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Can levelling up deliver effective devolution? Mayor of Teesside Ben Houchen on getting system change right

For a long time, the substance of the levelling up agenda felt amorphous and scattergun, with a sense from senior figures that they had been tasked with delivering something that was yet to be properly defined.

The eventual publication of the Levelling Up the United Kingdom White Paper last year sought to clarify this, outlining the key missions of the Government. System change and devolution was one of the central themes. At the recent inquiry session of policy institute Curia’s Levelling Up Commission, Mayor of Teesside Ben Houchen shared his thoughts on the devolutionary components of the agenda, how devolution has fared in Teesside and how devolution can best serve localities across the UK.

More of the same?

Devolution in England is a fairly uncontroversial topic in modern British politics. Every Prime Minister since Blair has put forward or vocally supported further devolution, based on the simple notion that localities know better than Westminster what they need.

In recent years, the devolution agenda in England has focused on the creation of (Mayoral) Combined Authorities (M)CA, wherein two or more local authorities join together and are often led by a directly elected metro mayor. Varying budgets and powers are transferred to these authorities from Whitehall, and the levelling up agenda pushes ahead with this trend, offering (M)CAs to areas that meet the guiding principles of effective leadership (code for directly elected mayor), a functional economic geography, flexibility in devolved powers and appropriate accountability frameworks.

While some have expressed concern that the ‘London-style powers’ of these (M)CAs as the White Paper describes may not be appropriate for rural areas with very different geographies and economies to London, Ben Houchen argued otherwise, saying: “we don’t have a city in the Tees Valley in the five local authority areas that I cover… It works very well here, so it definitely doesn’t have to be around large cities or Metropolitan areas.”

devolution teesvalley
The Teesvalley

Making devolution work

Instead, Houchen described what he felt to be more important factors for the success of devolution deals: “the two things you need for sustainable devolution to work, whatever the size, is a single community and a single economy.”

This is a very important point. If the (M)CA invests in one part of the area it represents and another part does not identify as being part of the same community, there will be a sense of injustice over the distribution of money to ‘other’ communities. Indeed, it is hardly surprising that the proposed Greater Yorkshire Devolution Deal in 2015 never went anywhere, as the rural communities and economies of North Yorkshire have little/nothing in common with the economies and communities of Sheffield and Leeds.

It is this kind of issue that frustrates local governments up and down the UK to differing degrees. The local government in Somerset for instance operates according to county boundaries drawn up in the 1400s, that do not reflect any kind of functional economic geography.

For this reason, the acknowledgment of the need for a sensible economic area and meaningfully singular community in the White Paper is an important point.

Indeed, when responsibilities are clearly divided, (M)CAs can be incredibly effective. Local authorities working together on issues that tend to bleed across dividing lines can only be a good thing. Moreover, as Houchen noted the greater devolution of finances in (M)CAs is key to granting a much more substantive degree of autonomy than in previously existing structures of local government:

“It does start to give that level of real autonomy. If you have a devolution deal, the combined authority gets a guaranteed amount of money every year for 30 years from government. That means that is devolved completely to the combined authority.”

That local empowerment is only set to stretch further when the (M)CA borrowing cap (currently at £800 million) is lifted: “this will allow Combined Authorities to act like Local Authorities, to borrow as much as you like on the basis that there is a prudent borrowing case and there is the ability to repay.”

Rationalising local government

However, with (M)CAs, the flexibility of devolution packages means that there remains significant confusion over what prospective M(CA)s can expect to be responsible for. Following the devolution deal negotiated between George Osborne and the leaders of Manchester, there has been little consistency:

“That was kind of seen as the template for what devolution across the rest of England could look like. And if you actually look at that deal, that encapsulates all of the powers under the current legislation that fallow for devolution within England. When you look at others across different areas, whether that was the West of England, the West Midlands or indeed the Tees Valley, you found that others, for whatever reason didn’t have quite all of the powers of Manchester, but we had a selection of different ones.”

For the public, finding out which  statutory powers and functions (M)CAs possess will require research  given the bespoke nature of each deal and their tendency to evolve over time with subsequent Orders.  

At the time, in 2017 there were several powers that the Tees Valley (M)CA were not granted, notably the powers of the Police and Crime Commissioner (PCC), which also encapsulated responsibility for fire. However, this is likely to change soon, as Houchen noted: “that is now being pushed as a UK government policy, that where there is a coterminous Combined Authority area with a PCC, then the Mayor will in effect become the PCC.”

There is certainly a reason for these differing deals and responsibilities, due to size, geography and the legacies of previous government and local authority responsibility sharing, there will be certain things that different areas will be (un)able to take on. But while a one size fits all approach is likely inappropriate, some greater degree of unification is important, particularly around skills and local economies:

“I think it’s fair to say every devolved mayor in England is united on the point around skills devolution…combined authorities have responsibility for managing the budget for adult education. We want it to go further than that. We all want to go further to post-16 budgeting because bringing the economy closer together with skills on a local economy basis is actually quite important.”

Given the importance placed by the levelling up agenda of encouraging investment in localities, third parties looking to invest in (M)CAs will need clarity that investment there, or a joint venture with the (M)CA itself is a safe harbour for such investment and that the (M)CA has the requisite powers and will continue to hold these powers.

Final Thought

While the offering of devolution deals across England is designed to rationalise the picture and tiers of local government, we instead have a sort of patchwork smorgasbord of overarching structures with varied and often ill-defined responsibilities. Even the least observant among us have noticed, you cannot cure local government of its dysfunctionalities by further muddying the water and lumping further tiers of government on top of it, that are ill-defined in their scope.   

(M)CAs can certainly work. With the financial powers they are being granted, they can hold a real and substantive degree of local autonomy, the kind which local authorities have hoped to have themselves for a very long time. However, if there is not absolute clarity over the division of responsibilities, there will be councils across the UK left feeling usurped and there will be politicians and officers fighting each other.

This squabbling over responsibility serves no one, least of all constituents. A much more rational approach is needed, based on matching desired outcomes to the most appropriate form of government, rather than trying to keep all levels of government happy all the time. Local government cannot be an exercise in placating different offices, particularly when that comes at the expense of service delivery.

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