metropolitan area with a devolution deal. While Government has historically favoured metropolitan combined authorities when it comes to devolution, the independent evaluation carried out by Warwick Economics on behalf of Government found that Cornwall has one of the strongest track records in using its devolved powers to deliver for the region. Five years on from the Cornwall Deal, based on our experience and lessons learned, we are in a good position to respond to the Committee’s Call for Evidence.
Cornwall, as the first and only non-metropolitan area with a devolution deal, has demonstrated that strong unitary authorities covering a functional economic geography can deliver real benefits for residents.
The first and most important lesson to learn from Cornwall’s experience is that the Government can proceed with confidence in devolving powers and funding to strong unitary authorities in non-metropolitan areas – and should give them parity of consideration when it comes to capacity building funding. Cornwall has been unable to draw on any capacity building funds which have been restricted to metro-mayor deals.
The second is that there is real potential to go further. The word ‘devolution’ is used to describe anything from one-off deals allocating funding to projects through to genuine devolution backed by the legislative transfer of power. We have been able to achieve the biggest benefits for people in Cornwall with the most significant elements of our devolution - such as bus franchising powers or our Intermediate Body status – where there has been genuine transfer of power and budgetary control.
The third is that a rebalancing of the central-local power partnership means Whitehall needs to change too – by organising itself to have a single conversation with places rather than Departmental silo’s, and by giving local place leaders a formal voice within the UK’s constitutional settlement.
1. Should there be comprehensive reform of the English devolution and local government system?
Yes. The “Levelling up” of economic performance at both local and regional level will require long term fiscal and policy decisions. There are no quick fixes or silver bullets as true levelling up will require long-term political commitment across a range of policy areas, including significant investment into the economic development of areas of the UK currently lagging behind and true devolution of responsibility for delivering against the levelling up agendas levelling up agendas, starting with Cornwall as the area furthest behind.
A large body of recent research reports conclude that the current centralised system of government funding and policy design, delivery and decision-making delivers sub optimal results in terms of levelling up and addressing economic inequalities between different areas of the UK. They also all support a more localised approach with devolution of budgets and decision making to local areas as a key design principle. A range of local, regional and national evidence has been used to inform our response to this question. Grant Thornton’s “Placed Based Growth – Unleashing counties’ role in levelling up England” report concluded that “With a geographic coverage that covers much of England, county authorities are well placed to meet this need. They are places where people live and work accounting for 46% of England’s population, 47% of its homes and 48% of its businesses. At a very simple level they are the ‘places’ individuals identify with, be that Surrey, Cornwall, Derbyshire or Essex. It is a combination of factors that places county authorities at the heart of place-based growth. They offer a broad reflection on different experiences, from those at the heart of driving economic growth through to those facing significant socioeconomic challenge”.
The report also suggested a number of “enablers” that are required to deliver place-based growth and in Cornwall and the Isles of Scilly we are confident that we have many of them already in place, including strong local leadership, quality of relationships, a partnership approach with governance structures that facilitate joint working, the creation of joint strategic plans, and clear communication.
Further evidence is supplied by the UK2070 Commission independent inquiry into city and regional inequalities in the UK as it states several times that “the UK is the most centralised of western democracies and as such the patterns of government expenditure are critical and at present a large part of Government expenditure per head is going to London. The regional patterns of inequality are deep and structural: the dependence on the Capital region with limited spill-over benefits; housing constraints; struggling communities requiring increasing support; investment in infrastructure has a short-term focus; and, the current economic conditions impact quality of life and threaten key environmental resources”. It also concluded that a huge gulf exists between the UK’s best and worst performing regions and towns. Research by Professor Philip McCann undertaken for the UK 2070 Commission compared the UK with 30 OECD countries across a broad range of 28 indicators. The report concluded that: “The UK is one of the most interregionally unequal countries in the industrialised world, and almost certainly the most interregionally unequal large high-income country.” See below.
