Charting a Path Ahead

DEVO MET: CHARTING A PATH AHEAD

MARCH 2015

CONTENTS

ABOUT THIS DOCUMENT 2

EXECUTIVE SUMMARY 3

INTRODUCTION 6

WIDER CONSTITUTIONAL CHANGE BUILDS MOMENTUM FOR CITIES 11

ISSUES TO RESOLVE 13

A COHERENT FRAMEWORK FOR CITY-LED DEVOLUTION 18

APPENDIX 1: CITY-DEVOLUTION 25

APPENDIX 2: WIDER UK DEVOLUTION 29

APPENDIX 3: DEFINITIONS OF METROS AND COMBINED AUTHORITIES 31

REFERENCES 33

1 ABOUT THIS DOCUMENT

The RSA City Growth Commission started new levels of collaboration within and its 12 month independent inquiry in October between city-regions across the UK, 2013. Chaired by renowned economist, Jim including in the Midlands (eg Birmingham, O’Neill, and directed by Charlotte Alldritt Solihull and Black Country Combined at the RSA, the Commission generated Authority)1 and the Great Western Cities significant policy and media impact scheme of Bristol, Cardiff and Newport.2 throughout. The final report,Unleashing This paper considers this progress in the Metro Growth was published in October context of wider devolution debates within 2014 and endorsed by the Prime Minister, the UK and the forthcoming General Deputy Prime Minister, Chancellor and Election on 7 May 2015. It then considers senior figures in the Labour party. how city-led devolution could be driven This document reflects on progress since forward across the UK during the next the RSA City Growth Commission published Parliament and beyond. its recommendations in October 2014. It is not a Commission report and is not based on Acknowledgements the views of individual Commissioners. Instead Particular thanks to Ben Lucas, Chair of it was written by RSA staff. RSA 2020 Public Services; Chris Murray The city-devolution agenda continues and the Core Cities. Thanks also to Brhmie to evolve rapidly. The Budget 2015 saw Balaram, RSA; Maximillian Yoshioka, another devolution deal for Leeds City RSA; Alan Trench, Honorary Fellow, UCL. Region. This announcement builds on For more information about the RSA, those of Sheffield City Region and Greater see www.thersa.org.uk. Manchester, which have also spurred

1. See Sandwell Council Press Release ‘Combined authority to drive economic powerhouse’ (2014) www.sandwell.gov.uk/news/article/3132/combined_authority_to_drive_economic_powerhouse 2. See Newport City Council Press Release ‘Great Western Cities – Creating a Severn power-house’ (2015) www.newport.gov.uk/_dc/index.cfm?fuseaction=news.pressrelease&contentid=CONT733063

2 EXECUTIVE SUMMARY

The political landscape continues What are the implications for central to change, fast Government, MPs and Parliament? The level of policy traction and rhetoric These questions are so important that across all parties is so significant it seems they need to be explored in a transparent, almost inevitable that the next government systematic way; it is not enough to rely on a will preside over further waves of devolution. series of ad hoc and incomplete agreements. It is important to recognise and celebrate Our economy, our society and our politics this achievement, including devolution deals thrive under dynamic, messy systems. agreed for Greater Manchester, Sheffield But a process for policy, and ultimately City Region and Leeds City Region. These constitutional, coherence will create a developments have accelerated collaboration bedrock for city-regions to respond to their and negotiations with other major city- local needs and opportunities – enhancing regions in the UK, and all are set against prosperity and empowering their citizens. a background of wider national devolution Finally, a clear process for driving to Wales, Northern Ireland and Scotland. devolution will allow each major party For decades the UK has been one of the to deliver on their commitments. The most centralised countries in the OECD. Coalition has already set out its vision for Recent policy progress suggests that, finally, city-devolution in terms of rebalancing the UK’s political economy is now starting the economy and building a Northern to show signs of reversing its march towards Powerhouse. For Labour, the process we ever increasing centralisation. With only a propose creates a fast track mechanism few weeks until the next general election, to be able to deliver its ambitions for sub-national devolution is one of the few apprenticeships and housing through specific points of cross-party consensus and this agreements with combined authorities, as well presents a genuine opportunity to empower as the Adonis review on economic growth. our city-regions, drive growth, create jobs and achieve better public service outcomes Fundamental questions remain for citizens. In pursuit of policy and process coherence, However, if we are witnessing the start this report highlights five main issues to of a journey towards decentralisation be resolved: and city-devolution, there is considerable 1. Legislative – In the next Parliament uncertainty about the end goal, and how ministers should seek to bring we will get there. Fundamental questions transparency and a sense of structure to a are still to be considered, including: what complex series of asymmetric governance powers places will be entitled to, under arrangements. Enabling legislation will be which circumstances? Should all places needed in making provision for new metro ultimately strive for the same arrangements mayors (where applicable) and to give a over time? How much will local residents, clearer articulation of the specific powers business, or civil society be involved in and responsibilities bestowed to local shaping new models of governance? and sub-national tiers of government.

3 This will help to provide a firm platform 4. Deficit reduction and a place-based for integrated governance models, aiding Spending Review – While central collaboration between the centre, cities government will continue to be and localities. responsible for allocating nationally 2. Public service reform is vital to improve raised revenues, payment by results outcomes and drive down costs, and in mechanisms are already proving an many instances it is proving to be more effective way of transferring risk and effective and appropriate to design and should form a key component of further deliver interventions at a local level. city-devolution deals. Multi-year Local Public service reform needs to go hand in Government Finance settlements will hand with the economic case for city led be essential to enable places to invest growth and devolution. This will involve strategically over a five to 10 year period. ensuring national policy reform – whilst Over the longer term one solution might often under the guise of decentralisation be a local government mutual insurance – supports the development of locally levy, pooling risk across Combined tailored and integrated public services. Authorities to assist other city-regions 3. Fiscal devolution – The recently announced in the event of financial difficulty. This review into business rates suggests would also help to enable councils – where there might be opportunity for a more and when they would wish it – to become ambitious dialogue between cities and more self-sufficient. Government on fiscal devolution. Over 5. Capacity and collaboration – Major metros the shorter term, moving to full retention across the UK will have to show they of business rates (as recently announced have – or are fast developing – the ability to for Greater Manchester and Cambridge), deliver against new powers, responsibilities liberalising council tax raising powers and risk sharing. Combined Authorities and enabling retention of the proceeds of will need to demonstrate capacity for data local growth (eg tax increment financing, collection and analysis, effective policy Earn Back, Gain Share or other similar making and evaluation, and financial and models) will enable combined authorities risk management. The costs involved in this to demonstrate and build experience in will not be inconsiderable and might prove managing retained fiscal revenues. Reform to be a point of self-selection for those of the current, blunt system of Local places prepared to put ‘skin in the game’; Government Finance allocation is also the pace of devolution needs to be set by long overdue. The most mature combined those with the most capacity to deliver. authorities should be able to borrow more flexibly, leveraging private funds as well as the value of public sector assets.

4 Recommendations independent assessment of the evidence, Building on the recommendation of the along clear and open criteria. Ministers would RSA City Growth Commission, this report then be held to account for delivering a ‘deal’ argues for an Independent City-Devolution that aligns with the recommendations of the Commission (ICDC) to be set up shortly Commission, answering to Parliament as to after the election. This body would be the the nature and justification of their decision. equivalent of the Smith Commission for city- The Commission would meet supported devolution and would have a UK-wide remit. by a City-Region Devolution Bill, which would An Independent City-Devolution place its authority in statute and set out Commission will ensure that city-regions powers available for combined authorities, which can demonstrate competence, subject to their fulfilling economic and accountability and collaboration, and have governance criteria set out by the ICDC. the economic platform and potential to City-regions would lead this process, given shoulder financial risks,should be able to their weight and reach of economic activity, enter into devolution negotiations with central but in time other places (eg county-based government. Taking this process outside combined authorities)3 might also apply for the immediate political and official arena ‘Devolved Status’, providing they can meet means that these negotiations are based on the eligibility criteria.

devolution to city-regions – units of scale that allow for strategic decision making and investment across functional economic areas – has been the missing piece of the puzzle

3. There may be rural areas with high levels of economic self-contained areas that may wish to apply as single authorities. Cornwall is one example. For a definition and brief history of combined authorities, see Appendix 3.

