London's unfinished devolution

 [Published by Centre for London, 3 July 2020]

Twenty years ago today, Ken Livingstone formally took on his powers as London’s first directly-elected mayor. His election had been a moment of high political drama rare in municipal government. Having legislated for a mayor and assembly in London, Tony Blair’s New Labour government had watched in horror as Livingstone – in their eyes a throwback to the 1980s ‘loony left’ – swerved all attempts to prevent his election, eventually running and winning as an independent against Labour’s Frank Dobson and the Conservatives’ Steven Norris.

The transfer of powers (unlike his successors, he had a two-month running-in period) was a much quieter event, despite the new Mayor declaring that it would be celebrated as “London’s independence day”, the occasion of the UK’s capital seizing back control of its affairs from the “most centralised state outside North Korea” (a favourite comparator).

Livingstone is no stranger to hyperbole, and his claim was probably not intended entirely seriously. The powers that he took on were limited and had been hard-fought by civil servants as the idea of a mayoralty took shape after the 1997 general election. Furthermore, London’s first mayor was denied control of London Underground while government struggled to finalise its disastrous ‘public private partnership’ scheme through 2000 and 2001.

But the powers were nonetheless significant: oversight of London’s police and fire services, a veto on major planning decisions, control of traffic lights, major roads, buses and (in due course) London Underground, and a new agency to manage European and domestic economic development projects. And all were drawn down from central government, rather than seized from London’s 33 local authorities who had repeatedly clashed with the Greater London Council, precursor to the mayor and assembly, in the 1980s.

Since 2000, London’s three mayors have shown themselves to be able advocates for the capital, leaders at times of crisis, and promoters of projects and policies that would have been impossible in the 1990s – from congestion charging, to London 2012, to cycle hire schemes. Their powers have been extended too, with affordable housing programmes, more extensive planning powers and stronger police oversight introduced through reforms in 2007 and 2011.

However, despite the extension of the mayoral model to other English cities in recent years and promises of a white paper, the advance of devolution appears to have stalled in the nation’s capital. The government’s recent interventions on transport and planning could even be seen as a rollback, as a former Mayor of London seeking to exert remote control over his successor.

But these interventions also highlight the flaws of the current system. Transport for London’s revenue base is so dependent on fares that government bailouts become inevitable during a shock like COVID-19, and a government that blocks mayoral plans to accommodate growth, without supporting any form of regional planning, is simply incoherent.

Recovering from the current crisis cannot be directed from Cabinet Office briefing rooms, or by despatching civil servants across the country to implement centrally determined policy. It will require agile and locally-appropriate measures across the country, from training programmes to targeted tax breaks. There are a thousand daily issues pressing on government right now, from infection monitoring to trade talks, so ministers do not have the time to micromanage planning policy and transport services, any more than they have the competence to do so.

Completing this unfinished devolution should begin with a discussion about money. The Mayor of London has extremely limited powers to vary council tax, and no powers over business rates or other property taxes. London’s shops and other commercial premises are taxed heavily while its richest householders pay some of the lowest property taxes in the world. This dysfunctional set up might be sustainable in boom times, but it could hobble the capital’s recovery in the tougher times that lie ahead. Responsibility for services without the power to set taxes makes for inefficient government and fudged accountability.

London’s mayoralty has proven itself to be a success over its first 20 years; it is time to take the next steps in loosening Whitehall’s grip on the capital and its finances.

Centre for London and LSE’s Professor Tony Travers are working on a book to mark the 20^th anniversary of London’s mayor and assembly, investigating the relative successes and challenges of the mayoralty to date, before asking what comes next for London. The book will be published in winter 2020.