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Under Starter’s Orders: the Combined Authority and Devolution Handicap

Under Starter’s Orders: the Combined Authority and Devolution Handicap

🕔03.Feb 2015

Talk about sticking it to the West Midlands; the Greater Manchester people could hardly have got their timing any better, if that had been their sole objective writes Chris Game.

Last week, while Paul Dale was reporting the warning of Centre for Cities’ policy chief, Andrew Carter, that our council leaders should “step up the pace on devising plans for a combined authority before the election, or risk Birmingham and the West Midlands being left behind by Manchester and other northern cities”  Greater Manchester leaders were flicking the whip and accelerating off into the distance.

At a meeting last Friday, the 10-council Greater Manchester Combined Authority (GMCA) settled the funding details for implementing the potentially path-breaking ‘Devo Manc’ deal signed with the Chancellor of the Exchequer in November, devolving extensive new powers and responsibilities to the city region.

These ‘details’ include the small matters of the appointment of a dedicated chief executive and senior management team, and the job profile and appointment process for the interim appointed mayor, who will serve until the actual mayor is directly elected in 2017

Yes, they’re that advanced, while Paul’s report reminded us of how far the West Midlands is currently lagging behind in the Combined Authority and Devolution Handicap:

Birmingham city council and the Black Country councils have reached agreement in principle to move to combined authority status, but Solihull and Coventry councils have not yet signed up.

Reluctance by Conservative-controlled Solihull to join forces with Labour-run authorities opens the possibility of a stand-alone Birmingham and Black Country combined authority which would not represent the economic footprint of the West Midlands.

And that’s barely the half of it. There are also the Worcestershire and Staffordshire councils in the Greater Birmingham & Solihull Local Enterprise Partnership (GBSLEP) to consider and the Warwickshire districts in the Coventry & Warwickshire LEP.

Join that disparate lot up, even if they were agreeable, and your economic footprint resembles the size, and possibly the shape, of a diplodocus track, and inevitably renders the name ‘Greater Birmingham’ – at once both a major asset but also itself a CA&D handicap – anything but a foregone conclusion.

In one sense, though, nothing’s changed: Greater Manchester’s been out on its own in this race for at least the past five years. Our concern should be at least as much with the other main runners and riders – the four CAs formally created in 2014.

First the rules. Despite the impression sometimes conveyed of council leaders rushing around, as if in a kids’ playground, trying to pressgang others into joining their team, Combined Authorities (CAs) are a serious, and statutory, business.

They’re supposedly set up by the Communities Secretary, not the Chancellor, at the request of authorities in a specified area, who have agreed a scheme for exercising devolved statutory functions relating principally to transport investment, economic growth and skills development.

Transport in particular explains why the original 2009 Act required the authorities to be contiguous or neighbouring – one reason why Solihull is key to a metropolitan West Midlands CA – and (unlike LEPs) should not include just some districts from a shire county area.

First away in 2011 was the Greater Manchester CA, comprising the 10 boroughs in the former GM metropolitan county, and since its 1986 abolition the Association of Greater Manchester Authorities, a kind of voluntary met county in exile.

This lengthy collaborative history is not an unqualified asset, but, to ministers, it gives the GMCA a huge starting advantage and potential governmental robustness, as does its visible geographical coherence.

Like all five CAs to date, it is LEP-based, and here the contrast with the West Midlands is stark – as shown in the respective maps.

CA LEP map_cropped

The GMCA is the former met county and the current LEP, and seven of the nine surrounding authorities are contiguous with the core city authority. The nine-council GBSLEP includes just two of the seven met county authorities, with the others split between two quite separate LEPs.

Politically the GMCA is normally strongly Labour, and the party currently controls eight of the 10 councils. Most of the Labour leaders have worked together for years, several having been in power for longer than Sir Albert Bore has led Birmingham, and even locally there were questions raised about the accountability of this ‘mafia’ of Labour leaders in the increasingly powerful, but still indirectly elected, CA.

