15.The consensus of the evidence we received is that devolution is a good thing. The large majority of our witnesses approved of the Government’s intentions, with some individual caveats, and were enthusiastic at the prospect of local areas gaining greater powers. We sought to identify the objectives of devolution and see whether there was a consistent sense at all levels of what it was designed to achieve. Our witnesses offered us a whole range of possible objectives. Professor Andy Pike, Newcastle University, said:
There are about five at last count. There is certainly the local growth and economic development side of things. […] There is the public sector transformation and savings stuff. There are two others as well that perhaps do not get addressed as much. One is the idea of greater accountability—the idea that Government can be brought closer to the people and made more accountable as a result—and then perhaps the other is about decentralisation being a better way to address some of these big societal challenges around ageing, climate change and so forth through more devolved arrangements.
16.Professor Colin Copus, De Montfort University, said devolution is about economic growth and “rebalancing the economy”, by which we understand a more selective geographic rebalancing of the economy aspired to by, for example, the Northern Powerhouse and the Midlands Engine. He went on to say that:
In that journey, there have been a number of other objectives collected as well. Public sector reform, certainly, looking at issues like transport, health and housing, and how those particular service areas integrate across any given geographical area, is central to this particular agenda. That brings up another objective about what is the role of local government with all of this and whether there is a barely-hidden agenda, maybe, to start to think about restructuring.
17.We heard that health devolution had its own different set of objectives. During our visit to Greater Manchester, we were told that their ambitions for health devolution included, as well as improving population health and longevity, helping people into work, improving self-care, standardising hospital treatment, caring for people with long-term conditions at home and provision of wraparound services for people with dementia.
18.Professor Pike summed up: “Overall, there is a lack of clarity, in some ways. There is an overlap and a bit of confusion, perhaps, sometimes in terms of which rationales are promoted at which points”. We asked the Secretary of State for Communities and Local Government, Rt Hon Greg Clark MP, for his objectives for devolution. He said “To restore to the cities, towns and counties of the country the ability to drive their local economies forward and to be more successful socially and environmentally as well”. This formulation, while admirable in intent, is unspecific. The Minister for Community and Social Care, Rt Hon Alistair Burt MP, said the core objective for health devolution was generating better health outcomes and giving an impetus to current work to integrate health services. We believe that the Government should set out the aims of its devolution policy more clearly, preferably in a way that would, over time, allow success to be measured. The Government needs a clear hierarchy for the many things it is trying to achieve through devolution—promoting local growth at minimum cost, achieving a better balanced economy, improving integration of public services, enhancing local freedom to experiment, bringing decision-making closer to local communities and enhancing the democratic process. It also needs to be clear how the forms of devolution it favours are intended to achieve them, while recognising that there may be a different balance and mix of objectives in different areas.
19.Setting out clear objectives for devolution is of crucial importance so that there are measurable outcomes from the process. The Centre for Public Scrutiny (CfPS) said:
Devolution requires clarity on ‘why’ devolution is a necessity […] we are concerned, from press coverage and from our own knowledge of the sector, that a number of councils are pursuing devolution deals without having the evidence to back up their assertions, or a clear sense of why devolution in certain areas will improve services.
20.Clear objectives, which can be embedded in devolution deals, are an essential part of the monitoring and assessment process. However, Professor Pike said that “There is a real gap in terms of monitoring, assessment and evaluation”. We asked Greg Clark about how the effectiveness of deals would be monitored: he replied that, given the ambitions for devolution were broad, there was no single measure of success. He talked about the trend rate of growth in places with deals increasing, greater prosperity for residents, people feeling they are getting better services and, after a period of time, thinking “Actually, that was a move in the right direction”. Alistair Burt said that, with health devolution, local areas should be able to demonstrate that key outcomes, which may be health inequalities or other indicators, like winter pressures and moving seamlessly from secondary to primary care in the community, are better.
21.As set out above, our witnesses gave us many important and ambitious reasons for pursuing devolution, particularly so for health devolution. However, with the exception of increasing economic growth, we are not certain whether these are intended to be the measurable objectives of devolution and are not convinced that the Government itself is any clearer. We are also not satisfied that the Government has considered and identified how to measure the success of a devolution deal once in place.
