Three vital steps in the right direction
Author: Dermot FinchDate: 15/07/2010
Publication: Local Government Chronicle
Decentralisation is already a key priority for this coalition government. Radical change looks likely, more so than under Labour. But if localism is to be truly transformational, it needs to connect with the economic recovery agenda.
Eric Pickles enjoys telling us that “localism, localism and localism” are his big three priorities. It’s a bit repetitive, but there is substance in his mantra.
The coalition agreement promises: “the radical devolution of power and greater financial autonomy to local government”. We now have a minister for decentralisation - Greg Clark. This area is the more obvious comfort zone for the Conservatives and Liberal Democrats - unlike VAT or tuition fees - so they will pursue it with real vigour.
Witness the Pickles-Cable announcement scrapping regional development agencies and inviting bids for local enterprise partnerships (LEPs) - joint local authority-business bodies to promote economic development.
Senior Department for Communities & Local Government officials assure me the new government signals a truly radical change. Mr Pickles and his ministerial team are shaping cultural change within the department. They are determined to dismantle anything they regard as ‘top-down’, and hand decisions to local people. And they are aware that different areas will do things differently.
Going further than Lyons
The Decentralisation and Localism Bill will shake up the planning system and create LEPs. Local government finance will be reviewed once again, aiming to go further than Labour’s modest Lyons Inquiry. Directly elected mayors will be offered to the 12 largest English cities.
But the path ahead will not be smooth. Councils will not like every aspect of localism - fewer targets will be popular, but mayors and LEPs could be more awkward.
Meanwhile, deep public spending cuts, £99bn by 2015-16, will trigger a massive wave of public sector job losses. Cities such as Newcastle, Plymouth and Liverpool will be most exposed.
Every city will need to generate more private sector jobs from now on to fill the gap left by the shrinking public sector. But, as our research has highlighted, private sector jobs’ growth is uneven. Brighton, Milton Keynes and Preston have a much better track record than Stoke, Barnsley and Middlesbrough.
Stimulating growth
Decentralisation could help stimulate much-needed private sector growth, but only if it includes real financial powers for our towns and cities. There’s a risk the Pickles brand of localism won’t include this, and could end up being marginalised as austerity kicks in.
So what needs to happen? First, Eric Pickles and Vince Cable must promote the role of cities in the recovery. The forthcoming white paper will be an opportunity to do that.
Second, LEPs should become powerful alliances of councils and business, able to take a smarter approach to economic development. Each LEP should adopt a realistic and bespoke approach to the recovery.
And third, the review of local government finance should give cities significant new financial incentives, like business rates, so they are encouraged to go for growth.
A version of this article first appeared in LGC
