Devolving power to our cities and regions has been heralded as a ‘new era’ and an exciting opportunity for positive change. Manchester has led the way in England, becoming the first region to take control of its health and social care budget on April 1st. But, asks Graham Haughton, is there a ‘dark side’ to the current devolution deal?
As a long-time supporter of devolution to regions and localities, I find myself torn by the current devolution deals – not because I am against devolution but because I have become convinced that the model of devolution currently being developed is potentially deeply flawed. In particular, I think Greater Manchester has agreed to a problematic model for city-regional governance based on a series of grabs for power and resources, linked to deeply problematic compromises paraded as pragmatism. Allied to this are dubious claims about the potential for local policy actors to deliver better integrated local services: claims which echo those made for most of the last two decades, but which seemingly never deliver.
My fear is that central government is succeeding in downloading – to local government – responsibility for the consequences of massive reductions to the size and capacity of the state, including the effects of welfare benefit reforms which impact on those in society least able to protect themselves.
Local politicians can and should protest
Manchester has led the way in the current round of city-region devolution, negotiating so-called growth deals that involve devolving mainly existing central government spending in the region to local government without necessarily increasing net expenditure. In the case of merging health and social care budgets at least, a transition budget was agreed that does appear to be genuinely additional, albeit short-lived. At the same time, cuts to mainstream local government budgets are presented in the neutral sounding technical terminology of public sector reform and demand management. Longstanding claims by local leaders that they could spend public money more effectively are now being put to the test, but in a context of substantial expenditure cuts.
Arguably local leaders have little alternative. I am often told that it is naïve to assume there are options for local government, other than accepting the inevitability of centrally-imposed cuts by an elected national government. But I remain convinced that local politicians can and should protest much more about the cuts they are facing that hit so hard at the very core of local services.
Some councils have indeed held out for devolution deals that are different to the Manchester model. Arguably that is built into the DNA of the current devolution approach, with its emphasis on local experimentation and local deals. It will allow alternative models to emerge, possibly encourage innovation. But initiatives such as selectively allowing local authorities to raise or retain more money locally, such as new business rates, will privilege certain authorities over others, mainly benefitting those cities with the largest business communities and lower concentrations of deprivation. Spatial justice is the biggest casualty of the current approach to asymmetrical devolution.
Shaky Academic Foundations
I worry that the Manchester approach, which sells itself as evidence-based, is actually based on shaky academic foundations. The supposed Manchester prototype is based on claims about the critical role larger cities can play in driving future growth. Many of these claims do not stand up to critical scrutiny. I have tried to tackle these issues in Mythic Manchester, a paper written with Iain Deas, Stephen Hincks and Kevin Ward, recently published in the Cambridge Journal of Regions, Economy and Society. In it we point to the selectivity involved in both theory and evidence, particularly in the Manchester Independent Economic Review (MIER), often used to support the Manchester devolution argument. To take an example, work commissioned as part of the MIER found that productivity levels in Bristol exceeded those of other major provincial cities in the UK. But in the final review document, this evidence was glibly dismissed because Bristol is ‘peripheral’, helping to make the case for Manchester.
Think about this for a minute. Bristol is dismissed for its alleged peripheral location, but Manchester is not! And what about other high growth towns and cities excluded from the sample on the basis that the study compared only the largest cities? There is a degree of circularity in this argument: large cities are best for growth as long as you only look at large cities.
Powerhouse rhetoric and the dark side of Devo
Meantime, powerful voices such as the Centre for Cities are loudly proclaiming that government funding for the Northern Powerhouse should be concentrated in larger cities. Using what I would argue is a distorted reading of agglomeration economics. Their case is that big cities are best placed to benefit from government investment and deliver higher growth. The irony here is that this ignores evidence also from the Centre for Cities about the high growth of some smaller cities. It is difficult not to be sceptical about an approach to national spatial policy which commits substantial public resources to develop infrastructure and maintain growth in London, while cutting expenditure elsewhere. If nothing is done about London’s continuing role as a subsidy junky, then everywhere else is left fighting for what remains.
Increasingly, as I look at the devolution deals emerging in Manchester and elsewhere, I worry that laudable attempts to devolve power are camouflaging profoundly damaging austerity measures. Government, it seems to me, gives with the one hand (devolution) and takes with the other (austerity). There is, then, a ‘dark side’ of Devo Deals. They come wrapped up with local responsibility for what is labelled as public sector reform. These reforms, such as those addressing ‘troubled families’, are often justified by the imagined capacity of local actors to achieve ‘efficiency’ savings through what is known as ‘demand management’, drawing on local expertise and better policy coordination across institutions.
Where’s the accountability?
Some of these interventions will no doubt work. But who will pick up the tab if and when some of these experiments fail? How do we hold those responsible to account? Elected mayors may be better than nothing, but it is still hard to see how other local leaders will be held to account when operating through the auspices of Combined Authorities.
What are DevoManc and the Northern Powerhouse then? I think empty phrases that masquerade as having an intellectual basis of sorts, but are actually best seen as political resources, strategies or tactics, being used by certain interests to privilege their own position relative to others. They are power grabs drawn up by those with a clear strategic intent but seized upon by opportunists of all hues to further their own agendas, whilst limited opportunities exist for public disagreement and consideration of alternatives.
Did anyone ask residents of Greater Manchester whether our local NHS and social care services should be merged, or whether we thought the relevant authorities were competent in what they already do, never mind taking on more? No. This is presented as a fundamental innovation – and it is – but it was carved up in back-room deals and not presented for meaningful public debate.
As a long-term advocate of devolution, I genuinely hope the current deals work well and that my fears are proven groundless. But even if the current devolution deals do prove successful in cities such as Manchester, there are challenges for those living in other areas. Smaller towns and rural areas will lose out, if the larger cities get preferential treatment from government on the grounds of tendentious assumptions about their unrivalled potential to drive national economic growth.
And for Manchester itself, there is a risk that promised efficiency savings from public sector reform fail to appear and local councils are left struggling to meet growing demands for services.
The likely government response – ‘well you asked for it’ – will be of little consolation.