Finally, it concluded that by enhancing local devolution, rolled out systematically with transfer of powers and resources to a comprehensive framework of mayoral and combined authorities, was required to deliver the decentralisation of central government functions for England in terms of budgets and ministerial responsibilities to align with local and transregional devolution.
A Joseph Rowntree Foundation report has estimated that dealing with the effects of poverty costs the UK £78 billion a year. London is at the leading edge of a broader national problem about house prices increasing to create growing problems about unaffordability and un-liveability for younger new entrants and the report highlights that this is also the case in peripheral rural areas like the Lleyn or Cornwall.
The continued concentration of economic growth in London and its wider region has been possible because of sustained public investment in infrastructure, yet the cost of low productivity in many regions of the UK acts as a severe drag on the economy. The chart below shows the extent of the disparity between London and the rest of the UK.
The report also states that for the past 50 years, government policy has been that spatial inequalities are undesirable, unacceptable and should be remedied. Policy labelling has been around unemployment hotspots or areas of deprivation rather than the potential of an area to create ‘new markets’ and unlock opportunities. Interventions usually arise as and when crises arise.
It concludes that this is a flawed strategic approach and that in order to help foster local growth, a combination of local place leadership with a clear long-term vision, leading strategic and local sustained action is needed in most areas. Furthermore, it suggested that there should be a twin focus on those key industrial sectors that will drive productivity and on the foundations of local economies. This is particularly important if policy interventions are not to end up excluding rural areas and marginalised towns from the wealth creating activity being promoted nationally. Our draft Local Industrial Strategy clearly articulates our desire to deliver this twin focus.
The Local Government Association commissioned Localis in 2020 to undertake a study into “Fiscal Devolution” and the opportunity to adopt an international approach “Rethinking Local”. The Chair of the LGA’s People and Places Board commented that: -
“As this report sets out, the UK is an international outlier, one of the most fiscally centralised countries in the developed world. Local authorities in Germany, Switzerland and Holland can access a diverse range of revenue sources. By contrast councils in England are only able to levy two taxes and both are subject to significant intervention and control by Whitehall and both stand increasingly exposed in the light of long-term changes in home ownership and business composition. As we look ahead towards the long process of economic and social recovery, this gap in local power and autonomy across England risks seeing our communities fall ever further behind”.
The Institute of Fiscal Studies have also recently published a report entitled “Sharing Prosperity? Options and issues for the UK SPF” and amongst its findings and recommendations it concluded that: -
All the above are national reports designed to further the debate around the “levelling up” agenda. They all conclude that the current centralised system of programme design, delivery and decision-making delivers sub optimal results and all support a more localised approach with devolution of budgets and decision making to local areas as a key design principle.
There are a number of cross cutting interventions from across Government purview that contribute to this levelling up. Interventions to “level” the per pupil allocation in the education system will help, over time, to ensure that attainment levels of rural and island communities (where the cost of delivery is often higher) and more deprived areas equal that of the our more affluent areas. In addition, increases in the investment in road, broadband and rail infrastructure outside the South East of England and the M4 corridor will help to ensure that all areas of England can benefit from improved connectivity to our major centres of population.
However, in addition to a re-allocation of existing Government spending there is an urgent need to replace the current EU Regional and Rural Development Programmes (i.e. 2014 to 2020 ERDF, ESF, EAFRD and EMFF) and other Government schemes designed to stimulate growth (e.g. Local Growth Fund, Getting Building Fund) with a UK Shared Prosperity Fund (SPF). The SPF must be an investment of at least equal value to current EU and national funding for economic development AND must have a razor-sharp focus on economic development activity with the specific purpose of making all areas of the UK prosper by placing those areas at the heart of the decision making for this fund. Beyond this there is also the need to devolve current levels of adult skills funding to local areas as that will allow us to respond more quickly to a very dynamic labour marketplace.
In addition, as the maps below illustrate, regional inequality in the UK is a more complex issue than a simple North/South divide.
