LEPs and the central South: a summary of our breakfast seminar in conjunction with PwC

Since their establishment in 2010, Local Enterprise Partnerships have been integral to economic growth across England, providing a channel for government investment in infrastructure, skills and innovation. A joint Southern Policy Centre/PwC seminar held at the beginning of December exploredhow our local LEPs see their future role and discussed how they can help fulfil the needs of the Central South of England.

Julian Gray of PwC opened the discussion by suggesting that the urban South Coast was a great place to live, but that it underperformed economically. The session’s Chair, John Denham, reminded us that LEPs are big spenders, but that their activities were ‘under the radar’ for many, and they needed to be accountable to business and local communities.

John reflected on the suggestion of Lord Jim O’Neill, former Treasury minister, at a recent Southern Policy Centre seminar that the central South lacked ‘a distinctive, “stand-out” proposal which built on unique local strengths and offered …. a clear sense of local identity and place’.

Gary Jeffries, Chair of Solent LEP, saw a compelling vision of the central South coast as a ‘world class coastal economy’, building on our existing strengths. He suggested that a strong component of that vision should be the marine and maritime economies, but without neglecting other strengths in medicine, space technology and the wider knowledge economy.

Gary noted the proposed changes to LEP boundaries (now approved by ministers) which would see the New Forest area become part of Solent LEP. The parts of Test Valley, Winchester and East Hampshire districts which were currently part of Solent LEP would join the rest of their district in EM3. This would strengthen Solent’s coastal focus.

The LEP want to shape a distinctive local industrial strategy which builds on what we do well, and provides an investment plan which will support the growth of these sectors and of our economy, tackling infrastructure under investment and low productivity.

Alastair Welch, director of ABP’s Southampton port, highlighted the significance of the port in the UK’s global trade. Southampton was not ‘the end of the line’ but a ‘gateway to the world’. We should lobby hard for the investment to help us maintain this pre-eminence, which has many wider benefits for the central South’s economy.

We should be ‘thinking big’ and ensuring we invest in what is already excellent in our local economy to maintain our world-leading status. That will ensure we send a message about the success of our local economy, rather than a gloomy assessment of weaknesses. They could only be addressed, Alastair suggested, by building on our local strengths.

Presentations concluded with an assessment from Zoe Green from PwC of what would make a good local industrial strategy. Zoe’s experience with the national pilot on these strategies made clear that government ministers wanted to see investment in areas and sectors which can unlock local, regional and national growth. The best strategies would be ambitious and offer a distinctive vision for a place – highlighting its brand, assets, talent and even ‘liveability’.

A good strategy would also be based on robust partnerships between the public and private sector, which allowed the area to explore new ways of working. In Zoe’s view, collaboration across boundaries was vital to realising the vision for what the central South can be. That transcends organisational boundaries and presents a picture of how partners can deliver change at a scale which will have real economic impacts. In some areas, neighbouring LEPs in the pilot programme had taken a more strategic overview of their local industrial strategies, making a persuasive case for investment by highlighting shared aspirations and ambitions.

The discussion that followed these presentations echoed the need for an ambitious vision that businesses could get behind. One speaker endorsed the need for our area speaking with a coherent collective voice, and the need to avoid being parochial. Others spoke about our shared identity and the many things that bind us together.

Many of the businesses present were keen to get behind an ambitious vision for our future, and there was some discussion about the process for developing local industrial strategies, including the timetable – with Zoe pointing out that Government’s aim was to have all in place by early 2020.

The LEPs are already building the evidence base for their strategies, and will want to involve local businesses and communities in shaping their vision. Attendees at our seminar reflected the enthusiasm for that collaborative approach, and the desire for an ambitious, positive statement about what the central South can achieve.

SPC and PwC hope to arrange further events as our local industrial strategies progress. We look forward to working with our LEPs and businesses to help shape our shared future.

Devolution in the South: reboot needed

Simon Eden, SPC Associate, on how the South needs to re-imagine its approach to devolution:

Devolution across the UK has proceeded in fits and starts.  Some councils and their partners embraced the process early, and came out with devolution deals which delivered financial support, greater autonomy and, in some cases, new powers.  Others came late, and got stuck in a ‘traffic jam’ of bids which sat on Ministers’ desks.  The Brexit referendum, a change of Prime Minister and then the General Election in June 2017 brought everything pretty much to a halt.  The process has yet to restart in earnest.

Many potential partners who bid to become Combined Authorities are in limbo, not knowing whether ministers will look favourably on their ideas or not.  As Government says nothing, so alliances fall apart, with councils voting against working in a Combined Authority with near neighbours.  Legal challenges seem to have more impact on who works with whom than does economic geography.

