The super-centralisation of the English state – Why we need to move beyond the devolution deception

Introduction

Public power in England is being restructured but not in the way Government ministers suggest. The Government claims to be pursuing a policy designed to devolve power to sub-national governments in England – to so-called ‘combined authorities’ in city regions and elsewhere. Ministers argue, for example, that the Cities and Local Government Devolution Act 2016, and associated measures, are designed to deliver radical devolution of power to the great cities of England. In this article, it will be suggested that this is a deliberate devolution deception. Ministers are not at all interested in creating a powerful system of sub-national governance, rather their undeclared aim is to super-centralise the English state. Instead of giving local democracy a significant boost, the Act, and the associated process of secretive ‘devolution’ deal making, is leading to an extraordinary centralisation of power in Whitehall. It will be suggested that, if England is to prosper economically and socially, we need an entirely new strategy for the development of sub-national governance, one that learns from abroad and leads to a significant strengthening of the fiscal and policy power of elected local governments.

The argument unfolds in four steps. First, it is helpful to retreat from the ins and outs of current public policy making and examine the way the centralisation of power in England has segued into super-centralisation over a period of 30 or more years. Because this process of centralisation has advanced in a multitude of small, and not so small, steps it is possible that many citizens and, possibly, some policy makers and scholars, may not be aware of the way Whitehall has orchestrated a truly remarkable extension of ministerial power.

Second, we identify the main flaws in the Government’s current approach to ‘devolution’ in England. Parliamentarians have produced several reports examining the performance of ‘devolution’ policy and they have not been slow to highlight the fundamental weaknesses. Academic analysis has also highlighted a number of concerns.

Third, we turn our attention to innovations in sub-national governance in other countries. The Local Government Association (LGA) has become increasingly concerned about the over-centralised approach being developed by the UK government. Early in 2016, the Association invited the author to prepare an international review of models of sub-national governance in other countries (Hambleton, 2016). Findings from this research are summarised. The evidence suggests, inter alia, that it is not necessary to have a directly elected city region mayor to have a very effective form of sub-national governance.

The final part of the article draws out the key themes that emerge from the analysis. It suggests that the UK government is falling, either willingly or inadvertently, into the trap of ‘seeing like a state’ when success in our 21st century globalising economy requires governments to ‘see like a city’. Suggestions for revitalising devolution policy are put forward.

The process of creeping super-centralisation

It is difficult to identify exactly when the central state started to make truly serious incursions into local democratic power. Stewart (2014), in his overview of the way local government in England has changed in recent decades, suggests that 1974 may have been a turning point. He discusses the reorganisation of local government in England and Wales that took place that year, and notes that, at the time, the move to create a smaller number of larger elected local authorities was expected to establish a stable structure of local government, one that would herald an expansion of freedoms for elected local authorities. This was not to be the case:

Many in local government before reorganisation felt central government control to be excessive, yet the experience of the last forty years has been of centralisation even under the label of localism with the 2011 Localism Act containing over 100 powers for central government over local authorities. (Stewart, 2014: 847)

In a previous Viewpoint, I explained how Conservative Prime Minister Thatcher, with her Rates Act of 1984, pushed through legislation that enabled the central state to decide, over the heads of local voters, how much they would be allowed to tax themselves (Hambleton, 2015a). This was, in my view, a key turning point in the Whitehall attack on local democracy. The central state took the power to force elected politicians to comply with central diktat, even if this required them to disregard the expressed preferences of the voters who elected them. In countries that value the importance of local democracy, this idea of a higher level of government taking the power to ‘cap’ local tax-raising is viewed as incomprehensible.

In 1984, the Joseph Rowntree Foundation became concerned about the uncertain and acrimonious relations then existing between local and central government, and set up a major research programme to study local and central government relations. In the period 1989–1996 over sixty research reports were published. ¹ Sir Charles Carter, who chaired this research programme, summarised the findings in a single report and concluded that elected local authorities must have ‘the freedom to do things differently’ (Carter, 1996). This fundamental insight is well understood in other Western democracies.

