Written evidence from The Centre for Governance and Scrutiny[1] (EDE 44) [2]

Public Administration and Constitutional Affairs Committee

The Evolution of Devolution: English Devolution

Evidence Summary

This submission engages with seven of the eight questions set out in the call for evidence.

Any attempt at reforming English devolution and local government will need to regard the current political context. In the wake of Brexit and the Covid-19 pandemic there have been particular implications on the location of power and decision-making. This could be the opportunity to attend to a ‘constitutional moment’ in which we reflect on and enact a shared vision for a better longer-term form of devolution within England and rethink our approach to local democracy.

Devolved tiers of governance and combined authorities must belong to the unitaries, shires and districts they sit above. Ultimately, aims should be set by local authorities, partners and communities in ascertaining how they want to draw down power and funding.

Improved outcomes for local people is what devolution needs to be driven by, but this will not arise automatically. It will also not arise purely as a result of agreement on structure. Many of the benefits will rely on relational aspects - the shared attitudes, behaviours and values that will define how devolution will work.

Devolution being a process, not an event, means that although outcomes are imperative, devolved arrangements will continue to evolve. Devolution will have to be flexible enough to accommodate for ‘diversity of place’ and being locally-led, and yet it will have to provide a consistent and coherent roadmap for localities embarking on the process. This is why we have suggested the following design principles:

• A presumption in favour of greater local self-determination
• More equal central-local relations, anchored in transparent and accountable collaboration
• Empowering local communities, councils and other partners to collaborate and to develop and deliver priorities based on consensus
• The needs of local democracy at the centre of any system
• The need for fiscal freedom and devolution

We also suggest the creation of a “constitution for the place”[3], to serve as way for the public to input into the devolution process, articulating how devolution has been agreed, and what it will entail.

Should there be comprehensive reform of the English devolution and local government system?

A distinguishing feature of English devolution is its uneven development and scattergun approach to transferring powers (with or without funds attached) at different scales and through different ‘deals’. This has managed to create a very confusing system of local governance and devolution to the point where citizens, as well as elected representatives at both local and national level, may not be clear on who has responsibility for what.

The language of localism and calls for comprehensive reform of a hyper-centralised England, and its local government system, are gaining traction in policy areas outside of devolution - especially in the context of the local public health response to the Covid-19 pandemic. The success of the response has largely been based upon having a single mission across all partners in a local area, driving all resources in the same direction and towards a common goal. Indeed, many thought leaders have outlined the connection between a lower level of territorial governance and the effectiveness of the pandemic response. However, the impact of this is still unclear and it is perhaps the nature of the central-local relationship that needs to be reassessed.

There needs to be an examination of the current system of local governance and devolution - to set out bold proposals to rebalance the central-local power structure of England. As it stands, it is central Government, predominately the Treasury shaping conditions on how particular budgets can be used, that ultimately determines what devolution looks like for localities. In order for reform to be meaningful, it should be led by a more practical sense of what is needed in individual localities. It should recognise that those needs will be different and that a one-size-fits-all approach to reform will be inappropriate – but that a consistent and transparent framework for change is necessary. Ultimately this is a process that needs to be led by local areas, and in particular by local government as the institution with the democratic legitimacy to bring together views on what the future should look like.

Efforts to reconcile an inflexible and often opaque devolution process have highlighted some of the flaws in the current approach. A disproportionate and prescriptive central ‘ideal structure’ has created unnecessary complications and delay. Structure appears to have been prioritised rather than local needs and potential outcomes, it has also re-emphasised that devolution in England is essentially a top-down process.

What aims and principles should underpin devolution in England?

Thus far, devolution policy has tended to emanate from the centre without regard for practical local input, and has required localities to conform to central prescription. While Government has repeatedly insisted that it has no central objectives and that devolution is for local areas to define, the approach taken towards devolution negotiations suggests that this is not the case[4]. There seems to be a significant reticence on co-designing any terms of devolution in England. It’s a paradox that the process of devolution itself is so heavily centralised – local leaders having to make the case to Whitehall for devolved power and bid for funds with strings attached from Central government.