The immense productivity gap that currently exists between the prosperous South East of England on the one hand and the rest of the country on the other must be therefore be levelled-up by investing in the LEP areas that are currently lagging behind. In addition, Government must recognise that for those areas that are outside the agglomeration impact of a city region, the need for an alternative to the current “trickle down” policy environment is paramount.
The economic shock caused by COVID 19, which the OBR estimates as the largest ever shock to the UK economy, has also hit some areas in the UK worse than others and this impact is expected to exacerbate the need for significant and sustained levelling up.
During the Covid19 crisis Cornwall and Isles of Scilly demonstrated strong place leadership. Through the Leadership Board a coordinated response was put in place swiftly to contain the virus locally and to support communities and businesses. Nowhere in the UK has the economic shock resulting from Covid19 been felt harder than in Cornwall and Isles of Scilly (CIoS). The CIOS local economy has been impacted more severely than any other area in the UK due to the importance of the visitor economy (1 in 3 private sector jobs in CIoS are linked to the visitor sector), the high prevalence of small and micro businesses and above average levels of self-employed.
The crisis clearly demonstrated that local knowledge and a tailored response is far more effective than a centralised ‘one size fits all’ approach. During the lock-down period CIoS demonstrated our ability to come together as an area to pool intelligence around the impact of the lock down on local sectors and businesses, effectively lobby for government support and efficiently distribute support and disseminate clear guidance and information. This coordinated response continues in the reopening and recovery phase.
As well as being the largest rural Unitary Authority we are also the first rural authority to receive a devolution deal in 2015 on which Cornwall has been delivering a strong track record – independently verified by the Ministry of Housing, Communities and Local Government, as well as in the Warwick Economics evaluation for BEIS. The Cornwall Deal has been a first step towards ‘closing the gap’ that characterises Cornwall’s position vis-à-vis national averages. By securing freedoms to design local policy solutions to the place-specific challenges of their rural and peripheral communities, Cornwall Council has delivered significant achievements, including crucial improvements to their transport infrastructure to better serve local need, the launch of a Growth & Skills Hub, and tackling the higher than average fuel poverty rate.
We bring to the table a strong ability to deliver a dynamic SPF investment programme. Based on our proven track-record of delivering on the Cornwall Devolution Deal, the CIOS Local Growth Fund and 20 years European Structural Funding programmes. Key to our offer is that Cornwall Council propose to take responsibility for the SPF programme and become accountable body for delivery and a full contracting authority. CIoS LEP led the development of the original CIoS ESIF strategy in 2013. The review of this process by Government commented that “there was evidence that LEP consulted widely with local businesses, communities and stakeholders in developing the strategy”. The ESIF strategy was also endorsed by Cornwall Council and Council of the Isles of Scilly. We have followed a similar process to develop our Local Industrial Strategy that will form the strategic basis for the proposed CIoS SPF Delivery Framework.
In recognition of the exceptional challenges and distinct opportunities faced by CIoS and its status as a Less Developed category of region, Government agreed to the establishment of an Integrated Territorial Investment (ITI) intended to inform investment of ESI funds over the 2014-2020 programme period giving a specific territorial focus on CIoS. The ITI was established as part of the HMG Growth Deal Agreement with CIoS in 2014. The ITI itself is underpinned by the ITI strategy which builds on and replaces the ESIF Strategy developed by CIoS LEP.
In a devolved SPF delivery model we would take the opportunity of designing a CIoS SPF programme outside of EU rules to significantly simplify the programme architecture and deliver a programme that is experienced as less bureaucratic for project stakeholders and which is cheaper to run for central government than the current EU programme. The aim of the local governance arrangements is to put in place a decision-making board which takes effective and efficient decisions about how to allocate funding locally that are fully accountable to citizens of Cornwall and the IoS, transparent and which have safeguards in place to manage any potential conflicts of interests. This would ensure that funds are allocated on the basis of fair criteria that ultimately will lead to growing prosperity for one and all in Cornwall and the Isles of Scilly.
