'City deals' could be a real step forward

As something of a veteran of central government efforts to devolve greater powers to cities, the latest announcement of a series of ‘bespoke’ city deals that could see a whole range of powers and freedoms devolved to England’s largest cities, might easily evoke the usual jaded response: I’ll believe it when I see it.

Yet there is something in the proposals, to be launched by deputy prime minister Nick Clegg and cities minister Greg Clark tomorrow, to raise a genuine sense of optimism that this time we may be about to take a genuine step closer to empowering the regional cities.

One reason to be more optimistic than in the past is the government has appointed a cities minister and the deputy prime minister has taken on the agenda. A lack of strong political backing for attempts by the Department for Communities & Local Government to devolve powers under Gordon Brown’s government meant the agenda never made it to the cabinet. Hopefully, that will now change.

But more importantly, as LGC exclusively revealed on Wednesday, there are an actual specific set of powers and freedoms on offer from Whitehall - rather than vague promises - many of which have been on the wish list of cities for quite some time.

For example, handing cities greater power over buses - something London takes for granted but almost the holy grail for Greater Manchester - could make a massive difference, along with strategic powers over rail and the devolution of local transport funding.

Likewise, a single consolidated capital pot along with the devolution of the Homes & Communities Agency’s regeneration and housing cash, would enable cities to bring together multiple funding streams, giving them the freedom to direct and prioritise economic investment.

There’s much else in the prospectus (the draft prospectus is here), for cities to seize.

But there is, of course, a catch: government wants to know who it is devolving to - and that’s where cities will need to step up to the plate.

The prospectus makes clear that it will expect cities to demonstrate strong and accountable leadership and robust governance arrangements and says, quite clearly, that the government favours directly elected mayors, with their democratic mandate.

However, the prospectus stops short of making the devolution deals conditional on cities adopting directly elected mayors in next year’s referendums.

There is of course a very good reason for this: the model of mayors proposed by the government cover just a single local authority - they are a mayor for Manchester City Council, not a metro mayor that would cover Greater Manchester -and the powers proposed in the prospectus are largely strategic powers that stretch across real economic areas.

As Lord Adonis said last week, by not including metro mayors in the Localism Bill ministers have “missed a trick” (and so did the last government) - ruling out what could have been the the most sensible vehicle for devolving the strategic powers outlined in the prospectus.

Instead, ministers have decided local enterprise partnerships will be the vehicle for the ‘city deals’. But for that to happen they will need to take on much more robust governance arrangements than is currently the case.

The prospectus says there is “no-perfect LEP-wide governance model that will suit all areas” and the “government will work with cities individually to develop models that work for them”.

But the Core Cities amendment in the Localism Act - which is the legal basis for the ‘city deals’ - identifies combined authorities, such as that in Greater Manchester, or economic prosperity boards - a statutory city region vehicle developed by the previous Labour government- as the most likely models of governance for devolution over real economic areas.

The core cities that have dragged their heels on bringing their LEPs onto a firmer footing now have good reason to do so. That will mean local rivalries will need to be put aside and, as in the case of Greater Manchester and their combined authority, a certain amount of sovereignty given up for the greater good of the wider metropolis.

To demonstrate the potential of the ‘city deals’ - and focus minds in other town halls - ministers should act quickly to devolve the whole menu of powers and freedoms to Greater Manchester, which has the requisite governance arrangements in place as well as a strong track record of private sector engagement.

The challenge to other cities would then be clear: get your act together, pool some sovereignty, and you too can move forward.