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Government’s devolution agenda ‘cowed by austerity’, angry academics claim

Government’s devolution agenda ‘cowed by austerity’, angry academics claim

🕔21.Jul 2016

Local councils must be more belligerent and bolder if they are to break free from “oppressive centralism and a type of devolution deal in which Whitehall holds all the aces”, a strongly-worded academic study claims today.

Devolution deals on offer to city regions are “cowed by the austerity agenda” and stacked in favour of the status quo, according to the Centre for Local Economic Studies and the Sheffield Political Economy Research Institute’s paper The Real Deal – Pushing the parameters of devolution deals.

The study proclaims:

Devolution should be about enabling local authorities to forge a progressive social, economic, democratic and environmental future. At the moment, it is not. And it should and can be.

It makes a number of recommendations, most of which appear unlikely to be accepted by a Conservative government. These include re-nationalising the railways, handing stronger tax-raising powers to the regions, giving councils powers to develop all publicly owned land, introducing land taxes and empowering combined authorities to take ownership of and manage local transport systems, including rail.

There’s also a call for Whitehall departments to embark on a programme of relocating their core functions away from London – something that has been promised on many occasions by Governments since 1997, but has never been delivered on any sizeable scale in practice.

The study says Brexit makes it even more important that devolution deals are given more teeth.

Almost certainly, many local areas will lose a significant chunk of European structural and investment funds in the years ahead, with no guarantees that the development finance gap will be filled by Whitehall. This underlines the need for progress towards devolution to go hand-in-hand with a move away from austerity.

The authors say there is little doubt that the Brexit vote was prompted in part by a sense that people “felt abandoned by central government” and the “message from the voters is not simply that the UK parliament must reclaim power from Brussels, but also that we must strive to create a more inclusive state within our country, which genuinely enables people to exercise control within their own communities”.

Calling for devolution to offer a new industrial future, involving manufacturing, ICT and creative industries, the report adds:

In social terms, it is clear that poverty and inequality stalk many of our towns and cities; devolution should offer a way of redrawing the role of the local state, transforming public services and provide new forms of social inclusions and mobility.

In environmental terms, we must make the transition to a greener, less carbon-focused economy, and capitalise on the green jobs opportunity. Devolution as its stands is cognisant of these aspects, but is underpowered and under an austerity cosh.

What we have had so far is a limited deal-making process of narrow negotiations with Whitehall, which seems to be stacked in favour of the status quo, and limited in terms of what it deems important. As such, the ability of local authorities to think and act progressively has been squeezed.

A new settlement must be based on partnership working that is transparent and underwritten by mutual trust between central and local government. Indeed, it is only through this type of process that citizens will trust the process.

As a new government takes office this is a valuable opportunity and critical juncture to reset the devolution agenda in the UK and create a new settlement.

The paper’s authors say the suggestion that devolution in its current form is heading in a progressive direction is “fanciful”, and add:

Business rates are being devolved, but local authorities will have very limited power to actually raise rates; at the same time, the government is offering local authorities the opportunity to raise the egregiously regressive council tax, in order to compensate for cuts in social care budgets, and has refused to grant local authorities the borrowing powers that would enable them to invest in infrastructure upgrades.

Local authorities and combined authorities should be empowered to take ownership of and manage local transport systems, including rail where appropriate, in accordance with their membership regional structures. City-regions would therefore have the power and resources to determine transport priorities within their area, including fare-setting powers.

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