Northern Powerhouse & devolution: a personal view

18/06/2015

The debate about devolution rages on. It is the big thing many people in the business community are interested in because it offers real opportunity and they want the North East - both Tees Valley and the North East LEP areas – to be at the vanguard of the Northern Powerhouse.

The lack of understanding about how it will work is widespread, I have been offering my clients and other interested parties a simple guide based on my understanding of the proposed approach from the Government.

First, the background.  After the Labour Government introduced a Scottish Parliament it offered the regions of England Regional Assemblies. These bodies had very little power and very few resources, but would have lots of new elected politicians to run them. The North East was first and we held a referendum, which threw the idea out. Now, after the recent Scottish independence referendum, Westminster is giving the Scottish Parliament more powers and is ready to offer parts of England increased devolution too.

Ministers are clear that the new powers and resources need to be requested by the regions, using the combined local authority bodies that are being established in the Local Enterprise Partnership boundaries. The North Eastern LEP has a combined authority. The Tees Valley LEP area is in the process of establishing one.

The game changer in this process was the General Election, which was won by the Conservatives. The Government has a manifesto commitment that suggests the new powers and resources must be administered by an elected Mayor. Therefore, the way to activate discussion on the issue of what powers and resources are needed is for each combined authority to accept this Mayor policy first. The leaders in Manchester have already done this and as a result will receive money and authority over a wide range of public services in the Manchester area.

Many in the business community in the North East are urging the North Eastern Combined Authority to do the same, to be among the first wave to accept Mayor and ask for powers and money here. A letter has been circulated, penned by the respected businessman and unpaid LEP board member, Jeremy Middleton. He has called for the seven leaders of the combined authority to open talks with the Government now about the money and powers we could have devolved from Whitehall to a North East Mayor. It is important to understand that the Mayor would only be responsible for the new powers and budget - not the local authorities' existing powers. The new Mayor would not be responsible for things like street cleansing or the other local services already provided by local councils. The Government's view is that it will not give up chunks of money and power without some elected and accountable figure; given that a Regional Assembly was decisively rejected, the Government decided that Mayors would be best. The Conservatives won the election and now claim a mandate to insist on the Mayors as a route to devolution.

In the North East, the seven leaders have decided on delay. They want to 'consult' (my view is that we had an election so there is no reason to consult on the Mayor question) and then open talks with the Government. This is bureaucratic paralysis and taking things this slowly will end up with the North East being lumped in with the rest, when we could be among the first.

Legislation confirming a Mayor for Manchester, together with that Mayor’s powers and financial structures, is likely to be before the House of Commons this autumn with voters likely to elect the first 'Metro Mayor' in May 2017.

 

Business and civic leadership in the North East needs to understand that Ministers are not going to tell us what new powers or resources they are going to give us, instead they expect us to make a case for what we want.

Let's consider what powers and resources Ministers could transfer quickly. Manchester has a full house; Police, NHS, and all economic and development tools. Its Mayor, and his or her powers, are contained within useful administrative boundaries that are co-terminus with each other. In the North East our three Police forces are not co-terminus with the two LEP regions, so changes to the Police Commissioners are unlikely.

However, our Mayors could serve either the geography of each of the region’s LEPs or in the case of the NE LEP maybe the Mayor could serve Tyne and Wear, with other arrangements for Durham & Northumberland. Tees Valley is likely to be accepted as an entire area for a new Mayor.

So, what should a Mayor's powers be in the North East? My own personal wish list would be:

  • Skills and employment, including taking over the administration of job centres and matching skills funding and employer recruitment to local sectors in local areas.
  • Transport, including roads and rail to integrate plans more effectively within established travel to work areas.
  • Economic development and the administration of the European money agreed between Brussels and the Government.
  • Sub-regional spatial planning, in order to logically plan zones for housing, business and industry across wider areas with the objective of cooling down 'hot spots' and warming up areas of decline.
  • Arts and culture, too much North East taxpayer’s money is spent on arts in London and we to ensure we do not become a cultural wasteland.

There is also a case for Mayors to run the fire authorities.

If all or some of the powers suggested above were granted to elected Mayors the money that followed could be considerable and the office would be worth pursuing. I have already talked to several well-known business leaders who would want to consider standing for the position (I hope they make themselves known publicly) and there are also some established politicians - in all parties - with the talent and experience to make the office work.

Even if the North East does make a coherent bid to Ministers for more devolved powers, it is likely to be May 2018 at the earliest before we see the transfer come about; any more delays by North East leadership will result in the region being even further behind. The Northern Powerhouse is a real policy, which is already corralling real resources, it is progressing with legislation and Minister - many of whom have roots in the North - are sincere in spreading wealth and power throughout England. The time for solid proposals is now.



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