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Councils and LEPs need devolution on demand

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At Glasgow, the Liberal Democrats confirmed their long-standing commitment to home rule for Scotland by supporting full implementation of the further powers promised to Scotland during the referendum campaign by all three unionist parties.

We also confirmed our support for further devolution to Wales in line with the recommendations of the Silk Commission.

So, where does this leave England? There are two aspects to this. First, solving the question of English votes on English issues becomes paramount. This is seen as a major issue of principle by the general public. A solution must be devised within the next few months.

However, it is the potential of devolution within England which must now command the urgent attention of local government. I have, for very many years, believed that devolution would lead to more effective use of public money and could enable faster growth. More recently, I have also recognised the need for a route map of how to get there.

Scotland voted ‘no’ in the knowledge that even a ‘no’ vote would result in extensive new powers following the vow delivered from Westminster a few days before polling day. Newspapers across the north of England followed up on the day after the Scottish referendum result asking the government: ‘What is your vow to the north?’

It is a reasonable question but it invites the reply: ‘What is it that you want?’ There is a huge difference between a Scotland which already has a parliament, significant devolved powers and has been debating independence for two years and English regions and sub-regions which have no directly elected structures, few devolved powers and have not been thinking much about devolution other than in generalities.

Defining what is wanted in detail, with clarity about governance and resourcing, is an essential prerequisite to devolution.

Thankfully, ResPublica and Greater Manchester have now produced a route map. Devo-max – Devo Manc, published in September is a compelling read. Sensibly, it understands the need for incremental devolution leading within a few years to the full and final devolution of the £22.5bn annual public sector spend in the Greater Manchester City Region to Greater Manchester.

It addresses the key issues around the need for change to combat the silo approach of Whitehall departments and the 50 central institutions which funnel public spending into Greater Manchester with more than a thousand funding lines and hundreds upon hundreds of centrally set measurements of outcomes.   

There is now a public appetite for devolution within England. Opinion polls show that. It is though only a response in principle given that there has been little said as to what that devolution might contain, how it would be funded and what governance structures would manage new powers and responsibilities.

It isn’t necessarily straightforward. Take tax and spending. In a Scotland with devo-max, tax raised and public spending would be broadly in balance. This is because even though the Barnett formula would in time be eroded, Scotland is likely to keep the corporation tax raised there. That could include some 90% of all UK oil and gas tax revenues.

So, what Scotland would lose with no Barnett formula it would broadly recover through control of corporation and other taxes. This is a very important matter not least because it establishes the principle of geographical ringfencing.

Some voices in London, not least some mayoral candidates, are suggesting that what is good for Scotland is good for London. There is an increasing demand for London to keep more of its ‘own’ money just as Scotland may. This has the potential for being a very dangerous trend for the rest of England.

Happily, the London Finance Commission and the collaborative stance taken by London with Core Cities has been hugely helpful in establishing that current levels of spending across England will be protected even if stamp duty, for example, is devolved.

At Glasgow, Liberal Democrats agreed that we wanted to devolve more power and resources to individual councils, groups of local councils and local enterprise partnerships, as appropriate. To do that, we would introduce a Devolution Enabling Bill in the new parliament to permit devolution ‘on demand’ to councils or groups of councils.

This is not to say that everything Whitehall does is wasteful and we should avoid using ‘Whitehall’ as shorthand for civil servants based outside London since many work locally and across boundaries already. We should also recognise the capacity for specialisms which lie in Whitehall and which will continue to be needed.

There won’t be any more money from devolution unless it is raised locally but there will be more effective joined-up delivery of public services such as skills investment, blue light services, health and social care as well as welfare. It is a prize worth putting a lot of time and effort into.

Lord Shipley, government adviser on cities and Liberal Democrat peer




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