Devolution in the central South of England has stalled.  Promising partnerships have collapsed.  Government has said nothing in response to the bids they received from once enthusiastic councils, LEPs and businesses.  No one is clear what will happen next, if anything.  In May of this year the Southern Policy Centre held a conference to explore why devolution for the central South has stalled, and how we could re-start that debate.

Our keynote speaker was Lord Jim O’Neill, former Treasury Minister who, along with former Chancellor George Osborne, was the architect of the Cameron Government’s approach to devolution.  Both O’Neill and Osborne had a very clear vision for devolution: their aim was to re-balance a national economy which they perceived to be dominated by London and the South East.  They wanted to stimulate local economies by devolving political power, decision-making and accountability to cities and city regions.

Successful devolution deals have been struck with some of our great northern cities, and with areas as far apart as Bristol and Peterborough.  But central southern England has missed out.  The businesses, universities and councils attending our conference shared a sense of frustration at the lack of a devolution deal or deals in our area.  A lack of progress meant our communities are not seeing the benefit of the extra investment in infrastructure, skills and housing such deals bring.

So what went wrong for the central South?  Lord O’Neill was very clear that the best bids he saw offered a distinctive, ‘stand-out’ proposal which built on unique local strengths and offered Ministers a clear economic payback.  The worst appeared to be no more than requests for additional money. Perhaps none of our proposals were exciting enough for ministers – or perhaps they failed to capture what’s unique about us?

We were told that only one of our bids, for the Solent area, got as far as being considered by ministers, and that it subsequently failed because of opposition from some local MPs.  Perhaps we also fell foul of ministers’ focus on conurbations, with no thought-out policy for the more typical mix of cities, towns and rural communities making up much of the UK.  But nor did we help ourselves, with discussions about devolution in the central South so readily becoming about ‘form’:  who sits on the Combined Authority, who chairs, who has what votes?  The political and administrative geography of our area is complex, and not everyone could agree on the make-up of proposed Combined Authorities.  Many saw an elected Mayor as a threat to local councils’ authority.

Councils are understandably wary about renewing that seemingly fruitless debate. But businesses, universities and others at the Southern Policy Centre’s conference recognised that the case for devolution remains strong.  By allowing decisions to be made and resources allocated at a local level we stand the best chance of addressing the problems faced by deprived communities, of targeting capital investment to where it will have the greatest impact, and of re-growing a strong economy by building on local strengths and opportunities.

But that case needs to be made once again, and this time, framed in a different way. While devolution is about a constitutional argument about where power should lie, there is also a far more pragmatic argument, making the case for devolution as a vehicle for solving local problems – from delivering improved housing supply to stimulating economic growth.  There is every indication that ministers see devolution in that pragmatic, functional way.  Maybe we need to re-cast the case we make to reflect this new mood.

So perhaps we should restart the devolution debate in the central South from a different place.  Maybe we should move away from politically-led debates about governance, voting rights and representation, and begin by looking at with how greater local control can deliver more jobs, better housing, and better life-chances for people.  For their part, ministers should articulate a more attractive ‘offer’ for those willing to overcome the institutional and political barriers to co-operation.

It’s sad to say, but it appears that Whitehall doesn’t trust local councils and local communities.  So we need to prove we can work together: councils with one another, with businesses, universities and many others.  There is nothing more powerful for Ministers than a demonstration that something works; it puts you on the front foot when it comes to making the case for seceding control.

If the old arguments have fallen on ministerial deaf ears, then perhaps this sort of ‘bottom up’ case for devolution will have more of an impact.  Businesses, universities and others working alongside local authorities as equals may be able to make a better, more persuasive case than we did in the past.

 

Lord Jim O’Neill’s speech to Devolution South conference

Earlier this year Lord Jim O’Neill was the keynote speaker at the Southern Policy Centre’s ‘Devo South: Getting Back on Track’ conference.  His speech to delegates can be seen here:

The full transcript of the speech can also be seen below.

“Good morning, thank you Stuart, and thank you John for inviting me.  As I said, it was back some time when this idea was first brought to me, and I said to John [Denham] – and I’ll deliberately repeat it here in front of all of you – “I’m not quite sure what I have of any wisdom to tell you about anything to do with either devolution, but in particular as it relates to the south of England!”  But given that I haven’t got anything else better to do today, it’s very nice to be here.  The other thing I should say, I think it was Stuart [Dunn, former CEO of Hampshire Chambers of Commerce] just mentioned to me, as we were sitting down, that in terms of getting the cast of people in the room present, one person said, “If you’ve got that Jim O’Neill coming, I won’t be attending, unless he apologises!”   Whether that is someone who’s been a victim of past economic advice of mine, or because he’s not a Manchester United fan or, as I rather suspect, he may have been involved in some of the discussions I was in the middle of, on a deal with potentially the Solent area, I don’t know.  But I’m pleased that somebody thought I was sufficiently that important that – it didn’t happen, it was my fault – but there you go.

