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The many faces of devolution

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The Greater Manchester Combined Authority is blazing its trail, but where and how will others follow? Just over a month on from the publication of the Cities & Local Government Devolution Bill, this is clearly a very topical question for local authorities.

Participants

David Brown, chief executive Merseytravel and head of paid service, Liverpool City Region Combined Authority

Guy Clifton, head of local government advisory, Grant Thornton

Keith Cooper, acting editor, LGC (chair)

Paul Dossett, head of local government, Grant Thornton

Martin Ellender, deputy head of government advisory, Grant Thornton

Fraser McKinlay, controller of audit and director of performance, audit and best value, Audit Scotland

Stephen Meek, programme director, Cambridgeshire and Peterborough Public Service Board

Pat Ritchie, chief executive, Newcastle City Council, part of the North East Combined Authority

Neil Thornton, director of finance and corporate business, Salford MBC, part of the Greater Manchester Combined Authority

The bill appears to offer localities the prospect that they will be able to negotiate individual devolution deals without having first established a combined
authority. It’s also clear that interest in devolution is growing rapidly, with the Local Government Association reportedly looking into how it can offer support to councils after being “swamped” with requests.

It isn’t just about ‘Devo Manc’ or the government’s commitment to creating a ‘northern powerhouse’. To cite just some of the activity currently building behind devolution, there is momentum developing around the idea of a new devolved deal for London (as exclusively revealed in LGC in April); counties in the southeast last month made a bid to new communities secretary Greg Clark; and Buckinghamshire, Northamptonshire and Oxfordshire CCs are also making the case to government under the banner of being “England’s economic heartland”.

But what actually are the opportunities and the challenges for local authorities from devolution? To debate these questions LGC in association with Grant Thornton brought together in June a high-level panel comprising authorities at various stages of their devolution journey, and, from Fraser McKinlay of Audit
Scotland, the perspective from north of the border.

LGC acting editor Keith Cooper, chairing the roundtable discussion, opened proceedings by asking panellists to consider, first, what they felt were the
implications of the new bill for the devolution agenda?

Pat Ritchie

Pat Ritchie

“The new government and the devolution bill and the emergence of things like the northern powerhouse are a very important, and radical, step in terms of devolution,” said Pat Ritchie, chief executive of Newcastle City Council, now part of the North East Combined Authority.

“If you combine [the bill] with the Greater Manchester deal it really does provide us with an opportunity - almost a game-changer - in terms of devolution. There are opportunities for places like the north-east and other parts of the country to come forward with propositions.

“But the really important thing in this is not so much about what’s on offer from government, but what actually do places want to achieve from devolution? That will look different in different parts of the country.

“There is no neat rulebook. Somewhere like Greater Manchester - a big, urban conurbation - will be very different to the north-east, which is more of a polycentric region with two big cities and strong links to its rural areas.

“This is not just about growth. You can see that in the Manchester deal and in the devolution bill itself; that it’s also about public sector reform and how we get the most out of the funding that’s available across the public sector.”

Neil Thornton

Neil Thornton

Neil Thornton, director of finance and corporate business at Salford MBC, part of the Greater Manchester Combined Authority, highlighted the evolution of
the current situation: “Devolution is such a fantastic opportunity for the Greater Manchester conurbation.

“Obviously what has been achieved in terms of the current proposals has been something that has been worked hard for over many years, in terms of the Association of Greater Manchester Authorities (AGMA), then moving into the Greater Manchester Combined Authority. This is not something that has
happened overnight for Greater Manchester.”

That point was important, said Guy Clifton, head of local government advisory at Grant Thornton. The AGMA was established 20 to 30 years ago: “How much has that lead-in time, in terms of the collaboration that has gone on, been critical to success? What does that mean for other localities who perhaps have not got that long history of working at that subregional level?”

“It’s been really important, that track record of working together as individual organisations,” Mr Thornton agreed. “Obviously in the early days it was predominantly around local authorities working together but increasingly it has become about public sector organisations working together.