5 INTRODUCTION

The case for city-led growth and devolved profile development in relation to devolution. policy and budgeting powers gained serious Announcements included cultural investment traction throughout the course of the RSA in Greater Manchester, science investment City Growth Commission’s inquiry. A central in the new Royce Institute and an integrated concept promoted by the Commission in ‘Transport for the North’ authority to drive spring 2014 related to the economic benefits connectivity between our northern cities. of scale and agglomeration. First we started Greater Manchester’s devolution deal has to speculate about the idea of ‘Man-Pool’ spurred new levels of collaboration within and then about ‘Man-Sheff-Leeds-Pool’, and between city-regions across the UK, which in turn helped generate the ‘Northern including in the Midlands (eg Birmingham, Powerhouse’ proposition that was Solihull and Black Country Combined subsequently backed by the Chancellor. It Authority) and the Great Western Cities was clear to the Commission that improved scheme of Bristol, Cardiff and Newport. connectivity, within and between our city- In the Budget 2015 the Chancellor also regions, would unlock benefits, particularly announced full business rate retention for where cities are geographically proximate as Greater Manchester and Cambridge, as in the north of England. well as a new devolution deal for Leeds City Commitments to support a ‘Northern Region (see box below). Powerhouse’ grew over the course of summer The timeline below illustrates just how 2014 through to the Autumn Statement later far the devolution agenda has come over that year – and this has been the most high recent years.

6 A RECENT HISTORY OF UK DEVOLUTION (2012–PRESENT)

2012 October – Lord Heseltine calls for city-devolution in November – Silk ‘No Stone Unturned’ report Commission on devolution to Wales recommends transfer of fiscal powers to Welsh Assembly 2013 March – Scottish Tory October – City Growth December – Draft Leader Ruth Davidson sets Commission launched as 12 Wales bill published up a commission to look month inquiry into how cities in order to implement at further devolution to can be empowered to drive the Silk Commission’s Scotland their economies fiscal devolution recommendations 2014 June – ‘Midlands Connect’ August – Five northern November – Birmingham formed to champion cities (Manchester, and Black Country transport investment across Liverpool, Leeds, Newcastle agree to form combined East and West Midlands & Sheffield) produce authority the ‘One North’ report July – The City Growth proposing a £15bn, 15 year November – The Smith Commission releases its investment plan to boost Commission publishes report Connected Cities regional transport links its recommendations for July – Labour’s Adonis the new powers to be September – The ‘No’ review on UK economic side wins in the Scottish devolved to Scotland, to growth recommends referendum. All three parties be included in a 2015 bill package of devolution to promise further devolution English cities and counties November – Greater to Scotland Manchester Devolution July/August – George October – Transport deal announced, Osborne gives his for the North set up by transferring greater first speeches on his government to better powers over finance and commitment to the connect the North and ‘Northern Powerhouse’ policy and creating a maximise its growth Manchester mayoral post potential December – Sheffield October – City Growth Devolution Deal devolves Commission publishes to new combined final report, Unleashing authority, increasing its Metro Growth control over policy and various budgets 2015 February – Labour February – Manchester February – The Prime pledge £30bn in greater becomes first English Minister announces UK devolution, with funds region to gain control of new devolution package transferred to the regions health and social care for Wales including over five years from 2016 budget worth £6bn referendum on new income tax powers, Welsh bonds, and guaranteed funding

7 GREATER MANCHESTER DEVOLUTION DEAL

In November 2014 Greater Manchester to be paid by results if investment reached a new major devolution in infrastructure leads to economic settlement with central government. growth – with gains of up to £30m The agreement aims to maximise the a year over 30 years. economic potential of the north and build • Skills/Business Support: on the work of the Greater Manchester Responsibility for devolved business Combined Authority (GMCA) through support budgets, and a more bestowing more power to the combined integrated service. The GMCA will authority and working in partnership with be able to address the mismatch a directly elected Mayor. between the supply of skills and Powers to be devolved to Greater the needs of business (eg through Manchester, worth £2bn per year, Apprenticeship Grants) to provide include: talent for future forecasted growth industries. • Transport: Responsibility for local transport, including control of • Governance Arrangements: A directly bus franchises, service routes, elected Mayor for Greater Manchester frequencies and fares in a London will be created. The Mayor will style arrangement. Greater lead GMCA, chair its meetings and Manchester has committed to allocate responsibilities to its cabinet. introduce a smart ticketing system The first elections are expected to (similar to London’s Oyster card). take place in 2017. The Mayor will The agreement will bring better joint be responsible for the new powers working with the Highways Agency in transport, planning, housing and to determine shared priorities for policing. The existing Police and strategic road networks. Crime Commissioner’s role will also be merged with the Mayor’s role. • Housing: Control of a new Housing Investment Fund of up to £300m On February 25th, 2015 it was announced designed to deliver 15,000 homes that Greater Manchester will take control over a 10-year period. of the entire NHS budget for the area worth £6bn per year, allowing it to join up • Planning: Devolved planning its health and social care services to an freedoms, including the power to unprecedented degree. The region will create a statutory spatial strategy, also control mental health, community which will guide investment and services and public health, focussing on planning across Greater Manchester. a preventative agenda in a bid to ease • Public Service Reform: The pressure on hospitals. devolution deal will enable Greater Greater Manchester will start making its Manchester’s work to be scaled up own decisions with the introduction of to help up to 50,000 people back a transitional roadmap from April 2015. into work, supported by a combined The roadmap will provide foundations budget of £100 million. It also gives for joined up business and investment GMCA control of existing health and proposals, as well as a joint Greater social care budgets, pooled by local Manchester Health and Social Care Greater Manchester authorities. Strategy. Full devolution of health and • Earn Back: Control of a revamped care services is expected to be in place ‘earn back’ deal, which allows GMCA by April 2016.

8 SHEFFIELD CITY-REGION DEVOLUTION DEAL

Sheffield City-Region’s Devolution Deal • Business Support: Sheffield City was announced in December 2014 and Region will align national and local sets out a further range of devolved business support including Growth powers and responsibilities, building Accelerator and the Manufacturing on the City Deal (2012) and Sheffield’s Advisory Service, through the LEP’s Growth Deal (2014). Growth Hub, so that businesses get a joined up service which meets their Over the lifetime of the Devolution needs. UKTI will become principal Deal (2015–2021), the Local Enterprise partner with Sheffield City Region’s Partnership (LEP) estimates that up Export Centre of Expertise and work to 15,000 new jobs could be created, closely with the LEP to encourage 12,000 new homes built and that it has more businesses to export. the potential to generate £530m in public and private investment. • Transport: Government will explore options to give the city-region more • Skills: The LEP and Combined control over the delivery of local Authority will form a joint venture transport schemes, particularly in partnership with the Skills Funding preparation for HS2 in conjunction Agency, which will be responsible for with Network Rail. Government will recommissioning provision so that work with Network Rail to ensure a new, forward looking system is in that the appropriate infrastructure place by 2017. Through an enhanced works are undertaken to support version of its existing Skills Bank, introduction of Sheffield’s Tram Sheffield City Region will play a Train service. central role in enabling businesses, especially SMEs, to take up and • Housing: The local authorities within invest in apprenticeships. Sheffield City Region will form a Joint Assets Board with the Homes and • Employment: The Department for Communities Agency to influence Work and Pensions will consult with asset disposals in a way that Sheffield City Region about the supports the local economy. possibility of joint commissioning for the next phase of the Work • Public Service Reform: The Programme beginning in 2017. DWP Devolution Deal has initiated an will also work with Sheffield City ongoing, open-ended relationship Region on the development of a between Sheffield City Region public service reform pilot to improve and Government to pursue further outcomes for Employment and devolution of power to drive growth, Support Allowance (ESA) claimants. reform public services and explore fiscal devolution.

