There is a “unique opening and new impetus for a radical devolutionary settlement” in England under the next administration, according to a recently published report from campaign groups Compass and Unlock Democracy.
This instalment of our new Municipal Missions Manifesto series, which explores what a reset of local government should look like under the next administration, outlines what shape this devolution could take, as detailed in the report.
Devolution in England requires a “radical approach and a comprehensive, coherent and irreversible plan for reform”, state Compass and Unlock Democracy in their new report. They have made a number of recommendations for a devolution plan (which can be viewed below) based on an analysis of five recent proposals that could “provide inspiration and guidance” for an incoming government.
However, developing a plan that “really empowers localities” requires “rewiring the relationships between central and local government and between local government and its citizens, both from a structural and organic perspective and building long-term cross-party political commitment”.
The report is titled ‘Power to the People? The Route to English Devolution’, and is written by Jonathan S. Davies, professor of critical policy studies and founder/director of the Centre for Urban Research on Austerity at De Montfort University, and Arianna Giovannini, professor of political sociology at the University of Urbino Carlo Bo in Italy and previously associate professor of local politics & public policy and director of the Local Governance Research Centre at De Montfort University.
Basis for devolution
The five proposals assessed in the new report are:
- A 2023 report forming part of a review of the UK constitution jointly conducted by Institute for Government and the Bennett Institute for Public Policy. Called ‘Devolving English Government’, it concentrates on institutional reforms and sees these as a prerequisite to successful devolution.
- A 2022 Labour Party report that sets out a vision for a New Britain founded on a new relationship between government, communities, and the people, based on a need to rebalance the economy.
- A short 2023 paper directed to Labour’s shadow Housing and Levelling Up Team, which assesses what can be done by an incoming government to achieve a lasting devolution settlement.
- Three 2023 Fabian Society publications that set out a progressive case for devolution, with a particular focus on local economic development and social justice spending, and fiscal devolution.
- A 2023 report by New Local co-produced with local leaders across the country. Titled ‘A Labour Vision for Community Power: Participation, Prevention and Devolution’, it sets an agenda for action to redistribute power out of Westminster, with a focus on so-called ‘community power’.
Although all the proposals were found to have “considerable merit”, the report stated that the New Local proposals were “the most comprehensive […] primarily because of their reach and detailed attention to the need for community empowerment throughout the design and implementation of devolution”.
The results of a survey of local leaders conducted by Unlock Democracy in parallel with the production of the report “echoes the desire amongst many local leaders for a flexible, bottom-up and community-focused approach, breaking from the prescriptive approaches of past and present governments”, Davies and Giovannini said.
The ‘Power to the People?’ report adds that a strength common to all the reports is that they recognise the current ‘devolution by design’ model to be “inadequate, overly prescriptive and insufficiently sensitive to local need”.
Financial future
Funding is of “critical importance to the credibility and effectiveness of devolutionary arrangements”, the report states, noting that “the devolution deals set in place since 2014 do little in the way of addressing the problem of local government finance”.
The report found that the most commonly held principle among the five proposals analysed is “the call for an end to short-termism, the need for stable, predictable funding (e.g. 3-5 year cycles) and removing competition between places over scarce funding pots, through consolidation and needs-based allocation (equalisation)”.
New local tax-raising powers are recognised as very important, but none of the five proposals directly addresses the question of additional borrowing powers. “Indeed, borrowing is one area in which the local leaders survey commissioned by Unlock Democracy demonstrated ambivalence about the desirability of further devolution,” the report states.
However, the New Local report proposes a “new system of relationships that widens the discretion of the local level and allows mayors, councils and communities to take decisions on matters that affect their areas” by “fully embracing subsidiarity, insisting that institutions operating at different levels should have direct power for the policy areas that are best addressed by each level”.
New Local also proposes a strategy to change the funding of local government based on two phases. In the short term, they suggest the creation of more stable, predictable funding (based on 3-5 year cycles) and the removal of competition between places for funding pots. In the longer term, they suggest options for fiscal devolution to allow localities to retain a greater share of the tax they generate, including devolving a proportion of existing national taxation, such as income tax, set within a national framework and a robust system of equalisation.
“In this way, the report emphasises the importance of ‘funded mandates’, arguing that devolution is not just about passing down powers but also an appropriate level of funding to match them,” Davies and Giovannini said.
New Local also suggests revising, updating and adopting the Total Place approach originally initiated by New Labour but cancelled in 2010, with measures including greater flexibility for pooling public service budgets and joint planning to underpin collaboration and share the risks of upfront investment.
Recommendations
The ‘Power to the People?’ report makes a series of recommendations for how a plan for devolution should be made.
The report’s broadest recommendation is that any incoming government should take a holistic approach to the policy – working on the economic, institutional, cultural, geographic and democratic dimensions of devolution in tandem.
“A good, sustainable plan for English devolution therefore requires several steps, focusing on enhancing the autonomy of the local level in terms of power and funding, while also rethinking the governance and cultural dynamics of the UK system,” the report states.
“Any incoming government that is serious about devolution should be prepared to take up this challenge and initiate a bold programme of constitution-shifting reform that covers all these dimensions.”
Other recommendations include protecting the constitutional autonomy of devolved and local institutions through a dedicated English Subsidiarity Bill, “explicitly defined as constitutional legislation, that provides devolved and local authorities with exclusive powers within their competences, based on a principle of non-interference from the centre”, and devolving a wider range of powers, based on the principles of flexibility and fully funded mandates.
Building on the New Local analysis explored above, the report also recommends creating stable funding for local government through longer cycles, removing the current competitive approach to funding allocation, allowing sub-national authorities to set a range of local levies, and rewiring the funding system for sub-national government institutions “to address instability and chronic under-funding”.
The next government must also address the austerity-driven collapse in discretionary service provision, and revive and enhance place-based approaches to funding, Davies and Giovannini said.
On governance, the report calls for the creation of a statutory body that gives formal representation to English local government at the centre, and the establishment of a convention on the future of English governance by Spring 2025 to determine devolutionary goals and timescales. The convention could also devise a new formula for equitable needs-based funding, the report authors said.
Finally, the report also recommends enacting an English Subsidiarity Bill, enshrining the subsidiarity principle in law; developing mechanisms at both national and local levels to ensure that citizens have a say in guiding devolution; and the introduction of an organisational change programme by UK government “to work against the Westminster-Whitehall control-reflex, and that local government bodies do similar to counter ‘municipal Stockholm Syndrome’”.
The full ‘Power to the People? The Route to English Devolution’ report can be read here.
For more information on Municipal Missions Manifesto, read our introduction to the series here. All articles in the series are collected here.
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