Devolution: the next five years and beyond Contents

4Bids, negotiation and agreement of deals: key themes

50.As we have discussed in paragraph 23 above, devolution in England is generally proceeding by means of deals negotiated and agreed between local areas and the Government. This is a pragmatic way forward but there are risks in deal-making which, to be mitigated, require the use of proper processes—we are all familiar with the drawbacks of ‘back room’ deals. Openness, transparency, agreement of a timeframe and equal influence between the parties will help to ensure the process and the deal agreed are both beyond reproach. The evidence we received suggested that the current process could be improved in a number of ways.

Public engagement

51.We have been struck by the lack of discussion and consultation with the public in areas which have proposed, negotiated and agreed devolution deals. At the question and answer session we held with residents during our visit to Greater Manchester, the vast majority of contributions, often made in angry tones, arose from the perceived lack of efforts by the combined authority to engage the public about the deal relating to their local area. While many valid points were made, we note that attendees, having elected to attend the session, were not necessarily representative of all Greater Manchester residents who are likely to be less aware of devolution. We were told that there had been a “complete, utter and total lack of democratic engagement”, “insufficient information” and that most people did not understand what Devo Manc was all about.111 When we raised this with our Greater Manchester witnesses, Cllr Kieran Quinn, the Leader of Tameside Metropolitan Borough Council, said he fully accepted there could have been more transparency.112 Cllr Sue Jeffrey, the Leader of Redcar and Cleveland Borough Council, told us that Tees Valley had not consulted the public before signing up to a deal113 and Cllr Alan Rhodes, Leader of Nottinghamshire County Council, said they were talking about the deal in the media and would hold a public consultation once it was agreed.114

52.Lord Kerslake, the Chair of the Centre for Public Scrutiny (CfPS), said that public engagement should take place both during “the process of coming to the deal” and then “having done the deal”.115 We think there is an additional initial stage which involves local areas consulting on devolution proposals before the negotiations begin. The seven week Government-set deadline for submitting bids did not provide any scope for this. We heard it was challenging even to consult the authorities involved and then agree proposals by this date.116 Local areas clearly felt they had to capitalise on the Government’s enthusiasm to get a deal done: explaining why Tees Valley did not undertake public engagement, Cllr Sue Jeffrey said:

We were approached very quickly by James Wharton and co. to have a conversation about how the Tees Valley might like to move towards devolution, and we certainly saw it as being advantageous for us to get into that conversation quickly and to get on with that conversation.117

Cllr Quinn reasoned that, as the deal was bringing new powers to local people, not taking them away, limited public engagement could be excused.118 Ed Cox, the Director of IPPR North, commented that West Yorkshire was the only area that had undertaken public consultation and that their second deal had not yet been agreed. He believed that the Government had been trying to create a sense of momentum “in order to get deals done and to drive devolution down” which had inadvertently been to the detriment of public engagement.119 Some areas are taking steps to engage and consult residents. Durham County Council announced that it will poll Durham residents on the agreed North East Devolution Deal in early 2016120 and, demonstrating that the public is interested in devolution, a Citizen’s Assembly121 in Sheffield voted for a more ambitious deal than the one agreed.122

53.For devolution to take root and fulfil its aims, it needs to involve and engage the people it is designed to benefit. There has been a consistent very significant lack of public consultation, engagement and communication at all stages of the deal-making process. This is due to areas having limited time in the run up to the 4 September deadline. The Government drove the first wave of devolution deals through at a rapid pace (considered in more detail in the next section) which meant there was no opportunity for engagement with residents, or for residents to have their say on the principle of devolution or the framework of the specific deal proposed in their area. Despite this, we believe that local leaders could have communicated more effectively and extensively with their residents about the deal process, the contents of the deal and how it would affect them. It should, for example, have been clear to any citizen what their elected leaders were seeking to secure for the area in negotiating a devolution deal with the Government. In addition, deals involving complex negotiations between national and local politicians do not lend themselves to public engagement. However, from now on, efforts should be made to engage, consult and communicate with the public at all stages of the process—in the preparation of proposals, their negotiation and following agreement. Strategies to involve the public may include citizens’ juries, public meetings and, within the NHS and local government, staff engagement sessions. Once a deal is entrenched and its reforms have had the chance to take effect, the public should be consulted on their experience of its practical effects.

