Strength in numbers: combined authorities and the levelling up agenda
Bringing together local authorities under city-regional mayors, combined authorities can achieve far more than individual councils. At a GGF webinar, public servants and economists considered their role in the government’s agenda to ‘level up’ Britain’s poorer regions. Matt Ross reports
“If we don’t get cooperative working in our major cities, ‘levelling up’ will not succeed,” said Vincent Goodstadt. And the pandemic, he argued, makes it still more important that the UK level up its less wealthy and productive regions, fostering economic growth beyond the South-East. With coronavirus emptying the capital’s offices, “we can no longer rely on London’s growth,” he noted. “London is going to face serious problems.”
A planner and city-regional specialist, Professor Goodstadt was a member of the 2070 Commission – which, chaired by former head of the civil service Lord Kerslake, reported in February how to address the UK’s regional inequalities – and chairs its 2070 Steering Group. Speaking at a GGF webinar examining the roles of combined authorities in the government’s levelling up agenda, he called for “a comprehensive approach across a whole range of areas” – among them “institutional change to make us fit for purpose, including the decentralisation of people, finances and powers.”
“This is a very timely discussion,” noted John Wrathmell, director of strategy, research and economy for Greater Manchester Combined Authority – which brings together the city-region’s 10 boroughs under a directly-elected mayor. Having topped the new government’s priorities list following the December election, levelling up “has dropped out of public debate during the COVID crisis. But in many ways, the crisis has thrown some of the underlying issues into sharper relief,” he said. “It’s showing up the weaknesses very clearly: we all knew about the under-funding of social care, for example – but you can now see the consequences of that much more powerfully.”
Adding injury to injury
The danger, added Dave Innes – head of economics at the Joseph Rowntree Foundation, which works to address poverty – is that coronavirus exacerbates existing inequalities. “Unemployment has increased fastest in places that went into COVID-19 with the highest unemployment rate,” he said. “There’s a worry that the next few months and years could see the levelling up challenge get much harder.”
While the pandemic exposes Britain’s existing social and economic inequalities, though, the combined authorities’ (CAs’) response has illustrated the power of coordinated action across a city-region. Greater Manchester, said Wrathmell, has been able to channel a wide range of services for vulnerable people through local ‘hubs’; to coordinate the work of health, social care and other local authority services; and to work with local businesses, responding rapidly as the situation developed. “The COVID crisis has provided a big impetus, forcing the system to go further and faster in quite a helpful way,” he said.
The CA’s “convening power”, Wrathmell added, allows it to coordinate policies and services across organisational and geographical boundaries – integrating health and care planning with work on infrastructure and productivity across the conurbation, for example. Take employment, said Innes: the authority’s ability to “join up lots of interventions at the local level” enables it to align policies on skills provision, job creation, local transport and business support, ensuring that each strand of work reinforces the others.
So far, commented Innes, the government’s levelling up policies have been built around transport capital investments, R&D and green jobs. “All of this is really good, sensible policy,” he said. “But for us, it’s only the start of an agenda that would truly level up for both productivity and living standards.”
Invest in people too
In particular, Innes called for more investment in local transport to “unlock job opportunities for people who might live a mile or two away, but lack the public transport to get them there.” He noted that acting through CAs can “only fix part of the problem,” pointing to the need to meanwhile drive progress within the “messier geography” outside the major cities. And he highlighted the crucial importance of investment in skills and training – something overlooked in the government’s focus on big capital investments.
(Photo by Jonathan Pow/[email protected])
The £3bn (US$3.9bn) national skills fund set out in the March Budget, he noted, comprises “half of one percent of the £600bn [US$780bn] promised for infrastructure. We need to be much less bound by this distinction between capital and current investment: any spending that improves growth potential over the longer run – of which skills spending is a vital part – is prudent, good spending.”
Currently, decisions over “capital investment are divorced from those on current spending – particularly skills, and other areas that matter just as much for economic growth,” Innes continued. “Only when we start to break down that distinction, and let places choose to invest in the things that will help them over the long run, will we really begin to level up.”
Check yourself
To give the centre greater confidence in devolving infrastructure spending powers, suggested Jonathan Werran – chief executive of the think tank Localis – the government could establish an autonomous investments assessor, tasked with judging whether planned investments are likely to generate the anticipated benefits. Much as the independent Office of Budget Responsibility reviews the implications of Treasury Budget decisions, he argued, introducing an auditor to examine infrastructure decisions would “allow a separation of the politics and the finance”, enabling us to “take investment out of central government’s direct control, but retain some of the sound principles of public finance.”
It’s just as important to sense-check policy decisions in areas where central government retains control, argued Goodstadt. Existing legislation, he pointed out, requires policymakers to carry out impact assessments on new policies, examining their impact on equalities issues and environmental sustainability. And he called for a similar duty “requiring every policy or programme to be subject to an explicit audit of their impact on inequality or levelling up”.
