The combined local authorities of Greater Manchester, Sheffield and West Yorkshire are going to be the first to receive more devolved powers which were announced in the Summer Budget. However, more cities should be calling for further decentralisation to give them greater control over the future of their regions. English cities have a huge potential to energise their local economies and to generate stronger employment and business growth. Devolving powers and budgets to local authorities would help major cities attract the investment they need to boost local economies.
Combined authorities and cities need the power to set bold new policies with much greater flexibility and freedom from central government. These new devolved powers in combined authorities should come with accountability to a newly elected mayor which will give residents and businesses a direct voice for change in their region. The Cities and Local Authorities bill currently awaiting consideration by the House of Commons promotes the election of a mayor as a mechanism to start devolving powers. Whilst some local authority leaders are opposing the creation of a new mayor, a leader is important for bringing insightful strategic overview in addition to stakeholder management to proposed projects. By not fully following the London model where the mayor has the direct power to make changes, new mayors should need a majority from the heads of their constituent areas, which should give the correct balance of power within regions. In addition, mayors need to be responsible for a large-enough region whether urban or rural in order for an effective strategy to be developed for the area.
The Eddington Transport Study in 2006 shows the mechanism linking transport to greater economic prosperity and development. By giving autonomy over local transport to cities, carefully considered local schemes could deliver more balanced growth across England and help unlock the economic potential of cities. Regional transport budgets should be partially devolved by 4-year settlements to combined authorities whilst retaining control over projects of cross-regional or national significance such as high-speed rail networks and London’s airport capacity. Whilst regional funding differences in infrastructure also need consideration, devolved power over local budgets is a key step in rejuvenating local transport systems.
Giving further tax autonomy to cities should be high on the devolution agenda. Whilst giving tax autonomy to cities is contentious at a time of falling council budgets, competitive forces should constrain councils from raising taxes to levels that adversely affect growth and development within the region. Local authorities should be able to vary business rates by adding a supplement to go towards schemes benefitting business like that of the Business Improvement District model. Giving greater autonomy over local taxes will empower local councils to act on projects they deem to be vital for the regeneration of their regions without waiting for approval from central government.
Local authorities throughout England face different challenges but more devolution in budgets and responsibilities will benefit the entire country. Greater autonomy over transport and taxes and new mayoral leadership will pave the way for allocative efficiency gains and more effective government.