In making this point, Sir Charles did not adopt an anti-central government stance – the title of his report on local/central government relations is Members one of another. But he was clear that central government should understand that it needs an inventive, powerful system of local governance if it is to succeed:

… where leadership is especially needed is in promoting the idea that doing things differently is not a grounds for suspicion or rebuke or bureaucratic obstruction, but the essential means for the emergence of new ideas which can then compete for more general acceptance. (Carter, 1996: 81–82) (author’s emphasis)

A recurring pattern in the shift from centralisation to super-centralisation of the English state is that opposition parties, more often than not, seem to forget their sterling opposition to over-centralisation once they have been elected to national office. Here I highlight two startling examples. First, in 1997, the newly elected Labour Government, led by Tony Blair, chose to retain ‘capping’ even though the party had campaigned on a commitment to abolish it. Tony Benn, noted in his diary on 17 July 1997: ‘Believe it or not, the Government has decided to continue the rate-capping of three local authorities … having spent thirteen years denouncing rate-capping as an infringement of local democracy’ (Benn, 2002: 428).

Second, it is instructive to note that Greg Clark, now Secretary of State for Business, Energy and Industrial Strategy, co-wrote a blistering attack on Labour’s centralised approach to government when he was Director of Policy for the Conservative Party (Clark and Mather, 2003). Their report, Total Politics. Labour’s Command State, is a lucid analysis of four drivers of centralisation: (1) targets imposed from Whitehall, (2) centrally controlled funding, (3) bureaucratic audit and inspection, and (4) rigid terms and conditions. In the light of this analysis, Clark (with his co-author Mather) concluded that: ‘We want to create local communities where: … Local government is directly accountable to ordinary people, not lost in the complexities of Whitehall’ (Clark and Mather, 2003: 100).

Sad to say, it turns out that ‘lost in the complexities of Whitehall’ is a strikingly accurate description of the situation Clark created when he became a Secretary of State. Those trying to design and develop arrangements for the new ‘combined authorities’, to be set up in May 2017, are required to engage in the preparation of Parliamentary Orders of mind-boggling detail and to negotiate mountains of case-specific detail with Whitehall civil servants.

When he was Secretary of State for Communities and Local Government, in 2015–2016, Clark introduced extraordinarily complicated arrangements for the detailed control of specific sub-regions in England. As the next section explains, the secretive and rushed approach to detailed ‘devolution deals’ for specific city regions, one that involves ministers deciding on the minute details of particular devolution bids, makes the Blair Labour Government’s approach to local government of the 2000s appear pretty much hands off.

The main flaws in UK devolution policy

The central problem with the Government’s approach to devolution in England is that it is not devolution at all. The Government is more interested in defusing blame for their misguided public spending cuts to local government than in empowering elected local authorities to make sound decisions on behalf of the citizens who elected them. Ministers have deliberately avoided providing clear, measurable objectives for devolution, preferring a strategy involving the construction of ‘devolution deals’ behind closed doors. On the basis of their own unpublished preferences, Ministers are picking and choosing which localities are to benefit from these deals. Ministers decide the criteria, Ministers decide the contents of each deal, and Ministers decide what funding will flow to the selected areas. The suggestion that this is a ‘devolution’ policy represents a misuse of the English language.

Importantly, Parliamentarians have noticed that the Government’s approach is misguided and they produced three well-informed critiques of UK ‘devolution’ policy last year. First, the House of Commons Communities and Local Government Committee, in Devolution: The Next Five Years and Beyond, said ‘… the policy risks being rushed and appearing driven by a purely political timetable’ (House of Commons Communities and Local Government Committee, 2016: 3). The committee did not mince its words: ‘From what we have seen and heard, we are very concerned that the public will not understand who will be responsible for what in their local area’, (p. 34). The Committee also takes the view that it is wrong to impose directly elected mayors on areas that do not want them: ‘… local areas should be free to decide whether an elected mayor was the right model of governance for their area’ (p. 30).

