New powers for local government: early observations on the Cities and Local Government Devolution Bill

The 2015 Government has moved quickly on the devolution of power to local authority areas, introducing the Cities and Local Government Devolution Bill into the House of Lords on 29 May 2015. The Chancellor, George Osborne, has made clear that this Bill forms part of the Government’s stated intention to create a ‘Northern powerhouse’, rebalancing the economy of the UK. What does the Bill tell us about the direction of the Government’s policy in this area?

1. The key debates are still to come……

The Bill includes wide powers for individual Orders to be passed, establishing a unique set of functions for each combined authority. These are to be negotiated between the Government and each local area. It is the Orders themselves, not the Bill, which will fix the functions to be devolved in each area. The consultations and the Parliamentary debates over the future Orders are likely to become the focus of attention for the policy’s enthusiasts, its sceptics, and those wanting devolution to go further and faster.

2. ….but some of the outlines are clear.

But this is not to say that the whole of the public service universe will form part of the negotiations. The indications from the three ‘devolution deals’ (Manchester, Sheffield and Leeds) agreed in the last Parliament are that negotiations will centre on policy areas associated with economic growth: business support, skills, apprenticeships, land use, transport. The regularity with which these matters appear suggest that the Government determines the framework for the negotiations, even if tacitly. That said, it is not surprising that large urban areas should seek powers to improve their economic performance.

It seems likely that Orders made under the provisions of the Bill, covering additional city areas, would be concerned with similar policy matters: this would be at one with recent speeches from the Chancellor.

The Bill makes clear that combined authority elected mayors may, but need not necessarily, take over the powers of Police and Crime Commissioners. The associated papers make clear that the elected Greater Manchester mayor will have no power over health and social care.[1]

3. Elected mayors rule OK?…

A good deal of attention has focused on the power in the Bill to introduce directly-elected mayors for combined authorities. The Bill draws a distinction between mayoral functions (“general functions”) and the combined authority’s functions, and the individual Orders will be able to specify which devolved powers belong to whom. But it is not clear that the elected mayor will be the strong leader that its proponents desire and that its detractors fear. Many decisions will have to be taken by majority vote amongst the combined authority members, giving ample opportunity for a mayor’s programme to be frustrated – or driven – by the combined authority. This is emphatically not the ‘London model’ of a strong elected mayor controlling city-wide public services.

David Finch, leader of Essex County Council, recently mooted the establishment of ‘county governors’ – in effect, mayors of county areas. This would allow non-urban areas a way of accepting the Chancellor’s insistence on significant devolution of power being accompanied by an elected mayor.[2]

Slightly more unexpected are the provisions for elected mayors to set a precept on council tax bills, and for combined authorities (separately) to levy on their constituent authorities. These powers will help combined authorities with running costs, but neither is likely to raise large sums of money. They are a far cry from the demands for fiscal devolution made by a number of recent research reports. Powers to borrow may also be made available, depending on the terms of the individual Orders.

4   ….but joint working is the name of the game.

The devolution deals so far have been characterised by large-scale commitments to joint working between the Government and the locality. These have tended to outweigh commitments to the wholesale transfer of powers. The potential for combined authorities to strike out in new policy directions, independent of central government, has been limited.

This approach may well be retained when Orders come to be made. The Bill does include substantial powers to transfer public bodies entirely into the control of combined authorities; but the existence of this power does not guarantee that it will be used. As the Government controls the Order-making process, it seems unlikely that any devolution deal would be agreed which did not align with the Government’s own aspirations for a given area.

Author: Mark Sandford

[1]     Cities and Local Government Devolution Bill 2015-16, Delegated Powers memorandum, p. 6

[2]     David Finch, “This cannot be George Osborne’s final offer on devolution”, Local Government Chronicle, 22 May 2015