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Devolution has created a seismic shift in the way authorities work together

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The chancellor’s case to rebalance the economy last year was the most important statement on the UK balance of economic competences that we have seen in decades.

The idea of creating strong, interconnected urban areas beyond the capital – much like it is in China, Germany or the US, where economic power is much more evenly spread out across the country – is one of the reasons I took this job.

I see rebalancing the economy as having two focuses: first, a programme of investment to improve things like infrastructure, connectivity, skills, and innovation across the country; and second, a move towards much greater devolution. It is the latter that offers such opportunity for local leaders.

As chair of the Cities Commission I observed that a key driver of this work is enabling local decision-makers to determine what’s best for their communities. That’s why handing significant powers to areas through the kind of radical devolution deals we have secured with Greater Manchester, and are now working through with other areas, can deliver the kind of economic growth and regeneration that has eluded us for decades.

The challenge for local authorities now is to make the most of it.

The offer we made to local leaders in city regions is about handing over significant powers to those areas that agree to have a point of accountability in an elected mayor. This is already creating a seismic shift in how local areas work together. Take the West Midlands, where once the idea of local councils across this region working towards a combined authority seemed unthinkable. It is now a reality.

The deals we have done already are opening the door for other areas – not just cities – to come forward and say: “I want these freedoms too.”

We can see local authority leaders becoming more ambitious about what they might try to achieve, which is very positive, because I believe the real achievements come when we step out of our comfort zone.

We are now encouraging places to move quickly and ambitiously to agree devolution deals, with those who want to be first in line submitting their proposals, which include provision for a mayor, by 4 September if they want to do a deal by the time of the spending review. We will, however, of course consider submissions from all places that have strong, credible proposals after the spending review too.

That has rather created a whirr of activity at the Treasury as our officials and ministers speak to a range of areas about what might or might not work, but I happen to think that is hugely exciting. Working together, we can remake the way our country is governed: nothing less than a devolution revolution.

Lord O’Neill, commercial secretary to the Treasury





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