9 LEEDS CITY REGION DEVOLUTION DEAL

In the final Budget of the 2010–15 approach to the delivery of business Parliament, the Chancellor announced a support from 2017 onwards, subject series of devolved powers to be extended to the outcome of future spending to the West Yorkshire Combined reviews. UKTI will work with LCR and Authority (WYCA) and Leeds City Region the newly created LEP International Local Enterprise Partnership. This builds to allow greater local flexibility and on the Leeds City Deal (2012) and their focus on trade across key sectors Growth Deal (2014) as another step in the and strengths. transfer of resources and powers from • Transport: Government will explore central Government to the Leeds City options to give Leeds City Region Region (LCR). more control over the delivery of • Skills: the LEP and Combined local transport schemes, particularly Authority will re-commission in preparation for HS2. LCR will also provision for WYCA to ensure that a work with Government, Network new, forward-looking FE system is in Rail and Rail North to ensure that place by 2017 that includes a focus on infrastructure works are aligned with specialisation and FE/HE graduate City Region’s investment strategy retention to meet the particular for rail stations and to support the needs of the City Region. The implementation of projects funded Apprenticeship Grant for Employers through the West Yorkshire plus (AGE) is also devolved, supporting Transport Fund. an enhanced version of its existing • Housing: Leeds City Region will Apprenticeship Hub network and reconfigure its existing Joint Employer Ownership Pilot. Assets Board with the Homes and • Employment: DWP will consult Communities Agency (HCA) to with Leeds City Region about the ensure asset disposals support possibility of joint commissioning the local economy. LCR and HCA for the next phase of the Work will also develop a Joint Asset and Programme beginning in 2017. Investment Plan to address barriers to development and leverage • Business Support: Government will local housing and regeneration work with LCR to develop a devolved investments.

10 WIDER CONSTITUTIONAL CHANGE BUILDS MOMENTUM FOR CITIES

Progress towards Devo Met has come in raising questions of national identity and the the context of a longer debate on UK-wide efficacy of our constitutional settlement. For devolution,4 which grew in intensity in the first time in a generation these discussions the run up to the Scottish referendum in were heard on street corners and in pubs September 2014 and has seen a landmark across the United Kingdom. decision in granting Northern Ireland the In November 2014 Lord Smith published freedom to set its own corporation tax from his Commission report on powers to be April 2017.5 devolved to Scotland,7 and by January 2015 In response to the Silk Commission, the Prime Minister, Deputy Prime Minister David Cameron and Nick Clegg announced and Secretary of State for Scotland unveiled in November 2013 that they would allow the draft Bill for an ‘Enduring Settlement’ a portion of income tax to be retained for Scotland.8 Complex and longstanding by the Welsh Assembly by 2020, subject issues, not least the West Lothian Question to a referendum. In March 2014 the Silk and possible ‘English votes for English Commission published its second phase laws’ solution, have raised the stakes higher report and recommended greater decision still, compounded as the general election making powers for infrastructure and could see the majority party in Scotland go criminal justice. The UK Government’s on to hold the balance of power in the UK immediate response was to push the issue Parliament. This could reopen the matter of into the long grass and see that the political independence as well as the stability of new parties came with a position ahead of the fixed term parliaments, whichever party or 2015 general election. Since then the Prime parties form the next government. We are Minister and Deputy Prime Minister have at a moment of profound constitutional gone further, committing in the St David’s uncertainty. Day Agreement to a ‘funding floor’ for Wales However, we are also at a moment of and referendum for devolution of income considerable economic opportunity. The tax by 2020.6 City Growth Commission argued that, by The Scottish referendum on independence aligning place-based economic development was a starker and more fiercely fought debate, and public service reform, government

4. A comparative table of the different arrangements for the Devolved Administrations can be found in Appendix 2 (Table 3). 5. www.gov.uk/government/news/new-bill-to-devolve-corporation-tax-in-northern-ireland 6. www.gov.uk/government/uploads/system/uploads/attachment_data/file/408587/47683_CM9020_ENGLISH.pdf 7. See box, ‘Scotland and the Smith Commission, Appendix 2. 8. ‘Scotland in the United Kingdom: An enduring settlement’ (2015) www.gov.uk/government/uploads/system/uploads/attachment_data/ file/397079/Scotland_EnduringSettlement_acc.pdf

11 could achieve its twin aims of growth and (LEPs); particularly, two LEP jurisdictions deficit reduction, as well as enable better overlap: and boundaries don’t match those outcomes for citizens; it is a principle of emerging combined authority structures. gaining credence in Whitehall. The City Parliament will also need to establish more Deals and Local Growth Deals started to firmly LEPs’ statutory functions, powers explore the idea, albeit with a high degree and accountability structure in relation to of central control, and limited to prescribed their Combined Authorities and constituent areas such as arrangements for skills (eg local authorities. Sheffield City Deal) and local variants to A transparent process and clear the Work Programme (eg Lambeth Working framework for sub-national devolution is in London). The Sheffield City Region needed to give structure to this evolving devolution deal, and – more significantly – series of ad hoc deals and closed door the Greater Manchester devolution and NHS arrangements, particularly in the context of deals, signify a shifting tide. a more variegated Union where the question Tangible investment commitment to ‘what binds us?’ is becoming more practically the Northern Powerhouse in the 2014 and conceptually profound. The list below Autumn Statement has since spurred new explains how we set out comparative details levels of collaboration within and between about existing and emerging national and city-regions across the UK, including in the sub-national devolution arrangements in Midlands (eg Birmingham, Solihull and the Appendix. Black Country Combined Authority)9 and the Great Western Cities scheme of Bristol, Guide to Appendix tables Cardiff and Newport.10 Integrated economic and social policy decision making within Table 1 and between city-regions will enable us to Political party (public) positions on realise the benefits from a better functioning city-devolution system of cities, empowered to manage investment, growth and outcomes for their Table 2 local areas. Existing city-level devolution arrangements However, the landscape is now so severely fragmented that in the next Parliament Table 3 central and local governments need to Existing national-level devolution work together to review the number and arrangements geography of Local Enterprise Partnerships

9. See Sandwell Council Press Release ‘Combined authority to drive economic powerhouse’ (2014) www.sandwell.gov.uk/news/ article/3132/combined_authority_to_drive_economic_powerhouse 10. See Newport City Council Press Release ‘Great Western Cities – Creating a Severn power-house’ (2015) www.newport.gov.uk/_dc/ index.cfm?fuseaction=news.pressrelease&contentid=CONT733063

