The FINANCIAL — Karel Williams comments in The Guardian on devolution powers for the North, according to Manchester Business School.
What single policy will simultaneously bankrupt northern city governments, destroy the NHS and privatise whatever is left of local public services?
If you believe a slew of recent articles, this legislative exocet aimed at the very heart of progressive politics is none other than DevoManc, the government’s plan to hand new powers to a mayor and the combined authority of Greater Manchester. As devolution spreads to Cornwall and onward to other northern conurbations such as south- and west-Yorkshire, the north east and Merseyside, this debate will only intensify.
The criticism is overblown, especially when you consider how limited George Osborne’s offer of devolution really is. Essentially, places like Manchester are being offered the chance to show that they can manage their own economic development and set out convincing plans for reforming the health and skills systems. Sceptics can sleep soundly knowing that the chancellor will not devolve new power over a penny of taxation, leaving us comfortably the most centralised country in the developed world.
What really underpins much of the criticism is deep unease at the government’s narrow approach to economic development. Academics such as Manchester Business School’s Karel Williams point out that England’s regions are hugely unequal, that the problem has been getting worse, and that DevoManc is a wholly inadequate response, especially in the context of public service cuts. They have a point: if devolution is supposed to be a panacea for the north’s economic woes, then it will fail.
But talk to people in Greater Manchester’s councils, and local authorities in many other parts of England, and you will find that their goals are much more realistic: to create a virtuous cycle in which those with poor skills get decent healthcare to make them fit for work, better training to equip them to get a good job, decent and affordable housing and good transport links. If Greater Manchester pulls it off, it has a shot at increasing its tax income and reducing need for its services.
The real problem with devolution is that it is not ambitious enough. Greater Manchester can create growth and increase its tax revenues, but all but a sliver of that money will go back to the Treasury. The city’s councils might get someone back into work, but they see just 7% of the overall saving to Osborne’s coffers. Without locally retained taxes, the virtuous cycle of growth and inclusion becomes far more difficult to realise.
Local authorities also lack ambition. Councils could use the devolution process to reinvigorate local democracy, bringing citizens and civil society into the heart of new approaches to local government. They could make a stronger case for alternative models of economic development, focusing on growing their social and cooperative economies, borrowing to invest far more ambitiously in housing or setting up US-style venture capital funds to foster start-up culture.
Criticism is healthy, but too many of devolution’s detractors are setting up a series of impossible hurdles for councils to vault. The likely result is not a better devolution deal, but stasis. If you’re against devolution, then you are saying that Osborne can run your city or county more effectively than the people you elect locally.
Places should take the powers while the deal is still on offer, then fight for more and better. This is the only to make sustained progress.