The budget was a missed opportunity for ambitious devolution

 In Articles, Speeches

This article was originally published on LabourList on 14 July and can be found here.

Last week’s Budget was a real opportunity to deliver devolution to every part of England, but the Chancellor missed it.

Labour wants to see devolution to cities, counties and communities in every part of the United Kingdom. Devolution to only our major urban areas is not enough, it must benefit towns and country regions too. Nor should it be just about giving more powers to town halls: tenants need more control over the homes they rent; patients need more control over their health and care services; and parents need more control over the schools their children go to.

Taking power out of Whitehall in this way and putting it into the hands of the people is long overdue, but it will not happen while the government lacks ambition.

Its limited approach means the government is threatening to leave some areas – particularly towns and counties – playing catch up with our cities. By telling them that that they are not worthy of the full package of new powers unless they accept a mayor, central government is still imposing its will on local government.

While some regions, like Greater Manchester, will benefit from having a directly-elected mayor, the government must not think there can be a one-size-fits-all solution. The Chancellor says that he will not impose the mayoral model but that is exactly what he is doing: championing negotiations on localism while simultaneously shutting others outside the room does not make for a very promising devolution agenda.

This approach is also, disappointingly, how the Northern Powerhouse is being assembled. Alongside Tory delays to the Manchester to Leeds rail upgrade, there was nothing in the Budget on new powers for the north-east. Building a Northern Powerhouse without half of the north is a major mistake.

And on housing, too, this was a missed opportunity. The independent Office for Budget Responsibility has said the overall impact of the budget will be to reduce affordable housebuilding by 14,000. Far from putting housing powers in the hands of local communities, the Tories are limiting local authorities’ ability to provide the homes they need.

The next test for this government’s commitment to localism will come in the Spending Review. After five years of deep cuts, local authority leaders from all political parties are warning they cannot take much more without significant impacts on frontline services; and the LGA forecasts a funding gap of £9.5 billion by 2020.

Ministers cannot continue as they are by setting areas up to fail, hitting those areas with the greatest needs the hardest – which feeds concern that the government simply wants to localise blame for the cuts they are making in Whitehall. Some of the areas currently involved in talks over devolution, like Liverpool which was announced last week, have so far suffered the greatest cuts in funding.

A fairer funding model, where funding goes to those areas with the greatest needs, should be matched by a more ambitious model of devolution, since there is nothing localist about the current ‘take it or leave it’ approach.

The government should realise that ending the culture of ‘Whitehall knows best’ will not be achieved by letting Whitehall override the choice of communities.