Guy Clifton

Guy Clifton

“You can’t underestimate the importance of that sort of track record over a fairly lengthy period of time, in terms of the confidence that’s provided to civil servants and ministers that Greater Manchester is a place that can be trusted in terms of taking the devolution agenda forward.”

“Virtually everyone you speak to says ‘we’re going to do this through devolution’ but you get the feeling that, in some places, it’s not something that’s been high on their agenda in the past,” said Paul Dossett, head of local government at Grant Thornton. “Because everyone else is doing it they feel they need to jump on the bandwagon. But until you identify what your purpose is, you’re not going to get far.”

“Rather than a dash for power or devolution, you must have a clear understanding about what the important things are that you need to have influence or control over to make those places the places they need to be,” said David Brown, chief executive of Merseytravel and head of paid service at Liverpool City Region Combined Authority.

David Brown

David Brown

“So it’s actually about having not only the collaborative working track record but a really clear narrative and evidence base about what are the things you need to change. It is that critical analysis of what’s important, why is it important and then what do you need changing, either through powers or influence or
financial control to make that happen. That often gets lost in the talk about powers.

“The second element for me is making a clear rationale about why doing something at a sub-regional level is the right thing to do. Neil’s pointing out that it’s taken 20 to 30 years to explain to local stakeholders why working at a Greater Manchester level makes sense. Elsewhere we still have to make that case.
This is about devolution of powers down; it’s not about devolution or moving things from a local level to a subregional level. It is about more collaborative working, more efficient use of resources at that local level.”

It stood to reason that authorities north of the border were watching intensely how the English experiment would turn out, said Fraser McKinlay, controller of audit and director of performance, audit and best value at Audit Scotland.

Fraser McInlay

Fraser McInlay

“At the moment Glasgow and the Clyde Valley are the only city regions that have done a deal. What’s striking about that is there are some particularly Scottish elements to it. For example, elected mayors aren’t even part of the conversation at the moment,” he said.

“There’s also that really, really important thing which for all of us, particularly as auditors, is hard to hang on to sometimes, which is the focus on outcomes. How is this going to make things better and different? There’s a real risk in all of this that we get sucked into discussions about governance and
accountability and structure - and all of that’s really important - but it all has to be a means to an end. That’s going to be the real challenge for us.”

Mr Clifton raised the question of the importance of fiscal independence within devolution. Clearly, he added, devolution encompasses a wide range of elements: NHS
commissioning, transport, skills, housing and so forth.

“But to raise additional income, such as through local taxation or a tourist tax, how critical is that to those of you who are working on devolution at the moment? Is it more important than the other powers?” he asked.

Stephen Meek

Stephen Meek

the Cambridge City deal, the fiscal element was a big part of our initial proposition to government,” said Stephen Meek, programme director at
Cambridgeshire & Peterborough Public Service Board.

“Thinking about devolution for the wider Cambridgeshire and Peterborough area, which we are doing at the moment, we are asking all the questions about purpose and what is it for and ‘are we jumping on a bandwagon?’ and ‘is this something that will genuinely be good for the area?’. The fiscal dimension is really important because the degree of growth that is forecast for the area - the potential growth devolution could free up - generates significant infrastructure costs. You talk to business leaders in Cambridge and they will say growth, fantastic etc, but if we can’t get from the station to three miles outside
Cambridge that’s a bit of a problem.”

The debate then moved on to discuss issues such as the importance of good governance, the role of data, audit and measurement, and the imperative of bringing communities on board in any drive towards devolution. As Ms Ritchie put it: “There’s something about how in any kind of thinking about devolution, especially if there’s going to be an elected form of governance that goes with that, how do you win the hearts and minds of people in all of this? It’s not just about business.”

Martin Ellender

Martin Ellender

“You talk about devolution of powers from government to improve economic prosperity in the city region. To be honest, on the streets of Huyton [on Merseyside], that’s not on the top of their agenda,” said Mr Brown. “It’s much more localised issues, which are still part of that bigger picture, but you need to be able to engage people in understanding what this is about, and making it real.”

