You wake up in hospital, and at the end of your bed is Jeremy Hunt – your new doctor – who tells you that due to the mistakes made by your previous, less sensible doctor, that you’re going to have to take an even stronger prescription. In his hand, he has some bitter pills for you to swallow, but in his other hand, he has a glass of watered-down devolution to knock it back with.
That is one way to describe the Chancellor’s autumn statement yesterday. As well as the diagnosis of recession, inflation and the biggest drop in living standards in six decades, he gave the prescription of spending cuts and tax rises. The Treasury will also be leaning on local government to raise tax, a tall order for councils stripped to the bone after 12 years of austerity.
What does he prescribe for devolution? Funding wise – it’s not looking healthy, as by not ‘inflation proofing’, £560 million will be lost from two key levelling up pots, which is a loss of £1 in every £13. Also, according to the Institute for Fiscal Studies, the Department for Levelling Up, Housing and Communities will proportionately see the largest reduction of all departments in post-2025 spending plans.
Due to the fiscal rules imposed on themselves, the government will have to rely on non-financial levers to offer anything on levelling up. One thing which will have brought some joy north of the M25 is the trailblazer devolution deals for Greater Manchester and West Midlands Combined Authorities.
This could give local partners greater flexibility and accountability over key economic growth funds, moving away from the competitive – and sometimes unhelpful – bidding process. Devolving powers to level up in areas such as skills, transport and housing through consolidating funding. Although this is essentially moving money around rather than giving more, the two Andy’s – Burnham and Street – will be pleased nonetheless.
Much in the spirit of decentralisation, this will in part be an experiment and, if successful, a blueprint for others to follow. Who said devolution wasn’t exciting?!
There will also be new mayors for Cornwall, Suffolk and ‘an area in the North-East to follow shortly’. This was slightly a non-announcement, as it was already known about Cornwall and Suffolk. In regards to the North East, it is a reference to Durham, who themselves nor their neighbours can figure out whether they want it or not.
The Chancellor showed some enthusiasm for devolution, by claiming that soon half of the country will be covered by devo-deals. However, the enthusiasm wasn’t fully backed up for levelling up, as he only confirmed to the ‘core network’ Northern Powerhouse Rail, I.E not including Bradford, a new line across the Pennines, and the restoration of the Leamside line in the North-East, which many Northern leaders have been calling for.
As predicted in last weeks’ DevoIntelligence, investment zones are not going ahead in their proposed forms, such as tax breaks and relaxed environmental protections. This will annoy some of those who worked to develop bids but is also welcomed by many devolution experts who questioned their impact.
