Eastern Powerhouse: Renewing the call for devolution in the East
Opinion | Steven Lynch, executive director, Eastern Powerhouse
The new Labour government has started, as all governments do, with a flurry of new policies and a King’s Speech so packed with policy goodies it will keep Parliament busy for the next year.
English devolution is yet again on the agenda, with Angela Rayner, the new Secretary of State for Local Government, writing to local authorities in “devolution deserts” to join forces and take on responsibilities over policy areas including transport, skills, and planning as part of a major transfer of power from Westminster.
With only one combined authority in the whole of the region, the East of England has some way to go, but how likely is it that our local authorities will embrace the opportunity for further devolution? History would suggest that this could remain an insurmountable challenge. But if the East is to shake off its current torpor and become a thriving economic dynamo, then our local leaders should be working together to put forward proposals for mayoral combined authorities in the East.
The legacy of Sir Howard Bernstein, the former chief executive of Manchester City Council who recently passed away, should point us in the direction we need to go. Through his determination to see his hometown thrive, Bernstein worked tirelessly to bring the boroughs of Greater Manchester together and create a combined authority which set the template for English devolution.
Can our leaders put aside district and county loyalties to work as one to deliver devolution for the East? Can two-tier authorities work beyond their existing footprint to create the combined authorities which the Secretary of State is calling for? And could this, in time, provide the bridge to a regional authority with the power to deliver the investment, homes, and infrastructure our communities need?
Leaders in the East have to set the agenda, otherwise the region will fall further behind. Since the abolition of regional development agencies, central government has had little interest in regional policy, while Westminster’s focus on large city regions like Greater Manchester has not benefited the East. There is no paradigm for success in a region like ours with smaller more disparate cities and towns – certainly not in the UK. The situation demands a different solution based on a connected ‘multi-centred’ growth model.
Change takes drive, determination and compromise. And government should also be willing to compromise if they are serious about English devolution. Thus far, devolution has been a modest ambition with relatively small amounts of funding and limited flexibility coming from the centre.
If English devolution is to succeed, substantial power has to be devolved from Westminster, including the ability to raise and spend tax revenues. The East of England is one of only three regions and nations in the UK that makes a positive contribution to the public purse. On this basis, Treasury should pilot fiscal devolution in the East.
Such a deal brings with it risks but potentially great rewards. Retention of business rates and other property taxes, together with income tax, would enable the region to invest in growth, spreading wealth across the whole area and seriously tackling deprivation. This may sound fanciful, but it is no less than what Scotland currently has as part of its devolution agreement. With a population of nearly 6.5 million people, the East is bigger than Scotland. Maybe devolution on this scale would incentivise local leaders to embrace change.
Perhaps the Right Honourable Angela Rayner has the determination to drive this through. We cannot underestimate her incredible drive to succeed against the odds – a quality to be admired. Does she also share the drive for regional success across all parts of the country? I believe we are about to find out.
