Levelling up – A new opportunity for further devolution in England?

Rob Hann explores the Government's 'levelling up' policy and looks at whether it is an opportunity for further devolution in England.

Hands up those who realised the Government’s ‘levelling up’ policy includes the potential for clusters of local authorities who missed out on the original flurry of devolution deals, to come up with new proposals to meet (in part) the challenges posed by the Post Covid 19 pandemic reboot to local economies. I confess this had passed me by until I took a closer look at the levelling up agenda and what some groups of neighbouring councils had been up to by way of making proposals to central government for change.

To recap, the landscape of local government was radically altered a few years ago with the introduction of a new tier of local government known as Combined Authorities. The core legislation relating to combined authorities is the Local Democracy, Economic Development and Construction Act 2009 amended by the Cities and Government Devolution Act 2016. A Combined Authority is a legal entity and public body established under legislation that enables two or more councils to collaborate and take collective decisions across traditional, regional council boundaries. There are two types of combined authority:

Those with an elected “metro mayor” and those without.

In the past, the Conservative Government under David Cameron appeared fixated on imposing a requirement for directly elected Mayors to be a pre-requisite of CA and devolution deal approval. However, it isn’t clear yet whether the Boris Johnson led Government will similarly insist on Mayoral led CA’s going forward or alternatively, whether more CA’s (with or without Mayors) are regarded as an essential addition to the existing local government landscape, given their ability to push forward and manage cross-boundary regional infrastructure projects and programmes?

The foisting (as many local authority regions saw it) of an elected mayor on them by central government was seen by many regions as a significant turn off to devolution. However, some areas decided to press on and take the Mayoral ‘hit’ in return for new powers and enhanced funding. Even the one current exception to the Mayoral CA ‘clean sweep’, the Northeast CA, started out with Mayoral intentions, but some of the original group of councils involved in the devolution bid, decided to halt mayoral election plans amid fears over post-Brexit funding, (although the CA was established for the remaining councils – Durham, Gateshead, South Tyneside and Sunderland). The oldest mayoral combined authority, Greater Manchester was established in 2011 and the most recent, North of Tyne, in 2019.

Out of the CA’s listed below, nine are mayoral combined authorities with only the Northeast CA being currently constituted without a Mayor:

• Cambridgeshire and Peterborough,
• Greater Manchester,
• Liverpool City Region,
• Northeast
• North of Tyne,
• South Yorkshire (Sheffield City Region)
• Tees Valley,
• West of England,
• West Midlands and
• West Yorkshire.

In addition, the Greater London Authority, comprises the mayor of London and the London Assembly, and was established by the Greater London Authority Act 1999, with additional powers made available through the Greater London Authority Act 2007.

In the summer of 2020, the Government linked the creation of further combined authorities to local government reorganisation. The publication of the Levelling Up White Paper is expected to set out ministers’ understanding of and commitment to further devolution in England. Given there are only ten CA’s established currently that leaves many other regions of England without either a Mayor or an over-arching legally constituted and recognisable entity (a Combined Authority) to articulate local infrastructure needs, help to develop bids for scarce funding from central government (and elsewhere) and to drive forward major transport, housing and eco projects (such as clean air zones or carbon reduction initiatives) which cross traditional local authority neighbouring boundaries. Many regions who do not currently have a CA/Mayor are suffering from FOMO (fear of missing out), worrying that those ‘big mayoral CA beasts’ surrounding them (in some cases) are now more recognisable as a regional delivery agency by the centre, that they get more press coverage and exposure than other regions and that the mayoral CA’s can be trusted to deliver regional development programmes.

Some groups of LA’s have already put forward (or are busily working up) proposals for more funding and for additional powers to be devolved to existing Councils who are seeking to demonstrate a strong commitment to working collaboratively with neighbouring councils and key allies within the relevant region.

But what are the options open to clusters of authorities who were not in the Devo 1 tranche of CA’s?