 

So, I don’t have any slides as such, although there’s one set of bullet points that I think has been circulated to a few.  I thought I’d touch on four areas, the way I’m going to do it is to try and provoke you guys to indeed rise to the challenge of the title of the event, and give you as frank a view as I usually end up doing with some risk.  Although now that I’m unemployed, it doesn’t really matter what I say.  And feel free to jump in as I’m going along, I certainly don’t plan to take forty minutes, and I think we’ve got quite a bit of time for discussion.

 

So, the four things I’m going to focus on and try to link them together as I do it is, first of all from 40,000 ft, about the structure of the UK economy, my whole entrance into this topic is actually relatively recent in my professional life.  I left the almighty Goldman Sachs after nearly 20 years, and 30 years plus career in the City four years ago, and I have this, sort of, mantra that I had no idea what it was I wanted to do, but if it couldn’t be better, it had to be different.  And when some people from the RSA approached me about: why don’t you look at something to do with the imbalance of the UK economy, I thought, “Well, that’s different!”  And that’s what led me to this.  So I think it’s important, and it will link to the other bits, as I say, to spend a bit of time thinking about that.  Secondly, with a lot of controversy: does devolution actually mean better decision-making?  Or does it simply mean more bureaucracy?  Thirdly, for any area, and I’m very aware of the fact that within the south there are lots of different kinds of places, what actually is the edge that you want to bring out of your area, in terms of some kind of persuadable focus on devolution?

 

I’ll say it now and perhaps come back to it, if I remember rightly when, I guess it would be Greg Clark, the Secretary of State of CLG, formerly put out the request around the country for devolution bids, I think we have either 41 or 44?  Not many of them actually got beyond officials, to the attention of the ministers and close advisors that were involved, because there were not that many that had things that stood out that made them look particularly interesting.   Then lastly, what else is there to focus on that’s not in those two or three things?

 

So, first of all with respect of the structure of the UK, and going back to why I was asked.  As I’m sure some of your know, probably many of you don’t know actually, the thing that I became strangely more known than most students of the miserable profession of economics, is because now nearly 16 years ago I dreamt up this weird acronym ‘BRICs’, to describe the potential rise of Brazil, Russia, Indian and China.  16 years later, some are rising more than others.  As I occasionally joked to some people, maybe I should have called it ICS!

 

But that’s another story.  But one of the things that was so obvious to me in the build up to what led to me thinking about that – and I used to travel far too frequently around the world – is the power of urban areas in driving economic growth.  And when I was asked by the RSA to lead this commission, it was called the City’s Growth Commission – so clearly that led to a bias straight away, from what the purpose of that Commission was, which meant we were not even thinking about rural areas.  A lot of people ignore the fact that that was the case, but our mission was about cities.  And importantly, in terms of how I approached it as being a chair, we only existed for a year, which was I found attractive, because I’ve no idea whether it was going to be a useful thing that I was doing in my life, but it also meant that we were not scared of sticking our neck out.

 

The other important thing to say, particularly in the context of what somebody just said last week, we approached it completely independently.  I don’t have any political ideology myself, even though I joined a Conservative government.  And I think one of the reasons why we ended up having an influence is, because that was the facts and we focused on it from the economic rationale as, opposed to anything particularly to do with the politics.  And I’ll say here now, one of many other controversial things – if somebody would have said to me at the start of that, that some of our ideas would be embraced by a conservative government, and a labour party would not be that particularly focused on what we were saying, I would have said, “No way!”  But that was the case.  And, again, I’m sure some of you with sympathies or involved in politics will immediately be thinking: ugh!  But that was the reality of what happened.  And it was the economic aspects of it that attracted George Osborne to embrace key parts of it, separately the whole issue of devolution, which was relevant nationally but, of course, the other part which I’ve become so immersed in, the so-called Northern Powerhouse.

 

At the core of why I emphasize that is, thinking about basic things about the UK, which we all know but most people actually forget, because they’ve got important things in their daily lives to be getting on with.  But we are first of all a remarkably imbalanced country in terms of the national economy, the dominance of London and the south east is not something that is normal for an economy of our overall so called wealth.  And with it, and I passionately get involved in these debates, with all this focus about so called inequality, actually on simplistic measures of income and equity, for various reasons, but contrary to the popular perception, measured inequality is a bit lower than it was 25 years ago.  What is dramatically wider is geographic in equality as well as intergenerational inequality.  But actual income and equality has not widened for many years, despite what we get bombarded with in a lot of media – but it’s quite rare.

