[Originally published on
LSE Policy Blog and
Democratic Audit UK]
The Government’s sporadic and asymmetric approach to devolution
reminds me of a story about the pioneering Mancunian music producer
Martin Hannett. When Joy Division first presented themselves at his
studio in 1979, Hannett told them to start playing, and then retreated
into a cupboard, shutting the door behind him. The bewildered band
played on for a few minutes, before sending Ian Curtis, their singer, to
knock on the cupboard door and ask Hannett what was going on.
“You just carry on playing,” Hannett replied. “I’m staying in this
f*cking cupboard, till I hear something I f*cking like, then I’ll tell
you.” The Mayor of London and the boroughs have been playing
devolutionary tunes since the London Finance Commission was set up in
2012, but are still awaiting any signal of Government approval.
Some omens have been promising. Last November, on the eve of the
London Conference, there was a major devolution announcement. New powers
would be devolved – over housing, planning, skills, health and social
care – to the Greater Manchester Combined Authority, headed by a
directly-elected Mayor.
At the Conference the next day, discussions were animated: what did
the ‘Devo Manc’ announcement mean, had London been left behind, how
could the capital catch up with the vanguard of the Northern
Powerhouse? On a panel that afternoon, Greg Clark MP, then Minister for
State for Cities, said that London shouldn’t wait to be handed more
powers on a plate, but should come forward with tangible proposals, as
the Greater Manchester authorities had done and as other city-regions
were doing, for our own ‘city deal’.
What has happened since then, or indeed since the London Finance
Commission’s report was published in May 2013? On fiscal devolution –
the power to set, vary and collect taxes – the London Finance Commission
proposed devolution of the full range of property taxes (including
stamp duty, capital gains tax, council tax and business rates), and the
relaxation of borrowing controls.
The current priority for London government is full control of
business rates, enabling local authorities to vary the regime to
incentivise growth in particular areas and sectors. As Government has
already legislated for local authorities to retain a share of business
rate growth (50 per cent generally; less in central London and other
areas seeing exceptional growth), you could argue that the principle has
been conceded, though there is little sign of appetite for more
comprehensive fiscal devolution – to London or other English cities –
from Whitehall.
The experience of Manchester and other cities suggests that
administrative devolution of other powers and budgets may be more
fertile territory. The Greater London Authority and London’s 33 local
authorities have been working together, through their ‘Congress of
Leaders’, to develop
proposals for devolution.
The emerging proposals are presented as part of a package of public
service reform; that is to say, as necessary enablers for more efficient
delivery of public services in London. They will be submitted to the
Government’s spending review this month, in the hope that changes will
be announced in the Autumn Statement. The proposals cover:
- devolution of budgets for employment support for long-term unemployed people;
- tailoring further education and skills provision to London’s needs;
- devolving budgets for business support, including for export promotion and SME growth;
- giving London government a lead responsibility for co-ordinating the criminal justice system;
- measures to improve co-ordination between health and social care,
including new joint commissioning arrangements, borough-based allocation
of budgets and devolution of capital budgets and assets; and
- more flexibility on housing, including on local authority borrowing powers and cross-boundary deployment of s106 payments.
The case for these measures is strong, not least given the resilience
and adaptability that local authorities have demonstrated during the
years of fiscal austerity. The Chancellor of the Exchequer has
already indicated
that he wants to devolve skills budgets to London, and to give the
Mayor more economic development powers, and city devolution has a more
powerful champion following Greg Clark’s promotion to Secretary of State
for Communities and Local Government. But it’s hard to get a reading on
the direction of government policy, not least as progress towards
health devolution – the biggest prize for London in terms of potential
for better joint working with social services – has been slow-paced in
Manchester. The cupboard door remains closed.
And there are other factors that may slow progress for London in
particular. The argument that London already has enough powers is
relatively easily dealt with. As the London Finance Commission argued,
devolution to London should be alongside, not at the expense of,
devolution to other cities. If London can meet its own housing and
skills needs, for example, it will put less pressure on other UK cities.
Politics may be a more serious obstacle, as London approaches an
election year. The Government may want to see what sort of mayor London
elects in May 2016, before doing an extensive deal on devolution (though
this is not in any case likely to involve the Scottish-style devolution
being
proposed by Labour outsider Gareth Thomas).
But the biggest stumbling block for London devolution, apart from
Whitehall’s innate inertia and reluctance to cede control, may be sheer
complexity. The city deals announced to date have placed a premium on
effective governance, with a directly elected mayor being superimposed
on joint working arrangements in Manchester. London already has a
directly elected mayor, of course. In fact it has five, including not
only the Mayor of London, but also the mayors of Hackney, Lewisham,
Newham and Tower Hamlets. In addition to these, there are 28 council
leaders, and the City of London’s august structures. Scrutiny in the
London Assembly, and in each borough, enriches this heady mix.
So London’s governance arrangements are significantly more
complicated than the ‘first among equals’ mayoral model proposed in
Manchester, and
likely to be adoptedin
other English city-regions, despite the new joint machinery proposed to
oversee devolved services (while retaining several ‘sovereignty’ over
existing services). There is also growing appetite for more powers from
London’s sub-regional partnerships – a third tier of governance. South
London Partnership has
established a formal joint committee
to lobby for and exercise more powers, and similar groupings in other
parts of London are pushing for a stronger subregional dimension to
devolution.
All of which may suggest that – 50 years after London’s boroughs were
established and 15 years after the Mayor and Assembly were elected –
London’s governance is beginning to show its age. The Greater London
Authority has accrued significantly more powers than were originally
envisaged, and more of these are direct (for example, on housing, land
and planning) rather than strategic roles.
For their part, the boroughs strongly resisted the suggestions
floated by Ken Livingstone for their merger into ‘superboroughs’. But an
emerging voluntaristic subregional geography suggests that they see the
need for something that sits between one metropolis and 33 sovereign
subdivisions, recognising that skills, employment, housing and health
are no respecters of administrative boundaries.
London’s leaders and mayors have been galvanised by the potential for
devolution to develop a powerful consensus for public service reform.
As they play on, hoping that Government will hear a tune it likes,
perhaps more radical thinking will be needed to secure the devolved
powers that the capital needs.