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BREAKING: Pro-devolution economist appointed to plum Treasury job

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The leading economist who chaired the City Growth Commission and urged council leaders to move “out of their comfort zone” to pursue devolution has been appointed as the Treasury’s devolution lead.

In one of the most significant parts of the reshuffle for councils, Jim O’Neill will be ennobled and will become commercial secretary to the Treasury.

He chaired the RSA’s commission, which reported last year, arguing for metropolitan councils with “robust” governance structures to enjoy more powers, including the flexibility to borrow on the open market. The commission argued they should also be given longer finance settlements, stretching up to a decade, and be able to pool budgets at a city region level, and retain business rates and council tax revenue.

In an LGC interview last year, Mr O’Neill recalled a meeting with council leaders and said: “They had a bitch about having no powers but didn’t come out with a credible or persuasive agenda for getting more.”

Mr O’Neill, a former Goldman Sachs Asset Management chair, urged English local politicians to capitalise on the momentum building up behind devolution in the wake of the Scottish independence referendum.

His report recommended that the process for devolving power and responsibility from Whitehall to UK cities, which it dubbed “devo met”, should run in parallel with that for Scotland.

It recommended the establishment of an independent devolution commission to evaluate applications for “devolved city status” by January this year. This body would vet devolution bids from May’s general election onwards.

The RSA commission said combined authorities had “great potential” as governance structures, but suggested directly accountable “metro mayors” may offer the most “resilient” oversight mechanism.

Mr O’Neill famously devised the “BRICs” acronym, to describe the emerging powerhouse economies of Brazil, Russia, India and China.

Mr O’Neill’s appointment was announced as the structure of the full Department for Communities & Local Government team emerged.

Baroness Susan Williams, the former Trafford MBC leader, will be the department’s representative in the House of Lords.

Former local government minister Kris Hopkins has left the department to become a whip, while Lord Ahmad, who oversaw cohesion issues, moves to a joint role between the Home Office and Department of Transport.

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