The Cities and Local Government Devolution Bill: a staging-post on a lengthy journey

Author: Mark Sandford, Senior Research Analyst, House of Commons Library

The Cities and Local Government Devolution Bill had its second reading in the House of Commons on 14 October. Many Members from all parties welcomed the Bill, some with greater enthusiasm than others. Many addressed the question of elected mayors, and opposition Members drew attention to the issue of local government finance. A number also raised caution regarding the idea of devolving powers over Sunday trading (a policy on which the Government has consulted, but which is not an integral part of the Bill).

The Bill itself is a single flourish in a much longer-term agenda, visible in the negotiation of a number of ‘devolution deals’ during the past 12 months. This was reflected in Members’ contributions to the 14 October debate, many of which focused on aspirations for their local areas. But the longer-term agenda is not easily pinned down, being scattered throughout a number of Government (and local) announcements. It is best understood through two key lenses:

  • As Lord Heseltine has said, much of what is contained in devolution deals is about ‘partnership’ between central and local government rather than ‘devolution’. The contents of the devolution deals fall well short of ‘devolution as we know it’ in Scotland, Wales and Northern Ireland. This is not to diminish the significance of the policy. It does promise a real change in the central-local relationship in England. But the changes will be shaped over several years, not introduced via a ‘big bang’.
  • ‘Devolution’ to local areas in England is being driven by the Treasury, with the twin aims of seeking economic growth and reforming public services. The Department of Communities and Local Government has played a secondary role throughout. The Treasury’s role is reflected in the powers slated for devolution within the deals agreed so far – and those demanded in the most recent bids. They centre on the economy (skills, housing, planning, employment and business support) and public services (transport, health and social care). They are very much a core menu with specials, rather than entirely locally bespoke.

The Bill itself, meanwhile, is largely technical in content. Aside from the introduction of ‘metro mayors’, perhaps its most significant provisions are in clauses 8 and 17, which permit the Secretary of State to use order-making powers to transfer functions from a ‘public authority’ (including the powers of ministers and Government departments) to local level. The power in the Bill is unusually wide: the House of Lords Constitution Committee has described it as a ‘Henry VIII clause’. Perhaps related to this provision, the House of Commons has committed the Bill to a Committee of the Whole House, a procedure normally reserved for ‘constitutional’ Bills. There is also an unusual clause which will allow the Government to ‘copy and paste’ powers from one area to another. This will be used to give Greater Manchester and Sheffield the powers available in London, to create a spatial strategy and establish Mayoral Development Corporations.

There is almost no mention of specific policy areas on the face of the Bill itself. The powers to be devolved to each area will only become apparent when Orders are made under the Bill, for Greater Manchester, Sheffield, and the other areas with which devolution deals have been struck. Moreover, as many parts of the ‘devolution deals’ do not require statutory changes, some matters will not be found in the Orders either. The devolution deal documents themselves will be the most reliable reference points.

The passage of the Bill, and any future Orders, will only be one stage in making English devolution work. The other critical elements of doing this will be continued commitment from both central and local government; but also capacity and funding. Demonstrated institutional capacity, together with robust business planning and clearly defined outputs, has been essential to successful devolution deals so far. Some local areas are only now developing the mutual trust or resources required. As a result many of the ‘devolution bids’ are in fact initial local position statements, intended as a basis for ongoing negotiations.

Local institutional capacity goes hand in hand with adequate funding. Here, the future is unclear. It is anticipated that local authority grants will continue to reduce throughout the 2015-20 Parliament. If this is the case, handling additional powers is likely to become increasingly challenging. And it remains to be seen how the Chancellor’s recent announcement that local government will retain 100% of its business rates from 2020 will fit into existing policy on devolution.

As these issues are not addressed in the Bill, the shape of English devolution is likely to continue to develop for some time to come.

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Mark Sandford's picture
post by Mark Sandford
House of Commons Library
21st October 2015
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