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City Region back on the agenda as Birmingham pushes ‘new model city government’

City Region back on the agenda as Birmingham pushes ‘new model city government’

🕔06.Mar 2014

The prospect of a powerful city region level of government administering economic development, transport, skills and housing across the West Midlands has been raised by Birmingham city council leader Sir Albert Bore.

Sir Albert used his annual budget speech to set out his vision of a “new model for city government”, with a clear indication that he hopes a post-2015 Labour government will move quickly on the decentralisation agenda.

He said: “At the city region level we would work together with our neighbours and invest a five-year devolved single funding pot of several billion pounds in transport, skills, housing and economic development.

“Infrastructure projects would be brought forward quickly and prioritised according to local needs. We would work with businesses to identify those needs and to leverage further investment.”

There is little indication at the moment that the coalition government will embrace city regions with single pot funding, even though the idea was raised in Lord Heseltine’s ‘No Stone Unturned’ report, which called for £60 billion to be transferred from Whitehall to the regions.

The idea of forming a city region level of strategic governance for the West Midlands has in the past brought objections from the Black Country councils, who worry about the motives of ‘all powerful’ Birmingham. But Sir Albert has invested time in attempting to persuade the likes of Sandwell, Walsall, Dudley and Wolverhampton to climb on board.

Triple Devolution

There are growing signs that Sir Albert may be knocking at an open door, with the Labour Party considering committing to a radical realignment of the way public services are organised in times of austerity, rather than simply tinkering at the edges.

A Local Government Innovation Taskforce set up by Ed Miliband and chaired by the leader of Manchester City Council, Sir Richard Leese, has issued its first report which calls for a radical decentralisation of budgets and powers from Whitehall to community level.

It sets out two broad choices facing local government:

  • To continue to salami-slice Whitehall budgets, squeezing separate public services and tinkering round the edges of traditional modes of delivery.
  • A radical reconfiguration of the system which links public service reform to growth; invests in people to become more productive and equipped to take advantage of future opportunities; and over time reduces demand by shifting from high cost reaction to long term prevention.

And while there is no place on the taskforce for a representative from Birmingham, the body does have an impressive line-up of town hall chiefs.

Its membership includes Sharon Taylor, leader of Stevenage Borough Council, Hackney mayor Jules Pipe, Kate Haigh, leader of Gloucester City Council Labour group, Simon Henig, Leader of Durham County Council, Sir Steve Houghton, leader of Barnsley Metropolitan Borough Council and Anne Western, leader of Derbyshire County Council.

The aim is to explore better ways of delivering public services in times “when there is less money around”, and the work of the taskforce is expected to shape Labour’s plans for reorganising the public sector should the party win the 2015 General Election.

At the centre of the group’s deliberations will be the notion of ‘place’, effectively transforming the relationship between public services by organising them around local areas rather than institutional hierarchies. This will mean an extension of community based budgeting, where councils, health authorities and the police pool budgets and cut out the duplication of service delivery.

The interim report notes: “A traditional, largely centralised model of service design has reached the limits of its efficacy. It is failing to deliver in the context of dwindling resources.

“Standardised approaches are struggling to deal with complexity or difference. Silos are causing inefficient duplication and creating barriers to innovation. And people are not sufficiently engaged and involved in service design.”

A strategy for public services based around ‘place’ provides an opportunity to be more efficient, according to the taskforce. Evaluation of community budget pilots shows the potential for savings of up to £20 billion over five years.

The report suggests a new approach to public services based on three core principles:

• Power for people to shape their services in response to their specific needs and those of their communities.

• Collaboration and co-operation between public services and organisations to stop inefficient duplication.

• Investment in prevention and early intervention to avoid the costs of failure.

How many of the taskforce recommendations will make it into Labour policy, and are put into place in practice, remains a matter for debate given the centralised nature of government in England.

Alex Jones, chief executive at Centre for Cities, summed up the nature of power rather neatly at a recent Guardian newspaper debate:

“Despite recent progress we haven’t seen localism yet. We have seen some steps towards it with local enterprise partnerships and community budgets, business rate retention and city deals.

“These things have all made a difference, but we continue to be one of the most centralised countries in the world.

“Seventeen per cent of local money is raised locally in the UK, 55 per cent is the average across the OECD. Funding and decisions still get made by the centre. On average 60 per cent of local authorities money comes from central government, more if you are in a deprived area.

“Devolving power would require big changes in Whitehall and civil service cutbacks make that even more challenging … there is a culture, for example, with the flooding, to look at David Cameron and say ‘it’s your fault.’

“Whatever the blame game, many politicians and civil servants still don’t buy into the case of why power should be devolved. There isn’t massive public call for it.”

We’ll be running a series of articles on the Files about the latest developments around devolution next week as part our #WM2015 series. 

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