“Osborne’s legacy is arguably one of centralisation”: so what would real devolution look like?

One of the less discussed side-effects of Brexit has been the complete collapse in the market for photographs of George Osborne in high-vis jackets. Sad. Image: Getty.

Devolution is a great opportunity.  After years of oppressive centralisation, devolution deals offer local authorities a chance to break free and forge their own approaches to economic development.

As it stands, however, the devolution agenda encompasses myriad risks and challenges for local authorities, with city deals characterised by unnecessarily conservative ambitions, a series of policy missteps and, at root, a flawed economic philosophy.

George Osborne was right to push for devolution as forcefully as he did – but his “my way or no way” approach to city deals seriously jeopardised the agenda’s credibility. If new prime minister Theresa May means it when she preaches inclusion and rebalancing, then Osborne’s departure is an opportunity to reset regional policy in a more sustainable direction.

But if devolution is to succeed, several things will have to change, and quickly.

Where Osborne went wrong

Above all, local authorities need to be unshackled from austerity. As I argue in Austerity Politics and UK Economic Policy, local government is perhaps the one area where austerity really has meant austerity, with local public services having been cut to the bone. Devolving depleted budgets is self-defeating.

City deals have to date also focused rather too much on devolving the responsibility to deliver national policy, rather than the responsibility to decide on how best to support local economies. And too often, delivery requires local authorities to outsource the actual administration of, for example, employment support programmes, relying on many of the same firms hitherto contracted by central government.

Osborne’s legacy is arguably one of centralisation rather than decentralisation, especially in relation to fiscal policy. Councils have been permitted to raise the largely regressive council tax – but only if they intend to spend the proceeds on replenishing squeezed adult social care budgets.


Similarly, the government has outlined plans to allow councils to retain all of the business rates revenue raised in their area, but offered very little freedom to redesign the tax, even though rates revenue is intended to replace central grants to local authorities over the medium term. The result will inevitably be greater inequality between areas with a highly developed private sector, and those looking to build one. All the while, much-needed additional borrowing powers for local authorities are nowhere to be seen.

A generous interpretation is that city deals have encompassed the devolution of micro-economic policy. Of course, macro-economic policy, almost by definition, cannot be devolved – and there is no evidence that national policy-makers take the needs and interests of different localities into account within making macro-economic policy.

In other words, the devolution agenda remains indebted to neoclassical ideas around “agglomeration” and self-sustaining markets, which implore government (at all levels) to simply get out of the way. It is a perspective which chimes with “Treasury view” traditions, and it is revealing that the Treasury has been almost solely responsible for the devolution agenda within central government. It has led to a deal-making process typical of Treasury statecraft, not least because the Treasury, insofar as it controls all public expenditure, always holds the strongest hand.

The configuration of devolution deals around city-regions is, in general, the correct approach, insofar as city-regions represent meaningful economic spaces. Yet it has been too rigidly applied, with some incredibly messy results, with too many square pegs have been forced into metro-shaped holes. Officials have paid insufficient attention to the risk that devolution done badly can increase geographical inequality, or to the opportunities inherent in enabling large cities with different strengths to work together.

We need a real deal for progressive devolution. Given the extent to which the growth plans in operation in almost every Local Enterprise Partnership area depend – often just implicitly – on increased exports to Europe, and the extent to which public investment in deprived areas was underpinned by EU structural and investment funds, Brexit underlines this imperative.

How to fix it

My report The Real Deal: Pushing the Parameters of Devolution Deals, co-authored with colleagues at the Sheffield Political Economy Research Institute and the Centre for Local Economic Strategies, argues that it’s a mistake to focus  on what local government needs to do, or how local government needs to change. Rather, the first step to devolution is reforming the centre.

The current devolution agenda answers the question, “What should be devolved?” A progressive approach to devolution would instead ask, “Where should power reside?” Let’s rethink from first principles the powers that central government has, rather than simply gobbling up the ones it is willing to give away.

It needs to be underpinned by a new constitutional settlement on centre-local relations. We also need a meaningful industrial strategy – something else May is promising – informed by the local, but led by the centre. Industrial policy involves the mobilisation of economy-wide resources in support of strategically important industries; by definition, local economies cannot do industrial policy alone.

Our report goes on to outline 11 sets of ideas around specific areas of policy relevant to the devolution debate (housing, transport, local banking and so forth). We seek to go with the grain of existing devolution deals, but broaden out their scope.

The devolution of employment support programmes, for instance, should see local authorities allowed to use these programmes strategically to support local economies, and not to force individuals into “any old job”. Councils should also be given more powers – including over tax – to shape how land within their jurisdiction is used, and see planning veto powers supplemented by the ability to shape local housing markets.

The scope of progressive devolution, however, goes beyond local authorities. All “anchor” institutions, particularly large public sector employers, could be doing more to support the local economies in which they are situated through procurement. Universities, in particular, should be better integrated into local economic governance – although this would require a decentralisation of research funding.

Underpinning all of this is the need for devolution to be a genuinely democratising moment. To succeed over the long term, the process will require much greater levels of citizen engagement in local politics, so strings-attached city deals have to be suspended while residents are consulted.

Many parts of the UK demanded the right to “take back control” on 23 June. Let’s give it to them where it really matters.

Craig Berry is deputy director of the Sheffield Political Economy Research Institute at the University of Sheffield. He has previously worked at HM Treasury, the International Longevity Centre-UK and the Trades Union Congress.

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Was the decline in Liverpool’s historic population really that unusual?

A view of Liverpool from Birkenhead. Image: Getty.

It is often reported that Liverpool’s population halved after the 1930s. But is this true? Or is it a myth?

