The Brexit vote was a call for devolution – not more powers for the PM and Whitehall

20th January, 2017 12:30 pm


Despite ongoing uncertainty around the commitment to this agenda within Theresa May’s cabinet, calls for greater devolution continue to grow. Let’s not forget that June’s Brexit vote was in part a call for greater local self-determination. It was not a call for greater centralisation of power in Whitehall.

The devolution agenda must step up a gear in 2017 to answer that challenge. Now more than ever we need local economies to be firing on all cylinders so we can maximise the potential of the UK economy as a whole and enable more people to share in the benefits of growth.

The timing of decisions by government is crucial. With national government preoccupied with the fallout from Brexit, it will be local government that drives innovation and economic growth in the coming years. It will be local government that brings divided communities together, and reduces inequality by providing much needed jobs and training opportunities. We need the tools to get on and deliver change.

This country remains one of the most centralised in the Western world. In recent years more of our public spending has come from central government than any other OECD country except New Zealand. Local authorities still lack much needed control over the taxes that are generated in their area. On average, for every £1 generated locally in taxes, local authorities keep only 9p. The rest goes to the Exchequer.

The impact of that centralised approach on areas like Leeds City Region is profound. 90% of decisions affecting residents and businesses in our region are taken 200 miles away. Civil servants in Whitehall are making decisions on up to £30bn of spending in Leeds City Region every year. The result is significant regional imbalances embedded in the national economy. Transport investment is a prime example – Yorkshire and Humber will receive an average of £250 per person for infrastructure between 2016/17 and 2020/21. That compares to an investment of £1,900 per person during that period in London.

As chair of the Core Cities Group I believe the importance of cities to the future of the UK has never been more acute. The ten core cities alone deliver 25% of the UK economy and are home to 19 million people. However, all our cities under-perform compared to their international rivals. Without giving cities more freedoms and powers that situation will continue.

Core cities also want to be empowered to deliver more inclusive growth to tackle growing inequalities. That will require much closer integration of economic and social policy with solutions tailored to the particular needs of different communities. From an economic perspective the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) Inclusive Growth Commission has suggested that if we could address the inclusivity gap we could also increase GVA (gross value added) by £192bn a year.

I do not want to suggest that the current devolution deals are a silver bullet for our national economy. They are not. But they do represent movement in the right direction and they leave the door open for further devolution negotiations.

I would urge the government to commit fully to this agenda, to increase transparency in the process and to share with local government lessons learnt from the evolving rounds of deals. The experience of local government suggests on-going – and often significant – resistance amongst some government departments to the principle of devolution. Too much emphasis is being put on joint working rather than true devolution.

Local authorities do not lack ambition. However, a number of regions are being held back by a disproportionate, and prescriptive, central focus on deal shape. A focus on the outcomes deliverable via varied local models, with locally determined governance, would provide something much closer to genuine decentralisation.

We are a long way from embedding a ‘culture of devolution’ in all departments. We are also a long way from engaging large sections of the public in the devolution debate. Devolution will only really take root if local people recognise clear lines of accountability via which they can scrutinise both the performance of deals and the huge amounts of public money spent through them. Imposing a ‘one size fits all’ mayoral approach, however, is not the answer. It merely creates another layer of complexity.

The financial outlook for local government has been bleak in recent years. Core funding for Leeds has reduced by £214m (47%) since 2010. We will see a further £53m of reduction over the next 4 years. When combined funding reductions and soaring demand pressures in Leeds in 2017/18 amount to £75m.

In contrast, the opportunities presented by devolution are cause for optimism. Devolution offers the potential to deliver innovative solutions to the challenges facing our citizens, with the aim of genuinely improving lives. With the right tools we can reduce inequality, deliver economic stability and secure more sustainable public services for the future.

Judith Blake is the leader of Leeds City Council

Value our free and unique service?

LabourList has more readers than ever before - but we need your support. Our dedicated coverage of Labour's policies and personalities, internal debates, selections and elections relies on donations from our readers.

If you can support LabourList’s unique and free service then please click here.

To report anything from the comment section, please e-mail [email protected]

LabourList Daily Email

Everything Labour. Every weekday morning

Share with your friends