Second, the All-Party Parliamentary Group Inquiry into better devolution for the UK argued in its report, Devolution and the Union, for a much more thoughtful approach. It noted that: ‘Progress to date has been piecemeal; devolution arrangements emerging through bilateral conversations and narrow constitutional amendments fail to take a view in the round’ (All Party Parliamentary Group, 2016: 4). The Group argued that the principle of ‘subsidiarity’ should be applied to all levels of government, meaning decisions should be taken as close to local people as possible.

Third, in July 2016, the House of Commons Public Accounts Committee weighed in with a devastating critique of government devolution policy. In its report, Cities and Local Growth, the committee sets out nine sensible recommendations (House of Commons Committee of Public Accounts, 2016). The committee says that the Government has not thought through the implications of devolution for central government departments. The decision on ‘Brexit’, which came after the report went to press, makes this criticism about the failure to consider the implications for Whitehall even more troubling. The committee also criticised the breakneck pace: ‘The speed of the process so far has already led to a lack of meaningful consultation with stakeholders, including local MPs, councils and voters’ (p. 6).

Various academic studies also show that the Government’s policy is failing to empower territorial governance in England. For example, Nurse (2015) examines the rhetoric around the creation of a ‘Northern Powerhouse’ and uncovers much confusion and little real progress. Several scholars have argued that ‘devolution’ policy can be more accurately described as the imposition, on a case-by-case basis, of bespoke, contract-style agreements on particular localities, agreements that will be very tightly monitored by, what can only be described as, an over-bearing central state. For example, O’Brien and Pike analysed the ‘city deals’ introduced by the Conservative and Liberal Democrat Coalition Government, in the period from 2011, and concluded that: ‘Regional and urban policy is being recast as asymmetrical and transactional “deal-making” and negotiation between central national and local actors unequally endowed with information and resources leading to highly uneven and inequitable social and spatial outcomes across the UK …’ (O’Brien and Pike, 2015: R15).

Sandford, having carried out an initial analysis of English ‘devolution deals’, comes to, essentially, the same conclusion: ‘Accountability, governance and even geography take second place to the aim of improving central policy outcomes via a contract-style relationship’ (Sandford, 2016: 1).

It is difficult to overstate the degree to which the central state is now determining exactly what is to happen in each ‘devolution deal’. The plans are for seven mayoral elections for ‘combined authorities’ to take place in May 2017: Cambridgeshire and Peterborough, Greater Manchester, Liverpool, Sheffield, Tees Valley, West of England (Greater Bristol) and West Midlands. In each case bespoke Parliamentary Orders, prepared under the Local Democracy, Economic Development and Construction Act 2009, have been laid. By way of example, the West of England Combined Authority (WECA) Order 2016 has eight parts and six schedules. It is fiendishly detailed, and it is not the only Order that will relate to this territory. As detailed negotiations proceed, additional Orders for each ‘combined authority’ will be drafted and presented to parliament. The super-centralisation process is not, then, a ‘one off’. This process will continue year after year on an area-by-area basis, with Ministers deciding whether or not to allow specific combined authorities to make subsequent changes to their existing ‘devolution’ deals.

A further problem is that the funds that will flow to these ‘combined authorities’, as a result of these negotiations, are vanishingly small. Take the devolution deal that has recently been negotiated for the WECA. This envisages £30 million a year coming from central government to the new combined authority, which will start work next May, and will comprise Bristol and the two neighbouring unitary authorities of Bath and North East Somerset and South Gloucestershire.

