Cllr John Merry, the Chair of Key Cities, reflects on a recent workshop where Key Cities members shared their thoughts on devolution.
Throughout the pandemic, the UK’s cities have proven their capacity to solve national-scale challenges competently and quickly. Yet, urban devolution does not have the support it needs from central government to illustrate its competency in solving other chronic challenges, like productivity and housing.
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On 22 April 2021, 20 Key Cities members from across the country affirmed that there is no one-size-fits all solution to providing more power at a local scale. In fact, what devolution means is a messaging challenge.
National-scale devolution creates confusion at a local level about who to follow on policy moves, while regional-scale authorities alongside a myriad of other local governance arrangements is creating an increasingly crowded and complex space.
Locally, we may also have lost our focus on communities and places by debating the relative merits of counties, districts and unitaries. For ease, let us assume that urban (or municipal) devolution is aligned to reconsidering the balance between trusting people to determine their own futures and the benefit of national safety nets.
Currently, there is little trust in local. Britain is highly centralised with a national and grant-focused funding system. Council tax, the only localised tax stream in England, accounts for about 18% of local revenue funding. This tax, along with business rates, is tightly controlled by central Government, and, although these taxes may conflict with local ambitions for more efficient land use, climate action, and social inclusion, it is all local authorities have to work with.
The UK’s cities also lag when it comes to productivity. This may well be because the benefits of local innovation are so constrained by central control. Indeed, there was a consistent message from members who felt the grant-focused approach to funding with tight restrictions makes it difficult for cities to strategically deploy and pool funds for maximum impact, while the resources required to bid for these removes local capacity. New central Government programmes sometimes conflict with longer-term strategic outcomes by not recognising or aligning with existing local initiatives. There is also the risk that the UK’s rich diversity is undermined by an ever-present sameness.
Devolution can be strategic to economic recovery, provided local knowledge is empowered to invest in people and places and to identify strategic connections with neighbouring authorities. It may even help us move closer to a partnership relationship with central government – there is no reason cities should not help give definition to the clear need to respond to regional inequality.
What is clear from our diverse membership is that urban devolution is not a panacea. However, local government will be more effective in solving national challenges if the balance of power shifts in its favour. This may include more fiscal autonomy over raising, spending, and borrowing, and less over-specifying how grant money can be spent. Ultimately, it requires we place more trust in our citizens. And, arguably, that debate is part of a much bigger cultural shift the UK may need to navigate.
In the debate around leasehold reform, the argument for the status quo is consistently that people may not be able to manage their own affairs. That sounds a lot like the reasons given for restricting local authority.
In sum, the UK has an autonomy problem – devolution still needs to work its way down to local level.