 

Another aspect of my learnings from pre-BRIC life, I did have a life before having that on my forehead, if you look at other very successful places in the world with contrasting styles, whether it be the US or Germany, they have a lot of places in their countries that contribute, so we are quite odd in that regard.  And I’m deliberately not saying whether it’s good or bad, but it’s odd.  The second thing, and it may be a coincidence, but it is also the case that we are remarkably centrally run, compared to anywhere else in the OECD.  The degree of central control over spending and revenue raising is almost, not almost, it is unparallelled in any other OECD country.  It is very tempting, therefore, to immediately conclude that the two things  I’ve just said are connected, they might not be, but I suspect there are almost definitely some bits which are.  And so the third thing to say, and I emphasise it again here because of what I acknowledged about the south being very diverse and different, and a lot of non-urban areas.  If you want to make a difference nationally, a difference, by definition the places that you’ve got to give the biggest amount of early attention to are the urban areas.  Which, a lot of people who are not in urban areas, quite understandably say: oye! what about us?

 

But if you are approaching from trying to change the national economy, it is reality that you have got to give primary attention to the urban areas.  Although I quickly add, and something that grows in my own mind, as we have seen with the Brexit vote, actually it was driven by people who were not in urban areas.  So, even if you want to economically focus on that primarily to make a difference, it’s not just people saying: oye! what about me? because it ends up influencing policy, so one has to be very conscious of that.  And since leaving government, I’m even more sympathetic to the issue, which I’ve seen described in your notes beforehand, about how there was this frustration that there appeared to be one approach to devolution, that was designed for urban areas, and there should have been more thought to be given to rural ones.  I’ll come back to that in a second, because it is obviously true.  But, I emphasise again, if you’re trying to focus on it in terms of changing the overall national economic performance, by nature it is the urban areas that you’re going to focus on.

 

Three other things to say before I go into the second part.  I was just at some sort of all-party parliamentary type discussion about the mayoral thing the night before last.  And to my on-going staggering amazement, still to this day a lot of people get into this amusing game as to: what the hell is the Northern Powerhouse anyhow?  Which is sort of amusing, but in my view a bit silly.  At the core of what is the Northern Powerhouse, and linking it to why I’m deliberately saying it now, what is unique about some parts of the north is that, within 40 miles of Manchester, you have three other big cities – Leeds, Sheffield and Liverpool.  There is nowhere else in Britain that has that.  The whole reason why the Northern Powerhouse, therefore, should be a policy focus, is because of that geographical fact.  Much to the irritation of many other people in the north, particularly those from the north-east, but also many others, unless everybody accepts and focuses on that issue, then the attention on doing what’s needed to get that economically to be a game-changer, will happen.

 

There was, and there certainly has been, post-leadership change with Theresa May, a lot of confusion about that, including in the minds of people close to Theresa May.  A lot of them think the Northern Powerhouse is just some fancy name for giving a load of money to Manchester – that is nonsense.  It is about trying to get the 8 million people that live within that radius of what I, sort of, inarticulately call ‘ManSheffLeedsPool’…I know, not one of my better ones.  But if you think of Bradford and Barnsley or Warrington, and all these places, that is 8 million people.  And if you can get them to behave as one collective group of consumers, or one collective group of producers, that is a game-changer for the future of the United Kingdom, and that is what the Northern Powerhouse is all about.  Now, because of social issues and human life, of course you can’t exclude anybody else from the north, particularly the north east, but that is what is at the core of the Northern Powerhouse.  And I won’t talk any more about it, but I want to emphasise it in the context of things that affect you, in terms of perceptions about what should be done and what needs to be done by government and people locally.  Because I don’t frankly think people close to Theresa May quite get that that’s what it’s all about, partly because of individual and group political battles within the Conservative party, apart from anything else.

 

The other lasting thing to say, which touching on the comments that we heard from the Vice Chancellor here is that, this is all against the background of a persistently low productivity performance of the country in general.  But it’s evidently, from the data we have, particularly weak in most parts of the country outside of London, and actually Bristol and the urban areas surrounding Bristol.  Which is the one area GVA-wise which is above the national average other than London, most other areas are significantly weaker.  And quite what, why, and all the rest of it, there are many things, but skills and education are almost definitely at the core of it.  So, the comments made about the role of education and particularly in universities, the role of universities in modern life is enormously important, in my opinion.  One of the other things that influenced me in a City Commission approach to all of this, is actually in the United States, with Boston and the North East.

 

When I first started studying economics in my shorts, it was fashionable in the 1960s to write-off Boston and the North East of the US, in the same way as become the norm about many parts of the [UK] North.  Boston and that area surrounding it, as I’m sure many of you know, is today one of the world’s most vibrant, urban-based communities, and it is almost definitely because of the universities being at the heart of it.  So, when I go back to that third point: what is your edge?  If your universities here, or in your own part of the south, or those educational institutions have some real edge, they should play a big role in the southern devolution house that you want.