The English devolution process starts from the presumption that the default position is the status quo, and that local areas need to make strong arguments in order to be “granted” devolution. We believe that Government needs to proceed with positive intent on the presumption of devolution and a recognition of the capacity of lower tiers of governance to achieve better local outcomes – and based on the understanding that matters with inherently local impacts demand local accountability and local governance.

The reasons for, and benefits of, devolution are likely to be different for every area – this stands to reason, otherwise there would be little point in pursuing devolution as a policy goal in the first place. But this means that local discussion and determination is vitally important[5]. Determinations about devolution must be built on local circumstances, and through a fundamental understanding of what local people need. This needs to be underpinned by a fair decision-making process that includes local views.

In our view, the design principles underpinning devolution in England should include but not be bounded by the following:

A presumption in favour of greater local self-determination

Devolution should provide the opportunity for local areas to define their own political and socio-economic goals and carry out locally sensitive decision-making (the lack of which helped fuel the vote to leave the EU in 2016). The articulation of a common purpose for a local area and specific arrangements tailored to each place is paramount, and this should form the rationale underpinning devolution. This requires an acknowledgement of the legitimacy of local leaders in implementing policy that may differ from central Government priorities and is inseparable from the next principle of reforming central-local relations.

More equal central-local relations, anchored in transparent and accountable collaboration

Without a fundamental change in central-local government relations, the prospect of effective devolution in England is highly unlikely[6]. So far, there has been a lack of trust and transparency and an expectation of secrecy concerning devolution deals, with Whitehall micromanaging any transfer of powers and funding. There will need to be a genuine effort from central Government to recognise local government on an equal footing and towards the parity of esteem it deserves. This kind of shift in institutional behaviours will require commitment, embedding and time.

Empowering local communities, councils and other partners to collaborate and to develop and deliver priorities based on consensus

Wherever possible, collaboration between local partners and joint decision-making based on consensus should be sought. Within broad agreement about the overall outcome and purpose of devolution for an area – it will allow different tactical priorities to be played out and discussed in a constructive way and within an overarching place strategy. For this to occur, there will need to be clarity on the expected behaviours, values and roles of those involved.

The needs of local democracy at the centre of any system

Built on the principle of subsidiarity, it is accepted by most that, under devolution, steps must be taken to continue to push power down to the lowest appropriate level, and as close as possible to citizens. There also has to be a conversation amongst a range of local people and community representatives about what good democratic engagement, governance and accountability will look like. Devolved governance systems must be built around the products of these conversations and enable inclusive, participatory and deliberative methods of democratic engagement on a regular and permanent basis[7]. Real change is achieved through governance designed around people not institutions – form should follow function. This is about bolstering local democracy in the broadest sense – recognising that the role of local councils will be central, but that the issue is broader than just this.

The need for fiscal freedom and devolution

There is a broader question of what form fiscal devolution and tax devolution should take in England. But meaningful local accountability for local matters would require that fiscal devolution should be a principle of devolution, and in this context there must be an examination of existing local taxes and budgets - how they are set, and how they get spent. Areas benefiting from devolution are heavily dependent on Government grants, which are often ring-fenced and based on a central assessment of needs. There should be greater access to local resources at the local level, rather than resources through negotiation with central Government. Money should be allocated to devolved areas or combined authorities based on the projects they have determined to be of most importance, rather than Government being the arbiter of funding decisions. Aligning the powers to collect and spend funds locally arguably enables more local accountability. The focus needs to be on how to create fiscal devolution that allows local and regional authorities to support their economies and raise the revenue they need, whilst recognising that a centrally redistributive element to the system will always be necessary.
 

Should devolution in England use the reserved powers to bring it in line with devolution in the rest of the UK?

