Labour needs to give power away, or lose it all together

Author: Dermot Finch
Date: 19/09/2008
Publication: Comment is free

As the Labour party gathers in Manchester this weekend, facing the very real prospect of defeat at the next general election, here's one idea for reviving its fortunes. If it wants to hold onto power, Labour should promise to give some power away.

So far, Labour has disappointed on devolution. Despite some incremental steps in the right direction, its track record on devolution in England has been too modest and piecemeal. Ministers have yet to live up to the lofty rhetoric of last year's "Governance of Britain" green paper, when Gordon Brown promised major constitutional reform for local government.

Meanwhile, the Tories and Lib Dems are talking the devolution talk, and successfully portraying Labour as top-down centralisers. Vince Cable last week promised to "take an axe to the overgrown thickets of quangoland". And David Cameron is now a convert to localism. But it's not yet clear what either party would do to devolve more power in England.

The onset of recession makes the need for devolution more pressing, not less. Here's why we need greater devolution in England: our cities and towns need more powers, so they can do more to improve their own economic performance. As the downturn starts to bite differently in different places, more local flexibility and autonomy is needed so that cities can respond to their own problems. But devolution cannot be rolled out uniformly across the country. It requires different approaches in different places, so that towns and cities can address their own issues.

Each city faces its own unique set of challenges. London has a disproportionately low rate of employment among women with children. Liverpool has an unusually high proportion of residents without any formal qualifications. And Cambridge faces very bad traffic congestion and a shortage of suitable housing.

If Labour is truly committed to greater devolution - which is not at all clear - then a few radical experiments are needed. We need a fully-devolved approach to tackling unemployment, with DWP and Jobcentre Plus handing over training and back-to-work budgets to local leaders and employers. This would help match up the supply of training with the demand for skills, and allow city leaders to tailor employment programmes to their own labour market.

We need local employers to play a much bigger part in skilling up the workforce. For too long, too many young people have left school and colleges without the skills that employers need. The latest complicated arrangements for funding and delivering job training are unlikely to do the trick. Why not give local employers a bigger say over training budgets, and allow them to identify and fill skills gaps?

And we need more devolved financial powers for our biggest cities, so they can finance their own transport infrastructure. Small powers like supplementary business rates are fine, but not enough. Councils should be able to club together and spend national transport budgets, and raise additional finance themselves.

If Labour is to re-connect with the electorate, it needs to be more radical. Pulling all the strings from Whitehall won't work any more.

A version of this article first appeared on Comment is Free