 

So, let me move quickly into the second part.  Here, where I ask: does devolution mean better decision-making, or more bureaucracy?  Here I’m going to bring in some of my own personal observations about the interplay with national politics, particularly following what happened last week, and the fact we have an election.

 

The fact of the matter is…so first of all, and again it will become more evident now, the reason why I emphasise economics is, most people approach the issue of devolution from national tribal politics which, in my opinion, is wrong.  It is going to be very interesting as we creep through time, because most people in Whitehall just simply don’t get it.  Their first port of call is: what does this mean for my party?  And what does it mean for our political prospects?  As I said already, I was sort of shocked that throughout the days of the City Growth Commission, or the brief time of it and in the immediate aftermath, the Labour Party hierarchy seemed completely unfocused and disinterested in the topic – it may have been a symbol of something broader, who knows.  I think, although obviously many of you will have your own opinions about his motives and the PM’s, at the time, motives, I think what they were attracted to, the idea was, (a) because they had to worry about the Scottish Referendum but, (b) David Cameron’s government and George Osborne’s Chancellery were becoming known as just standing for one thing, which is austerity and reducing the deficit.  I think they saw that the idea of focusing on devolution and trying to do something to change the way the UK operates, gave them a different think.  Whether that’s true or not, that’s what I assumed, because if that’s what they assumed, they would be right, because, as I discussed earlier, it would be a game-changer.

 

However, a lot of their Conservative party colleagues didn’t get that, and looked at it as: what does it mean in terms of us and our power?  So, there were at least two urban based deals that didn’t happen, frankly because of Conservative party politics.  It would be dressed up for other reasons, publicly, but that’s why it didn’t happen, because if we went for the mayoral thing, wouldn’t that be a way of just simply handing power back to the Labour party?  Now, I say that so candidly because, maybe I’m a bit naive, and my brief 14 months in politics told me I certainly am…

 

I have some optimism of the six mayoral elections we had last week – was it six?  Four of them went to Tory, I’m pretty sure that there was no expectation of more than two at best, so that might have destroyed the idea that by pursuing that path, is simply handing power back to Labour – I could be very wrong.  And I suspect in terms of the spirit of what you’re trying to do for the PM’s advisors – and I’m sure many of you know better than I – it’s a very tight group, they may be more open to the idea than they might have been two weeks ago, is my suspicion.  Because it won’t seem to be what they thought before.  But, and in the spirit of the second part of the way I split it, more focus on the nature of an ask should be: why is it I’m asking for something?  Is it an excuse for something that we should be doing within our existing structure?  Is it because we really want more responsibility?  Is it because there was some announcement that everybody should be in a bid for devolution, so we thought we better had, because everybody else is?  Or what is it?  Because going back again to what I said in my very opening comments, not that many of those initial ones reach my desk.  The only one that came across my desk, is the one that I ended up having quite detailed discussions with a number of you, who I see still with the bruises, but smiling in the room, and that’s because I think it was pretty credible.

 

Maybe, but I think you need to explore what my interpretation was about last week’s results, as to whether the appetite is back, because the thing that really stopped it, was the political dimension about votes and Tory party majority.  Two other things about it, if the polls… and remember I said it’s true, I don’t really care about national politics, it all seems a bit stupid to me, but there you go.  If the polls are right, and if the Tories get, I don’t know, 60 plus majority, it would make it easier for those at the centre, if they wanted to do devolution deals, to do them.  The other big place where we never got a deal, and it’s sort of ridiculous, is Leeds, and it gets dressed up in all sorts of crazy things, but it’s because of the marginal Tory, or what’s perceived to be marginal Tory seats in West Yorkshire – that might be changing too.

 

The other thing I would say lastly about all of that, is the turnouts, even though it was low, certainly from the ones that I’m personally close to, were significantly higher than expected.  Greater Manchester, itself, was nearly twice what they feared the week before would be the case.  So for the process and for those of you…and obviously I know it’s not that many of you who are interested in mayoral type ways of approaching it, I think there will be some pleasure about the turnout in those places that actually voted.  If you look at the turnout for London, the first time they did it, it was not much different, so I think it’s quite encouraging, even though obviously you would want something like that to be higher.

 

So coming to number 3: what is your asset or edge?  So, what is it that makes you different?  Obviously given my own background and journey into this broad space, it’s easy for somebody like me to see that the urban conglomeration, let’s call it the Solent area, that has the same rationale as the Bristol based area, West Midlands, blah, blah, blah, blah.  Hence why that discussion went the way that it should have ended up… For other areas, you have to think about what is your edge even more.  And here I’ll be slightly contradictory to the spirit and tone of what I said earlier.  Again, partly because of politics, as you all know, we did get encouraged to tiptoe into rural based deals with mayors, which pretty clear to me, despite the fact I was the one that had to have the discussions with them, weren’t likely to succeed.  Because what was there that was so special that some of them were offering, and especially because of the diversity of the areas that were included?  And I think those of you that are looking for deals that have a lot of non-urban aspects to it, you have to think very carefully about: what is the uniquity within it that you are hoping to seriously get, especially as it relates obviously to any transfer of money?  Because otherwise it will get lost in focus pretty quickly.

