Devolution still firmly on the agenda
02 December 2016
Devolution’s place in the list of government priorities has been questioned openly in recent months, boiled down to one simple point: without George Osborne has the policy lost its political significance?
Well, midway through his Autumn Statement to Parliament, the chancellor answered this, and other questions, with a simple, but crucial statement:
“Devolution remains at the heart of this government’s approach to supporting local growth.”
This was not an isolated comment, either, lost somewhere in the hour-long, six-and-a-half thousand word speech: it followed a long passage detailing infrastructure spending across the country and a commitment of £1.8bn of funding for Local Enterprise Partnerships (LEPs) across England.
Mr Hammond certainly presented the case differently from his predecessors, rooting it in an argument about UK productivity rather than a plainer argument that we need to ‘rebalance the UK economy’. But in doing so he illustrated an unemotional grasp of devolution’s importance and made his case with a stark observation:
“…no other major developed economy has such a gap between the productivity of its capital city and its second and third cities, so we must drive up the performance of our regional cities.”
And just in case anybody doubted the intent, he published a strategy for addressing productivity barriers in the Northern Powerhouse, which included a commitment to grant over half a billion pounds (of the £1.8 billion LEP funding) to the north through the next round of local growth deals. Amongst other examples, there was agreement to proceed with transport projects such as business case development funding for the ‘Sheffield Supertram’ renewal.
A strategy for the Midlands Engine is to “follow shortly”. In similar vein, he reaffirmed commitments to city deals in Edinburgh and Swansea (amongst others) and further developments in the devolution deals for the West Midlands and London (the bit outside Whitehall…). And for all the combined authority areas electing their mayors for the first time next year, there is now the prospect of some new borrowing powers.
There were gaps, of course: although it is reported that Cambridgeshire and Peterborough have now signed up in principle, no new combined authority deals were formally announced, nothing new about skills (except for London) or about health and social care beyond Greater Manchester. And we will have to wait a bit longer for the re-fashioned industrial strategy.
But in the midst of a broader post-Brexit imperative to demonstrate that the UK is very much ‘open for business’, this Autumn Statement was a declaration that devolution still has a strategic place at the heart of government economic thinking.