12 ISSUES TO RESOLVE

The information set out in Tables 1 and 2 governance? What are the implications for (below) illustrates that the level of policy central government, MPs and Parliament? traction and rhetoric across all parties is The following section examines five so significant it seems almost inevitable main issues yet to be resolved by Whitehall, that the next government will preside over Westminster and the cities themselves. further waves of devolution. It is important These are not exhaustive, but are sufficiently to recognise and celebrate this achievement; important that they will each need progress has been unexpected but also addressing if the UK is to resume a sense of unpredictable – with new initiatives stable and coherent political economy: seeming at times to be developed almost at random. 1. Legislative However, it is equally important to Enabling legislation will be needed in draft consider the barriers still in place and ahead of the 2015 Queen’s Speech to ensure the limits of government and political inclusion in the first Parliamentary session. commitment to city-regions. While Greater Legislation is particularly needed in making Manchester’s devolution deal is a game- provision for new metro mayors. The City changing step towards integrated economic Growth Commission previously endorsed and social policy, complete with a new metro mayors as one potentially effective elected metro mayor, major questions and form of governance, but noted that there hurdles remain. might be other arrangements that could be For example, local authorities, sufficiently robust. government department officials and There are instances where mayoral political party staffers might reasonably models are limited. Despite the many wonder what powers are to be considered successes of the Greater London mayoral for renegotiation, and how relationships model, for example, from transport to and arrangements between a range of local policing, the office has experienced barriers and national agencies and organisations to social change – typically where it will be impacted. Are all places entitled to lacks remit over public services and their receive the same powers, and, if not, how relationship with economic development. will this be assessed, and powers determined Initial proposals for the Greater Manchester and enabled? Should all places ultimately metro mayor have sought to learn from strive for the same arrangements, even this and the Combined Authority has put if it takes longer to achieve the requisite considerable weight on the necessity for criteria? What happens if local authorities integrated social and economic policy as don’t want to work across their functional well as an integrated model for governance economic areas, should they be coerced between the tiers of government. and by whom? What’s the price to pay for A framework for how tiers of government devolution to city-regions, and how much – local, sub-national and national – would will local residents, business, or civil society work together, with a clear articulation be involved in shaping these new models of of the specific powers and responsibilities

13 bestowed to each, could provide a firm prosperity for the people that live and work platform for collaboration. For example, in there? Enabling legislation needs to give Greater Manchester’s case, it is currently not overarching coherence to the devolution entirely clear what “joint-commissioning”11 programme, whilst accommodating arrangements will mean in practice different governance arrangements in (beyond health and social care), either different places. between the Combined Authority and the boroughs, or with central government and 2. Public service reform departments. London’s recent deal with the Public service reform is vital to improve Chancellor, which promises devolution of outcomes and drive down costs, and in the Apprenticeship Grant to Employers, was many instances it is proving to be more similarly vague in its “remit to work with effective and appropriate to design and government to reshape skills provision”12 deliver interventions at a local level. Greater in the capital. Manchester’s recent arrangement for health However, city-led growth and reform and social care are predicated on this should not be stalled by rows over types argument and there are a number of other of governance arrangements. Effective services where local authorities are getting governance structures are vital to ensure better results (eg employment services and leadership, accountability and strong skills). Where government is responsible for partnership working across services and ensuring minimum standards and value for localities, but we have seen a tendency for taxpayers’ money, evidence suggests that central government to prioritise specific integrated resources for locally designed forms of governance first and pursue policy public services can achieve better outcomes. outcomes second. Governance structures More broadly, top down re-organisation alone do not ensure capacity to deliver. of services – whilst often under the guise of As the UK has demonstrated in the past, decentralisation – complicates devolution top-down approaches can undermine to cities. Administrative boundaries for public attitudes towards devolution. different public services are not necessarily It is vital not to risk the current co-terminous, which adds complexity momentum, defying decades of increasing to efforts to work in partnership. Joint centralisation, by dictating the terms for commissioning arrangements between how local places and combined authorities central government, cities, public service should be accountable to their citizens. professionals and providers (including In the next Parliament ministers should the private sector) will have to rely on seek to bring transparency and a sense of sophisticated collaboration and/or the structure to a complex series of asymmetric emergence of new accountability structures. governance arrangements. This need not City leaders have spoken of the impact require a huge Bill codifying local and of the re-organisation of the health service, central government or a Constitutional for example, with the creation of Clinical Convention (although there might be Commissioning Groups and local Health merits to initiating these approaches and Wellbeing Boards taking time to at some point); the immediate task is embed and creating additional difficulty purely functional – how do we enable in integrating social care. While the aim city-regions to take on a series of genuine might be an integrated system of ‘networked powers to integrate strategic economic governance’, central government policy does and social policy, thus driving growth and not often support this.

11. See Manchester City Council Press Release ‘Devo Manc: Greater Manchester and Govt reach trailblazing agreement’ (2014) www.manchester.gov.uk/news/article/7015/devo_manc_greater_manchester_and_govt_reach_trailblazing_agreement 12. See Greater London Authority Press Release ‘Mayor delivers New Year boost to apprenticeships drive with £14m fund for small and medium sized businesses’ (2014) www.london.gov.uk/media/mayor-press-releases/2014/12/mayor-delivers-new-year-boost-to- apprenticeships-drive-with-14m

14 3. Fiscal devolution gaps), but would have the freedom to choose Fiscal devolution has not yet featured as how they managed their finance, funding and much as it should, with scepticism inside expenditure over multiple years. Whitehall as to how this could operate in practice. In particular, do cities have 4. Deficit reduction and a place-based credibility in managing the risks of greater Spending Review fiscal self-sustainability and how can city City-led growth and public service reform level borrowing be accounted for, and will be key drivers in restoring the health managed, on the central balance sheet? of the nation’s finances. Only by aligning The recently announced review into business economic and social policy at the local scale rates may, however, create the opportunity will government be able to manage down the for a more ambitious dialogue between cities national deficit and respond to long term and government. challenges such as ageing, climate change Over the shorter term, combined and wealth inequality. authorities would have opportunity to This relationship between public demonstrate and build experience in service reform, economic development managing retained fiscal revenues. This and sustainable, city-led deficit reduction could quickly mean: moving to full retention is increasingly understood by local policy of business rates, liberalising council tax makers. However this argument is still to be raising powers and enabling retention of the won across Whitehall and might require a proceeds of local growth via TIF, Earn Back, credible alternative to HM Treasury being Gain Share or other similar models. the ‘backstop of local government’ if we are Over the longer term, the most mature to see a radical step-change. While central combined authorities could borrow flexibly government will continue to be responsible up to an agreed amount with HM Treasury. for allocating nationally raised revenues, These ‘debt deals’ would be linked to cities’ where city-regions take on financial and public service reform and fiscal retention fiscal responsibilities they need to be able to arrangements, allowing places to invest to commit credibly to a real transfer of risk. save across multi-year settlements. There In the short to medium term, payment by is also a case to review the reform and/ results mechanisms are already proving or devolution of Stamp Duty Land Tax effective and should form a key component (SDLT) in England and Northern Ireland, of further city-devolution deals. with consideration for partial retention Over the longer term one solution might by city-regions.13 be a local government mutual insurance levy, In conjunction with greater discretion pooling risk across combined authorities over capitalisation (the ability to borrow or to assist other city-regions in the event of use capital receipts for revenue purposes), financial difficulty. The narrow parameters and setting of council tax bands, pooling of the existing Prudential Code would be funding streams and/or leveraging their full a helpful start in avoiding problems of asset base (including the future value of moral hazard. In any scenario, multi-year public sector land), fiscal devolution is the Local Government Finance settlements fullest expression of city-based growth and will be essential to enable places to invest reform. For example, cities aren’t currently strategically over a five–10 year period, able to borrow against the future value of shifting emphasis onto preventative public sector land, which could open up vast approaches in order to realise, retain and sources of regeneration and infrastructure reinvest savings achieved across government investment. Cities might choose to adopt in the long-term. their own ‘fiscal rules’ by borrowing only However, none of the political parties for investment (rather than filling resource have so far committed to rethinking

13. SDLT was devolved to the Welsh Assembly in 2014 and Scotland’s reformed Stamp Duty – Land and Buildings Transaction Tax – comes into force from 2015.