2. What aims and principles should underpin devolution in England?
In setting guiding principles, the Government should prioritise devolved budgets, decision making and delivery to the local level to address regional inequality and variations in economic contraction. In this context “local” to us means Cornwall and the Isles of Scilly. The systematic bias in national policy and funding decisions toward cities can only be levelled up by targeting LEP areas, regions, towns and rural areas that are lagging behind and varying the policy approaches according to the differing nature of the local areas and their challenges.
Whilst we recognise the challenges caused by overlapping areas and organisations in England we believe that (as Cornwall Council as a Unitary Authority was formed through local authority reform in 2009, the fact that the Council for the Isles of Scilly is also a Unitary Authority and the fact that their coverage areas are coterminous with our LEP area, our Local Nature Partnership area and our Health and Wellbeing Board area) no further reform of the structures is required.
All of the above participate with other local place leaders in the Cornwall and Isles of Scilly Leadership Board which is our rural alternative governance model to a Combined Authority mayoral model and which we believe delivers the strong Place Leadership required to drive recovery. We believe that further devolution is key to addressing the levelling up agenda. The emergency response to COVID 19 has provided repeated demonstration of the effectiveness of local solutions over “one size fits all” central schemes, reinforcing well-rehearsed arguments for decentralising power and equipping local place leaders with the tools and levers to improve outcomes. It is vital that Cornwall and the Isles of Scilly secures the necessary powers and funding to drive forward our recovery, and our shared vision for renewal. We need to get the geographical footprint right in order to effectively reduce disparities between regions. Our experience has clearly showed that Cornwall and Isles of Scilly has proven to be the right footprint to, on the one hand, capture regional disparities, while on the other being a big enough footprint for strategic planning.
Cornwall Council has gone on to establish an exemplary track record in using our existing devolution deal to deliver lasting benefits. For example, Transport for Cornwall, a rural first for full integration of public transport journeys, has delivered more frequent, better quality and cheaper services. Independent reviews have highlighted Cornwall’s strong place governance, with a unitary authority providing single democratically elected leadership for Cornwall alongside a Unitary Authority covering the Isles of Scilly. Resetting the relationship between central and local government is vital with more responsibilities and budget devolved to local authority and/or LEP areas to support future resilience. Another example of where we have developed closer collaboration is the work already underway in the Health and Care sector to accelerate the training and development of nurses/care providers.
3. Should devolution in England use the reserved powers to bring it in line with devolution in the rest of the UK?
Cornwall and the Isles of Scilly prides itself on the collaborative approach we take to stakeholder engagement and consultation. Developed over 20+ years of being involved in the design and delivery of EU programmes we have always adopted a bottom up and collaborative approach. Our unitary status, commitment to double devolution where appropriate (to Town and Parish Councils) and our co-terminosity with the Cornwall and Isles of Scilly Local Enterprise Partnership helps to facilitate this approach and as can be seen in other sections of this report the development of the Cornwall and Isles of Scilly Leadership Board is a way of involving other place leaders in a co-ordinated approach.
Cornwall Council has a strong culture of engagement with its stakeholders and residents. This was noted in an independent evaluation undertaken by Warwick Economics and Development Ltd (WECD), commissioned by MHCLG, BEIS and the Cities and Local Growth Unit to examine the internal institutional processes, progress and governance of authorities across England with a devolution deal. WECD visited Cornwall in March 2019 and provided initial high-level feedback stating that “Cornwall Council demonstrated a strong governance model, a culture of continuous improvement, a devolution programme that was well organised and comprehensive, transparency of officers, Members and external representatives, and commitment by senior management and political leadership”. Early indications of the research findings were presented to Cornwall and the Isles of Scilly Leadership Board in March 2020, which showed that Cornwall proved to be the exception in relation to public and business understanding and perceptions of key local governance roles and concepts that are part of devolved institutions.
