From Government announcements about the “Northern Powerhouse” to local authorities’ own local plans, the word “devolution” appears to be everywhere these days. But what does it actually mean?
At its heart, devolution is about bringing decision-making closer to the people it affects. For some years Government has acknowledged that it’s neither cost-effective nor sustainable for the majority of decisions affecting local communities – from the funding received by colleges to the property taxes paid by businesses – to be taken in Westminster.
To this end at the start of the Parliamentary term the Government introduced the Cities and Local Government Devolution Bill, which establishes a framework through which local authorities can bid for additional powers from Government. Through this, authorities have the opportunity to make the case the Treasury for the devolution of certain powers, and the related budgets.
You may have seen that recently the Greater Manchester Combined Authority was handed power over its entire health and social care budget – currently valued at £6 billion. That’s the sort of deal councils across the country are coming together to consider bidding for, but there is no prescribed package. Some councils may want to work together on developing a better transport network, and they’d get money to do that (the Treasury would take it out of the Department for Transport’s budget, and give it to the local authorities). Some might want to focus exclusively on developing more housing – in this case the Treasury would reallocate funds currently apportioned to the Department for Communities and Local Government, and give it to the local decision-makers.
Of course, we can’t ignore the context within which all of this is happening. Government spending has been squeezed consistently since 2010. Local authorities have been receiving less and less money in the form of direct government grants. Government believes that by working together local authorities can make significant efficiency savings and deliver more effective public services. Devolution bids therefore have to make explicit not just how they will enable authorities to deliver better services, but how they will do so at reduced cost to the Exchequer.
Along with the devolution of existing budgets, the Government is also gradually taking a step back from local taxation – giving authorities more power to raise revenue locally (as well as deciding where it’s spent). By 2020, for example, all councils will be able to cut business rates in their region to encourage growth. In the Autumn Statement the Chancellor announced that councils would have the power to apply a new “precept” (essentially a surcharge) to council tax bills, to help compensate them for the rising cost of delivering health and social care services to an ageing population.
Thinking strategically, many councils seem to have reached – or be reaching – the conclusion that they can achieve more by working together, allowing them to make economies of scale and deliver improved outcomes for their residents. The Greater Manchester Combined Authority, for example, is made of the ten councils representing the city of Manchester and its surrounding areas.
But local authorities have done things their own way for a long time – it’s not easy to expect different councils to come together seamlessly and align what can sometimes be a set of diverse and competing interests. Some will have specific needs that they don’t think the others will be interested in – so why partner with them on it?
A complex network is emerging – local councils are talking to one another, putting together deals covering some or all services, thinking strategically and for the long term about their relationship with one another and the development of the region they represent. Each council is trying to safeguard its own priorities while at the same time co-ordinating where appropriate and finding efficiencies where they can.
We have yet to see how these dynamics will play out, but if agreement proves elusive for some areas the ‘devolution revolution’ may turn out to be a bit of a damp squib.
At ubu we’re confident in our ability to support and transform lives, wherever our clients are. We’re approaching devolution as an opportunity to discuss with local authorities here in the North and in the Midlands about how our services could help support their objectives of delivering effective, compassionate support services to local residents.
It’s an exciting – but sometimes confusing time … don’t worry though we will be navigating our way through it over the coming months!