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Devo Deal II: How does it stack up?

Devo Deal II: How does it stack up?

🕔24.Nov 2017

If you could assess the depth of a devolution deal by pages or clauses, the second version is definitely progress. At 6 pages and 31 clauses longer, Devo Deal II has trumped the document that led to the formation of the West Midlands Combined Authority and the creation of the role of elected Mayor.

Whilst that’s no way to measure devolutionary progress, there are many interesting elements in this document.

Very little of it is about ‘devolution’ as such. But there are plenty of shared commitments and promises of Government and WMCA working together.

Andrew Carter, chief executive of the Centre for Cities think tank, commenting on the Budget, said:

Metro mayors are the big winners in this budget.

If there was doubt about the merits of having a mayor, this Budget put those misgivings to bed.

In particular, it showed that the mayoral city regions – due to their clear and accountable leadership – will be given priority ahead of other places when it comes to Government decisions on investment and policy-making.

It’s also notable that there is mention of the Midlands Engine in the very first clause. The document states that the developing arrangements between central government and local leaders are “part of realising the potential of the Midlands Engine as a key growth centre for the UK.”

On skills, the government commits to:

…full implementation of the skills measures included in the Midlands Engine Strategy.

Some would rather the Midlands Engine concept was dropped from the lexicon, but there it is. Front and centre.

The second Devo Deal will need to go through consultation as well as passing through local authorities, LEPs, the WMCA Board and, in part, Parliament. By common consent, the public consultation exercise on the first devo deal was weak – this one will need to be more extensive and less ‘leading’ in nature.

A major feature of the deal is the idea of a local industrial strategy that will work between the national Industrial Strategy and the region’s Strategic Economic Plan.

The Industrial Strategy White Paper will be launched by Greg Clark on Monday. Chamberlain Files understands there will be further commitments heading toward the West Midlands which have not already been stolen, sorry announced, by the Chancellor this week.

As we know, there is £6m over three years for a Mayoral Housing Delivery Team.

As Chamberlain Files speculated earlier in the week, a Housing Deal still has a way to go. We understand that the Mayor and local leaders are putting together a system that will seek to deliver the houses required across the West Midlands, building on the Land Commission and land Delivery Plan, without agreeing to a statutory regional spatial plan.

The devolution deal states:

The Mayor, local leaders and government are committed to an ambitious increase in the number of new homes in the West Midlands and are continuing work on a Housing Deal to increase the supply of land and increase housing delivery across the West Midlands.

As has been well trailed, devolution of skills is presenting Mayor Street and his team with their toughest Whitehall-shaped challenge.

As identified in the Treasury Red Book, there is £5m over the next three years for a local construction training programme.

WMCA will establish one of the Department for Education’s (DfE) Skills Advisory Panels (SAPs), which are explained as:

The SAP will involve a new local partnership between the WMCA, local employers, post-16 skills providers and central government. SAPs will have a key role in bringing together strategic planning for post-16 skills provision based on data and intelligence on local labour market demand, and in influencing post-16 skills provision, including the implementation of T levels in the local area.

The deal says that the outcomes of the WMCA’s Productivity and Skills Commission will need to be aligned with the SAPs and the national skills strategy. That sounds positive move if you are keen on partnership, but a backward step if you believe devolution and local leadership are the way forward in addressing the region’s number one challenge.

The deal highlights Government and the WMCA developing an Employment Support Framework Agreement to drive the better coordination of employment, skills and health services.

On the surface, it sounds like sensible co-ordination. But, Andy Street and incoming director of skills Julie Nugent have their work cut out if they want to cut the apron strings from DfE to allow employers, education and training providers and elected leaders to develop a skills strategy that is owned and run in the West Midlands.

On transport, we know about the £250m which will be used on the Metro extension.

The concern among transport bosses in the region has long been on ‘network resilience’ – how the region’s transport network, especially the Strategic Road Network, can withstand the pressure of growth and the disruption that will be caused by construction of HS2.

There is some support from Government for Transport for the West Midlands in tackling this challenge, including more funding for developing a business case and options for a Regional Integrated Control Centre. But, the deal stops short of handing across any transport powers or large sums of ongoing funding.

There is an interesting clause on HS1/HS2 connectivity:

Government will continue to work with the WMCA to explore how the planned HS2 Interchange and Curzon stations can be designed so as not to preclude opportunities for international connectivity if HS1 and HS2 are connected in the future. Any costs associated with these decisions must be met locally.

There are commitments toward joint working on digital developments in transport and improvements to air quality. There is also support for the work of the West Midlands Regional Energy Commission.

In sector terms, the biggest winners are automotive and digital.

The deal states:

The government wants the West Midlands to be a national and international hub for developing new automotive technologies, enhancing the UK’s global share of these key growth sectors and contributing to climate change and air quality objectives.

This government is committed to supporting the West Midlands as a centre of electric vehicle manufacturing, competing with China, Germany and the United States, creating tens of thousands of new jobs in the next ten years, while autonomous vehicles are already being tested in Coventry City Centre.

The deal also underlines:

The West Midlands will be a key testing location for the best entries to a new innovation prize led by the National Infrastructure Commission to determine how roadbuilding should adapt to best support driverless cars.

Government is also currently considering £80m funding through the Industrial Strategy Challenge Fund’s Faraday Challenge.

On digital, the deal states:

the Mayor and the WMCA have a compelling vision to become a global tech hub.

The document also highlights the launch of WMCA’s Urban Challenge and the Government’s announcement of new funding to create ‘Tech Nation.’

There are a series of commitments to ‘work together’ on public sector reform, including on digital and mental health initiatives as well as the Housing First pilot programme for tackling homelessness as announced in the Budget.

As well as the moves to integrate the Police and Crime Commissioner and Fire Authority into the Mayoral function for 2020, there is a commitment to:

identify other devolved powers and funds that will support the Mayor’s priority of tackling health inequalities.

As well as capacity funding for elected Mayors announced in the Budget, the deal states:

the government and the WMCA will reach agreement on a debt cap which will enable the government to take steps to extend the WMCA’s borrowing powers to align with the WMCA’s functions.

It also says Government will work with the WMCA on “selected themes as appropriate” from the WMCA’s Funding for Growth Programme.

It’s the final two clauses of the deal where the most interesting carrots are dangled.

The government will, subject to the agreement of Parliament, provide for the Mayor of the WMCA to have the power to introduce a business rate supplement, which would be subject to a ballot of affected businesses.

…the government will work with the WMCA to consider whether there are appropriate functions that could be exercised by the Mayor to support the investment programme [to drive growth].

The test of Devo Deal III will be whether consideration of more powers and commitments to “work together” turn into substantial clauses which can be accurately described as devolution.

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