As a matter of principle, we would agree that the principles behind the use of “reserved powers” would provide a solid basis on which to build a consistent devolution framework for England.

However, this has two challenges – structural and cultural. Structurally, this would require a more symmetrical approach to devolution than is currently being pursued; the question of how to manage institutions with an England-wide institutional structure within this framework is a challenging.

Culturally, we suspect that little appetite exists for this shift in policy direction at a national level, or the fiscal certainty that would need to go alongside it.

To what extent should there be consistency in devolved and local governance within England, and to what extent is asymmetry necessary?

Firstly, it is important to highlight that there has been an inconsistent commitment to devolution from Government over the past decade or so, with varying degrees of support and enthusiasm from separate Ministers and Departments.

The resources and governance mechanisms handed to the devolved institutions of combined authorities and each metro mayor have been highly divergent, each having a bespoke deal negotiated behind closed doors. In one sense, the need for divergence reflects the needs for localism (as we explain below), but it is moot whether a commitment to localism provides the underpinning for Government’s current approach. This is an approach that has neglected almost entirely the questions of how policy and power will be put into practice across combined authorities, how intra-local relations between combined authorities (and between combined authorities and adjacent non-combined authority areas) will be altered, and how co-dependency between places is impacted.

At the moment, there is a large degree of variation between the responsibilities and funding that different devolved institutions have. Yet devolution’s patchwork of heterogeneity is no bad thing in itself, there will of course be some asymmetry in application because it depends so much on the needs of ‘place’. Although asymmetry is necessary, it will have to occur within a consistent framework to assure a degree of transparency.

What matters is that we have a process of devolution that can deal with the specific problems and aspirations of an area. Areas have responded differently to the economic, social and demographic changes that have happened in recent decades, and the imbalances that exist between areas in England is often invoked as the Government’s drive for the ‘levelling up’ agenda. The way in which inequalities are addressed in parts of the North West will be very different to the way that they would be addressed in parts of the South East. The principles will be the same, but the people on the ground making these decisions will be channelling different local needs.

The devolution agenda thus far has been carried out with an economic imperative, focusing on big cities and their functional economic areas as drivers. But the piecemeal approach adopted means large areas of England are not yet covered by a deal, particularly where they lack a large conurbation to act as an obvious anchor for economic activity. It is increasingly important to establish how towns and localities outside metropolitan areas are going to fit into the devolution strategy and participate in its benefits. Devolution will have to be distinctly different in urban areas and in more rural areas, and the governance and accountability arrangements established for combined authorities will have to reflect this distinctiveness. Managed poorly, this could serve to further fragment the overall English devolution settlement. But the fact remains that in many respects, non-metropolitan areas face similar kinds of issues to their metropolitan counterparts, in creating local growth and skills, coordinating better local transport and integrating health and social care, but the solutions to these will be different. Essentially there cannot be a one-size-fits-all in the way that devolution is achieved.
 

What is the purpose of the current “devolution” deals and mechanisms? Are these purposes being achieved?

Current devolution in the English context has been transacted with the Cities and Local Government Devolution Act (2016). The Act facilitated groupings of local authorities to sign up to a ‘Devolution Deal’ under the requirement that they enact a Mayoral model within a new ‘Combined Authority’. Hence, English devolution has emerged out of a series of separate, bilateral negotiations between Whitehall and different groupings of local authorities resulting in combined authorities as a new tier of government.

The rationale underpinning these deals was that governance across larger geographical areas can unlock the opportunity for more strategic thinking across a place, and for better partnership working. Combined authorities have, by and large, been instigated around driving economic growth and large-scale development, including transport. The Local Democracy, Economic Development and Construction Act 2009 established the combined authority entity and was effectively an amalgamation of the Economic Prosperity Board and Integrated Transport Authority in the now defunct metropolitan counties. Hence, present governance arrangements in most combined authorities have formed out of the legacy arrangements of the prior passenger transport authorities[8].