15 the processes and principles of local government processes and initiatives as a government finance, or how current and frequent barrier to coordinated investment future devolution deals will feature in the and tailored policy delivery.14 However, next Comprehensive Spending Review. many local authorities acknowledged that Multi-year financial settlements are in many cases, and for a myriad of reasons – a precondition for genuine autonomy over historic, structural and personal – consistent local spending and investment. The Labour collaboration with neighbouring authorities party has committed to devolving £30bn is often difficult. The impact of this is to city-regions over five years (see Table perhaps greatest in house building where the 2 below), but has not yet specified how Duty to Cooperate15 has failed to ensure the a Labour government would allocate that number of homes identified in Local Plans funding: to which places, and under what in English city-regions is delivered. circumstances. Figure 1 below shows that if Major metros across the UK will have Greater Manchester’s November devolution to show they have – or are fast developing deal was applied to all eight English Core – the ability to deliver against new powers, Cities, the total would exceed the Labour responsibilities and risk sharing. At a first Party’s annual £6bn pledge. A mark of level, the ability for places to collaborate significant progress would be for the next sufficiently to form a combined authority is Comprehensive Spending Review to allow for an initial indicator of a city-region’s capacity place-based capital and resource allocation for governance. Combined authorities over the course of its duration. will need to demonstrate capacity for data collection and analysis, effective policy 5. Capacity and collaboration making and evaluation, and financial and Local capacity to deliver devolved risk management. The costs involved in settlement and barriers to local devolution this will not be inconsiderable and might varies. Throughout the course of the City prove to be a point of self-selection for those Growth Commission inquiry, local officers combined authorities prepared to invest, and political leaders identified central putting ‘skin in the game’.

to achieve the full gains from devolution, it is important for metros to align their economics with their politics and administration

14. An example of this is Liverpool, one of the UK’s biggest ports, which is currently not connected into the planned HS2 route. Proposals initiated by One North and developed by new Transport for the North seek to enable passenger and freight connectivity from East to West. www.gov.uk/government/publications/northern-transport-strategy 15. The Duty to Cooperate was created in the Localism Act (2011). It places a legal duty on local planning authorities, county councils in England and public bodies to engage constructively, actively and on an ongoing basis to maximise the effectiveness of strategic planning across local administrative boundaries. See the ‘National Planning Policy Framework; Practical Planning Guidance’ for more information.

16 COMBINED VALUE FOR EIGHT ENGLISH CORE Figure CITIES IF GREATER MANCHESTER’S DEVOLUTION 1 DEAL EXTRAPOLATED (PER ANNUM)

2 4 6 8 10 12 £bn per annum* 6.0 Labour Pledge

11.7 Combined value if GM deal extrapolated

*For each of the next 5 years Source: Respublica (2015) ‘Restoring Britain’s City States’ with analysis by New Economy

17 A COHERENT FRAMEWORK FOR CITY-LED DEVOLUTION

The array of devolution arrangements in departmental involvement. A clear Table 3 illustrates the extent to which the process is needed to bring transparency and UK is increasingly moving away from being legitimacy to this emerging patchwork of a uniform state where public services and affairs, linked to – but not impeded by – economic policy are determined solely from concurrent processes of wider, national level the confines of Whitehall and Westminster. devolution within the UK. Scotland, Northern Ireland, Wales and Greater London have enjoyed a longer Driving Devo Met through history of devolved powers, but often these an Independent City- have been limited by their scope or degree of Devolution Commission decentralisation. For example and in terms The City Growth Commission argued in its of scope, Greater London has had very final report for an Independent Devolution limited policy direction over public services. Committee to be established, and fast, to In terms of decentralisation, Scotland is deliver Devo Met for our major urban areas. arguably the most centralised nation of the Our cities are home to the majority of the Union. Until recently in the United Kingdom, population and are centres of productivity, devolution to city-regions that allows for knowledge-sharing and commerce. Cities strategic decision making and investment at have ‘economic reach’ stretching out into the scale of functional economic areas have surrounding towns, neighbourhoods and been the missing pieces of the puzzle. rural areas, driving UK economic growth Considerable progress has been made and prosperity. They need to be free to make during the course of the recent Parliament, appropriate, timely and forward looking culminating most prominently in Greater decisions in the best interest of their place Manchester’s devolution deal and its and local people. £6bn carve out of the national health and The City Growth Commission welcomed social care budget, as well as the Sheffield the potential of the combined authority devolution deal and recent announcements model, enabling places to collaborate for Greater London. formally along functional economic But these steps, and others before boundaries they identify with and central them, have been the work of protracted government to engage at the scale of a negotiations behind closed doors in city-region. Combined authority areas Whitehall – often with central government also provide the basis around which ‘moving the goalposts’, ‘marking [cities’] LEPs are reconfigured (where necessary), homework’ and, in the case of Greater ensuring coterminous administrative Manchester’s health deal, without boundaries. To achieve the full gains from

18 devolution, it is important for metros to • The ICDC would have a UK wide remit, align their economics with their politics analysing how devolution to cities and administration. applies in Devolved Administrations An Independent Devolution Committee and contributing to their processes of – or, as argued now here, an Independent legislative change. City-Devolution Commission – will ensure • The Committee would advise upon the that city-regions which can demonstrate eligibility criteria for cities achieving competence, accountability and ‘Devolved Status’ including a guiding collaboration, and have the economic list of the powers and level of multi-year platform and potential to shoulder financial funding settlements available under risks, should be able to enter into devolution which circumstances. negotiations with central government. • The Independent City-Devolution Taking this process outside the immediate Commission will receive bids only from political and official arena means that these combined authorities. The ability for negotiations are based on independent places to collaborate sufficiently to form assessment of the evidence, along clear a combined authority is a useful initial and open criteria. Ministers would then be indicator of a city-region’s capacity for held to account for delivering a ‘deal’ that governance.16 aligns with the recommendations of the • A presumption in favour of devolved Committee, answering to Parliament as to powers would operate and government the nature and justification of their decision. would be required to explain to Parliament when and why it decided What would the Independent City- against the recommendation of the ICDC. Devolution Commission (ICDC) do? • Metros with Devolved City Status Building on the RSA City Growth should be reviewed at least every five Commission’s work, we recommend that years, enabling metros to bid for, a Standing Commission be established and propose, new powers. Devolved shortly after the Election, meeting first arrangements could not easily be reversed, on an informal basis and then as semi- with clear principles in place as to when permanent entity with its authority and how central government might in statute: remove specific powers. • The Commission invites bids from • Ahead of the Spending Review the city-regions for devolved powers and Commission would publish an interim arrangements on a rolling basis. report holding government to account for • The Commission would evaluate the extent to which it had enabled and/or these bids, providing a comprehensive delivered progress. assessment as to whether and why they • Thereafter, the Commission would might be eligible and advising how report annually to Parliament, unsuccessful bids could be improved – holding government to account for setting out clear steps for cities to pursue the pace and degree of progress on for bids to be re-evaluated at a later date. sub-national devolution.

16. Note that where groups of local authority boundaries do reflect functional economic areas, there should be a process in place in which these can be changed with relative ease in order to enter Combined Authority arrangements.

19 TIMELINE OF ACTIVITY

SET UP EQUIVALENT OF SMITH COMMISSION FOR CITY DEVOLUTION

To advise policy detail and draft legislation, including:

Enabling provision for metro mayors and other governance models designed to support strategic economic development and public service reform.

Specific powers to direct, spend or commission (jointly or solely) for city-regions, subject to meeting CITY-DEVOLUTION LEGISLATION certain criteria. GETS ROYAL ASSENT AND PUTS BY 2020 DEVOLUTION AGREEMENTS STANDING DEVOLUTION COMMISSION WITH ALL 15 MAJOR UK METROS19 RSA City Growth Commissioners publish Multi-year funding deals for combined ON A STATUTORY FOOTING independent assessment of devolution to cities, authorities (or their constituent including Belfast, Cardiff Capital Region, 12 months on since final recommendations, local authorities, as appropriate). The ICDC would continue to recommend to the Edinburgh, South Hampshire (Southampton and ‘Unleashing Metro Growth’. Quad18 whether individual metros should proceed Portsmouth) and Tyne and Wear (Sunderland, Greater fiscal autonomy for to negotiate the specifics of their Devolved Newcastle and Tyne Valley). Devolved Status city-regions. Status (within a specified time period).