On 19 June 2020, the Cornwall and Isles of Scilly Leadership Board formally endorsed our proposed approach to developing a shared vision for ‘The Cornwall We Want’ to inform our recovery and renewal plans; and building a strong ‘yes for Cornwall’ case for devolution of the powers and funding needed to deliver those plans. Since then extensive partnership consultation has taken place to consider and steer our priorities for devolution. We are currently preparing a renewed case for significant fiscal and legal devolution that will underpin our developing vision for Cornwall as we drive economic recovery and renewal post crisis. There is a strong fit between the Government’s objectives and Cornwall’s offer.
Our case for investment as a levelling up priority is compelling, as one of the least developed regions in Europe; worst affected by the economic impacts of COVID 19, and at greatest risk if a post-Brexit trade deal is not reached; and we present a significant opportunity in the Race to Zero due to the region’s natural capital, strength in green and marine technologies, to decarbonize the (national) economy and achieve net zero commitments. We continue to work with Government to build support for a second devolution deal in Cornwall, ahead of the publication of the White Paper on Devolution and Local Recovery expected in the autumn.
The commitment to collaboration and the value we derive from it has been recognised locally but also by MHCLG. In developing the case for our ITI they stated that: -
“The most obvious point of good practice to date has been the early allocation of a substantial proportion of the ERDF budget. This is due in part to the long-term experience of Cornwall Council and the CIoS LEP, and also due to good communication with beneficiaries in the region”
Whilst there is always room for improvement the fact that we have unitary structures covering 100% of our geography our upper tier authorities are seen as key delivery partner for growth. By actively engaging in and resourcing the strategy development process, acting as lead and/or accountable body for delivery and/or providing match funding for delivery we can demonstrate our credentials as credible partners for both Government and local stakeholders.
4. To what extent should there be consistency in devolved and local governance within England, and to what extent is asymmetry necessary?
Strategic authorities come in different shapes and sizes and to this extent, asymmetry in governance is necessary – and should not result in asymmetry of powers. Consistency in devolved and local governance arrangements is not required for the aims of devolution (empowering local democracy, levelling up) to be successful; rather parity of consideration for different models of place leadership is required. “The government must show genuine commitment to a range of different models of governance and be responsive to the creative solutions being developed in counties”.
The economic shock caused by Covid19, which the Office Budget responsibility (OBR) estimates as the largest ever shock to the UK economy, has hit some areas in the UK worse than others. The Cornwall and Isles of Scilly (CIoS) economy has been impacted more severely than any other area in the UK due to the importance of the visitor economy, high prevalence of small and micro businesses and above average levels of self-employed.
The UK SPF will play a crucial role in supporting areas across the UK to bounce forward following this economic shock. A SPF investment into CIoS is needed more than ever and a devolved SPF programme will give a significant boost to our economy at a crucial time when it is needed the most. As the SPF will replace EU funding and be one of the government’s main policy instruments to deliver levelling-up across the UK. It needs to be of sufficient scale and scope to make a difference. A series of reactive, one-off competitive opportunities will be ineffective at tackling deprivation and achieving prosperity. We strongly believe that with the right focus on a fair and green recovery CIoS can not only pull through the Covid19 crisis, but bounce forward stronger, greener and more inclusive than before. We also firmly believe that devolution of programme design, budgets and decision making is the most effective way of delivering sustainable local economies. Local stakeholders are best placed to understand the nuances of their local economy.
As evidenced above many independent commentators have demonstrated that the current centralised approach to socio-economic policy/delivery has not worked and that regional inequalities are increasing. Therefore, if we continue this model these inequalities will inevitably continue. It is therefore time to “recast the mould” of economic development and let local stakeholders drive the changes that are necessary to deliver the levelling up agenda in their areas by driving placed based inclusive growth and improved high street vitality.
The productivity challenge in CIoS is multi-faceted, requiring orchestrated long-term action across the foundations of productivity to deliver the right mix of interventions – there is no ‘one size fits all’ solution to lifting productivity or “levelling up” the economy. Shovel ready projects have a place in helping to drive local growth and to create jobs, but they should not be funded instead of or in isolation to wider and longer-term actions designed to address some of the more challenging or structural issues facing local economies. For example, in order to deliver a “shovel ready” building on a specific site ignores the fact that it could have taken many years of consultation, master planning, land decontamination and site servicing to get to the point where buildings can be built.