Initially there was an understandable focus on the economic and infrastructural benefits of devolution to a combined authority. But there is increasingly a broader conception being deployed, encompassing fire, police and the integration of health and social care, as illustrated in Greater Manchester.

The governance arrangements of the combined authorities do vary but, to gain full advantage of the Government’s deal on allocation of resources mostly in terms of grants, each must agree, politically speaking, to a directly-elected Mayor (without local referendum)[9].

The devolution deals have been portrayed as a transfer of powers, but they are more accurately described as delivery agreements – combined authorities will deliver x on behalf of Government for which they will receive £x million – there is some overall freedom to act within the funding framework, but arguably not as much as the use of the word “devolution” would suggest.

Consequently, these new bodies have acquired a limited set of administrative responsibilities and powers, lacking meaningful control over their own revenue streams and unable to determine their own priorities, particularly if these diverge from the preferences of central Government.

On the question of whether the purposes of devolution are being achieved – this may be too soon to speculate on at this stage as asking whether the “purposes” of devolution are being met invites selection of specific policy objectives, where actually the underlying objective of devolution is to push power down. If devolved areas are having to answer whether Government’s objectives are being met by their activities then surely this isn’t meaningful devolution.

Objectives have varied across combined authorities, and all combined authorities face particular challenges. A lot of this is down to the unique nature of place-based challenges presenting in different areas. No overarching purposes have been consistently articulated within the devolution context, and where they have been indicated they tend to emphasise long-term economic growth.

The directly elected Mayor has been a practical requirement of most devolution deals, and has at least in part, achieved purposes related to more local accountability and better area governance. Intended as providing a visible high-profile individual tasked with being accountable for the actions of combined authorities, and with a political mandate derived from direct election. There have been benefits to Mayors, particularly through the political leadership that has been critical in facilitating wider conversations and commitments across an area.

Although Mayors have provided an individual anchor for local accountability and leadership, it is also worth pointing out that Mayors are in practice also held accountable by the press and public for things they are not actually accountable for - due to their visibility as the local figurehead and confusion around where responsibility lies. Whilst there is a strong political mandate gained from their electoral legitimacy (which plays into their role in building and developing partnerships at the sub-regional level), there are other governance models that could effectively deliver local outcomes alongside providing accountability. The onus also needs to be on accountability of a Mayor, of a combined authority, of leaders, to local people in that area, rather than central Government holding devolved areas to account.

In practice, the role that combined authorities have undertaken has revolved around convening power across areas and bringing together a multiplicity of partners to work on strategic issues of common importance. Thinking about the agglomeration benefits and relational benefits from larger-scale working, there is a collective leadership responsibility from a range of partners across a combined authority area, and Mayors have successfully enacted their role as convenors. Many local partners operate within separate funding streams and accountability frameworks pursuing separate objectives. Mayors have played a vital role in settling potentially conflicting individual objectives under a wider shared strategy and developing strong local relationships.

Whilst Greater Manchester is the longest serving combined authority, and so arguably the easiest case to cite as an exemplar of partnership working, it also had the advantage prior to establishment of being coterminous with the historic metropolitan county and a legacy of collaborative working between political leaders from constituent authorities and the business community.

However, much of the ‘soft power’ of convening and leadership rests on the personal character of the Mayor. Considering the unique personalities of the individuals charged with leading in combined authority area, there has been a considerable task in making relationships work and ensuring everybody around the table understands what their roles and responsibilities are.

Without focusing on structures too much, governance models are important. The current Mayoral model in combined authorities is based on co-operation and bringing people together to work in a collaborative way. But, at the same time, it should be stated that any devolution model must allow for differences between localities.

Another principal issue to highlight is the extent to which a ‘deal’ is the focus, and thinking about governance strictly in terms of the relationship between Government and the devolved area. The deal-making process itself is one characterised by a central-local arrangement, rather than as a local matter for the combined authority and its constituent authorities to work through to their satisfaction. When there is this central-local deal, involving an agreement of the delivery of certain outcomes in a certain way, the extent to which the purposes of devolution are being achieved is questionable.

