William Eichler 07 October 2015

Council leaders welcome chancellor’s ‘devolution revolution’— but problems remain

Council leaders welcome chancellor’s ‘devolution revolution’— but problems remain image

Local government leaders are positive about further devolution, but big challenges remain according to new research.

A study by think-tank Localis, carried out on behalf of Grant Thornton UK LLP, shows that there is a lot of support among local leaders for the chancellor’s ‘devolution revolution’.

However, it also highlights certain practical challenges that remain; in particular, the fact that some devolution bids fail to fall in line with central government thinking.

The aim behind Localis’ report, Making Devolution Work, is to provide practical guidance to local leaders on how to get the most out of the devolutionary process.

Paul Dossett, head of Local Government at Grant Thornton, said: ‘This report is aimed at getting under the bonnet of the devolutionary conversations taking place between Whitehall and local government across England. These discussions will shape the way public services are commissioned and delivered for decades to come.’

It shows that council leaders believe, on the whole, that devolution will bring a number of benefits to residents, especially in the areas of transport and infrastructure, health and social care, and housing and planning.

Other positive signs for devolution from local government leaders include:

• Seventy-two per cent of local authorities say devolution conversations with Whitehall were constructive or very constructive
• Seventy-four per cent think that their bid is based on a genuine functional area
• Two thirds say conversations with neighbouring authorities have been constructive
• Eighty-two per cent accept the prospect of forming a combined authority as a precursor for further devolution

The report does, however, bring to light several misunderstandings about what central government expects to see.

While Whitehall wishes to see ‘innovation’, only one in every nine local government stakeholders interviewed thought local public sector innovation was a vital priority for the government.

Central government also wants to see a unity of purpose between public sector actors in the devolutionary process. But, according to Localis’ findings, less than one in seven survey respondents believe the government view ‘long term collaboration with other public sector bodies’ as of vital importance.

Another misunderstanding concerns fiscal devolution. Almost half (47%) of the survey respondents believe it will happen inside this parliament and a further 33% think it will happen within the next parliament.

But the reality is, despite business rate devolution, further devolution of other taxes or tax raising powers is not on the agenda, and councils do not have autonomy to borrow money against anticipated tax receipts to invest in new infrastructure.

Alex Thomson, chief executive of Localis, concludes: ‘Though several city regions will have successfully negotiated substantial devolution deals by the end of this year – and many others will be midway through submitting proposals – devolution will be a long and iterative process. By shedding light on the current round of talks and proffering suggestions to those in central and local government, our research is intended to help guide this process.’

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