The LGA in June 2021, published a ‘guide to help councils navigate devolution deals’ Devolution deal to delivery | Local Government Association which also provides conclusions from a research project carried out into the differences, advantages and challenges faced by the first 9 Mayoral CA’s. One of the issues the LGA home in on is whether this Government may take a more flexible approach to devolution that its predecessor and if so, what other options are available than Mayoral CA’s?

The Guide contains a spectrum of collaboration and organisational as illustrated below building on Greater Manchester’s example of moving from the left to the right of the spectrum over a long period of time.

The LGA rightly point out that:

• Statutory joint committees are formal bodies that can be created by councils without any government involvement, but maybe they lack the stability of a combined authority because any council can decide to leave of their own volition.
• The combined authorities are formally established by Parliament and are more stable than a joint committee because any changes in their membership also requires Parliamentary approval.
• There is more scope in the constitutions and governance arrangements for a combined authority to reflect the different roles of different councils and politicians in a sophisticated way than a joint committee can.
• The legislation provides for the establishment of mayoral and non-mayoral combined authorities. The preference for combined authorities is more a reflection of government policy on devolution than a local appetite for mayors – although the LGA say their research has identified examples of the added value of a mayor.

What this may be leading to for the future landscape of local government is anybody’s guess.To add to the LGA list we could include Economic Prosperity Boards as another legally constituted public body but which is seen as a sort of smaller sibling to a full-blown CA. This option (perhaps rightly) to date has received little attention as it is very similar to a CA but without transport powers. Nonetheless, economic prosperity boards remain an option under existing legislation and should be considered when undertaking an appraisal. The great advantage of setting up a legal entity such as a CA and/or a statutory Board is that it would be a public body (and not a private company or other similar vehicle) with a clear regional identity and remit, with familiar public sector governance, fiscal and propriety rules to follow and which could itself drive through major projects and be a catalyst and champion of locally driven schemes to the centre.

However, if some areas in future have high profile Mayors and some don’t, and some have CA’s without Mayors or have economic prosperity boards without transport powers or mayors, what will the impact be on those regions that do not have a visible, personality championing their cause? What happens If some regions maintain the status quo but still manage to get some semblance of devolution and additional powers through to the existing LA structure? Will they be able to deliver their new objectives if they do not have a specific legal entity (such as a CA or EPB) to contract and drive forward projects and programmes on behalf of all LA’s in the region?

Finally, there may be some tricky vires issues to think through for third parties dealing with these potential diverse structures for devolution in England. As sketched out above, there is now the potential for a ‘smorgasbord’ of over-arching structures being created in the English regions going forward. But finding out which CA’s (or other similar entities) have been provided with which statutory functions is no easy feat.

Whereas the powers and functions of district councils, County councils and unitary authorities can be found in the relevant enabling statutes (such as the Local Government Act 1972), finding out precisely which CA’s have been provided (via bespoke devolution deals with the centre) with which statutory powers and functions, is more difficult. The individual Orders which established each CA set out the transport and economic and development functions which are enjoyed by each CA, and those Orders have, in many cases been amended by subsequent Orders.

Third parties seeking to invest in or join forces through (say) a joint venture with a CA might in future insist on a vires certificate from the relevant CA to ensure they have a safe harbour for such investment. Vires certificates were common in a previous age (under the PFI). By a somewhat convoluted route which takes one through the backwaters of various pieces of local government legislation, it can be discerned that the Local Government (Contracts) Act 1997 applies to most Combined Authorities, meaning a vires certificate can be given by those CA’s who have the 1997 Act powers. As ever with local authority powers and the ultra vires doctrine, the devil is in the detail.

There are some big questions here and big challenges for councils and regions as they seek to second guess what the current Government is really looking for if further devolution deals for some English regions are to stand a chance of success. One thing is clear though – standing still is not an option.

Local authorities must continue to explore practical ways to work together to combat the huge challenges which all local communities face following the havoc created by the Covid 19 Pandemic. Perhaps a new tranche of public bodies covering the English regions not yet embraced by a CA-like structure will help to ‘level up’ what seems to be a very uneven landscape at present.

Rob Hann is Head of Local Government at Sharpe Pritchard LLP

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