By Dan Corry, FGF Chief Economist
Andy Burnham has entered Downing Street with a welcome determination to do away with the over-centralisation that has dominated British governance for decades – if not centuries. His government wasted no time announcing their intention to ‘rewire the state’, empowering local decision-makers – especially the mayors in strategic authorities.
Yet straight away he is faced with the issue that has bedevilled many people on the left for so many years: how this squares with the progressive value of equity, of giving everyone, wherever they live, a fair chance and a decent life.
Firstly, the minute you have genuine devolution you can, and will, have different outcomes in different places. Some of this will be down to political choice – rather than postcode lottery – as the public can vote in mayors of varying political beliefs. This begs the question: are we happy, as progressives, with different regions following this agency wherever it leads? Or do we want guard rails in place so that, for instance, a mayor who does not believe in supporting social services beyond the minimum, or does not want to build more houses in their area, cannot follow through and override national political priorities?
Second, there are concerns about economic inheritance. We know some regions are more prosperous than others and therefore have greater prospects of growing their economies as we go forward. But we don’t want a family to suffer just because they happen to live in the wrong area. This leads to a thorny issue of equalisation: how to help worse off areas by redistributing resources across geographical divides? And how do we do this without denting the incentives for areas to improve their own economies (if they get less central support the better they are doing ). With the prospect of substantial fiscal devolution on the horizon – changes which would allow Mayoral Strategic Authorities (MSAs) to raise more of their own money and spend as they wish – this issue will become even more acute.
And third, concern comes from the belief that to be a citizen of our country, certain benefits and services need to be the same for every citizen. Even if progressives buy the devolution story most would instinctively recoil from the idea that the amount of disability benefit or NHS support a citizen can get could be very different across different geographies.
The New Labour government did start to grapple with these issues – even if its devolution agenda was a bit half-hearted. Trying to find the right balance was done in various ways, through Local Area Agreements (LAAs), Local Public Service Agreements (LPSAs), Total Place and growth schemes. Devolution was also accelerated in the NHS, police and even in schools – even if the overall framework was largely centrally controlled. And quite radical settlements were found with Wales and Scotland which were expanded over time. These initiatives had a lot of value – although from today’s perspective it may well look like the centre was still holding on to too much power.
At that time, it was the concept of ‘earned autonomy’ that was particularly loathed. This said that the centre – especially the Treasury – would only devolve power to places that looked well governed and were delivering well. They felt, with some legitimacy, that they would still have to pick up the tab if things went wrong.
In a paper I wrote with Professor Gerry Stoker back in 2004 for the New Local think tank – ‘New Localism : refashioning the centre-local relationship’ – we argued for a movement away from the ‘steering centralism’ of New Labour’s attempts to devolve power, to a more ‘sensitive centralism’, and then to what we termed ‘New Localism’. New Localism started with the idea of localising, but then called for various measures to be brought in to deal with the potential conflict and friction with progressive values – rather than starting from a central perspective and ‘letting go’ a bit.
One answer to the equity issue around devolution is to make sure that at the MSA level there is strong internal accountability, not only directly via the ballot box to local citizens but also through things like local versions of the Westminster parliament’s Public Accounts Committee. This could highlight, and to some extent ‘enforce’, financial propriety and other desirable behaviours, as well as shining a light on where a mayor is allowing citizens to get a bad deal. A good local investigative press helps with that too. Only if all this fails should the central state step in.
Of course, it can be argued that other countries who are far more decentralised manage all this OK and have generally not – at least where they have had progressive governments – found that it tore their countries apart or embedded inequality across areas. Some constitutional settlements, like the German Basic Law – which Andy Burnham has spoken highly of – try to embody the idea that difference cannot become too extreme across regions, with German federal law in theory trumping regional (‘Länder’) law where that is needed to achieve ‘equitable living conditions’ across the country. This would require some kind of written constitution which would be a big change for the UK if it came in. And it is worth remembering that some of the more ‘federal’ nations have a strong history of powerful semi-autonomous regions, which has helped to sort this out. Even then, some are bedevilled by regional jealousies and even separatist movements (as in Spain). And rightly, it is often pointed out that the current centralised Whitehall system seems to lead to an awful lot of inequality across regions.
So this is the tightrope to walk – and walk it the Burnham government should certainly do. It should be clear where there are standards that ought to be national – although exactly how local areas achieve those standards could and should be up to them. Burnham must also be clear where he is happy to have differences of policy, different outcomes, and to accept that life will differ depending on which postcode you live in.
