Devolution: Has Whitehall really moved closer to town halls?

In making bids for more powers, many councils have moved outside their comfort zone to craft plans that improve local services. Can the same be said of central government?

By Jessica Studdert

28 Mar 2017

The early promise of devolution to rebalance power, funding and initiative in one of the most centralised countries in the world has so far fallen short. Of the 38 original devolution bids made in 2015, only six substantive devolution deals have been agreed with mayors due to be elected in May. There are a few more still in the pipeline but the overall conversion rate has been poor relative to the appetite shown by local areas.

There are many reasons for this. Each area is different, but in many a combination of territorial and political concerns has proved too difficult to overcome. Yet it has been a frequent refrain that Whitehall departments are refusing to engage, and while there is frustration amongst those directly involved in devolution at this perception, it is timely to assess the experience from the perspective of local government.

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The devolution policy set by government has required more reforms from localities than it has of Whitehall. Local authorities must enter new governance arrangements through a combined authority and a directly-elected mayor as a precondition for a full deal. There is no similar requirement on Whitehall departments to reform the way they work together or to develop new place-based accountability themselves.

The devolution deal model is a peculiar combination of total clarity over governance reforms on the one hand, but vagueness about the wider process and a lack of transparency over negotiations on the other. The tight timetable set for local areas to come forward with bids was not matched by a commitment from Whitehall about when to expect results. Many areas in active discussions have received patchy commitments, and experienced delays and poor communication. Although an informal approach could in principle enable freedom to pioneer tailor-made deals, in practice it has fed a lack of trust in the process and a sense of “divide and rule” among local government that has led to plenty of wheels being re-invented, or at least, re-negotiated. It has also largely shut the public out from the process, with local government turn inwards to seek deals, rather than out to their residents in a wider conversation about legitimate governance in the 21st century.

The devolution deal model, which evolved from city deals agreed under the coalition government and inspired by the pioneering approach to collaboration in Greater Manchester, is now firmly set. There is a sense that Whitehall institutionally prefers to deal with one size to fit all when it comes to localities. This governance model has proved more difficult for some metropolitan areas with less clearly defined economic or political geographies. It has been a particular challenge in two tier areas, many who feel an urban model has been transplanted carte blanche to shires, without understanding of the nuance of geography or their particular policy priorities. As a result, discussions over governance form seem to have subsumed the whole agenda, at the expense of any real further ambition over policy function. While the prospect of some new powers has started conversations locally, they have not necessarily always been perceived as substantive enough to break through local governance logjams and reach agreement.

Without clarity over Whitehall’s responsibilities, the functional aspect of devolution has morphed into an informal template of what’s “on the table”, combined with a series of red lines demarcating what isn’t. The powers and budgets available from various departments seem to be driven primarily by what they are prepared to cede, rather than by any coherent vision for where best to locate services. For example, while the more local approach of the Health and Work Programme is welcome, its precursor the centrally-managed Work Programme was severely underperforming and poor value for money. What’s up for being devolved shouldn’t just be the failing and riskier ends of the national system.

The absence of agreed cross-Whitehall principles underpinning devolution means departments operate largely independently. Local government must respond to each separately – it does not have the luxury of one size fitting all. So, although an emerging trend towards being more “place-based” in some central agencies is welcome, these don’t seem to have regard to each other. While NHS England has created 44 STP “footprints”, these are based on hospital catchments and don’t necessarily relate to either the 39 LEPs or the new devolved architecture. Although 16-18 further education provision is undergoing area-based reviews, accountability for under-16 schools provision is direct to the DfE via a patchwork of academy chains. This lack of coordination creates new fragmentation between policy priorities and service responsibilities in places. It doesn’t make sense if the ultimate point of devolution is to align decision-making levers to respond more effectively to multi-faceted challenges.

For devolution to progress, new place-based accountability should be developed involving cross-departmental reform at Whitehall. This would create a more sophisticated interface with places that mirrors the integration happening on the ground. But the focus shouldn’t all be structures and organisations – the culture and behaviour incentivised by the centre is just as important and should be recognised. For example, in Greater Manchester, although the health budget has been devolved NHS regulations persist, meaning that the reality in practice so far is delegation. Local partners remain constrained in their ability to innovate and integrate to meet their early stated ambitions. If devolved chunks of the existing system must continue to operate within an unreformed national framework, their potential will be limited.

Devolution should involve new ways of working throughout the system. Local government is being challenged to work differently, but how far has Whitehall begun to operate beyond its comfort zone?

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