Aligning capital, revenue and skills support at project/business/place level is key to success and this is best achieved by devolving decision and delivery to local level so that “shovel ready” projects can be accelerated, and longer-term projects can be developed. Analysis of our economy undertaken as part of our work on our Local Industrial Strategy identified four broad groups of businesses that share common economic characteristics and therefore also fall into groups with regard to actions to improve productivity, recover and grow.
5. What is the purpose of current “devolution” deals and mechanisms? Are these purposes being achieved?
The Cornwall Deal was built on earlier Growth Deals and its purpose was to give Cornwall more freedom to tailor services to local needs, support local businesses and create jobs. It was designed to empower public and private sector partners in Cornwall to reform services, to make them more effective and efficient for communities, and accelerate the delivery of the area’s Strategic Economic Plan.
Signed in 2015 with local partners, Cornwall Council has led the way as the first rural authority to secure a devolution deal. Since then we have delivered significant achievements, securing the freedoms to design local policy solutions to the place-specific challenges of our rural and peripheral communities. Our local features, from our dispersed settlement pattern, to our small and micro business base, have prompted a set of locally-led, tailored solutions that devolution has been vital to delivering. As a unitary authority that enjoys a largely co-terminous set of public sector partners, devolution has enabled us to lead on tackling major local challenges and the tools to deliver regeneration at pace and transform public services beyond recognition. For example, the Cornwall Deal gave us the freedom to create an integrated public transport system, as described above.
Devolution for Cornwall has never just been about greater powers for the Council and partners – our commitment to ‘double devolution’ has driven the transfer of power over community assets to local communities – securing greater local leadership of more resilient community assets. Over 300 assets have now been devolved to local communities, with major packages for towns such as St. Austell changing the shape and nature of locally owned service provision. Devolved highways funding of £1m annually over 4 years to community networks has enhanced local decision-making, alongside support for over 100 communities to gain planning powers through Neighbourhood Development Plans.
Our progress has been acknowledged by senior civil servants who stated that we were one of the most advanced areas for delivery of our devolution commitments. An LGA Peer Review recognised how our Deal had served as a catalyst for wider reforms and our approach and learning in areas such as transport and energy should be shared nationally.
6. How should decisions on English devolution be agreed?
Between Government and local place leaders. A top down devolution model (e.g. mayoral model or combined authorities) should not be imposed on all areas. Whilst suitable for some areas in other areas where alternative models exist trying to impose a wider geographic footprint or additional tier of Governance will only be a distraction. In Cornwall and the co-terminosity between our Leadership Board, our LEP, our LNP and Cornwall Council and the Council for the Isles of Scilly (as unitary authorities) provides a suitable governance model to agree devolution powers.
A rebalancing of the central-local power partnership means Whitehall needs to change too – by organising itself to have a single conversation with places rather than Departmental silo’s, and by giving local place leaders a formal voice within the UK’s constitutional settlement. Local place leaders need a formal voice within the constitutional settlement to secure genuine ongoing dialogue and a permanent shift in the central/local power partnership.
7. How should the interests of different parts or regions of England be better represented to central government and in intergovernmental arrangements as well as in Parliament?
Presently there is no formal requirement on Government to engage with local place leaders, other than the Devolved Administration. As such, regional engagement takes place according to the whim of the Government of the day. Currently, regional engagement is limited and, to the extent that it does take place, favours mayoral combined authorities over non-metropolitan areas. Extensive recent research reports consistently conclude that local place-based leadership has a key role to play in driving local economic growth. We would welcome formal structures to ensure that local government voices are more firmly embedded in central government decision making.
