Issues & Ideas | 2nd November 2014

How devolution to Manchester could work

English devolution is on its way, announced by the prime minister the morning after […]

Photo: Getty


English devolution is on its way, announced by the prime minister the morning after the Scottish referendum, and all of a sudden the north is politically fashionable.

George Osborne is personally championing northern devolution with his “northern powerhouse” scheme, Nick Clegg has a rival “northern futures” project, and influential think tanks are arguing for central government to give power to northern regions and cities.

If ever a city demonstrated both the need and the potential for English devolution, it is Manchester.

It has a successful history of collaboration between the ten authorities that comprise the city region. it has already created the Greater Manchester Combined Authority. It was one of first and largest of the government’s City Deals with an innovative “Earn Back” mechanism for forward-funding infrastructure investment.

And, of course, we could equally cite twenty years of successful regeneration and a much longer history of radical politics and of civic and commercial innovation in the city.

If ever a city demonstrated the potential for English devolution, it is Manchester.

At the same time there is a £5 billion fiscal gap between the money Manchester earns and the money it spends. Funding is provided by more than 50 different central bodies and, as in the rest of that country, the vast majority of that money is spent on responsive public services rather than on the preventative measures that would improve people’s lives and help reduce that £5 billion gap.

This is the framework through which Respublica’s recent report, Devo Max – Devo Manc, examined Manchester’s potential and the challenges it faces.

The report calls for a place-based settlement in which all public services and all £22bn public spending are devolved to Manchester, and for fiscal devolution in which property taxes and even income tax are managed and partially retained locally. It claims that these proposals “are perhaps the most radical yet made for city-based devolution”. Certainly, they go further than many in placing income tax and health under local control.

That would be both a strength and a weakness. Localising health and integrating health and social care budgets for example is clearly desirable but politically very hard, as it involves tackling entrenched interests in the NHS and initiating a difficult conversation about why healthcare should be free and social care paid for.

At the same time it is surely true that if we are to make progress on a localist agenda it will be through deals between government and localities of the sort that Devo Max – Devo Manc proposes.

In general, the authors put forward a powerful case with a good balance of radicalism and political feasibility, given enhanced credibility by the support of the Manchester City Council and the Combined Authority.

Most refreshingly, the report avoids one of the most common weaknesses in the wider devolution debate.

Too often proponents of devolution get seduced by new structures.

Whilst stressing the importance of effective governance, it doesn’t fall into the trap of substituting a technocratic fix for a democratic one. Instead it emphasises the need to have public service integration led by partnerships between existing local councils that people understand and feel they have a say over.

Too often proponents of devolution get seduced by new structures: an English parliament, regional assemblies or elected mayors. Manchester’s success over the last decade has been rooted in good local government and effective local democracy; Devo Max – Devo Manc wisely builds upon this.

There are weaknesses of course. It’s not clear why what a “Minister for Manchester” would in practice add to the suggested governance arrangements and the (fine) idea of local Public Accounts Committees is not credited to the Centre for Public Scrutiny, who have been promoting them for some time.

Overall though, the report lives up to its claims for radical localism. It lays down a clear road map for Manchester and a clear challenge for other areas to think through what their versions of Devo Max might look like.

Jonathan Carr-West is Chief Executive of the Local Government Information Unit. This piece is provided by the Think Tank Review, a new site bringing you the best ideas, policies and proposals from the think tank world.