How should decisions on English devolution be agreed?

There needs to be a comprehensive devolution framework, but this framework must be locally-led and principles based. Admittedly the term ‘framework’ does have top-down connotations, so there may be a better way to label it. But the way in which decisions on English devolution should be agreed must be the product of conversation and collaboration between local leaders, local communities and central Government.

It should be a framework of principles with a clear statement of the aims and purpose of devolution as well as the roles and responsibilities of those tasked with delivering the outcomes. It should be open to both metropolitan and non-metropolitan areas based on the needs and ambitions of each place, as well as promoting flexibility in what kind of arrangements will take shape locally - arrangements being agreed with an understanding of the capabilities and capacities of local areas. If a framework is too detailed and rigid it runs the risk of imposing uniformity and disregarding local divergence.

Without some kind of framework, there is a worry that mechanisms will be established which might duplicate and overlap with existing governance arrangements. The process attached to formulating and designing a framework for those mechanisms will mean that all those involved will be participating in design with a clear outcome in mind, to make provision for how constituent parts will work together[10].

There also needs to be a transparent decision process with all the powers and funding on offer. The devolution deal making process so far has been opaque, and the formal process has been negotiated for the most part in private.

The process should go wider than local government forging a sense of a common endeavour, bringing in other partners as part of the combined authority footprint. It should be underpinned by a shared narrative for the future of an area. In order to deliver long-term objectives there will have to be the inclusion of a wider range of stakeholders, beyond the current central-local focus.

Considering the different partners involved - combined authorities, local authorities, Local Enterprise Partnerships and others - there is a tendency to focus on the logistical arrangements and structural / process relationships between those institutions, rather than thinking about the behaviours and relationships that will enable the outcomes they have to deliver overall. This will require collective leadership and a shared understanding of the purpose of what these governance structures are trying to achieve. Culture – behaviours, attitudes and values – are crucial components for success, but have often been overlooked.

An electoral cycle is comparatively short, when devolution objectives will most likely have a lifespan of 20-30 years, and so there will have to be a public conversation with multiple partners if meaningful long-term success is going to happen. Clarity of purpose means that Mayors will have to consider how they work within the framework provided by their predecessors, and the way they mould that previous work to meet their own political priorities. But the level of public engagement and consultation in respect of devolution needs to recognise that the public are not interested in governance structures at sub-regional level but are interested in outcomes.

When considering the outcomes of devolution in England, there is the reality of a distinct and significant imbalance between different areas. The agreed outcomes arrived at through the process of devolution to a particular area should be assessed on their own terms with ongoing local measures. Especially involving transparency and public dialogue around whether expectations are on course to be met, and how funds are being allocated to produce maximum social value.

We have previously suggested the creation of a “constitution for the place”[11], an evolution of agreements piloted by Wigan and Preston amongst other areas. This would serve as way for the public to input into a document to articulate how devolution has been agreed, and what it will entail.

The constitution for the place would:

• Create a framework which allows agreement of mutually endorsed outcomes and priorities;
• Be owned by all local partners and leaders in an area (bearing in mind our broad definition of “leaders” and leadership);
• Provide a mechanism for leaders, across the place, to hold each other to account;
• Clearly articulate roles and responsibilities, and set out the framework for collaboration and deliberative decision-making;
• Express the new behaviours – including the new political culture – necessary for these things to be successful;
• Establish the changes that councils and other bodies might need to make to their governance and communications systems for this to work;
• Establish how information sharing, transparency, insight/evidence-led decision- making will operate.

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?

English regions should be better represented, and the Government could develop mechanisms for including Mayors and other local leaders in Parliamentary committees. Cabinet committees and certain Departmental Boards may be a place to have Mayoral involvement. Yet the representation needs to work both ways, there should be dedicated representatives from central Government within devolved areas or English regions.