The Cornwall and Isles of Scilly Leadership Board, borne out of an independent governance review in 2016/17 provides collective leadership and strategic oversight over joint priorities. CIoS has long enjoyed cross-sector collaboration in a relatively simple administrative landscape. The Leadership Board provides integrated strategic leadership of place and is responsive to its communities, with constituent members retaining responsibility for delivery, which is a key strength. The Board consists of a wide range of local partners including one of Cornwall’s six MP’s who provides the conduit with central Government, alongside the chair of the Cornwall Association of Local Councils, fulfilling the same engagement role with our 213 town and parish councils. Chaired by the Leader of the Council, this role provides a clear point of accountability, establishing a model for rural and unitary authorities, which eliminates the potential conflict arising from an independent mayor competing with the leader of a unitary council as the representative of place.
CIoS has proven itself as a credible and competent partner to Government, with independent reviews confirming our strong track record of delivery on our devolution deal and our residents have told us they want more decisions about Cornwall to be made by Cornwall. The strength of joint leadership has really shown its value during the pandemic, marshalling joint responses and actions that resulted in the spread of Covid-19 being minimised, it is central to our recovery and renewal plans to ensure Cornwall and the Isles of Scilly ‘bounces forward’.
8. Is there a public demand for such structures/measures? On what basis should the form, geography and extent of devolved regions or areas be determined, and what should be the role of culture and identity?
Across the country, surveys undertaken by Warwick Economics in their evaluation of devolved institutions and institutional processes found relatively low levels of engagement with information resources produced by devolved administrations – apart from in Cornwall where a relatively higher proportion reported engagement with sources of information issued by Cornwall Council. While there is no public appetite for additional governance structures, there is evidence that there is public demand for more local control over decisions. The general public were also asked to what extent they agreed that too many policy decisions affecting their area are made outside it. Respondents in Cornwall showed the highest agreement with the statement, at 64%. Central Government has the opportunity to demonstrate its commitment to democratic development and accountability by strengthening Cornwall’s Devolution Deal.
The Centre for Cities report on levelling up concluded that “The different nature of the challenge in each place means that the policy approach must also vary”. The IMF stated that “Regional inequality is one of the key factors that determine the UK’s overall productivity performance and growing inequality indicates to us that regions are not supported to deliver on their full potential. The emergency response to COVID 19 has provided repeated demonstration of the effectiveness of local solutions over “one size fits all” central schemes, reinforcing well-rehearsed arguments for decentralising power and equipping local place leaders with the tools and levers to improve outcomes.
It is vital that Cornwall and the Isles of Scilly secures the necessary powers and funding to drive forward our recovery, and our shared vision for renewal. We need to get the geographical footprint right in order to effectively reduce disparities between regions. Our experience has clearly showed that Cornwall and Isles of Scilly has proven to be the right footprint to, on the one hand, capture regional disparities, while on the other being a big enough footprint for strategic planning.
Resetting the relationship between central and local government is vital with more responsibilities and budget devolved to local authority and/or LEP areas to support future resilience.
For a prolonged period covering various different government administrations decision-making and funding has been largely concentrated in the urban areas of the UK, primarily within London. This is a key driver of regional inequality. The OECD singles out the UK as the most centralised country in the Western world , while the UK2070 Commission and OECD point to regional inequality in the UK being significantly larger than comparative countries.
A collaborative publication led by Cornwall Council entitled ‘Britain’s Leading Edge’ also shows that that there is a systematic bias in national policy and funding decisions toward cities – referred to as a ‘policy corridor’ (see map) – that in turn deprives more rural regions of investment and thereby limits their ability to contribute fully to the future national economy. In this context, Cornwall and the Isles of Scilly is not currently delivering its full potential and a dedicated investment through the UK SPF is needed.
While newspaper headlines have focused on a binary North/South divide, we are reassured by the Prime Minister’s personal assurances during Prime Ministers Question time in January 2020 that Cornwall will have its EU funding allocation replaced via the SPF in monetary terms that leaves us no worse off, and that Cornwall will receive additional investment for infrastructure and health .
