Compared to other global cities London has very little control over fiscal matters
For decades a battle has waged between centralisers and devolutionists inside all of the UK’s main political parties. Unlike many of the political battles we see, whether or not to devolve power is an issue which extends across political parties.
Despite what George Osborne would have you think, the debate about whether and what to devolve is not new. Too often local and regional politicians have jumped at the chance to demand new powers or funding. But powers for powers’ sake will never win the argument.
To be credible, devolution bids need to be steeped in tangible examples illustrating to the government, and the Treasury in particular, that we know what we want, why we want it and how we’ll use it to make things better.
Without those tangibles, what is essentially a discussion about moving services closer to people will be too abstract for a groundswell of support to develop.
As a former council leader and current London Assembly member I’ve seen what a difference devolving power can make. In London, the figurehead of a mayor has undoubtedly meant a new profile for the city but it has also created the pan-London space to explore policies which affect the whole capital, cutting across the 32 individual boroughs.
Obviously devolving power is not a panacea, but nor should it be a smokescreen for cuts.
With many of the country’s best leaders increasingly found in local government, often innovating and offering far better value for money than Whitehall, it is easy to imagine local government being forced to shoulder yet more of the pain.
Set against the backdrop of austerity there is always going to be concern that devolution is little more than a political tool for passing down cuts; however that doesn’t mean we shouldn’t take advantage of the opportunities.
As someone firmly in the devolutionist camp, I’ve always viewed active government as very different to a centralised state.
Cities are melting pots, which often means that devolving responsibility for services can actually help remove postcode lotteries, as solutions tailored to local areas will be more successful. It’s not just about competing for more of the pie, but ensuring that more services are commissioned and run locally.
Compared to other global cities London has very little control over fiscal matters. Take the question of business rates and whether increases should be retained by the councils which raise them.
If done solely as a cover for cuts, with Treasury ministers gleefully telling councils to work harder to increasing business rate growth to plug budget gaps, then it will fail. If however the retention of business rates is matched by other funding reforms, for example removing some of the many ringfences around grants and freeing up councils to invest in services, then we’re looking at a genuinely new way of working.
That new way of working must be focused on making cities, boroughs, and regions more agile, free to move quickly and adapt to the area’s needs, cutting out the cumbersome processes of Whitehall and moving the design of services closer to the people they are meant to benefit.
On a political level however new powers also need to mean new scrutiny. The London Assembly has shown that scrutiny makes for better policy. As the Public Accounts Committee’s chair Meg Hillier MP put it yesterday:
“When things go wrong, it must be clear who will be held to account. Taxpayers must understand who is spending their money, how that money is allocated, and where responsibility lies if the system fails to deliver good value.”
As the devolution battle continues and the next wave of plans starts to take shape focus will move from structures and process to tangible outputs and the difference it will make to ordinary people. They, at the end of the day, are what devolution is all about.
Len Duvall AM is the leader of the London Assembly Labour Group. Follow him on twitter @Len_Duvall
2 Responses to “Devolution must not be a smokescreen for cuts”
CharlesJ
Another problem to address is the fact that a currency issuing country always needs to maintain certain power centrally, i.e. enough central fiscal capacity to prevent inflation or deflation; ensure adequate demand in the economy overall so that in general as well as locally unemployment can stay low.
Bradley EC
The autumn statement will be tantamount to a declaration that the welfare state has had it. The effects are going to be very serious and I do not think devolving powers will conceal in any way how bad things are going to get. Much, much worse than tax credits. Much worse.