Why we need triple devolution for the City Regions

The cities and city regions must be at the heart of the next Labour manifesto.  It is in the cities that the innovation which will create a new and more balanced economy will happen.  It is now more than a quarter of a century since metropolitan government was dismantled by the Thatcher government.  Labour restored strong governance to London and must now do the same for the other great city regions.

David Miliband used to refer to a “double devolution” from government to councils and from councils to communities.  If the cities are to succeed, I believe there needs to be a triple devolution of powers and resources – from Whitehall to the city regions and councils and from the councils to their neighbourhoods.

I believe this idea can provide a framework for Labour’s approach to localism and the cities but also a response to the looming crisis in the funding of public services.  It brings together the twin priorities for the next Parliament of modernising our economy and our public services.

Firstly, Labour must deliver on the promise generated by the City Deals and the Heseltine review.  There must be a genuine single pot created by pooling most of the money currently allocated to government departments for economic development, skills, housing and infrastructure investment.  This must be set out in the manifesto in detail and driven through in the Spending Review as a separate budget heading.

But if the city regions are to make the best use of this flexible resource then they must have adequate governance structures.  Combined Authorities should be created for all the core city regions and the council leaders of those Authorities should take direct control of the single pot, giving strategic direction to transport, housing, economic development, skills policy and strategic planning across their area, whilst sweeping away the current complex mesh of joint committees and other bodies.  Local Enterprise Partnerships should become advisory bodies to the Combined Authorities – the same arrangement that operates in London.

Secondly, at the level of the individual council, Labour should commit to a genuine transformation of local services.  We cannot do this on our own.  Government must open up departmental budgets and focus them on each local place, so that we can create fully integrated services, for example in health, social care, community safety, early intervention and welfare to work.  This integration will provide the basis for investment in prevention and demand management, enabling sustainable public services and better social outcomes.

Thirdly, Labour needs to support a radical shift to more community and neighbourhood based services, based on learning from councils such as Birmingham that have long supported internal devolution.  Providers such as housing associations, schools, social enterprises and community organisations can play a much wider role in supporting the life of the whole neighbourhood; not just housing services or environmental services or libraries or schools but joined up neighbourhood services.  This approach will also enable co-production and the empowerment of communities and individuals – a key Labour value and objective.

But in addition to all of this we need new freedoms to raise funds and invest locally.  Labour should legislate for genuine Tax Increment Financing and enable voluntary initiatives to raise local tourist taxes.  There is a strong case for enabling more flexibility in the council tax bands to create fairer taxation and Labour should show its commitment to localism by genuinely scrapping council tax capping.  Councils should also be given more freedom to invest in housing, perhaps linked to the creation of a new generation of community led housing associations.

Ultimately the electorate cares most about jobs and the economy and about the quality of life in their local community.  Labour’s positive messages about creating “One Nation” and a new economy must be matched by clear and radical policies for devolution.  Triple Devolution must be part of a bold, distinct and optimistic message at the next election.

Sir Albert Bore is the Leader of Birmingham Council. This piece appears as part of a collection of essays on the future of local government collated by the New Local Government Network.