Spring May October 2016 Spring 2015 2015 2015 2016 2017 2018 2019 2020 2020

June/July Autumn/Spring 2015 2015–2016 June 2016

QUEEN’S SPEECH ANNOUNCES A CITY-REGION DEVOLUTION BILL ICDC PUBLISHES FIRST ANNUAL Powers available, subject to fulﬁlling REPORT TO PARLIAMENT EVALUATING certain criteria. COMPREHENSIVE SPENDING REVIEW GOVERNMENT’S PROGRESS ON CITY DEVOLUTION City-regions would lead the devolution process, including provision for place-based multi-year given their weight and reach of economic activity. commissioning and investment agreements. What powers have been devolved, and where? In time other places (eg county-based combined authorities)17 might also apply for Devolved Status, Overall, how might cities' bids be improved providing they meet the criteria. and what are the lessons for central and local leaders and policy makers?

17. There may be rural areas with high levels of economic self-contained areas that may wish to apply as single authorities. Cornwall is one example. For a definition and brief history of combined authorities, see Appendix 3.

20 SET UP EQUIVALENT OF SMITH COMMISSION FOR CITY DEVOLUTION

To advise policy detail and draft legislation, including:

Enabling provision for metro mayors and other governance models designed to support strategic economic development and public service reform.

Spring May October 2016 Spring 2015 2015 2015 2016 2017 2018 2019 2020 2020

June/July Autumn/Spring 2015 2015–2016 June 2016

18. The Quad is comprised of the Prime Minister, Deputy Prime Minister, Chancellor and the Chief Secretary to the Treasury. It was an arrangement designed to facilitate decision making across the Coalition during 2010 –15 and may or may not be introduced in subsequent Parliaments – whether a single party in the UK government has a majority or not. The idea behind using the Quad in this model is that this group of ministers comprises the most senior figures in the Executive as relate to financial and constitutional matters. 19. See Appendix 3.

21 How would the ICDC be structured proposed criteria). Members might include and how would it fit into the academics or leaders in civil society or existing landscape? business without active political affiliation, The ICDC would be chaired by a leading, since this commission derives its authority credible voice respected across the from its independence and advisory role political parties and by central and local ‘above the fray’. government alike. In a similar way to the The Committee would advise the Smith Commission, an independent chair Quad directly (or equivalent under the would be appointed by the Prime Minister, next government) so as to ensure maximal agreed by members of the Quad. political visibility and prioritisation. A sub- The Chair would be supported by Cabinet Committee, such as that led by approximately six to eight members William Hague, Leader of the House, during approved by the Quad and drawn from the Smith Commission, would be a credible persons with the relevant knowledge, alternative. Other options include the recent experience or expertise that would enable proposal by Lord Faulkner to restore the them to advise upon, and assess against, the No.10 Policy Unit to drive a Labour-led eligibility criteria for city-devolution (see box administration’s priorities. below for the City Growth Commission’s

Figure STRUCTURE OF THE INDEPENDENT CITY-DEVOLUTION 2 COMMISSION AND ITS RELATIONSHIP TO PARLIAMENT AND THE EXECUTIVE (ILLUSTRATIVE EXAMPLE)

Explains to HOUSES OF PARLIAMENT Parliament

Reports annually PM/CHANCELLOR Advises Ministers

SECRETARIAT INDEPENDENT CITY Advises Appoints Within Cities and Local DEVOLUTION COMMISSION Government Growth Unit (BIS/DCLG/CO)

CHAIR Provides administrative support

6–8 MEMBERS from civil society, academia, business and government

22 DEVOLVED STATUS CITY-REGIONS

The City Growth Commission specified • Does the Metro have a rigorous in its final report a range of measures approach to risk management and designed to create a thriving ‘system has it clearly demonstrated its of cities’ where inclusive, sustainable risk capability? economic development is achieved hand • Has the metro demonstrated capacity in hand with effective public service to work with other metros and central reform. This would enable city-regions government to devise and deliver to design and finance more strategic and regional or national projects? tailored local policy and programmes for skills, transport, housing and broadband infrastructure. Economic growth and potential At the maximal end of the devolution • Does the metro have a clear vision spectrum, these measures would for its economy and public service enable city-regions to manage their reform over the long term, and a ‘fiscal gap’ with central government by feasible strategic economic plan to retaining more of the proceeds of local deliver this ambition? growth and having greater financial and • Eg has the metro considered fiscal flexibility. These cities would be how to nurture its innovative, ‘Devolved Status’ city-regions. enterprising economy, and attract Those metros with the most robust and retain high skilled talent? governance structures, which have • Eg has the metro (plans for) an a track record of delivery and risk integrated transport authority management, should be considered designed to improve connectivity for ‘Devolved City Status’. This would within the city-region? grant the same consultation rights as the Devolved Administrations within • Does the metro have a firm, data- Whitehall decision-making and UK based understanding of the structure government structure. of its economy, including its current strengths and weaknesses, and Proposed key criteria for Devolved the potential challenges and City Status opportunities for the medium to longer term? Capability in governance and a proven • Does the metro have an effective, track record co-terminous Local Enterprise • Does the metro have an effective Partnership with robust, collaborative geography, defined by its wider business leadership? functional economic area? • Does the metro have an established • Does the metro have a strong track economic development delivery record of collaboration between its capacity? constituent Local Authorities? • Does the metro exhibit signs of • Does the metro have a robust system economic potential, including of governance, enabling effective established and emerging areas of decision-making and accountable growth success? leadership and management?

23 DEVOLVED STATUS VENN DIAGRAM

capability in growth governance and potential a proven track and success record

Source: City Growth Commission, (October 2014) ‘Unleashing Metro Growth: The Final Recommendations of the City Growth Commission’

a clear process is needed to bring transparency and legitimacy to this emerging patchwork of affairs, linked to – but not impeded by – concurrent processes of wider, national level devolution within the uk

24 APPENDIX 1: CITY-DEVOLUTION

POLITICAL PARTY (PUBLIC) Table POSITIONS ON CITY-DEVOLUTION 1

Conservative Party Labour Party Liberal Democrats Fiscal Against new local taxes. Propose that councils Support the devolution of devolution Enacted stronger fiscal are able to keep all of greater tax raising powers to incentives for councils to their growth in business cities, counties and regions support enterprise and rate revenue. of England, including growth (eg by extending the business rates and a review As part of five-year local retention of business of the case for localising devolution plan, would give rates to 50 percent), and stamp duty land tax. local authorities greater reducing ring-fencing so control over funding for that councils are more self- housing, transport, and sufficient. other policy areas. Greater Manchester and Cambridge (and surrounding local authorities) awarded 100 percent business rate retention in the Budget 2015.

Introduced trigger referendum system for local authorities wishing to raise council tax. No plans to remove this.

25 Conservative Party Labour Party Liberal Democrats Policy More Growth Deals, with Propose giving city and Support the devolution of making metro mayors a key criterion county regions more power greater legislative powers powers and for substantial devolution of in order to re-balance the to cities, counties and processes funding and policy powers. national economy, based regions of England. on conclusions of 2014 Working with Local Desire the introduction of Adonis review. Enterprise Partnerships a process of ‘Devolution (where boundaries Do not think devolution on Demand’ via an ‘English determined locally, rather should be dependent on Devolution Enabling Bill’ than centrally) and local cities being run by mayors. which would be introduced authorities to promote jobs in the next parliament if the Plan to keep Coalition Local and growth. Lib Dems are re-elected. Enterprise Partnerships but Propose helping local will reduce these in number, ‘English Devolution Enabling authorities join up public probably along combined Bill’ would allow areas to services locally. authority boundaries. demand from Westminster the powers they want Support greater local Want to prioritise from a menu of options accountability and direct localised skills training – including many of the democracy, eg local and apprenticeships. powers devolved to the referendums. Support the creation Welsh assembly. This would Will continue to support first of a public accounts be implemented via a set of past the post elections for committee for local ‘tests’ around geography, Westminster and all levels of governments to oversee population, competence, local council in England. how money is spent. local democratic mandate, a fair electoral system and transparent governance structures.

