"For decades, central government has made the rest of the country conform to a Whitehall template. The Bill calls time on that."
In his speech to Leeds ONE on 11 September David Cameron pointed out that "It is … a proven reality that money spent closer to people is often money spent wiser – "
City Deals, Growth Deals and the more recent devolution agreements between the Government and Greater Manchester, Leeds City Region, Sheffield City Region and Cornwall have been the policy approach to date to facilitate money being spent on local economic development and transport systems. Going forward, the Government's intention is to conclude bespoke Devolution Deals, including using combined authorities (as established by the Local Democracy, Economic Development and Construction Act, 2009 (LDEDC)).
4 September was the deadline for submitting devolution proposals - 25 submissions were expected, 38 received. Again in the words of the Prime Minister - "Local people have really seized this opportunity and put forward transformational proposals." Ministers and civil servants are now reviewing each proposal with a view to striking at least some deals ahead of the Chancellor's spending review on 25 November.
So, the Government's manifesto commitment to allow cities and areas outside London to reach their economic potential, is moving forward. The Cities and Local Government Devolution Bill will amend the LDEDC to provide a legal framework enabling decentralisation of extended powers (including social care, as well as economic development and transport) to cities and regions within England and Wales.
Introducing the Bill into the House of Lords, Baroness Williams acknowledged "For decades, central government has made the rest of the country conform to a Whitehall template. The Bill calls time on that."
But there is much to debate.
The Bill will ultimately be enabling legislation, which can be applied flexibly to enable each combined authority/area's proposal through secondary legislation. It is this flexibility which promotes concerns in some (there is no clarity on the strategy for how and exactly which powers will be devolved) and a sense of opportunity in others (one size does not fit all, and over-strict criteria will not allow enough room for manoeuvre to permit different sets of proposals to succeed). The Parliamentary process will ultimately provide the considered balance for going forward.
The devolution process will be competitive and conducted by negotiation; by voluntary offers from local communities in whatever way they want to combine. The Bill could, with agreement, include devolution to a combined authority of any local authority function and any public authority function - including that of Ministers and government departments - exercisable in relation to the authority's area. It could involve the conferring of a general power of competence on the combined authority. It also enables changes by regulation to the constitution, membership, structure and boundaries of local authorities, for devolution deals where a combined authority may not be appropriate, and enables proposals to be put forward for non-contiguous geographical areas (which cannot combine pursuant to the LDEDC) to work together. For example, in West Yorkshire, where the city region for Leeds does not map to the boundaries of West Yorkshire, and where York groups itself economically with Leeds for the purposes of transport, but cannot be formally part of the current West Yorkshire Combined Authority for transport matters on a full basis.
Currently the Bill only requires consent from local authorities as to what the final solution might look like. What about business? There have been calls in the Lords, quite rightly, for local business to contribute to the debate. One of the drivers for autonomy is gearing - the Regional Growth Fund purports to return five to six times in investment terms, to what the taxpayer could afford. Whilst there are calls for Government to identify the fiscal rights which will come with devolution, one can see that again that will be a matter for negotiation - depending on the proposals put forward. Business involvement - whether from those already trading, or potential investors in a region - in this process will be critical. The Chancellor's delegation with business leaders to China, is very much a part of kick-starting that discussion. His Northern Pitchbook showcases £24 billion worth of projects that are available for investment to enhance the economic development and transport infrastructure of the Northern Powerhouse.
But the Government wants a single point of contact, if it is to relinquish this level of control; mayors appear to be a central plank of the devolution process. Mayoral governance is an internationally proven model, but could the Government's insistence that there must be a "metro mayor" for devolution to take place, be a barrier to the devolution process as a whole? It seems from the Cornwall devolution package that the Government's approach may become more flexible ; the deal announced on 16 July 2015 does not include a mayoral appointment. Treasury justification for this is that Cornwall is already a unitary authority with a decisive leadership. How this will be negotiated in other deals remains to be seen. The latest draft of the Bill (after its third reading in the Lords) includes the original provision that:
"The Secretary of State may by order provide for there to be a mayor for the area of a combined authority."
And also a new provision, that such an order:
"shall not be used as a condition for agreeing to the transfer of local authority or public authority functions."
Having made its way through the House of Lords, the House of Commons will now probe the scope of the detail of the Bill (second reading in the Commons scheduled for 14 October 2015) - the considerable powers to be devolved, how they will be funded and the timescales involved.
What is clear is that devolution, rather than centralised control, is now the default assumption. A new clause 2 (introduced into the Bill after the third reading in the Lords) requires any new piece of legislation to make a "devolution statement" - ie that its introduction is compatible with the principle that powers should be devolved to combined authorities or the most appropriate local level - except where those powers can more effectively be exercised by central government.
DLA Piper will track the Bill's progress, in the context of our Northern Powerhouse blog, and report on the scope of Devo Deals as and when they are announced.