Bristol contains half the population of the combined authority. As a notional exercise, we can suggest that the city might receive something like half the funding, perhaps £15 million a year, from this ‘devolution deal’. Not all bad, you might say. But central government is slashing its mainstream financial support to Bristol, as well as neighbouring authorities. The cut in central government financial support to Bristol City Council is from £201 million a year in 2010/2011 to £45 million a year in 2019/2020 – that’s a 78% cut. If these cuts go ahead Bristol will, in 2019/2020, receive £156 million a year less from central government than it did in 2010/2011. True, a rising income from business rates should help to fill the gap, but a gaping fiscal chasm will remain. In the light of these figures, the ‘extra’ £15 million a year from the devolution deal is, of course, not ‘extra’ at all. Rather, it merely reduces the size of the fiscal damage central government is doing annually to Bristol to a cut of around £140 million a year. Recall that the Bristol city region is relatively prosperous. The fiscal hit on city regions in the north of England, whether or not they have ‘devolution’ deals, can be expected to be much worse, because their business rate income is unlikely to be as buoyant as local authorities in the south, like those in the Bristol city region.

Given the extreme, top down ‘do as I say’ approach being imposed by central Government, it is hardly surprising that some localities have decided to walk away. For example, the devolution deals in the North East, in Norfolk and Suffolk, and in Greater Lincolnshire have already collapsed, and there is uncertainty about whether deals for other sub-regions will be agreed in the future. Leave aside the details of local struggles and myopic conflicts now disfiguring politics in parts of England, the central issue for those interested in delivering a real devolution policy relates to political accountability. In a truly devolved system of governance, and we will examine some inspiring examples in the next section, elected leaders are answerable ‘downwards’ to the people who elected them, not ‘upwards’ to distant figures in higher levels of government. The policies being rushed through by the UK central government are not in line with this widespread understanding of the meaning of the word ‘devolution’. Rather, the directly elected mayors of combined authorities and the councillors who work with them will be, despite their local electoral legitimacy, expected to be directly answerable in all manner of ways to Ministers in Whitehall. There can be little doubt that this is an unsustainable model of sub-national governance.

Learning from sub-national governance in other countries

In my new book, Leading the Inclusive City, I examine place-based leadership in 14 different countries and draw lessons from the experiences of some of the most innovative systems of local governance in the world (Hambleton, 2015b). This international comparative analysis of urban policy, and the changing dynamics of city and city region governance, suggests that the super-centralised approach to devolution in England is completely out of step with progressive policy making in other countries. I found no other country that is pursuing such a top down ‘we know best’ approach to city region governance. In researching the book, I discovered many examples of inspirational local leadership – in, for example, Copenhagen, Curitiba, Freiburg, Malmo, Melbourne and Portland. In Denmark, Brazil, Germany, Sweden, Australia and the USA – and, for that matter, many other countries – we find elected local authorities making remarkable progress precisely because the central state is not interfering in what the elected, locally accountable local authorities are doing.

In 2016, the LGA invited the author to prepare an international review of models of sub-national governance in other countries. The aim of this study was to widen the conversation about devolution policy in England. The report is available in two versions on the LGA website: a short, accessible report for busy practitioners and a longer research report providing a more detailed overview of the dynamics of devolution in England and a fairly full account of international innovations in sub-national governance (Hambleton, 2016).

Based on consultation with city leaders in England the report sets out six principles for good governance that could be helpful for those creating combined authorities: civic leadership; effective decision-making; transparency and efficiency; accountability; public involvement and business engagement. There are different ways of delivering good performance against these criteria and the report explores some of the different routes.

The international literature on metropolitan and non-metropolitan governance suggests that reform options lie along a spectrum. At one end, the solutions involve the merger of existing units of local government into larger municipalities. In the middle area of the spectrum, we find various collaborative arrangements designed to produce effective collective action for large areas through inter-local agreements, coalition building and/or the introduction of an additional tier of government. And at the far end, we find those who try to make a virtue out of governmental fragmentation. From this ‘public choice’ perspective, small units of local government should behave as if they are in a market place.