As the discussion drew to a conclusion, Mr Cooper asked panellists what they and others could learn from devolution so far. For Liverpool’s Mr Brown it was understanding what the Manchester deal is - the conclusion of a 20-30 year process - rather than how it is portrayed, as something that has come about overnight. It was also important to have “a clear objective of where you want to be as a place, with a lot of solid evidence to support that, and then understanding what are the barriers or the things we need to change”.

“Having evidence and [business] case, and having a vision: something that everyone can be signed up to,” said Cambridgeshire’s Mr Meek. “Ensuring the
politicians, whatever their party, are all saying the same thing and are absolutely committed. Not just going there with a ‘we’ve got to be in it to win, but if we don’t that’s fine’ attitude.

Paul Dossett

Paul Dossett

, one of the things Manchester tell me about it is they initially set themselves the challenge of showing how much Manchester contributed to
the UK economy, therefore ‘give us more’. Actually what they discovered was Manchester was a net beneficiary from the UK economy. But then that gave
them their pitch, ‘help us, help us reduce it’, I thought that was really interesting.

“Then, clearly the relationship that had been built up over 20 to 30 years and the ability then to sit opposite the chancellor and convince him. You can do all
the evidence and all the legwork and have all the bright ideas and documents, but in the end it’s that whites of the eyes.”

“For me, there is something really interesting about that leadership, governance issue and how you ensure this is a means to an end and not an end in itself; how you actually demonstrate the measurement long term, that it’s making a real difference,” said Audit Scotland’s Mr McKinlay.

“The importance of a clear vision, the importance of understanding what’s unique about your community, and understanding that in a real evidence-based way and developing propositions and taking decisions on that basis,” said Newcastle’s Ms Ritchie.

“The devolution agenda is all about enabling those decisions to be taken at a local level, where it’s easier to join up the budgets - and we’re developing our thinking at the combined authority level around how we might link that to economic growth.

“But also things like the ability to share data, the ability to work across budgets, which is at the heart of the Manchester deal. It’s not just a growth deal, it’s a public sector reform deal as well.”

 

Making devolution work

The LGC roundtable highlighted that, while what places want from devolution will differ, the opportunities involved are as much about enabling whole-system public service reform as they are about creating devolved powers to drive economic growth.

Potential benefits identified by participants included the ability to undertake long-term planning across different public sector funding streams, an opportunity to realise fiscal self-sustainability, and improving public sector productivity, economic prosperity, social outcomes, and citizen engagement.

The roundtable identified a number of key considerations for places progressing devolution:

  • Clear, shared objectives such as agreeing what growth means for a locality and how it should be pursued. This should be based on a clear rationale, drawing on an effective evidence base.
  • Being clear on the barriers and agreeing a route map to overcome them - but responding to opportunities as they arise on the journey.
  • Considering influence versus control Some localities may not want the full package of the devolved powers, such as skills, transport, housing, planning and NHS commissioning. How important are factors such as fiscal devolution (as opposed to increased influence over an existing budget) and subsidiarity - if a locality receives devolved powers, what powers can or should then be devolved further, and to whom?
  • Recognising when national is best, for example retaining the national planning framework, with devolved flexibility - or a ‘right to vary’ - to avoid perverse consequences.
  • How key roles should be allocated - the balance of power across participating authorities, and the need for key officers and elected officials to have a collaborative leadership style. How can capacity to lead and manage the devolution agenda be created and resources prioritised, including the political capacity to represent a locality?
  • Agreeing appropriate governance arrangements Democraticaccountability and scrutiny, as well as organisational structures, will be important to get right, but these are a means to an end and should not be at the expense of a focus on outcomes.
  • How best to win ‘hearts and minds’ How can you demonstrate the benefits of devolution to employees and the public? Can the public be re-energised to engage in local politics?

There will undoubtedly by other considerations for places considering devolution and perhaps the most important of these is the preparedness of organisations, and those who lead them, to concede their sovereignty for the greater good of local outcomes.

Guy Clifton, head of local government advisory, Grant Thornton

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