22.We recommend that the Government publishes, in order of priority, its long-term objectives for devolution, the mechanisms needed to achieve these and the means by which it will measure success. Following discussions with the local areas involved, relevant objectives can be incorporated in each devolution deal. This would enable areas to assess whether they are doing better with a deal than without. Linked to this, the Government should set up a mechanism for monitoring deals and reviewing and consulting the public on their impact. This would also make it easier to gather and disseminate best practice and lessons learnt. Local areas must have the powers needed to achieve the objectives of devolution, for example to integrate and deliver public services aligned to local needs. In the annual report (described in more detail at paragraph 45), they should state whether they have been given sufficient powers, levers and resources by each of the Government Departments involved to achieve the objectives of a deal and what more is needed.
23.After city deals, growth deals and now devolution deals, the current approach to devolution in England is overtly one of deal-making, which can be characterised as negotiations behind closed doors between central government and representatives of local authorities. Professor Pike said the deal-making process was a way of working between “a top-down Whitehall blueprint” and a “complete bottom-up free for all”. Lord Kerslake, the Chair of the CfPS, and former Permanent Secretary at the Department for Communities and Local Government, said that approaching devolution in this way meant that:
You stop the problem that previously bedevilled devolution, which was unless everyone did it the same way, it was not going to happen. The risk of a formulaic or framework approach is that you get to a lowest common denominator.
24.Indeed, one of the consequences of deal-making is that devolution does not happen in a uniform manner; deals have so far been agreed with seven city regions and with Cornwall. Professor Pike described it as “very ad hoc” and “piecemeal”. This is compounded by the fact that some places are more ready to take on devolved powers than others and will forge ahead, for example Greater Manchester (which we will consider in more detail from paragraph 28 below) and Cornwall. As Cllr John Pollard, the Leader of Cornwall Council, told us:
We managed to be the first non-metropolitan area to secure a deal, because we were actually ready for it. We had been working for some 12 months before on fairer funding projects and trying to look at the funding of Cornwall in relation to the funding of other areas.
Alexandra Jones, the Chief Executive of the Centre for Cities, reinforced this point, saying “some places are ready for and want different powers. They want to take on more”.
25.But there also needs to be a readiness on the part of Government to devolve the new powers which local areas ask for. The Minister for Local Growth and the Northern Powerhouse, James Wharton MP, said “The issue has occasionally been, ‘The ask coming from this local area goes further than we can be confident in going at this time’”. However, he went on to say:
We often then discover that we can find some sort of compromise they are happy with and we will continue, as part of the nature of the devolution process, to look to see if we can go further in the future and what other levels we might be able to make available to them to reach their objectives.
We were pleased to hear the Government indicate that the deal-making process is ongoing and evolutionary. Greg Clark confirmed this by saying:
It is a characteristically ingenious approach from the leaders of Sheffield […] that anything agreed with anywhere else should reopen the discussions with Sheffield. That is exactly the sort of ingenuity I had hoped for when we saw these deals.
Of course, everyone looks very closely at what is being negotiated in those places. Because this is not a one-off final chance, people do come back, and we have seen this in Greater Manchester. I am absolutely certain that Sheffield will, as it demonstrates its ability to make use of the powers, come back and ask for more. Some of those will be determined from the experience on the ground and some by looking over their shoulder and saying, “This city over there has done this. We did not think of that, but now we have seen it and we would like to do the same.” I very much expect this approach to continue.#
26.We believe that deal-making, which seeks to find a balance between a ‘bottom-up’ or ‘top-down’ approach, is a pragmatic way to approach devolution, and we particularly agree with Lord Kerslake’s comments that a framework approach to devolution at this early stage in the process can lead to the lowest common denominator. The natural consequence of deal-making is bespoke but asymmetric devolution as places ready to take on more powers put forward proposals and agree deals ahead of others.
27.In acknowledgement of this asymmetry, it should be made explicit in each devolution deal that areas may acquire further devolved powers over time. Where an area has asked for particular devolved powers but was refused them, if still desired, such powers should be available to that area if they have been given to other similar areas at a later date. By the end of the Parliament, we should have reached the position of devolution by right to local areas, with the Government having announced the powers that will be on offer to local government. This would then provide a basis for the negotiation of further, more ambitious deals covering new policy areas and/or a more comprehensive package of devolved measures agreed between Government and local government as a whole.
34 Q4 [Professor A Pike]
35 Q4 [Professor C Copus]
36 Q4 [Professor A Pike]
39 Centre for Public Scrutiny ()
45 Greater Manchester, Sheffield, West Yorkshire, Liverpool, West Midlands, North East, Tees Valley
Prepared 29 January 2016