The next Government, by all forecasts one led by Liz Truss, will need to quickly set about dealing with the war in Ukraine, solving the cost of living crisis and kick-starting economic growth.
In this context, will the incoming Prime Minister press the brakes on the English devolution agenda?
It may seem like a lifetime ago – but it was only in February – that the Government set out proposals in the Levelling Up White Paper for 13 possible new devolution deals. These included a clutch of county deals and opening negotiations for two ‘trailblazer' devolution deals with the Greater Manchester and West Midlands Combined Authorities.
What progress has been achieved since then? This week the Government confirmed a devolution deal is on offer worth £1.14bn over 30 years for the East Midlands, covering Derbyshire, Nottinghamshire, Derby and Nottingham. Nottinghamshire CC said the leaders have agreed ‘in principle' to the combined county authority (CCA) deal, that will mean a new elected regional mayor.
And last month, a deal signed by the levelling up secretary Greg Clark transfers powers to a directly-elected mayor in York and North Yorkshire, and will bring half a billion pounds of Government investment over 30 years.
What needs to happen next? Given global and national events, Whitehall can provide a limited attention span. But one well-placed political insider's view is that the Government must ‘crack on' with all of the deals.
They highlight devolution may not feel like the first lever to pull to solve the cost of living crisis, improve energy resilience and security, or kick start economic growth. But at the core of those problems is a set of local economies and local areas that haven't built up resilience and growth, and where devolution-facilitated approaches are desperately needed.
And they add that the challenges are made much harder by an overly-centralised Government, and this increases the chance that devolution will be ‘deprioritised'. Their strong expectation is that due to the ‘art of the possible', the focus will be on getting a few more deals signed quickly.
Where do the two candidates left in the Conservative leadership race stand on devolution? While Rishi Sunak was seen as a localism enthusiast while at the Treasury, he wanted to ensure that if he thought money wasn't being spent well there were ways to pull it back. Liz Truss's long-term record and view is less clear. After getting the endorsement of West Midlands mayor Andy Street, she said she would back the trailblazer deal in the West Midlands and that she wants to empower local leaders. She has said she will back Northern Powerhouse Rail in full. ‘So, some of the language is there, but it's not central to her vision of how you restore growth to the country and how we become more resilient. So there is a risk that we drift,' said the source.
Levelling up secretary Greg Clark is praised for being clear when he went to the Department for Levelling Up, Housing and Communities (DLUHC) that he was going to try to get as many of the deals done as possible. It is thought to be more likely than not that another deal or two in addition to the East Midlands deal will be signed by next week.
They are ‘more than 50% confident' that will include an expanded Mayoral Combined Authority deal for the North East. Likely to be called the North East Combined Authority, this would be created from the expansion of the current North of Tyne Combined Authority to include South Tyneside, Sunderland and Gateshead, with Durham as a non-constituent member. One further deal is a possibility at this stage.
In the case of the two combined authority trailblazer deals, both the West Midlands and Greater Manchester teams have been having conversations over the summer with all relevant government departments. A summer statement outlining progress with ‘pre-deals' could be made, with a broader announcement likely later this year. The question will be, when the new PM gets in place, to what degree they are willing to drive that forward.
It is seen as crucial that the Levelling Up and Regeneration Bill gets through Parliament without undue delay, as it provides the statutory footing for the new devolved bodies and is the mechanism needed to bring a county into a devolution deal without the support of districts. The CCA model is crucial to getting the county deals done, but the Bill currently does not allow districts any role in scrutinising or consenting to any secondary legislation transferring powers from them.
Districts have stressed to The MJ that they will be taking their case for playing a full role in devolution in shire counties to the new Prime Minister. Cllr Sam Chapman-Allen, chair of the District Councils' Network, said that while districts fully support the Government's commitment to extending devolution to shire county areas, ‘we believe the current approach to county deals denies districts the full and active role we merit in delivering success for our local communities'.
He continued: ‘We will be urging the new Prime Minister and secretary of state to amend the Levelling Up and Regeneration Bill to remove clauses which allow district functions to be transferred to combined authorities without consent and which exclude districts from being constituent members.
‘Districts will be working constructively with ministers, civil servants and our partners at county level to overcome the devolution deficit in shire areas.'
Zoe Billingham is director of IPPR North. She told The MJ the trailblazer deals for the West Midlands and Greater Manchester may be safe ‘because if Andy Street has endorsed Liz Truss I imagine that's in return for the additional skills powers and all the other things Andy Street and Andy Burnham have asked for together.
‘So when it comes to pathfinder devolution and potentially to forms of fiscal experimentation which probably would not have been in scope previously, it feels like both [Conservative leadership] candidates might be quite open to that.'
According to Ms Billingham, it feels like whatever Ms Truss's views on devolution before the contest, ‘by going round the country and by seeking the endorsement of metro mayors and others, including northern Tory MPs, it feels like both chair of the Northern Research Group [of MPs] Jake Berry and [Tees Valley Mayor] Ben Houchen in particular, but also Mr Street later in the campaign, have managed to secure some pretty significant victories'.
Director of the Northern Powerhouse Partnership Henri Murison told The MJ the idea that devolution will be rolled back seems unrealistic. He continued: ‘Deals like the North East are likely to go through really quickly. It doesn't feel like there will be a huge amount of political bandwidth for devolution to be a central theme of this Government, but I can't see us losing ground from what we've already achieved.'
The county deals are not going as well within DLUHC, he added. One of the challenges is that without a metro mayor it's unlikely that they will include the primary benefit of long-term ‘gainshare' investment funds. ‘Certainly the North Yorkshire deal has the investment fund. My fear is that county deals will not necessarily have the same traction as full devolution.'
His advice to areas such as Cumbria that are still deciding what sort of deal to push for, is to not pursue a county deal, and to press instead ‘for a metro mayoral deal and get the maximum funding available.'
Adam Hawksbee is deputy director and head of levelling up at think-tank Onward. He told The MJ: ‘It's the wrong time for the Government to take their foot off the pedal – they should get the rest of the deals announced in the White Paper concluded as soon as possible. In particular, mayors in the West Midlands and Greater Manchester should get sweeping new powers over skills and regeneration so they can boost growth and support our recovery from the cost of living crisis. The Levelling Up Bill underpins many of these new deals, and without it many of the new county deals simply won't be possible.'
Ahead of the East Midlands announcement, a DLUHC spokesperson said: ‘We are delivering on our Levelling Up Mission that will see every part of England that wants a devolution deal having one by 2030.
‘We recently announced a historic deal for York and North Yorkshire, meaning the 818,000 people can directly elect a leader to represent them, backed by a £540m fund to provide long-term investment in the region. Negotiations with other areas are progressing and further deals will be announced in due course.'
