Cities Devolution Bill announced but law firm warns on powers and budgets

A Cities Devolution Bill is to be included in the Queen’s Speech later this month, the Government has confirmed, but a leading law firm has warned that securing the release of powers and budgets was “the elephant in the room” with the proposals.

In a speech in Manchester Chancellor of the Exchequer George Osborne said the Government “was not imposing a mayor on anyone”. However, he added that he was not interested in any more ‘half-way house deals’.

“We will transfer major powers only to those cities who choose to have a directly elected metro-wide mayor,” the Chancellor said, justifying the decision on the basis that it was a proven model that had worked around the world.

Osborne insisted that the arrangements would create “a powerful point of accountability”, with a person vested with the authority of direct election.

“It makes the devolution of multi-billion pound budgets, and powers from policing to housing possible.”

The Chancellor said the Bill would mean that by the end of the year the legal framework would be set so that any city can proceed to implement a mayoral devolution deal.

James Wharton, newly appointed MInister for the 'Northern Powerhouse' in the Department for Communities and Local Government, has been tasked with taking the legislation through Parliament.

But David Hutton, head of local government at Bevan Brittan, said: “The elephant in the room is how to secure the release of powers and budgets. Whitehall has been reluctant to reduce controls and interference in spite of local government demands: this agenda suggests they will, but what levels of approvals will be required before new ideas can be rolled out and funded?
 
“The scale of opportunity for English cities and regions is hugely significant. But getting so many different neighbouring local authorities – and the wider public sector – to work together under an elected Mayor will require robust governance and structures. That will be the first step for many if they are to take advantage of this new landscape.”

Hutton added that obtaining clarity on issues such as accountability and budgeting would be key.

“Will Government be prepared to release budgets and if so, on what terms? New models of accountability and the relationship between central and local government will need to be rewritten,” he argued.

Hutton said: “Manchester's ‘devo-deal’ touches many issues but is everything now on the table? For example, would local government be trusted to take on and deal with the welfare cuts agenda?
 
"Our work with local government emphasises the opportunity and desire for joined up budgets, multi-year settlements, and a regional approach to major issues on infrastructure, housing and improving the skills and employment opportunities in an area. Welfare could be added to that list.”

In his speech the Chancellor said the Government would also empower towns and counties by extending a form of the City Deals programme run in the last Parliament.

The Local Government Association urged the Government to ensure that devolution benefited all parts of England.

Cllr David Sparks, the Association’s Chair, said: "The proposed devolution of transport, housing and policing powers is great news for our larger cities but we want to make sure that the benefits of devolution reach every corner of England and the United Kingdom.

"This will require different approaches to both governance and the powers needed for different areas, rather than a one-size-fits-all solution.”

Cllr Sparks added: "There is compelling evidence that making decisions at a more local level will bring about huge economic and social benefits including reducing youth unemployment by half, creating 500,000 homes and helping people to live independently at home longer, saving almost £4bn alone.

"But all parts of the country, from city regions to non-metropolitan areas, need greater freedom from Whitehall.

"We are now urging government to go further and set out a new settlement for all of England which devolves decisions on important issues like skills, housing, transport, care and infrastructure. This is vital if the economy is to prosper and good quality public services are to survive."

In response to the Chancellor's speech, the West Yorkshire Combined Authority announced its intention to consult on a metro-wide mayor.

WYCA Chair Cllr Peter Box said: “The Chancellor has now made clear that greater levels of devolution in England are directly linked to a change in governance.

“We were clear in the last Parliament that in the light of people having strongly rejected elected mayors in recent referenda in Bradford, Kirklees and Wakefield, we did not believe this was the model for West Yorkshire and York.

“However, the Chancellor has now made his position clear and we need to consult the local people, businesses and stakeholders of West Yorkshire and York on the governance options that could unlock extra powers and resources from Whitehall. We will be asking government to let us have details of what extra powers and resources could be made available to us in return for a change of governance."