The immense productivity gap that currently exists between the prosperous South East of England on the one hand and the rest of the country on the other must be therefore be levelled-up by investing in the LEP areas and regions that are currently lagging behind. We also suggest that higher per head allocations are targeted at those areas that are furthest behind in order to provide greater resources to support the levelling up of these areas. In addition, Government must recognise that for those areas that are outside the agglomeration impact of a city region the need for an alternative to the current “trickle down” policy environment is paramount.
In setting guiding principles, the Government should therefore prioritise devolved budgets, decision making and delivery to the local level to address regional inequality and variations in economic contraction. In this context “local” to us means Cornwall and the Isles of Scilly and whilst we recognise the challenges to Government caused by overlapping areas and organisations in England we believe that the co-terminosity provided by Cornwall Council, the Council for the Isles of Scilly and the LEP area is unique and should be recognised as such. We therefore believe that further devolution is key to addressing the levelling up agenda and that we can deliver a balance between Whitehall decision making and local decision making that will deliver better outcomes for all. Through our experience of delivering 20 years of EU programmes, the only rural devolution deal and Local Growth funding through the LEP we are confident that we have the capacity and capabilities at local level to do this work on behalf of central government.
By empowering local and regional government to deliver local growth that would be of national importance provides an opportunity for local economies to make best use of local resource, strengths and opportunities whilst also benefitting the UK economy. For example, Floating offshore wind (FLOW) is amongst the quickest growing renewable energy technologies in the world, with a potential market at least double that for conventional offshore wind. As yet, there are no FLOW world leaders. Cornwall & Isles of Scilly Local Enterprise Partnership (CIOS LEP) has been leading a regional initiative to build-out FLOW in the Celtic Sea, including through the development of a Celtic Sea FLOW Regional Business Plan with a roadmap of projects and an ambition of 2.5GW in the Celtic Sea by 2030.
The emergency response to COVID 19 has provided repeated demonstration of the effectiveness of local solutions over “one size fits all” central schemes, reinforcing well-rehearsed arguments for decentralising power and equipping local place leaders with the tools and levers to improve outcomes. It is vital that Cornwall and the Isles of Scilly secures the necessary powers and funding to drive forward our recovery, and our shared vision for renewal. We need to get the geographical footprint right in order to effectively reduce disparities between regions.
The changes made in response to the crisis, such as reduced travel, have shown to have a major positive impact on the environment, air quality and global Green House Gas emissions. Many people and businesses have quickly responded to the crisis, adapted and diversified in ways that many thought impossible only a few months ago. IT systems have been installed and work patterns made more flexible, to enable huge numbers of people to work from home and students to take part in online lessons. Recovery provides an opportunity to build on those positive changes, keep hold of good practices and to continue the trajectory to Net Zero.
It is becoming increasingly clear that Cornwall and the Isles of Scilly faces ongoing significant economic challenges as a result of the COVID-19 pandemic, with the scale of the challenge yet to be fully apparent. Evidence from local, regional and national research demonstrates that our economy has been impacted more severely than any other area in the UK due to the importance of the tourism sector and the high prevalence of small and micro businesses and self-employed. The UK SPF will therefore play a crucial role in supporting areas across the UK to bounce back from this economic shock.
 Submitted by Jessica Tangye, Policy Specialist – Strategy and Engagement, Cornwall Council
 Grant Thornton’s Placed Based Growth – Unleashing counties’ role in levelling up England report; the UK2070 Commission independent inquiry into City and Regional inequalities in the UK; Joseph Rowntree Foundation research; the Local Government Association/ Localis study into “Fiscal Devolution” and the opportunity to adopt an international approach “Rethinking Local”; and The Institute of Fiscal Studies report entitled “Sharing Prosperity? Options and issues for the UK SPF”
 OBR ‘Fiscal sustainability report’ July 2020
 OBR ‘Fiscal sustainability report’ July 2020
 With the term EU funding we are referring to current ERDF, ESF funding and elements of the rural development (EAFRD) and Fisheries programmes (EMFF)