It was bound to concern Coalition ministers, and partly explains George Osborne’s insistence that the Labour leaders’ part of November’s extended devolution package was their agreement, however reluctant, to a directly elected mayor.

Contrary to some over-excited headlines, this will not be a ‘London-model’ mayor, but one who, as well as providing the GMCA with visibility, accountability and political continuity, will lead a portfolio-holding cabinet of the 10 borough council leaders.

The overriding reason for the mayoral requirement became clear with the Government’s next devolution deal, with the forever Labour Sheffield City Region CA, which, like the GMCA, covered the same area as the former (South Yorkshire) met county and current LEP.

Sheffield’s agreed package was smaller in all respects than Greater Manchester’s, but in particular it contained no extension of fiscal devolution, beyond the existing business rates retention scheme and new homes bonus – whereas Devo Manc extended Greater Manchester’s already unique Earnback deal, enabling it to retain more of the additional tax revenue generated through infrastructure investment.

As William Hague, chair of the cabinet’s devolution committee, told a parliamentary reform group recently, Conservative ministers are hugely wary of devolving revenue-raising powers, because of the “very, very fraught history” of local government finance and some councils’ “lack of control” during presumably the pre-rate-capping 1980s (p.6).

Thirty years on, therefore, ministers’ elephantine, Thatcherite memories have pitched the price of any worthwhile fiscal devolution as a directly elected mayor. Sheffield leaders, as Paul Dale noted, had made no secret of their opposition to an elected mayor. For them, then, some additional control over transport, skills, housing and business support, but nothing approaching a Devo Manc.

Still, at least they’ve got something. Their neighbours in the West Yorkshire CA thought they’d try bluffing Osborne, so they stuck to their bids for fiscal devolution – including full retention of the growth in business rates and some exemption from council tax referendum rules – and hoped he might overlook their opposition to an elected mayor.

He didn’t, so they dropped the fiscal stuff, but now, two months later, they’re still waiting for any kind of deal at all, or indeed even a phone call.

So too is the Liverpool City Region CA that, even more misguidedly, thought it might hurry things along by proposing some “open talks” with Osborne about the possibility of a Manchester-type deal – which was never on – and without apparently the six borough councils agreeing even amongst themselves about an elected mayor. Two – Knowsley and St Helens – want a referendum first, though on what isn’t at all clear.

There was some excitement last month when David Cameron assured a Q&A audience in Wirral that devolution “doesn’t necessarily have to involve the creation of a metro mayor”.  But all he was actually doing was reiterating the distinction between the Manchester and Sheffield deals.

That leaves the North East CA, the only one so far to cover a significantly wider area than a former met county, and for that reason alone of possible interest to the West Midlands.

It too is LEP-based, but here a LEP covering most of the North East region – Northumberland and Durham unitaries, plus the five boroughs in the former Tyne and Wear met county – whose voters overwhelmingly rejected an elected regional assembly in 2004.

The remainder of the region – Teeside and Darlington – has its own LEP, but could have a case for inclusion in what would be a regional-scale devolution deal.

Osborne himself seems keen, no doubt for partisan reasons, but at present any deal is only at the prospectus stage, which puts the North East at the rear of the chasing pack – albeit comfortably ahead of the West Midlands and the rest of the field.

Personally, that doesn’t bother me. I indicated in these columns in November my scepticism about the unseemly rush to announce a manifestly half-baked proposal for a Birmingham & Black Country CA, and neither of the Yorkshire CAs improved their devolution prospects by similarly going off half-cock.

I therefore found myself disagreeing last week with Centre for Cities’ Andrew Carter. We haven’t even agreed a membership of a CA, or a name, and we know the current Coalition price of a major devolution deal – fiscal extras included – is an equally contentious directly elected mayor.

In three months’ time we’ll have a new government – possibly a professedly even more devolutionist one and almost certainly different ministers, so why the frantic rush?

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