The Lord Heseltine

Heseltine's "No Stone Unturned" could still kick start Regional Devolution

By: David Bailey @dgbailey
Published: Tuesday, October 7, 2014 - 14:48 GMT Jump to Comments

More powers ceded to the local level along with clearer fund-raising powers are needed if the LEPs and city regions are to have a real chance of promoting local economic development

The recent Scottish referendum has reawakened the debate over devolution in the rest of the UK, including for English cities and regions. A window of opportunity for devolution seems to have opened up, and it’s time to make the most of it.

Devolution is much needed, as England remains by far the most centralised state in western Europe - even after the coalition government’s policies on localism, City Deals and local growth funds.

In part that is because scrapping the old Regional Development Agencies (RDAs) bizarrely recentralised power to London, rather than downwards to Local Enterprise Partnerships (LEPs). And England’s cities – Birmingham included - punch well below their weight economically, especially when compared with city power-houses in the likes of Germany and France.

A starting point for regional devolution could still be a properly implemented Heseltine Plan. Hezza’s 2012 ‘No Stone Unturned’ report came up with a raft of proposals, with the goal of shifting some £60bn over four years from central government control to the English regions.

While officially praising Hezza’s report, the coalition government’s response was pretty pathetic, with just a few billion pounds actually devolved, in part because of a ferocious inter-departmental turf war won by the Treasury which stymied further decentralisation.

Meanwhile, Labour hasn’t gone much further, promising just £4bn a year in devolution to ‘city and county’ regions. Peanuts.

But that Treasury Yes-Minister style ‘win’ now needs to be reversed, given that Scotland has been offered ‘Devomax’ in the form of much greater control of resources. That, of course, raises the obvious question: why can Scotland – population 5.2m – have a very significant degree of autonomy but the West Midlands – population 5.6m – can’t?

The official government line is that English devolution started last April, when Westminster gave the OK to a ‘combined authority’ made up of cooperating councils in the North-East to pool resources from local authorities comprising Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland.

This North-East combined authority became the fifth to get up-and-running after others were created in Manchester, Merseyside, West Yorkshire, and Sheffield.

Of course things have proved much more difficult in the Midlands, where Birmingham and partners have so far failed to get their act together and risk being left behind at the devolution pantomime - given that both the government and Labour Party have indicated that it is the combined authority model that they will be backing.

This is all becoming hugely pressing for Birmingham, as the City Growth Commission, which will advise the Government on city finance and governance, is to produce its report imminently. Its Chairman, Jim O’Neill, has already hinted that the commission is likely to nominate the existing five combined authorities as the first city regions to have devolved powers, thus leaving out Birmingham.

It’s this danger which has prompted an impassioned plea from the leader of Sandwell Council, Darren Cooper, to Birmingham’s leader, Sir Albert Bore, with Cooper stating: “Unless we see some positive move before Christmas we in the Black Country will go it alone. We will be saying to Birmingham do you want to join us? If you don’t want to join us we will look elsewhere”.

So ‘Come on Cinders, we need to go to the Devolution Ball’ seems to be the message to Birmingham from its nearest neighbour.

But more broadly, it should be recognised that the combined authority model is just one small step forward. The new combined authorities aim to bring together a mish-mash of regeneration agencies in each place. Yet a number of challenges risk undermining the project.

One is that just as combined authorities are being created in the North, dark clouds in the form of whole-scale local authority spending cuts are gathering. The northern city councils will probably lose 20% of their budgets, on top of what has been cut since 2011.

Secondly, it’s clear that whole areas of the country are left out of the combined authorities – including at the moment cities like Coventry. The over-riding focus on the core cities leaves out areas where LEPs may end up scrapping for resources and foreign direct investment.

In the short term much greater efforts to decentralise more powers to the local level are indeed needed, along with clearer fund-raising powers if the LEPs and city regions are to have a real chance at promoting local economic development. On that the city regions and combined authorities that the national parties have been offering may offer a useful starting point.

But at some point, a genuinely regional scale will have to be back on the agenda to join up the work of fragmented LEPs. When it does, the lessons from the ‘old’ RDAs, both positive and negative, will need to be remembered.

Effective devolution needs an ability to join things up, to ‘think’ regionally, and to have real control over policy areas like transport, regional economic development, health and welfare, the environment and tourism.

So the key issue after the Scottish referendum isn’t the need for an ‘English Parliament’ as some have claimed, but rather the need to look again at English regions.

In December 2012 InformationDaily.TV interviewed Lord Heseltine at the launch of his "No Stone Unturned" report. Watch the video here

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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