Favour establishing a Cornish Assembly with legislative powers for Cornwall, which would run housing, healthcare and transport decisions.

Funding The government recently Adonis review recommends Have not made specific committed released £2bn for local that £6bn for infrastructure, funding commitments. growth deals, and plans training, transport and to invest £12bn in local housing be devolved each economies nationwide. year to city-regions and combined authorities. An additional £2bn and further £6bn were devolved Have laid out five-year to Greater Manchester and devolution plan with £30bn £31m to the Sheffield City devolved to local authorities. Region in their respective devolution deals.

26 EXISTING CITY-LEVEL Table DEVOLUTION ARRANGEMENTS 2

Greater Manchester Sheffield City Greater London Glasgow Other UK cities Combined Authority Region (SCR) (GMCA) and Directly Elected Mayor (DEM)

Fiscal Control of a reformed No fiscal Power to locally In order to Full business rate devolution earn back deal (which powers, but will retain business maximise the retention awarded allows the 10 Greater be considered rates, whereby impact of the to Cambridge and Manchester local in future councils retain Infrastructure surrounding local authorities to retain negotiations. 50 percent of Fund, the Scottish authorities in the part of the uplift in their business rate Government 2015 Budget. the local tax yield growth, subject to will, as part of in addition to the a strong national the City Deal, Newcastle and business rate), within equalisation explore proposals Gateshead will the current envelope mechanism. to change the benefit from new of £30m a year for current legislative Tax Increment 30 years. Discretion to offer provisions relating Financing powers, business rate to local authority with all growth Full business rate discounts. borrowing and in business rate retention awarded in repayment based income generated the Budget 2015. Ability to require within four key a referendum if on prudential principles. Accelerated council tax was Development raised above a Zones (ADC), (very low) national ring fenced by threshold. government and retained by the two Councils for 25 years.

Budgeting Control of the Control of the Responsibility Responsibility Devolution of powers Apprenticeship Grant Apprenticeship for transport, for implementing Apprenticeship for Employers in Grant for policing, and the agreed Grant for Greater Manchester Employers fire and rescue, projects under Employers to and power to reshape in Sheffield including ability to the Glasgow Leeds City Region and re-structure the and the Adult set their budgets. Infrastructure and power to Further Education Skills Budget. Fund, which pools re-commission FE (FE) provision within Plans for a skills together £1.13m for West Yorkshire Greater Manchester. Devolved deal which in funding. Combined business support will devolve Authority Responsibility for through the Apprenticeship from 2017. devolved business LEP’s Growth Grant to support budgets, Hub, including a Employers to Leeds City including the new Export Hub the Greater Region given Growth Accelerator, from 2015. London Authority. greater control Manufacturing Advice over employment Service and UK Trade Possible services, and Investment (UKTI) devolution of business support, Export Advice. business support transport from 2017. and housing/ Responsibility The Department regeneration for a devolved (with HCA). and consolidated for Work and transport budget. Pensions will Control over consult with skills funding Control of a new SCR about the and provision £300m Housing possibility of joint to combined Investment Fund. commissioning authorities in Work Programme. Full control over health the Midlands, spending of £6bn a including year from April 2016. Birmingham, once they are formed.

27 Greater Manchester Sheffield City Greater London Glasgow Other UK cities Combined Authority Region (SCR) (GMCA) and Directly Elected Mayor (DEM)

Wider Power to assume the Power to roll-out Responsibility No power over policy role currently covered ‘oyster-style’ for policing policymaking powers by the Police & Crime smart ticketing and fire and in justice and Commissioner. on all local rescue services, related services. bus services. including Responsibility for determining Responsibility franchised bus Authority to make their priorities for developing services, integrating more decisions in London. a citywide single smart ticketing about preparation assurance across all local for HS2 Responsibility framework modes of transport, improvements to for planning which will guide and exploring roads and rail. and provision decision making opportunities for of transport. and ensure devolving rail stations Authority to lead infrastructure across the GM area. discussions with Given expenditure schemes taken Highways Agency powers in relation forward will Powers over strategic and Network to housing and deliver: value for planning, including Rail, ensuring regeneration, money; additional the power to create that investment with ability to economic growth; a statutory spatial decisions are in influence spend of and support framework for GM. line with what national housing economic local people need. programmes. Control of an inclusion. This expanded Working Authority to make will include Well pilot, with decisions about consideration of central government which assets to housing. funding linked to good sell, and how to Responsibility performance up to regenerate some for designing, a fixed Departmental sites, will be commissioning Expenditure Limit shared between and implementing (DEL) in return for local and national a new scheme risk sharing. government to get to provide the best deal for Have the opportunity employment taxpayers and the support to to be a joint local economy. commissioner with up to 4,000 Department for Work Will enter into Employment and Pensions (DWP) discussions with and Support for the next phase of SCR over a public Allowance (ESA) the Work Programme. sector reform claimants and pilot from 2015 help 600 in bringing together sustained work. JCP, SCR local authorities and other bodies to improve outcomes for ESA claimants.

28 APPENDIX 2: WIDER UK DEVOLUTION

EXISTING NATIONAL-LEVEL Table DEVOLUTION ARRANGEMENTS 3

Scotland Wales Northern Ireland (NI) Fiscal Can vary basic rate of Does not yet have borrowing NI Executive has borrowing devolution income tax by three pence powers, but will gain new power (increasing up to (has not been used). powers with upcoming £1,000 per capita). Wales Bill. Smith Commission Extremely limited fiscal recommends new powers in St David’s Day 2015 variation (Regional Rate retention of Scottish income package allows referendum and Air Passenger Duty tax and VAT revenues to be on Welsh income tax taxes only). implemented in the new bill. powers, and guarantees minimum funding for Welsh Will gain new borrowing government and ability powers in 2016 to raise cash on money (Scotland Act 2012). markets independently. Legislative Primary legislative powers National Assembly can NI Assembly has full and for devolved matters. make laws in all 20 areas legislative powers on budgeting devolved to Wales. most economic and Provided block grant by UK powers social matters. government which it can Provided block grant by UK spend as it pleases. government which it can Provided block grant by UK spend as it pleases. government which it can Budget determined within spend as it pleases. a Comprehensive Spending Budget determined within Review alongside UK a Comprehensive Spending Budget determined departments. Review alongside UK within a Comprehensive departments. Spending Review alongside UK departments. Wider Devolved powers over Devolved powers over Devolved powers over policy health (NHS) and social economic development, health and social care, making care, education and education and training, education, employment and powers training, local government health and social skills, social security, local and housing, justice welfare, housing and government and housing, and policing, economic local government, pensions and child support, development and highways and transport, justice and policing, internal transport. public administration. economic development and transport, and NI Powers relating to disability February 2015 Devolution Civil Service. and housing payments to package proposes control be devolved, new £2.5bn of energy and fracking. Scottish welfare system to be created following the Smith Commission.

29 SCOTLAND AND THE SMITH COMMISSION

Scotland’s devolution journey dates back being pooled and redistributed to the creation of the Scottish Parliament across the UK. The Scottish in 1999 as enshrined in the Scotland Act Parliament will control 60 percent of 1998. Once the Scottish Parliament of spending in Scotland and retain was established, Scotland immediately 40 percent of Scottish tax. became responsible for core devolved • Powers relating to disability and matters such as the NHS and education. housing payments will be devolved, The Scotland Act of 2012 devolved and the ability to create new welfare further powers in executive borrowing payments will deliver a Scottish and income tax that are due to come into welfare system with a starting value effect in 2015 and 2016 respectively. of £2.5bn a year (one quarter of In the aftermath of the 2014 Scottish all welfare spending outside the Referendum, Prime Minister David state pension). Cameron made clear that in light of • The Scottish Government will be Scotland opting to remain part of the given the power to change the UK the pre-referendum commitments frequency of Universal Credit made by the three main pro-union parties Payments, vary existing plans for to deliver further devolution of powers single household payments, and pay would be honoured. landlords directly for housing costs To determine how this would be done, (in Scotland). It will also be solely Lord Smith of Kelvin was invited to bring responsible for the employment together Scotland’s five main political programmes currently contracted parties in order to reach an agreement by the Department for Work and on the future devolution of powers. This Pensions (DWP). ‘Smith Commission’ concluded in favour • The Scottish Parliament will acquire of a new set of powers for the Scottish the power to extend the franchise Parliament, which will be translated into to 16 and 17 year olds in time for a bill at the beginning of the next UK the 2016 Scottish Parliamentary Parliament in 2015. elections, should it wish to do so. Planned changes include: • Receipts raised in Scotland by the • Scottish income tax revenues will be first 10 percentage points of the retained by the Scottish Government standard rate of VAT will be assigned to be spent in Scotland, rather than to the Scottish Government’s budget.