 

Other two points relate to it, then I’ll stop.  One is to reiterate what I’ve said about skills and education.  I suspect, but I don’t know, not least because I’m eight months removed, again linked to a possible bigger majority, I suspect there might be a bigger appetite to at least explore aspects of getting close to education devolution.  It was a red area inappropriately in my view, as I used to say to George and David all the time, it was, kind of, ridiculous.  But it was a red area because of the philosophy that originated essentially from Michael Gove, but I suspect that might be more open.  And if it were, that is an area that all parts of the south have a chance to jump into.  And, again, in that regard I reiterate the obvious thing about universities, but in terms of, I think, stating the obvious, to truly be a long term game-changer, basic education and skills, because they’re the things that ultimately matter for productivity, I believe looking at the economics of it, it is pretty almost definitely the case that people in local areas are more likely to have some experience about what are the issues that really matter to that area, rather than just one centrally imposed plan.

 

But, again, rather than just some simple off the shelf ask, think through what is unique about what it is that you’re trying to persuade these people.  At the end of the day, I mean, Treasury doesn’t seem to be quite as powerful as it was at the moment, but at the end of the day, with good reason, the country with debt to GDP ratio of 90% vicinity, you’re dealing with officials that have been around a long time, who are well: at the end of the day, we’re handing over responsibility that might influence our future debt performance, so we’re only going play our role in trying to persuade a senior minister, if we really believe it’s credible.  And that, of course, is why the Greater Manchester guys were so early onto it, because there are only so many times you can keep Howard Bernstein out of the office.  Thank you.

 

 

Devolution in central Southern England: British Academy Round Table

As part of a series of events across the country organised by the British Academy as part of the Governing England programme, a discussion at Winchester Cathedral visitor centre took place just a week after the new Isle of Wight Council leader indicated his opposition to the Solent Combined Authority proposal despite the recent publication of a consultation which found significant public support for it.

John Denham, Chair of the Southern Policy Centre, chaired the discussion. Its key findings can be found here.

What do Hampshire businesses want from local government?

Hampshire businesses have had their say in what they want to see from local government and from any devolution deal done with central government:

Hampshire businesses want to see a single, simple to engage with local authority, with a more ‘can-do’ approach to business.

There is overwhelming support for the devolution of more powers and resources from central government and for a more strategic and integrated approach to economic development, infrastructure, housing, transport and planning. These are two of the headline conclusions of a survey of business attitudes towards local government and devolution undertaken by the Southern Policy Centre for Hampshire County Council. There was no clear consensus on the most appropriate geography for single local government structures. Businesses tended to identify distinct economies and characters of the north and south of Hampshire (including the cities and the Isle of Wight), although there was some support for a ‘single county’ approach. Business also wanted to see better links between the cities and their hinterlands. While there was little support for the current two-tier structure, businesses recognised that large authorities would still need localised democratic decision-makng structures. The interest of small businesses needed to be protected in any change to large authorities. Businesses generally enjoyed a positive relationship with local authorities although concern was expressed that some councils were losing key business facing officer expertise as a result of spending cuts.  The biggest frustration was the inconsistent policy approaches of different local authorities, while there was a perception that within local authorities economic development and planning were often badly coordinated. The majority of businesses support elected mayors, though they stressed the need for strategic leaders rather than personality-based candidates. The report was based on nearly 50 one-to-one interviews with business leaders and six focus groups covering different sectors of the economy and different parts of Hampshire. The report sets out a number of guiding principles that should be taken into account in any future decision-making:

 

  • Business would welcome single-tier authorities, but there was no clear consensus over their size and geography. Any proposals should set out how they relate to recognized economic areas. The key choice would appear to be between a binary structure, based on the southern urban area and the north and more rural parts of the county, and a single ‘county, cities and Isle of Wight’ structure
  • The need for a strategic approach on development and infrastructure favours larger authorities. Any proposals for larger authorities should set out how local democratic decision-making can be retained on appropriate issues
  • Businesses were concerned about the loss of capacity and expertise amongst officer teams in some smaller local authorities. Any proposals for reform should show how sufficient capacity and expertise would be retained and strengthened, and care should be taken not to seek cost savings at the expense of the quality of business engagement with local government
  • Any proposals for larger authorities should show how the interests of small businesses in local decision-making and as suppliers would be protected
  • The retention of business rates can potentially strengthen the relationship between local government and business, but business rates themselves were widely seen as unfair. Local government must plan now to ensure it is far more accountable to its business rate payers once this change is implemented
  • Devolution presents a genuine opportunity to grasp the nettle and become significantly better at planning and delivering transformational infrastructure projects. Any proposals for change must show how a new local authority structure will be able to exercise powers that are now (or in the future may become) available in an efficient, effective and democratic way
  • Any proposals for change must be sensitive to the wider uncertainties affecting business, including potential changes to business rates and the UK’s exit from the EU. Any reorganisation of local government and/or devolution deal needs to be executed as quickly, cleanly and clearly as possible, across an economic geography that ‘makes sense’
  • A majority of businesses would support an elected mayor, and there do not seem to be substantial business objections to the creation of such a post