We do not argue for the re-establishment of the regional Government Offices, but the developing agenda for parts of the central Civil Service to move to more regions of the country could be seen an element of this.

Until clear arrangements for devolution in England are made and applied, understanding how – structurally – such arrangements should be organised at a national level feel speculative.
 

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?

Public opinion and its support for devolution in England is at best occluded. Whilst there may not be strong public demand for devolution or new tiers of governance (and little interest in “structures” specifically), there is certainly interest in the outcomes of devolution and in wanting decisions that affect people happening closer to where they are. There is public recognition of the credibility and legitimacy of local institutions and in ensuring that decision-makers can be held robustly to account.

There are examples of very public accountability of Mayors, like the Greater London Assembly conducting the public Mayor’s Question Time meetings ten times a year. The Mayor of Greater Manchester travels around each of the ten authorities to hold open public question times. The Mayor of the West Midlands also attends formal public question sessions with the combined authority Overview and Scrutiny committee a minimum of two times a year.

Whilst many Mayors have garnered an increasingly high public profile, there is not always a great understanding of the services that different tiers of local government provide and their concurrent responsibilities, and there is progress to be made in raising the public awareness of the Mayoral role - beyond the recognition achieved by the Mayor of London and Mayor of Greater Manchester. Unsurprisingly, confusion exists in places where metro Mayoral positions overlap with local authority Mayors, as in Liverpool and Bristol – but local media and civic education have a role to play here.

Tensions between local, regional and national tiers of government have been brought to the fore over the course of the pandemic, highlighting the effects of devolution on policy-making, civic identity, and party politics. Devolution in England can provide an area with distinct policies and voice, although London and Greater Manchester are the most prominent cases in point so far. The recent public dispute between Government and Andy Burnham has drawn greater attention to the regional tier of government in Greater Manchester, and provided an extra boost in public awareness of the political importance in the role of Mayors, as both a local champion and a spokesperson escalating issues to the national scale.

The geography of devolution should take place at the scale most appropriate for outcomes to be delivered. Whether it is economic development, skills, infrastructure, health and social care - these are policy areas that cross local authority borders, so devolution will have to capture the geography of those who are intended to benefit most from these policies. This will of course be at a strategic level rather than a service delivery level, and will need to take into consideration the functional economic area, where people live and work. This being said, fixating on the functional economic area as the appropriate geographical scale for devolution is too rigid an approach, especially concerning more rural regions like Cornwall where this was seen as unsuitable.

Devolution has tended to follow the logic of administrative convenience, attempting to map onto old county council boundaries. Coterminous administrative boundaries are an important aspect - the reality is that we have a system in which few local authorities have coterminosity of boundaries with other parts of the public sector e.g. Police Force areas, Fire and Rescue areas, NHS Integrated Care Systems, or Local Enterprise Partnerships. This overlapping and disjointed system presents added complications to effective partnership working. The picture is even more complicated when taking political geography into consideration and the occasional lack of cooperation or irreconcilable differences that can emerge between local leaders.

Devolution endeavours to bring wide ranging communities together under governance structures with whole place-based outcomes in mind, but governance structures might find it challenging to identify a shared sense of place, or relate to the public within those various areas[12]. In some cases, boundaries can be quite effective at capturing place identity, in other cases they divide unified identities or preside over disparate identities. There is no optimum geographical size for devolution, it will depend on the challenges and outcomes set out, whilst recognising that much rests on the historical presence of a sense of place. Yet it is possible for a newly forged forward-looking identity to draw people, and partners, in the area together in a sense of common purpose[13].

Finally, and as we have outlined previously, there needs to be public input into what devolution will look like for a local area. Not a post-hoc consultation after the fact, but as an inbuilt part of the decision-making process. Undertaking a time limited, inclusive deliberative process such as a Citizen’s Assembly on English Devolution, is one example of bringing citizens into the process of resolving issues of identity and geography or scale of devolution, like reaching consensus on what the boundaries of devolved areas should be.

November 2020

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