Often, it’s simply assumed that it’s true. The end. Indeed, proud Londoner Lord Adonis – a leading proponent of the Liverpool-bypassing High Speed 2 railway, current chair of the National Infrastructure Commission, and generally a very influential person – stood on the stairs in Liverpool Town Hall in 2011 and said:

“The population of Liverpool has nearly halved in the last 50 years.”

This raises two questions. Firstly, did the population of the City of Liverpool really nearly halve in the 50 year period to 2011? That’s easy to check using this University of Portsmouth website – so I did just that (even though I knew he was wrong anyway). In 2011, the population of the City of Liverpool was 466,415. Fifty years earlier, in 1961, it was 737,637, which equates to a 37 per cent drop. Oops!

In fact, the City of Liverpool’s peak population was recorded in the 1931 Census as 846,302. Its lowest subsequent figure was recorded in the 2001 Census as 439,428 – which represents a 48 per cent decline from the peak population, over a 70 year period.

Compare this to the population figures for the similarly sized City of Manchester. Its peak population also recorded in the 1931 Census as 748,729, and its lowest subsequent figure was also recorded in the 2001 Census, as 392,830. This also represents a 48 per cent decline from the peak population, over the same 70 year period.

So, as can be seen here, Liverpool is not a special case at all. Which makes me wonder why it is often singled out or portrayed as exceptional in this regard, in the media and, indeed, by some badly briefed politicians. Even London has a similar story to tell, and it is told rather well in this recent article by a Londoner, for the Museum of London. (Editor’s note: It’s one of mine.)

This leads me onto the second question: where have all those people gone: London? The Moon? Mars?

Well, it turns out that the answer is bit boring and obvious actually: after World War 2, lots of people moved to the suburbs. You know: cars, commuter trains, slum clearance, the Blitz, all that stuff. In other words, Liverpool is just like many other places: after the war, this country experienced a depopulation bonanza.


So what form did this movement to the suburbs take, as far as Liverpool was concerned? Well, people moved and were moved to the suburbs of Greater Liverpool, in what are now the outer boroughs of the city region: Halton, Knowsley, St Helens, Sefton, Wirral. Others moved further, to Cheshire West & Chester, West Lancashire, Warrington, even nearby North Wales, as previously discussed here.

In common with many cities, indeed, Liverpool City Council actually built and owned large several ‘New Town’ council estates, to which they moved tens of thousands of people to from Liverpool’s inner districts: Winsford in Cheshire West (where comedian John Bishop grew up), Runcorn in Halton (where comedian John Bishop also grew up), Skelmersdale in West Lancashire, Kirkby in Knowsley. There is nothing unique or sinister here about Liverpool (apart from comedian John Bishop). This was common practice across the country – Indeed, it was central government policy – and resulted in about 160,000 people being ‘removed’ from the Liverpool local authority area.

Many other people also moved to the nearby suburbs of Greater Liverpool to private housing – another trend reflected across the country. It’s worth acknowledging, however, that cities across the world are subject to a level of ‘churn’ in population, whereby many people move out and many people move in, over time, too.

So how did those prominent images of derelict streets in the inner-city part of the City of Liverpool local authority area come about? For that, you have to blame the last Labour government’s over-zealous ‘Housing Market Renewal Initiative’ (HMRI) disaster – and the over enthusiastic participation of the then-Lib Dem controlled city council. On the promise of ‘free’ money from central government, the latter removed hundreds of people from their homes with a view to demolishing the Victorian terraces, and building new replacements. Many of these houses, in truth, were already fully modernised, owner-occupied houses within viable and longstanding communities, as can be seen here in Voelas Street, one of the famous Welsh Streets of Liverpool:

Voelas Street before HMRI implementation. Image: WelshStreets.co.uk.

The same picture after HMRI implementation Image: WelshStreets.co.uk. 

Nonetheless: the council bought the houses and ‘tinned them up’ ready for demolition. Then the coalition Conservative/Lib Dem government, elected in 2010, pulled the plug on the scheme. 

Fast forward to 2017 and many of the condemned houses have been renovated, in a process which is still ongoing. These are over-subscribed when they come to market, suggesting that the idea was never appropriate for Liverpool on that scale. 

At any rate, it turns out that the Liverpool metropolitan population is pretty much the same as it was at its peak in 1931 (depending where the local borough boundaries are arbitrarily drawn). It just begs the question: why are well educated and supposedly clever people misrepresenting the Liverpool metropolis, in particular, in this way so often? Surely they aren’t stupid are they?


And why are some people so determined to always isolate the City of Liverpool from its hinterland, while London is always described in terms of its whole urban area? It just confuses and undermines what would otherwise often be worthwhile comparisons and discussions. Or, to put it another way: “never, ever, compare apples with larger urban zones”.

In a recent Channel 4 documentary, for example, the well-known and respected journalist Michael Burke directly compared the forecast population growths, by 2039, of the City of Liverpool single local authority area against that of the combined 33 local authority areas of Greater London: 42,722 versus 2.187,708. I mean, what bizarre point is such an inappropriate comparison even trying to make? It is like comparing the projected growth of a normal sized-person’s head with the projected growth of the whole of an obese person, over a protracted period.

Having said all that, there is an important sensible conversation to be had as to why the populations of the Greater Liverpool metropolis and others haven’t grown as fast as maybe should have been the case, whilst, in recent times, the Greater London population has been burgeoning. But constantly pitching it as some sort of rare local apocalypse helps no one.

Dave Mail has declared himself CityMetric’s Liverpool City Region correspondent. He will be updating us on the brave new world of Liverpool City Region, mostly monthly, in ‘E-mail from Liverpool City Region’ and he is on twitter @davemail2017.