30 APPENDIX 3: DEFINITIONS OF METROS AND COMBINED AUTHORITIES

COMBINED AUTHORITIES

• A combined authority is a legally Combined Authority, and the West recognised entity able to assume Yorkshire Combined Authority. the role of an integrated transport A further combined authority is authority and economic prosperity proposed for the West Midlands board. The first combined authority conurbation around Birmingham, was established in April 2011 as an to be formed in 2015. Councils indirectly elected, top tier, strategic in the Tees Valley area, including authority for Greater Manchester. Middlesbrough, Hartlepool, Redcar Combined authorities have since and Cleveland, Stockton and become a means to achieve Darlington, have also announced additional powers and funding as part plans for a combined authority. of ‘city deals’ to metropolitan areas. In Respectively, Nottinghamshire and April 2014, four combined authorities Nottingham, and Derbyshire and were created in order to coordinate Derby, are also developing combined transport, economic development authorities with a single LEP ‘N2D2’ and regeneration. These combined overarching these. Buckinghamshire, authorities were formed voluntarily, Oxfordshire and Northamptonshire allowing groups of local authorities have agreed to bid for a combined to pool funding and responsibility authority and are negotiating to govern more effectively over agreement with their district councils. a wider area. • In 2014 the government consulted on • In addition to the Greater Manchester changes to the legislation governing Combined Authority, the list includes combined authorities. Proposed Liverpool City Region Combined changes included extending the Authority, North East Combined legislation to Greater London, Wales Authority, Sheffield City Region and Scotland.

The RSA City Growth Commission used travel to work areas to define new metro areas, including city centres and their surrounding hinterlands.

31 Table CITY GROWTH COMMISSION 4 COMPOSITION OF METRO AREAS

Metro 2011 Census Composition of metro area population London Metro 12,578,981 London built-up area, plus following built up areas over 100,000: Luton, High Wycombe, Crawley, Chelmsford, Southend, the Medway Towns, Slough, Farnborough/ Aldershot, Basildon and Reading Greater Manchester Metro 2,894,240 Manchester, Wigan and Warrington built-up areas; includes Glossop and Wilmslow West Midlands Metro 2,800,248 Birmingham, Wolverhampton, West Bromwich, Dudley, Walsall, Solihull, Coventry, Bedworth built-up areas West Yorkshire 1,777,934 Leeds, Bradford, Wakefield, Huddersfield, Dewsbury, Keighley, Halifax built-up areas Glasgow Metro 1,601,154 ONS-defined agglomeration

Merseyside Metro 1,189,386 Liverpool and Birkenhead built-up areas. Comprises Liverpool, Bootle, Litherland, Crosby, Prescot, St. Helens, Ashton-in-Makerfield, Birkenhead, Wallasey, Ellesmere Port, Bebington Tyne and Wear Metro 1,110,306 Tynside and Sunderland built-up areas. Comprises Newcastle upon Tyne, Gateshead, South Shields, Tynemouth, Wallsend, Whitley Bay, Jarrow, Sunderland, Washington, Chester-Le-Street, Hetton-le-Hole, Houghton-le-Spring South Yorkshire Metro 1,066,790 Sheffield, Rotherham, Rawmarsh, Barnsley/Dearne Valley and Doncaster urban areas: (Barnsley, Wath upon Dearne, Wombwell, Hoyland, Doncaster, Bentley, Armthorpe, Sprotbrough) East Midlands Metro 1,000,445 Nottingham and Derby built-up areas: Nottingham, Beeston, Carlton, West Bridgford, Ilkeston, Hucknall, Derby, Borrowash, Duffield South Hampshire Metro 855,569 Southampton and Portsmouth built up areas: includes Eastleigh, Gosport, Fareham, Havant, Horndean, Locks Heath/Bursledon/Whiteley and Hedge End/Botley built up areas Edinburgh Metro 853,253 Edinburgh, Dunfermline and Livingston built-up areas

Cardiff Capital Region 754,131 Cardiff and Newport built up areas Metro Bristol Metro 731,776 Bristol, Filton, Pill, Frampton Cotterell, Winterbourne, Bath, Keynsham, Saltford built-up areas Belfast Metro 579,554 Built-up area

Leicester Metro 508,916 Leicester, Syston, Whetstone, Birstall, Narborough, Enderby built-up areas

Source: City Growth Commission (February 2014) ‘Metro Growth: The UK’s economic opportunity’ based on Office for National Statistics built up area definitions of continuous commercial or residential development, aggregated along travel to work area patterns.

32 REFERENCES

City Growth Commission (February Manchester City Council Press Release (Nov 2014) ‘Metro Growth: The UK’s 2014) ‘Devo Manc: Greater Manchester and economic opportunity’ available at Govt reach trailblazing agreement’ available www.citygrowthcommission.com/ at www.manchester.gov.uk/news/article/7015/ wp-content/uploads/2014/02/Metro-Growth- devo_manc_greater_manchester_and_govt_ February-2014.pdf reach_trailblazing_agreement City Growth Commission (October 2014) Newport City Council Press Release (Feb 2015) ‘Unleashing Metro Growth: The Final ‘Great Western Cities – Creating a Severn Recommendations of the City Growth power-house’ available at www.newport. Commission’ available at gov.uk/_dc/index.cfm?fuseaction=news. www.citygrowthcommission.com/ pressrelease&contentid=CONT733063 wp-content/uploads/2014/10/City-Growth- Respublica (2015) ‘Restoring Britain’s City Commission-Final-Report.pdf States’ available at www.respublica.org.uk/ Department for Communities and Local wp-content/uploads/2015/02/Restoring- Government, National Planning Policy Britains-City-States.pdf Framework and accompanying Practical Sandwell Council Press Release (Nov 2014) Planning Guidance available at http:// ‘Combined authority to drive economic planningguidance.planningportal.gov.uk/ powerhouse’ available at www.sandwell.gov. Greater London Authority Press Release uk/news/article/3132/combined_authority_ (Dec 2014) ‘Mayor delivers New Year to_drive_economic_powerhouse boost to apprenticeships drive with HM Government (Dec 2014) ‘The Implications £14m fund for small and medium sized of Devolution for England’ available at businesses’ available at www.london.gov. www.gov.uk/government/uploads/system/ uk/media/mayor-press-releases/2014/12/ uploads/attachment_data/file/387598/ mayor-delivers-new-year-boost-to- implications_of_devolution_for_england_ apprenticeships-drive-with-14m accessible.pdf ‘Labour or Conservatives – what HM Government (Jan 2015) ‘Scotland in the powers are the major parties offering United Kingdom: An enduring settlement’ councils?’ The Guardian, July 2014, available at www.gov.uk/government/uploads/ available at www.theguardian.com/ system/uploads/attachment_data/file/397079/ public-leaders-network/2014/jul/10/labour- Scotland_EnduringSettlement_acc.pdf conservatives-powers-councils-devolution

33 RSA 8 John Adam Street, London, WC2N 6EZ 0207 451 6848 @theRSAorg www.rsa.org.uk