 

Tainting a good idea

Combined authorities in the balance

It may be Budget day before we learn whether any part of central southern England will reach agreement with the government on a ‘devolution deal’.  But the chaotic process of recent months may have damaged the credibility of what is, at its heart, a very good idea.

In the past few weeks, the Hampshire and Isle of Combined Authority, widely regarded as the best developed and most widely supported devolution proposal, apparently stalled. Negotiations then opened between some (but not all) of the councils involved in the Partnership for Urban Southampton Hampshire (PUSH)  area. In recent days it seems the Hampshire proposals may have come back on the agenda, though it remains possible however that the south Hampshire deal will remain in play. The process has not been helped by the involvement of two government departments – the Treasury and Communities and Local Government – sometimes in separate conversations with different local authorities.

Southampton City Council leader Simon Letts told BBC South on Sunday that he expected a deal based on Solent councils to be announced in the budget. It appears, however, that this would exclude New Forest, Test Valley and Winchester Councils that are all currently part of the Parnership for Urban Southampton Hampshire, but would include all of East Hampshire including large areas that are currently outside the PUSH area.

Meanwhile in Oxfordshire, which seemed to be moving forward with its own devolution proposals, the row between the Prime Minister and the Conservative Leader of the County Council has spilled over into a radical proposal – backed by the County’s MPs – to break up the County into four unitary local councils.  In Dorset, where devolution proposals were published in September, the debate has also moved towards the abolition of the County Council and its replacement with two unitary councils. Devolution plans for Surrey and Sussex have stumbled on the failure to reach agreement with Brighton, and the rest of the region’s councils are sitting out the whole devolution debate until how it will work is made clearer.

Unlike the northern city regions, southern local authorities enjoyed little history of the close cooperative working and deep relationships that had taken decades to build in Manchester. It was always going to be difficult to build them in a few months, but it was made harder by the lack of any clear ground rules, and changes in central government policy.

Back in the summer, local authorities were drawn together by the prospect of retaining 100% of business rates and the need to reach cooperative agreements between authorities. By October, all local authorities were told they would keep their business rates whether or not they were in a devolution deal,. The rules were also changed so that new combinations and divisions of authorities could be proposed. These changes weakened the glue that was holding deals together and some began to fragment as they have in Hampshire/IoW, Oxfordshire and Dorset.

Further difficulties were caused by the Government’s insistence on the imposition of elected mayors. It seems the near collapse of the Hampshire deal was nothing to do with the quality of its economic development or public service proposals but the rejection by the majority of Hampshire council leaders of an elected mayors. It appears that one reason that the government has enterntained a southern combined authority is the willingness of those council leaders to accept a mayor. If the Hampshire deal is to go ahead it will require a change of heart on this issue.

At this point it looks like the government is willing to trade proper decision-making for the political face-saving of achieving an elected mayor. Yet, the impact of elected mayors can be overstated. Far from all powerful, the  new elected mayor of Great Manchester will be one person amongst a committee of 11 local authority leaders. Their own real powers stretch no further than Policing and Fire and Rescue. We already have Police and Crime Commissioners across the region and, in December, the Government floated plans to give all PCCs oversight or Fire and Rescue. In other words, we are close to getting someone with many mayoral powers whether or not there is a devolution deal. However, the one real advantage of having a fully-fledged elected mayor is the right to raise and keep additional business rates for economic development.

With so much uncertainty and upheaval it’s hard to be confident that we will see any quick boost to economic growth and/or the more efficient public services that are at the heart of the devolution idea. According to our research this is what the region needs, and it’s what business wants.

The vision, of powerful combined authorities cooperating together across the region looks a very long way away. The integration of health and services – perhaps the biggest single prize in terms of more effective and efficient public services – will be hard to deliver in the middle of local government reorganisation and many of the new authorities will be too small to integrate their services with health on their own. The poor alignment of economic development, political and health boundaries highlighted in our earlier report will remain or become worse.

And slowly but surely, for better for worse, the death of the English County Council takes a few steps forward. But that, like all the other issues in this article, has not been the subject of any public debate or consultation. Yet, as our work on the citizens assemblies showed, these are issues that the public and business can engage in and contribute to.