“The most insidious reason why there has not [so far] been the change required is because we’ve had a hidden and perverse set of policies which have been counter to the rhetoric,” he said. “It’s not just that the rhetoric hasn’t been carried through with the scale of action required; it’s that the actions that have been taken, the way money has been invested, the decisions that have been made, have been contrary” to the goals of levelling up.
Take housing, said Goodstadt: national policies anticipate continued out-migration from the North, and ever-growing demand for homes in the South-East – working directly against the levelling up agenda. “The reason why this is got away with is that there’s no auditing of the spatial impacts of decisions on communities across the country,” he said. “There should be a levelling up test on policies – so if you’re going to make a decision which is counter to it, that is at least explicit.”
Maturing relationships
Meanwhile, he continued, the government should change its approach to the CAs’ development, “moving on from a deal-based process to one based upon an entitlement to devolution.” The needs of local areas vary widely, he said, and thus so do the tools and powers they require: government should set out “a portfolio of what is possible, quite extensively defined, and let people choose what they need.”
Recalling his experiences of brokering those deals, John Wrathmell recalled “stale debates about relatively minor powers”. At one point, he said drily, “we had a debate with central government about whether Greater Manchester wanted the power to regulate laundries – which was apparently a power held elsewhere, and might or might not be useful, but didn’t feel quite up to the scale of the task.”
Nowadays, though, “in the established combined authorities, we’ve moved away from those deal-based discussions with government,” said Wrathmell. Instead, there’s “an ongoing discussion with central government and our constituent boroughs where we say: ‘Here’s a common challenge and a common set of objectives. How do we bring together what we’ve got to try to achieve those?”
And national government, he said, seems genuinely interested in both levelling up and city-regional devolution. “We’re quite optimistic at the moment, in terms of our discussions with central government about this agenda. Levelling up, I think, will return centre-stage because it’s a political requirement as much as anything else. And there still seems to be an appetite in government for further devolution,” he said. “We’re heading in the right direction, and the strengths and challenges that COVID have highlighted have given more impetus to that.”
Matching the rhetoric
To make real progress, though, the centre will have to release its grip on budgets or tax-raising powers. “You need the resources to respond to these big economic challenges,” said Wrathmell. “You could easily see a situation where the rhetoric on levelling up is strong, but the follow-through is relatively small, incremental change. The idea that that’s going to lead to levelling up is very difficult to believe.”
To make a real difference, said Innes, government will have to make a large and long-term commitment to the agenda: “If we don’t get that long-term commitment in place, and if we don’t invest in the right things at the right scale, we will not solve the challenge.” Werran agreed, calling for the government to provide “a few more drops of the hard stuff, in terms of real powers; genuine autonomy, especially over finance; the ability to choose what and when to fund, rather than having that dictated centrally.”
Combined authorities’ ability “to direct money they raise from their own areas to their own needs will be crucial,” concluded Werran. And to get there, said Goodstadt, we need a “total reversal” in relationships between the national and city-regional levels – moving “from central decision-making supported by local delivery, to local decision-making supported centrally.”
Having spent decades studying and managing cities and regions around the world, he said, “my experience is that where you have very powerful, enabled and resourced authorities dealing with significant, coherent functional regions, these places are the most effective and progressive; the most economically sound; the most environmentally resilient; and the most socially just.”
“In the way we’re run, we are the most centralised among the developed countries; and we’re the most unequal,” Goodstadt concluded. “It’s more than a coincidence that this is the case.”
This webinar was the final session in a four-part online conference on ‘Levelling Up in the era of COVID-19’. The first session, featuring senior panellists including a former DEXEU permanent secretary, Treasury adviser and Northern Powerhouse chief, covered how the Levelling Up agenda should evolve in response to the pandemic, and examined the best ways for government to realise its goals. The second session explored the government’s goal of redistributing civil servants away from London and the South-East. And the third session considered the role of infrastructure in levelling up.
You can also watch this entire panel session on YouTube:
About Matt Ross
Matt is Global Government Forum's Contributing Editor, providing direction and support on topics, products and audience interests across GGF’s editorial, events and research operations. He has been a journalist and editor since 1995, beginning in motoring and travel journalism – and combining the two in a 30-month, 30-country 4x4 expedition funded by magazine photo-journalism. Between 2002 and 2008 he was Features Editor of Haymarket news magazine Regeneration & Renewal, covering urban regeneration, economic growth and community development; and from 2008 to 2014 he was the Editor of UK magazine and website Civil Service World, then Editorial Director for Public Sector – both at political publishing house Dods. He has also worked as Director of Communications at think tank the Institute for Government.
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