54.We found that the negotiation process in particular had attracted strong criticism123 and accusations that deals are being made in secret—the CfPS said the detail is being “thrashed out in private between a handful of privileged individuals”124—which has implications for openness and transparency. A member of the audience in Greater Manchester told us that she saw devolution as “one group of people in central London passing power to another group of elite people locally”.125 However, Lord Kerslake thought it would be very hard to make the process work if the negotiations were public.126 The impression we took from Greater Manchester was that the Government wanted the negotiations to be kept confidential, which necessarily limited public engagement. Cllr Quinn told us that “the Treasury wanted a deal signed before we could move into a more public domain” and Cllr Derbyshire, the Leader of Stockport Metropolitan Borough Council, echoed this.127

55.In addition, the criteria used by the Government to judge the suitability of proposals have not been published. When we asked the Minister for Local Growth and the Northern Powerhouse how proposals were judged, he said the Government wanted to see cooperation, a desire to drive the devolution agenda and bottom-up agreement.128

56.We think it is too late to engage the public only once a deal has been agreed. While it is reasonable that the actual negotiations are not open to the public, steps should be taken to inject more openness into the process by publishing on the relevant authorities’ websites:

The Government should also publish the criteria it uses to assess and agree proposals so local areas can refer to these when drawing up their devolution bid. A similar level of transparency should continue to be maintained once the deal has been agreed.

Timetable

57.The timetable for both proposing and agreeing deals has been very tight. In terms of putting forward bids, areas were given seven weeks to submit “formal, fiscally-neutral proposals and an agreed geography” to the Treasury by 4 September 2015129 so that they could be taken into account for the Spending Review. Our witnesses said this was a “narrow period of time”130 and described how places had rushed to complete bids within the timescales.131 It was suggested that the short deadline might have adversely affected the quality of the proposals put forward. Lord Kerslake said he worried that some places “will be pushed into deals that really are not going to work and move them backwards rather than forwards”.132

58.We heard that, while timing was a challenge for urban areas, it was worse for non-metropolitan areas as their deals involved many more institutions. South East England Councils (SEEC) said “The size, scale and variety of local authorities across the South East add to the time taken to agree far-reaching devolution proposals”, citing Hampshire Council’s deal involving one county council, three unitaries and 11 districts.133 The Derbyshire and Nottinghamshire devolution bid is similarly complex. Cllr Rhodes told us that “Getting 19 local authority leaders and their members through the departure gate at the same time has been an extremely challenging thing to try to do”.134

59.According to a recent report by IPPR North, counties, in particular, need time to build trust and develop working relationships between partners.135 The County Councils Network said that the devolution agenda should respond intelligently to the particular circumstances of county and two-tier areas.136 We were therefore pleased to hear the Minister say:

Areas that take a bit longer may take a bit longer. There is no desire, certainly from my point of view, to close the door on devolution and “You did not reach an agreement in time. Therefore, we will refuse to talk to you again.”137

We also heard that, once the proposals had been submitted, there was no fixed or agreed timeframe for negotiations and so the Government tended to rush or bring forward deadlines. Cllr John Pollard, the Leader of Cornwall Council, said that the original plan had been to have the Cornish proposals ready before the summer recess but that:

The Chancellor told us, “Let’s see if we can do the deal before the summer recess,” which I must say was a bit of a shock to some of our officers, who had to produce a lot of detail, a lot of documentation, a lot of negotiation, in very short order, but we managed to do that. Therefore, at the end of July, we signed our deal.138

Cllr Jeffrey said that the Tees Valley devolution deal happened “very quickly”139 and that they found the various deadlines difficult:

At one stage, it was, “Can you do it by here?” and then, “Can you do it by the time of the Tory party conference?” and then, “Can you do it by the time of the comprehensive spending review?” There were a number of enforced deadlines, which put extra pressures on that perhaps would not have been there otherwise, but at the end of the day we did as well as we could.140

60.The Government is moving devolution forward at a rapid pace, which is welcome. However, some areas, particularly non-metropolitan areas, found it very challenging to meet the 4 September deadline. There is a risk that they may be rushing into bids which have not been properly planned and are based on relationships with neighbouring areas which have not had sufficient time to bed down. The Government also appears to be setting deadlines in accordance with events in the parliamentary and political calendar. We welcome the Secretary of State’s acknowledgement that some areas may take longer than others to submit bids and recommend that any deadlines imposed should take this into account. Then, once a bid has been submitted and negotiation on the content of the deal begins, the parties should decide on an agreed and prompt timeframe, with fixed deadlines, not influenced by political criteria, for negotiation and agreement of the deal. It is essential that this takes into account the time needed to undertake consultation and engagement with the public.

61.In addition, in accordance with the evidence given by the Minister, we suggest that the Government makes a clear statement that devolution will take place at different speeds in different places, and that taking time to craft a proposal to take account of local specificities will not adversely affect the Government’s response to it. This would encourage areas to spend longer building relationships, preparing proposals and consulting residents, and would be particularly beneficial for non-metropolitan areas.

