Working with the Northern Powerhouse is not getting into the bed with the enemy – it’s standing up for your community




The recent Budget put the spotlight back on the Government’s “devolution revolution”, with a number of new combined authority areas agreeing to have a devolution deal and a directly elected mayor. The reaction? Very mixed. Celebration of historic agreements across boundaries sits side-by-side with criticisms, including some mayors being seen as an undemocratic imposition, or the devolution agenda being regarded as a political ploy to shift the blame for public service cuts to local (often Labour) leaders, instead of the national Conservative government.

This divide in opinion has played out very publicly in the North East in recent months. Businesses in the area have argued that the deal could be “spectacular“, and councils in Newcastle, North Tyneside and Northumberland have all agreed to sign up. However, in the same period of time, Labour MPs have penned an open letter urging local leaders to reject the deal, and both Gateshead and Durham councils have refused to ratify the deal.

All those opposing the deal are clear that, while they support more local control in the region and the prospect of growth it could bring, they do not believe the agreement on the table – especially the creation of a regional mayor – will deliver it, with concerns raised about lack of “fair funding” in particular. The developments of recent weeks make it very uncertain whether it will be possible to deliver this deal. Even though it can go ahead without all the local councils backing it, big issues like transport will be almost impossible to deliver without areas like Gateshead involved.

The detail of the deals clearly matters but there is a much bigger political component to the debate about devolution. Seeing Labour leaders working in partnership with a Conservative led government on devolution and regional economic growth – territory that many Labour MPs believe should belong to them – understandably raises hackles, particularly if there are additional concerns about mayors and devolution being more about cuts than anything else.

As a result, many in Labour circles are suspicious about being seen as being “in bed with the Tory enemy” on devolution, as recently highlighted in a Manchester Evening News article about the reluctance of local leaders to put their hat in the ring for the Greater Manchester mayoral position. Add in the fact that, for a range of other reasons, pressure is now building on the primary proponent of mayoral devolution, the Chancellor, and the temptation for Labour MPs to disrupt the devolution process grows further.

But while such calculations are politically understandable in the short term, Labour politicians and the people that they represent risk missing out on a much bigger opportunity if the deals, like the one in the North East, fall through.

That’s because stronger local and regional leadership brings with it the potential to directly benefit the people who live there. Britain remains the most centralised country in Western Europe. Decisions about everything from buses to business rates are made in SW1, with local areas seeing limited benefit from the decisions they make about more housing, supporting jobs growth or supporting people to get jobs. And it’s not delivering results; despite being highly centralised, Britain has some of the highest levels of inequality in the OECD.

The devolution currently on offer may not be perfect, but places who embrace it will be better placed to provide a powerful counterpoint to central government orthodoxy, while also crafting and implementing policies tailored to the way that people actually live their lives locally, and showcasing their city or region on the international stage. The mayoral model also has significant advantages; having a figure with a direct mandate to act, sitting outside Westminster but on a more equal footing with those that hold power there, would empower local areas to deliver better outcomes for residents. Given the current state of national party politics, mayors could also provide the Labour party with an opportunity to demonstrate to the country what they would do if they were the national government.

Areas with a mayor should also strengthen a local area’s ability to challenge the Government. As London Mayor Boris Johnson has demonstrated over the years, strong local leaders are better equipped to speak out against national government – even when they belong to the same party. During the last Parliament he successfully shielded London from police cuts, famously criticised the proposed cuts to housing benefits as leading to a “social cleansing of London”, and just last year criticised the Conservative manifesto promise to extend the right to buy.

But the most important reason why Labour should think twice before seeking to derail the devolution agenda is that devolution is by necessity a journey, not an event. Since 2014, Greater Manchester has had four separate devolution deals, while we have seen the first steps towards substantial fiscal devolution as councils will get to keep 100 per cent of their business rate revenue – something resisted by central government for decades, but which mayoral combined authorities will be best placed to take advantage of in a way that does not disadvantage their local authority members.

There is an argument that devolution deals are not ambitious enough – but the best way to improve them is not to stop them happening at all, but instead for places to take the powers on offer today, and use them to make the case for more tomorrow. When the new mayors are elected next year, whichever party they belong to, they will have the direct backing of people across the city region. They will be working with their combined authorities to make decisions locally that had previously been made nationally, and they will have the kind of visibility that means they can speak up for their local area. Surely that’s not “getting into bed with the enemy” – it’s standing up for your area and the people who live there.

Alexandra Jones is chief executive of Centre for Cities


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