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West Midlands devolution deal faces crucial seven-day deadline

West Midlands devolution deal faces crucial seven-day deadline

🕔16.Nov 2015

The West Midlands has a week to seal a devolution deal with the Government, or risk being left even further behind by the great cities of the north of England, writes Paul Dale.

George Osborne will deliver his Autumn Statement on Wednesday November 25, and will take pleasure in outlining multi-billion pound devolution packages for Manchester, Yorkshire, Merseyside and the north east where city regions have negotiated powers and budgets to run economic development, transport, skills and some health services – in return for agreeing to have an elected mayor.

It is a little over two weeks since the Prime Minister urged West Midlands council leaders to “be bold with their vision” in order to trigger a bold response from the Government. It is two and a half months since the seven West Midlands metropolitan authorities submitted a devolution submission to the Treasury thought to be worth about £9 billion over 30 years.

Realistically, a deal must be signed and sealed by next Monday. The next seven days will be crucial. It is surely unthinkable that the shadow West Midlands Combined Authority will walk away from Mr Osborne with nothing, although there are conflicting messages about why the talks are going down to the wire.

On the one hand, discussions are still taking place so there must be hope. On the other hand, there is plenty of evidence to suggest the most likely deal breaker remains the Chancellor’s insistence that the West Midlands accepts a directly elected metro mayor in return for devolution.

Influential publications such as Local Government Chronicle and the Financial Times have reported that the West Midlands’ stumbling block centres on whether the financial value of the proposed devolution deal warrants the political upheaval of a mayor.

There is a feeling that the region, with the economic might of Birmingham at its head, deserves a more lucrative settlement than, say, smaller Greater Manchester or Merseyside.

What remains unknown is whether the West Midlands’ submission to the Treasury is a mere starting point for negotiation at the bottom end of the scale. In other words, ‘this is the minimum we would expect if we must have a mayor, but we’d actually like a lot more’.

The ‘asks’ so far include powers for the mayor to levy a council tax precept and impose supplementary business rates, plans to spend £15 million a year from the Government’s road fund to make the M6 Toll road free, and for the West Midlands Combined Authority to take control of air passenger duty at Birmingham Airport.

A £500 million housing loan fund is envisaged as well as an £8 billion investment fund tied largely to economic development off the back of HS2.

A bolder bid might include substantially more investment to extend the Midland Metro tram to Birmingham Airport and the NEC, as well as funding to reopen disused rail tracks across the region.

Whatever package the council leaders come away from the Treasury with will have to be endorsed by each of the seven authorities – Birmingham, Solihull, Coventry, Walsall, Wolverhampton, Dudley and Sandwell.

Experiences elsewhere suggest a move to rule by metro mayor will be the most difficult proposal to finesse past councillors, with most deeply suspicious of or, completely opposed to, a mayoral system.

Liverpool city region will this week sign Osborne’s fifth devolution deal, although the mayoral issue here is not so important because Liverpool city council already has an elected mayor, Joe Anderson, who is expected to run for metro mayor.

Many big cities, including Birmingham and Coventry, rejected having mayors in referendums in 2012. Campaigns are springing up, particularly in the north, for devolution metro mayors to be put to fresh referendums.

St Helens Council, part of the Liverpool devolution deal, has been most vocal in calling for a poll.

In the north east, the leader of Durham Council, Simon Henig, has decided to stage a postal poll of 400,000 voters to advise councilors on whether or not to have a metro mayor. It remains unclear whether the council would adhere to a ‘no’ vote, putting the devolution deal at risk.

Devolution plans in Yorkshire have been the subject of fierce debate.

A panel of South Yorkshire voters convened by the Electoral Reform Society rejected a deal by 20 votes to 10. Most of the panel members wanted a more ambitious Yorkshire-wide agreement with a full parliament similar to the Welsh Assembly.

West Yorkshire says its own devolution bid has been “scuppered” by Conservative authorities in York, East and North Yorkshire.

Judith Blake, leader of Leeds council, told the Financial Times that “Greater Yorkshire does not stack up” but there were still “some difficulties” in accepting a mayor.

In Lancashire, some districts have walked away from a Preston-centred devolution effort.

It is clear, therefore, that English town halls instinctively kick out against the notion of a metro mayor. It is even clearer that the requirement to have a mayor is Mr Osborne’s thickest red line – you don’t have to have one, but don’t expect maximum devolution without one.

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