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What does our ‘Money In, Money Out’ devo equation look like?

What does our ‘Money In, Money Out’ devo equation look like?

🕔16.May 2017

Instead of just six, we might easily have had at least nine new Combined Authority (CA) mayors by now – a whole baseball team of them – and a very different political arithmetic. Instead of a 4-2 Conservative majority, quite possibly 5-4 in favour of Labour, and with it a potentially rather different medium-term future not just for them but for English devolution generally.

The North East, West Yorkshire, and Sheffield City Region, all traditional Labour heartlands, were on the George Osborne/Greg Clark metro mayoral list this time last year, but gradually dropped out – if not as precipitately as the former Chancellor himself.

The North East was first to go, four of the seven council leaders voting against pursuing their Devo Deal. It reflected the general suspicion of imposed mayors shared by almost all council leaders, but was more to do with Theresa May, in her then not so strong leadership mode, being unable to give any assurances about post-Brexit funding.

Though it could be that what looked like dithering was all part of a plan of Baldrickian cunningness, like last week’s leak of Labour’s manifesto.

West Yorkshire was next. The Labour leaders of the five metropolitan boroughs were prepared reluctantly to accept an elected mayor, but the proposed city region included the much more Conservative councils of North Yorkshire, and their leaders, or at least their MPs, weren’t.

Following which there was one of the periodic revivals of the idea of an ‘even bigger than Scotland’ whole-Yorkshire CA.  But what actually thwarted the Sheffield City Region (SCR) mayoralty, if only temporarily, was the CA’s failure to get its consultation right when it came to adding districts in Nottinghamshire and Derbyshire to the core South Yorkshire boroughs.

In January, therefore, the High Court ruled that it had to go back and do it properly, and, as far as this May’s elections were concerned, we were down to just six.

This was a setback – maybe not for the Government, but for both the CA and the Northern Powerhouse vision in which the SCR has a lead role. It had been, after Greater Manchester, the next CA to sign a Devo Deal, and it also commissioned one of the most interesting pieces of devolution research: an in-depth study and measurement of Devolution and Disadvantage in the SCR by Dr David Etherington and Professor Martin Jones of Middlesex and Sheffield Universities respectively.

It is a critical contribution in all senses of the word. The authors acknowledge the positive opportunities offered by the Cameron Government’s approach to devolution, and the increased powers the SCR could have over transport and economic planning, skills, employment, and eventually health and welfare.

But they argue, with extensive statistical backing, that it needs not only to go further, but also to acknowledge (1) the full extent of the region’s economic and social disadvantage, and (2) the damaging and continuing contribution to that disadvantage being made by the Government’s ongoing policies.

The heavy focus of the devolution settlement and particularly the mayor’s role on skills, employment and business support is welcome. But it risks insufficiently recognising the needs of the most disadvantaged groups, thereby reinforcing, rather than reducing, the most serious inequalities of the city region and its communities.

These inequalities are increasing, the authors argue, and cost in the table below, even as they’re professedly being addressed, by the policies of the same government that is promoting devolution: austerity expenditure cuts, and an ever harsher welfare regime discriminating against already disadvantaged groups – like Cathy Mohan, the Abingdon voter with the learning disability, who for some reason blamed Theresa May’s team or Government for taking away her disability living allowance.









Bring all these costed elements together, and you have a ‘Money In, Money Out’ devolution equation – or, to be more accurate, a non-equation.

When, to the income lost to the 9 SCR councils through the government’s annual funding cuts (£442 million between 2010 and 2014), are added that lost to local residents through its welfare cuts and benefit reforms (£577 million), and the cumulative cuts for the 2016/17 year (£131 million), the ‘Money Out’ side comes to £1.15 billion.

And substantially exceeds what always seems to be described – in order, presumably, to big it up – as the “new and additional” devo deal funding allocation of, in the SCR’s case, £30 million a year over 30 years.  It amounts – you might, and they do, say – to a devolution of austerity.





Now, I’m not for a moment suggesting the Etherington/Jones methodology is perfect, or comprehensive, or devoid of political overtones. It can obviously be argued that it’s not comparing like with like, that it omits things that should be included (like the 2015/16 cuts to councils’ funding, for example), etc.

In which case, the challenge is obvious: improve on it.  And that’s what I’m suggesting for the West Midlands and indeed Mayor Andy Street, whose political interests are clearly rather different from those of the SCR leaders.

I genuinely don’t know if we’ve an equivalent ‘Money Out’ analysis to make an equation out of the West Midlands’ ‘new additional’ £1.095 billion (£36.5 million a year over 30 years) funding allocation, but I’d certainly be interested to see one.

Not least because today we’d be able to compare it, not only with SCR’s, but with Greater Manchester’s. Etherington and Jones have been commissioned in effect to replicate their SCR study in what you might call the crucible of English city devolution, and they’re due to launch their report this evening.

I haven’t seen it, but they did reveal recently that they’d found that “in addition to local government cuts [the £442 million figure for the SRC], the post-2015 welfare reforms will take almost £13 billion from claimants in the region by 2020/21 – the equivalent of £690 per working age adult per annum.” (my emphasis)

Against this ‘Money Out’, Greater Manchester’s ‘Money In’ is the same as Sheffield’s: £900 million over 30 years.  It’ll be interesting, then, to see which, if any, of the four Conservative metro mayors is the first to commission an Etherington/Jones study of their area.

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