Saturday December 28, 16:05
Blog - 28th December 2024
The Ministry for Housing, Communities and Local Government published its white paper on English devolution entitled ‘Power and Partnership: Foundations for Growth’ on 16th December 2024. The government is focused on economic growth and sees radical reform of local government as essential if this is to be achieved. The purpose of this blog is to summarise the white paper and provide some comment.
The government says that its aim is to rebuild local government after years of mismanagement and decline. They intend to reset the relationship with local government, to give the sector more autonomy and put councils on the road to recovery. They intend to provide multi-year settlements, updating the way they provide funding to local government, end micro-management, and move to a meaningful partnership between central and local government. They intend to rebuild local authority workforces and modernise how councils do business. They recognise the vital role of local councillors as frontline community convenors, and executive members and leaders as partners in delivering the government’s missions.
Most people in the sector welcome these statements and this approach, but are sceptical about whether the government’s proposals will actually deliver devolution in practice. Devolution is not about giving grants to local authorities, it is about empowering them to take their own decisions.
The government considers that unitary councils can lead to better outcomes for residents, save significant money that can be reinvested in public services, and improve accountability with fewer politicians who are more able to focus on delivering for residents. Therefore, they will facilitate a programme of local government reorganisation for two-tier areas, and for unitary councils where there is evidence of failure or where their size or boundaries may be hindering their ability to deliver sustainable and high-quality public services. They will invite proposals for reorganisation from all these areas. They will take a phased approach to delivery, considering where reorganisation can unlock devolution, where areas are keen to move quickly or where it can help address wider failings. They are clear that reorganisation should not delay devolution and plans for both should be complementary. They will work closely with areas to deliver an ambitious first wave of reorganisation.
The Civic Hall in Leeds. Leeds City Council is one of the few unitary councils with a population of over 500,000 and is the largest in the West Yorkshire Combined Authority.
The government considers that new unitary councils must be the right size to achieve efficiencies, improve capacity and withstand financial shocks. They consider that in most areas this will mean creating councils with a population of 500,000 or more, but there may be exceptions to ensure new structures make sense for an area, including for devolution, and decisions will be on a case-by-case basis. Most existing unitary authorities (including London boroughs, metropolitan councils and new unitaries) have a population of fewer than 500,000 and this raises the prospect of expanding or amalgamating most existing unitary authorities including those that have only recently been created.
The Civic Centre in Newcastle-on-Tyne. With a population just short of 300,000, Newcastle-on-Tyne City Council is smaller than the government's optimum size!
Many in the sector agree that unitary authorities can provide clearer accountability and more economies of scale than a two-tier system. It is also clear that England currently has an inconsistent structure of local government that perhaps should be rationalised. However, it is not clear how the government arrives at the conclusion that 500,000 is the optimum population for a unitary authority. I am not aware of any research having been done to identify what would be the optimum size for a unitary authority and my own perception is that some of the most effective have a population of about 300,000. Reorganisation is also a time-consuming exercise and should it really be imposed on areas that have only recently been reorganised or on a local government sector that is clearly struggling to deliver services such as adult social care and children’s services with constrained budgets at a time of rapid change? The government says the gains would outweigh the costs but many in the sector are sceptical.
The White Paper claims to initiate the biggest transfer of power out of Westminster to England’s regions this century. It also aims to increase the number of directly elected Mayors and to increase their powers, saying that:
“Mayoral devolution works because Mayors can use their mandate for change to take the difficult decisions needed to drive growth; their standing and soft power to convene local partners to tackle shared problems; and their platform to tackle the obstacles to growth that need a regional approach. It works because they have skin in the game and are accountable to their citizens.”
Areas where mayoral combined authorities will exercise increased powers would include:
The government’s goal is to create strategic authorities in all parts of England that will be several councils working together, covering areas that people recognise and work in. Many places already have combined authorities that serve this role. The government intends to develop these new strategic authorities collaboratively and in partnership with existing local authorities. However, to ensure that citizens across England benefit from devolution, and to ensure the effective running of public services, the government will legislate for a ministerial directive. This will allow the creation of strategic authorities where local leaders have not been able to make progress. The government also plans to reorganise local government into unitary authorities in all areas. Therefore, unitary authorities and combined authorities will be imposed where there is local opposition or lack of agreement.
The government will put a framework into legislation setting out the powers that go with each type of authority. The framework is intended to be a floor on their ambition, not a ceiling. It is intended to enable mayors to drive growth and the public to hold them to account. The most far-reaching and flexible powers will be for mayoral strategic authorities. This suggests a continuation of the previous government’s approach of providing more powers and resources to areas that adopt political structures of which they approve – I’m not sure this approach can really be described as devolution!
The proposal for more directly elected Mayors is controversial. Many people in the sector consider that concentrating power in the hands of a single person undermines the role of councillors and conflicts with the need to ensure that all relevant matters are taken into account through collective decision making. However, some existing Mayors are generally acknowledged to have been able to drive progress in their areas in a way that council leaders have not been able to. Furthermore, conflict does not necessarily arise between mayors and councillors. For example, a year ago I was part of the Local Government Association’s peer review team that carried out a corporate peer assessment at Watford Borough Council. We concluded that it is an excellent authority with good relationships between the Mayor and the councillors.
The government considers that mayors can find it impossible to do the basics, like pass the budget or implement an effective transport strategy, because unanimity amongst constituent councils is sometimes needed. They say that deploying a veto can be a political device and not in the best interests of getting houses built or growing the local economy. So, they intend to move mayoral strategic authorities to simple majority voting, including the mayor’s vote, wherever possible. Many in the sector consider that a disadvantage to this approach would be a loss of democratic accountability.
The government proposes integrated financial settlements for established mayoral strategic authorities, seeing them as central to delivering change. These will commence at the following spending review, and their scope will be confirmed at each spending review based on functional responsibilities, and their value by a formulaic process. They will have a single systematised approach to spending controls and a single, streamlined, overarching assurance and accountability framework.
Outside of the integrated settlements, the devolution framework will include a simplified funding landscape for mayoral and foundation strategic authorities. This will include:
The government will reform local growth funding, rationalising the number of funds and moving away from competitions. Future local growth funding will recognise the centrality of strategic authorities for economic growth. Funding for mayoral combined authorities will continue with investment zones to create additional jobs and economic growth in areas that are underperforming economically.
The government considers that mayoral strategic authorities need funding certainty to plan for the long-term and get maximum impact from their spending. Therefore, thirty-year investment funds will remain a core part of the Devolution Framework, with existing arrangements honoured, new areas receiving this funding on their creation, and funding for new institutions standardised to increase fairness. In due course, the government will also remove gateway reviews for established mayoral strategic authorities that have passed gateway one or equivalent.
Mayoral combined and combined county authorities have been able to raise a mayoral precept since legislation made in 2016 and 2023 respectively. However, they cannot use this on their full range of functions, often including vital growth levers like bus services and adult skills. The government will legislate to change this, raising the value for money of this existing power.
What I would like to see emerging is funding of local government based on an objective assessment of need and local authorities being empowered to take their own decisions about levels of local taxation and priorities for expenditure.
The white paper is available on the government’s website. To view it, please click here.