“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.

Want more of this stuff? Follow CityMetric on Twitter or Facebook.

 
 
 
 

This fun map allows you to see what a nuclear detonation would do to any city on Earth

A 1971 nuclear test at Mururoa atoll. Image: Getty.

In 1984, the BBC broadcast Threads, a documentary-style drama in which a young Sheffield couple rush to get married because of an unplanned pregnancy, but never quite get round to it because half way through the film the Soviets drop a nuclear bomb on Sheffield. Jimmy, we assume, is killed in the blast (he just disappears, never to be seen again); Ruth survives, but dies of old age 10 years later, while still in her early 30s, leaving her daughter to find for herself in a post-apocalyptic wasteland.

It’s horrifying. It’s so horrifying I’ve never seen the whole thing, even though it’s an incredibly good film which is freely available online, because I once watched the 10 minutes from the middle of the film which show the bomb actually going off and it genuinely gave me nightmares for a month.

In my mind, I suppose, I’d always imagined that being nuked would be a reasonably clean way to go – a bright light, a rushing noise and then whatever happened next wasn’t your problem. Threads taught me that maybe I had a rose-tinted view of nuclear holocaust.

Anyway. In the event you’d like to check what a nuke would do to the real Sheffield, the helpful NukeMap website has the answer.

It shows that dropping a bomb of the same size as the one the US used on Hiroshima in 1945 – a relatively diddly 15kt – would probably kill around 76,500 people:

Those within the central yellow and red circles would be likely to die instantly, due to fireball or air pressure. In the green circle, the radiation would kill at least half the population over a period of hours, days or weeks. In the grey, the thing most likely to kill you would be the collapse of your house, thanks to the air blast, while those in the outer, orange circle would most likely to get away with third degree burns.

Other than that, it’d be quite a nice day.

“Little boy”, the bomb dropped on Hiroshima, was tiny, by the standards of the bombs out there in the world today, of course – but don’t worry, because NukeMap lets you try bigger bombs on for size, too.

The largest bomb in the US arsenal at present is the B-83 which, weighing in at 1.2Mt, is about 80 times the size of Little Boy. Detonate that, and the map has to zoom out, quite a lot.

That’s an estimated 303,000 dead, around a quarter of the population of South Yorkshire. Another 400,000 are injured.

The biggest bomb of all in this fictional arsenal is the USSRS’s 100Mt Tsar Bomba, which was designed but never tested. (The smaller 50MT variety was tested in 1951.) Here’s what that would do:

Around 1.5m dead; 4.7m injured. Bloody hell.

We don’t have to stick to Sheffield, of course. Here’s what the same bomb would do to London:

(Near universal fatalities in zones 1 & 2. Widespread death as far as St Albans and Sevenoaks. Third degree burns in Brighton and Milton Keynes. Over 5.9m dead; another 6m injured.)

Everyone in this orange circle is definitely dead.

Or New York:

(More than 8m dead; another 6.7m injured. Fatalities effectively universal in Lower Manhattan, Downtown Brooklyn, Williamsburg, and Hoboken.)

Or, since it’s the biggest city in the world, Tokyo:

(Nearly 14m dead. Another 14.5m injured. By way of comparison, the estimated death toll of the Hiroshima bombing was somewhere between 90,000 and 146,000.)

I’m going to stop there. But if you’re feeling morbid, you can drop a bomb of any size on any area of earth, just to see what happens.


And whatever you do though: do not watch Threads. Just trust me on this.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

Want more of this stuff? Follow CityMetric on Twitter or Facebook.