On 9 February, leading politicians, decision makers and academics will meet in Glasgow to discuss how more powers can be devolved to the UK’s cities. The meeting is being organised by the Core Cities group, which advocates a bigger say for Britain’s major cities outside London.
The Glasgow gathering is the latest sign of a growing appetite for financial freedom for the UK’s cities and regions. The movement picked up pace during the Scottish independence referendum campaign with the pledge by political party leaders at Westminster to give more powers to the Scottish Parliament. The subsequent publication of the Smith Commission’s recommendations prompted Sir Richard Leese, leader of Manchester City Council and chair of the Core Cities UK cabinet, to respond:
“What’s good enough for the Scottish Parliament should be good enough for big cities across the UK. Today’s commission report unveils significant fiscal devolution for Scotland and the power to retain more of the tax revenue it raises. This is something that Core Cities UK strongly advocates for cities on both sides of the border, giving us the power to make a difference on the ground and unlocking their full potential.”
But even before the Smith Commission had reported, devolution for cities was rising up the political agenda, and the major Westminster parties had already started setting out their proposals:
- In November, the chancellor of the exchequer, George Osborne, unveiled a plan to give Manchester new powers over transport, planning, housing, police and skills. Similar packages are proposed for Leeds and Sheffield, part of the government’s commitment to build a ‘Northern Powerhouse’ as a counterbalance to the ‘London super-region’;
- The Labour Party has promised that, if elected to government, it will pass control of business rates to the major cities, and that the House of Lords will be replaced by a senate of elected regional and city representatives;
- The Liberal Democrats have called for devolution on demand to be offered to any part of England with a population in excess of one million.
Politics is one factor driving the demand for more city devolution; another is the economic situation. As the Centre For Cities recently observed:
“From a public finance perspective, there is an increasing realisation that future reductions in public sector expenditure will be impossible to deliver without changing the way public services are designed and delivered, and this requires more to be done at the local level.”
For many, the moves to cut the purse strings held by Whitehall and Westminster are long overdue. The City Growth Commission noted in October that the UK has the most centralised system of public finance of any major OECD country, with sub-national taxation accounting for only 1.7% of Gross Domestic Product (GDP), compared to 5% in France and 16% in Sweden.
The Commission argued that more powers for the cities would build on the momentum of the government’s City Deals by creating stronger, more inclusive and sustainable growth in the UK, and suggested that London, Manchester and West Yorkshire are already equipped to take on the risks and benefits of fiscal and funding devolution. While some, including the Prime Minister, welcomed the report, others, such as Stephen Brady, leader of Hull city council felt short changed:
“I’m really, really disappointed that Hull once again has been overlooked in favour of the bigger cities. We’re like the forgotten city, despite being strategically so important. We’ve won the City of Culture 2017 bid. What else can we do to prove that we want to be given the chance to run things ourselves?”
His response is a reminder that establishing a comprehensive devolution settlement that covers all of Britain will prove challenging.
Ultimately, the real prize of city devolution could be a fairer society. A report from the International Monetary Fund in April 2014 found that decentralising government expenditure and revenue can help achieve a more equal distribution of income. But the authors stressed that this would require several conditions to be fulfilled, including comprehensive decentralisation on both the expenditure and revenue sides.
During its Glasgow meeting in February, the Core Cities group promises to unveil a ‘Charter for Local Freedom’ setting out the powers it wants central government to devolve down to cities. And with cities set to play a key role in shaping the outcome of the general election, it’s clear that this is one issue that will continue to build. As Alexandra Jones from the Centre for Cities observes:
“The debates about devolution and the city regions have not always had political momentum; there’s no shortage of that now.”
We’ll be attending the Core Cities Devolution Summit on 9 February – follow @idoxinfoservice for live tweets and this blog for follow-up commentary.
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