By drawing on an analysis of successful city region governance models around the world, the report provides profiles of four models that have won praise internationally. These examples are chosen to illustrate reforms that can be positioned at very different locations on the merger-to-hands-off spectrum. They are: Auckland Council, New Zealand; the UK’s Greater London Authority (GLA); Portland Metro, in Oregon, USA; and Stuttgart City Region, Germany. These examples illustrate very different ways of governing large areas. The six principles of good governance are used to provide an assessment of the strengths and weaknesses of these different models. Two of the examples – Auckland and London – have directly elected mayors, the other two do not. We can note that no examples of effective models of ‘public choice’ approaches to metropolitan governance could be found.

In 2010, the New Zealand government abolished eight local authorities in Auckland and created a large unitary local authority, led by a directly elected mayor and 20 councillors. In addition, there are now 21 elected local boards that have responsibility for decision-making about local services. The Auckland Council has a population of 1.6 million, considerably larger than any unitary authority in England. It raises the possibility that it might be desirable to consider merging local authorities in existing English city regions into enormously powerful, unitary city region authorities.

The GLA was created in 2000 and is a strategic metropolitan authority. It has a directly elected mayor and a London Assembly comprising 25 assembly members. It is a second tier of government and the London boroughs continue to provide most local government services. The GLA is widely respected internationally, not least because Mayor Livingstone had the vision to introduce a congestion charge – a tax on vehicles entering the central area of the capital – in 2003. This measure has led to major improvements in public transport and significant environmental gains (Richards, 2006). The implication here is that it could be desirable to consider creating English city region authorities on the GLA model. Such a move would differ significantly from the curiously complicated, and opaque ‘combined authority’ proposals envisaged by the Cities and Local Government Devolution Act 2016 and related legislation. There would be direct election of a city region mayor alongside direct election of city region assembly members.

Created in 1978, Portland Metro is, rather like the GLA, a metropolitan level of government operating above existing municipalities. Voters elect a president plus six councillors to run the Metro and they also elect a Metro auditor to hold the Metro politicians to account. The president appoints members to committees and commissions but does not have any powers independent of the council. This model of metropolitan governance, which serves a population of 1.8 million people, is, arguably, one of the most effective in the USA. Strengths include: direct election of the president, direct election of senior councillors and direct election of the person responsible for scrutiny of the executive. The introduction of such a model in England could enhance the collective leadership of city regions. It would provide a significant boost to the power of citizens, as they would directly elect not just the senior figure – the President – but also other senior councillors and, interestingly, a powerful scrutiny leader.

The Association of the Region of Stuttgart is different again. Governing a city region with a population of 2.6 million, and introduced in 1994, the directly elected regional assembly has 87 members. These politicians are elected using proportional representation and the assembly chooses the chair. As with the Portland Metro, this person has very little independent executive power. A consequence is that the civic leadership of this major, and very prosperous, city region in southern Germany is guided by a strategic organisation that is very accountable to local citizens. This model provides more of a challenge for the English system of local government because it would require the introduction of a system of proportional representation.

The international evidence shows, then, that different cities and city regions in different countries have adopted different models of leadership. In particular, this research shows that directly elected mayors should not be seen as the only way of organising the political leadership of sub-national governance in England. On the contrary, if devolution is to mean anything, elected local councillors should be free to design and develop alternative forms of governance for combined authorities. Welcoming such flexibility would open up creative opportunities and a variety of ways of refreshing local governance could emerge. Note that, in all the models of sub-national governance presented in this report, all of them widely regarded as successful, the elected politicians are accountable ‘downwards’ to their citizens. This contrasts sharply with the present approach to so-called ‘devolution’ in England. As we have seen, the devolution deals agreed to date appear to be more like contractual arrangements in which local leaders are expected to be accountable ‘upwards’ for the delivery of specific programmes and projects as set down by central government officials.

Developing a new strategy for devolution in England

What are the implications of this analysis for devolution policy in England? Three pointers emerge. These concern: (1) ways of seeing, (2) local/central power relations in England and (3) international lesson drawing.