Written evidence submitted by DevoConnect [POD 006]
THE DEVO 3.0 REVIEW:
The success and scope of devolution deals implemented, including the impact on local economies and health economies and the progress of all bids submitted by the September 2015 deadline
Conversely, three main weaknesses were identified:
The geographical spread of existing deals, including to non-metropolitan areas and the impact on adjoining areas
Further powers that local areas have accumulated over time and powers they should have which they don’t have already, including the specific case for London
At the same time respondents were positive that Metro Mayors could affect change and did have an important role and new powers. With regards to helping achieve productivity and growth the following top actions Metro Mayors should focus were cited: transport/ connectivity, particularly intra-regionally; skills investment; closer working with the private sector; and the creation of local industrial strategies.
Metro Mayors were also seen as having a key role in reducing inequalities and they was support for them to deliver inclusive growth with a focus on: employment and skills; transport infrastructure; and health. (The Committee may like to be aware that an independent and cross party inquiry into the value and accountability of devolved health systems is currently underway under the auspices of the Health Devolution Commission.)
The Devo 3.0 Review concluded that in the short term, there is a need for a settlement with existing elected Mayors focused on the devolution of all adult skills funding and powers; NIC’s recommendation on devolving transport and other infrastructure spending; and some elements of fiscal devolution.
In the medium term, the Government must set out a clear devolution framework, or continuum, showing the range of current Government powers and funding suitable for devolving and which can be accessed as capacity and competence, as well as leadership and demand, becomes available at the devolved level.
The commitment to devolution across Government and capacity in Whitehall to promote and monitor devolution, including the Government’s ability to capture relevant data at the right level – for example, in city region and combined authorities to assess the effectiveness of deals.
Devolution must be a top five priority for the Government which should be clear about the purposes of devolution: supporting a new Treasury objective of rebalancing the economy geographically; creating more democratic governance; and the better delivery of public services.
The Government should publicly acknowledge that devolution is a process as well as a principle: something that can, and will, only be delivered in partnership with existing elected Mayors and local government as well as business and other stakeholders.
The Devo 3.0 Review concluded that the next wave of devolution in England should not be conditional on local government reform but ultimately what is needed is triple devolution: to local government; to the sub-regional (Mayoral) level; and to the sub-national level, i.e. the North, the Midlands, London and the wider South East.
It also concluded that a Secretary of State should be appointed to lead the implementation of devolution. All Government Departments - including HMT and relevant quangos – need to be genuinely committed to the principle, and support the process, of devolution and rebalancing the economy.
Governance and accountability: the impact of elected mayors and whether they are necessary to make devolution a success. Public engagement with the devolution process and how scrutiny is working in practice
To increase democratic participation in decisions the top actions Metro Mayors should take are: consulting the public directly on decisions; increasing the visibility of decisions and the impact they have; and the devolution of further powers (increasing the importance of the decisions made.)
The Review concluded that a number of important issues need to be better understood and addressed: the diversity deficit, especially regards gender; and the arrangements for scrutiny of devolved structures at the sub-regional or city region level, as well as Westminster and Whitehall levels.
In conclusion, the next wave of devolution – Devo 3.0 - must not be ‘half hearted’ nor ‘one size fits all’. Devo 3.0 needs to signify the end of imposed blueprints and shift the emphasis towards local and sub-regional partners taking the lead in agreeing deals. The Metro Mayoral model should not be the only model permitted.
How access to new sources of income – for example business rate growth – have impacted local areas and how broader devolution of financial powers will affect the success of the policy.
The adequacy of existing sources of income and the potential need for more sources of income for local authorities that acquire more powers. Whether further business rate retention would provide additional funding for devolved services.
Asked about the weaknesses of the existing city region Metro Mayoral or combined authority models one anonymous contributor typified many responses when stating: ‘there is a lack of resources and an ongoing reliance on centralised decision making from Westminster.’ There were also comments from a Conservative and Labour Mayor respectively such as ‘trying to pedal with the brakes on’ and ‘holed below the water line.’ One Mayoral office spelt out why it currently feels like 'devolution with strings attached':
The Combined Authority’s policy toolkit is incomplete, meaning we occasionally have to compromise fidelity or clarity, or make circuitous arguments for investment - for example in the areas of wellbeing and environmental action. The lack of sustainable funding is a significant barrier - this relates to capital, revenue and admin. It makes it complicated to plan long term investment strategies and pipeline with full confidence in their delivery. Similarly, reporting lines between sub-regional and national government are complex. The relationship with Departments is positive but still suffers from a client/master deficit.
The Mayor of London’s Office condemned the inability to levy taxes to meet the needs of the city: ‘Other cities around the world have way more freedom.’ Henri Murison, Director, NPP, answered the question regarding weakness succinctly: ‘The lack of significant meaningful fiscal devolution’. Andy Burnham, Mayor of Greater Manchester, pointed to a fundamental problem with current arrangements:
A Mayor inevitably creates expectations as a focal point for complaining but has not got the powers and funding, for example on transport, so you have accountability without genuine responsibility.
One respondent referred to this as the ‘devolution deception’ – the mismatch whereby a Mayor is held accountable for an issue but does not have the powers or funding to properly address - improve or reform - the issue. Sir John Armitt, Chair of the NIC, put it this way:
Not sure I would want to put myself up for that role without the fiscal freedom/financial wherewithal to ensure I could deliver. Politically Mayors are in a difficult position.
The Devo 3.0 Review concluded that the Government should provide Metro Mayors with a positive and determined, permissive and flexible, approach to devolution; more powers; and more funding including fiscal devolution. It was noted Sir Howard Bernstein called for ‘a structured approach to functional and fiscal devolution - not a “one size fits all” approach but one which is related to earned autonomy.’
The potential scope of a devolution framework. Whether the current practice of bespoke deals for local areas is working or should some powers be made available to any local authority that chooses to adopt them
However, in the longer term, there was strong support for the framework approach. The Review concluded that the Government must set out a clear devolution framework, or continuum, showing the range of current Government powers and funding suitable for devolving and which can be accessed as capacity and competence, as well as leadership and demand, becomes available at the devolved level.