Professor John Denham

Chair, Southern Policy Centre

Assembly South report

Introduction

Assembly South was part of an important new experiment in how to organise democracy effectively. It consisted of a group of 23 citizens and 6 councillors from the Solent and Isle of Wight area who met in Southampton over two weekends in October and November 2015 to discuss the future of local governance. The aim was to select the citizens randomly to be broadly representative of the local adult population. During the two weekends, they learned about the different options, consulted with advocates of a range of views, deliberated on what they had heard, and formed recommendations.

Read the full report here

Assembly South was one of two citizens’ assembly pilots organised by Democracy Matters, a collaboration of university researchers and civil society organisations supported by the Economic and Social Research Council. The second pilot assembly, Assembly North, ran over the same period in Sheffield and has produced its own report.

The main aims were:

  1. To assess whether the creation of citizens’ assemblies could improve the operation of democracy in the UK and to build knowledge on how such assemblies might best be run;
  2. To investigate what members of the public in England think about devolution when they are given the opportunity to learn about and debate the issue in depth.

Participants voted that if there were to be a new devolved body:

  • It should cover the Hampshire and the Isle of Wight area, instead of other options like the South East or Solent
  • Health and social care integration should be the most important priority for the body, followed by public transport, business support and housing investment
  • There was a dead heat on the question of whether participants would vote for or against the current deal on the table

A key finding of the research team is that randomly selected citizens are ready, willing and able to engage with complex policy and governance debates when given appropriate support and opportunity.

This report sets out the background to the creation of Assembly South. It describes the Assembly in terms of its composition and working methods. It then presents a detailed outline of the Assembly’s discussions and recommendations. It concludes by briefly reflecting on lessons learned and next steps.

Year One at the Southern Policy Centre

Why a southern think tank?

We were launched in 2014 by Greg Clark and Lord Adonis to provide public policy focus for central southern England: the area from Dorset to West Sussex, and the Isle of Wight up to Oxfordshire.

The region faces challenges distinct from both London and other English regions. Our public spending per head is low, our landscape is very mixed and we have a fast ageing population.

Average incomes are above the national average but living costs are high. A fast growing population is the context for contentious issues like the need to develop more housing while maintaining sensitivity for the natural environment.

Economic development, though generally good, is uneven and constrained by shortages of skills, infrastructure and finance.

Devolution

Our first major workstream is around devolution policy, working with groups like South East Strategic Leaders to shape a devolution deal that works for the south.

We brought Sir Richard Leese, Leader of Manchester City Council, down to Winchester Business School for a series of talks. Here are five lessons we can learn from Devo-Manc.

Our key piece of work looked at the challenges and opportunities for the major devolution bids in southern England, and interviewed important employers in the region to get their thoughts. Read the report on Devo-South here.

For a different perspective see our work on Citizens’ Assembly South, a project with university partners, YouGov and the Electoral Reform Society to better understand the views of non-specialists.

Data

We launched our Open Data initiative in March this year (see the launch video here), becoming an Open Data Institute Node in May. See our ODI Hampshire mini site.

Since then we’ve applied open data principles to studying adult social care in the south, with a BBC South commissioned report showing a collapse in the number of residents receiving the service but alongside a fairly stable level of investment.

We’re also working on a Higher Education Funding Council project to understand areas with lower than expected levels of participation in university in southern England, and to then develop a toolkit that can be applied across the country.

Our latest event brought together open data specialists with policy makers in Hampshire. We showed that a bigger focus on data has already been used to drive improved decision making in public policy, but there’s still a long way to go. See our Storify for a round up of resources and discussion points.

Democracy

Our already mentioned Assembly South project showed that ordinary residents can make a contribution to the devolution debate, but what about even more specialised and arguably more thorny policy problems?

We’ve recently held an event for local residents to discuss housing policy and hear from expert speakers (report out soon, watch this space!), but before that we held deliberative polling seminars on commissioning budgets and migration politics.

Apart from that, we had the pleasure of running an Arnie Graf Tour across southern England. The tour covered local authorities, the third sector and universities, and ranged from Southampton to Oxford. The kick off event in Winchester with Isabel Hardman and Danny Kruger was about community organising; what is it and does the sort of thing that Jeremy Corbyn inspires count?

Partners

We’ve worked on events with private organisations like KnowNow Information, Open Data Aha! and PWC, and universities including Southampton, Bournemouth, Solent, Winchester and Oxford.

Our institutional partners include the Open Data Institute and a cross party Advisory Board of many talents.

Our research projects have been supported by regional organisations like BBC South and Business South, and national bodies like HEFCE.

Plus we work closely with organisations ranging from Hampshire Hub to the Electoral Reform Society.

Want to work with us? Get in touch.