Balancing central and local influence

62.The Treasury and, to a lesser extent, the Department for Communities and Local Government are driving devolution; this is inevitable at the outset, since devolution is a central government policy. However, when it comes to deal-making, there is an important balance to be struck between the influence that the Government has on a deal and the influence the local area has. From what we have heard, the Government appears to have the upper hand, seen in the way it prescribes the content of deals and sets the deadlines and, as our witnesses confirmed, requires that local areas adopt elected mayors in return for a full package of devolved powers.141 The recommendations we made above—encouraging devolution at different speeds and setting out a timeframe—would provide a clear process for parties to follow and would help to counter the perception that the Government is exerting too much influence over the deal-making process.

63.We have also detected the sense among non-metropolitan areas that the Government’s devolution policy is biased towards city regions; for example, Essex County Council said that the main focus to date had been on city regions142 and SEEC called for devolution to be significantly extended outside the cities.143 With the exception of Cornwall, the deals agreed to date have all been with urban areas and the Government’s rhetoric has often focused on devolution to cities to the exclusion of other areas.144 Furthermore, Cornwall is not representative of non-metropolitan areas: the New Local Government Network said that it was “an outlier in terms of geography, funding, economic conditions and governance (being a unitary) and cannot be taken as a model for anywhere else”.145 Other witnesses also mentioned a “little bit of urban bias early on in the process”146 and the process being “controlled by that at the moment”147 but also said that an initial focus on city regions was appropriate if the key objective of devolution was economic growth.148 However, in its written evidence, the Department did mention devolution to “local areas—rural or urban, cities, towns, or counties”.149 It is often argued that urban areas are increasingly the source of the highest levels of economic innovation and growth and that, if the objective is economic rebalancing, this requires greater devolution to city regions. We understand and sympathise with this approach. Nevertheless, the agreement of a devolution deal with a non-metropolitan two-tier area would help to address any sense that the Government is biased towards devolution to city regions. The next non-metropolitan deal will therefore be particularly significant and we look forward to one being agreed in the next six months.

64.According to Professor Copus of De Montfort University, non-urban areas can gain from a devolution agenda focused on cities.150 He argued that the benefits of better urban economic performance eventually spread beyond the administrative boundaries of urban areas to be reaped by non-metropolitan areas. This is clearly already the case for London and large areas of the South East. Nevertheless, we are concerned that this will not be the case for small towns and county areas outside the South East which risk being left out and left behind. The Government should consider this a major issue and monitor the impact of devolution deals on adjoining or nearby areas to assess whether such areas are benefitting or being left behind.

111 Communities and Local Government Committee, Public question and answer session in Greater Manchester, 26 October 2015.

112 Q57 [Cllr K Quinn]

113 Q160

114 Q155

115 Q161

116 Q31

117 Q160

118 Q57 [Cllr K Quinn]

119 Q159

120County Durham residents to be given devolution vote”, Chronicle Live, 28 October 2015

121 The Citizens’ Assemblies are being conducted by Democracy Matters, a group of academics from the University of Sheffield, the University of Southampton, University College London, the University of Westminster and the Electoral Reform Society in a project funded by the Economic and Social Research Council. See also Electoral Reform Society (DEV 032) paras 19-21

122South Yorkshire citizens want stronger Northern Powerhouse”, Democracy Matters, 9 November 2015

123 Q165

125 Communities and Local Government Committee, Public question and answer session in Greater Manchester, 26 October 2015

126 Q161

127 Q57 [Cllr K Quinn, Cllr S Derbyshire]

128 Q274

130 Q5

131 Q16

132 Q176

133 South East England Councils (DEV 026) para 3.4

134 Q134

136 County Councils Network (DEV 052)

137 Q273

138 Q132

139 Q160

140 Q168

141 Q14

142 Essex County Council (DEV 035) para 10. See also the Chief Economic Development Officers Society and the Association of Directors of Environment, Economy, Planning and Transportation (DEV 013) para 12

143 South East England Councils (DEV 026) para 2.5

144 See, for example, HM Treasury, Spending Review 2015, 25 November 2015, para 1.248

145 New Local Government Network (DEV 053) para 10

146 Q32 [Professor A Pike]

147 Q32 [Professor C Copus]

148 Q32 [Professor A Pike, Professor C Copus, Ms A Jones]

149 Department for Communities and Local Government (DEV 027) para 7a

150 Q32




© Parliamentary copyright 2015

Prepared 29 January 2016