Combined authorities and devolution

April 1, 2015

Are combined authorities the key to unlocking greater regional devolution? Angelica Gavin considers the key issues.

From a purely legal perspective, combined authorities seem to be the ideal vessel for devolution of powers. Originally intended to provide opportunities for local authorities to collaborate on projects relating to transport and economic development and regeneration, the Greater Manchester Combined Authority has already been granted powers far beyond this (including the ability to retain 100% of business rates and control of a £6bn healthcare budget). The West Yorkshire and Sheffield City Region combined authorities have also negotiated deals, although the extent of the powers which have been devolved to them are more limited.

However, the scope for combined authorities to take on further powers is even greater. Section 15 of the Localism Act 2011 provides that the Secretary of State may transfer the functions of any “public authority”, including a minister or government department to a combined authority. This definition is presumably sufficiently wide to include the public functions of a local authority, although this is not expressly stated. Section 16 provides that a combined authority may take on non-legislative functions of Ministers where the Minister believes the power can be appropriately exercised by a combined authority. The range of powers which could potentially be devolved to a combined authority is enormous, although no orders have been made under these sections so far.

Combined authorities are also well set up to exercise powers once they are granted. Like local authorities they have a general power of competence, and are able to provide discretionary services for a commercial purpose. They therefore have the potential to exercise all of the functions of a local authority, with the benefit that they can be formed over a wider regional area. The government has recently published a draft legislative reform order which would remove restrictions on the membership of combined authorities (which currently have to have geographically contiguous boundaries and have to be formed of whole local authority areas and not parts). The new legislation would allow combined authorities to be formed where authorities are geographically disparate; provided that the Secretary of State considers that the authorities can collaborate effectively in the exercise of specified statutory functions.

However, becoming a combined authority is not necessarily a complete solution. Although theoretically one of the benefits of becoming a combined authority is a reduction in costs through sharing resources and avoiding the duplication of services, this will not necessarily be the case in practice. Authorities entering such an arrangement may be tempted to defend their sovereignty by retaining control of their own functions rather than entering into shared services type arrangements within the combined authority; particularly as there is no real incentive to enter into any deeper form of collaboration.

The potential for efficiency savings through joining a combined authority is significant, but it is unlikely that the full economic benefits of becoming a combined authority will be realised unless real fiscal powers are devolved. To date, the Greater Manchester Combined Authority has been the most successful in negotiating the devolution of powers, although the extent to which such powers will enable the authority to raise taxes and borrow in a meaningful way are limited. The fact that Greater Manchester has agreed to have an elected mayor appears to be at least part of the reason for the grant of powers - other authorities which have rejected a mayor are seemingly held back by the fact that they are unable to demonstrate that their combined authority is sufficiently democratically accountable to be a safe place for significant powers to be devolved. The risk is that combined authorities which are not being devolved greater powers become expensive additional tiers of bureaucracy without fulfilling the dream of becoming sustainable and self-sufficient decision makers for their local areas.

The road to becoming a successful combined authority is long and tough, and characterised by years of negotiation and wrangling with your neighbouring authorities and ministers. There are other options. The first Economic Prosperity Board (“EPB”) was created in Cheshire and Warrington in December 2014. EPBs are bodies which take on the economic development roles of their constituent local authorities, but they have similar abilities to take on additional powers to a combined authority. Other alternatives might be delegations of powers between authorities for the performance of statutory functions, or regional shared service hubs for back office services. We are seeing many authorities entering into innovative service delivery solutions in order to benefit from costs savings. These collaborations have the potential to foster stronger relationships between authorities which, although they may not have the immediate benefit of devolution of powers, can form a firm base from which authorities can begin to cement a more formal relationship.

Taking a long term view, it is not necessarily the legal form of the entity that will determine whether further powers are to be granted, although in the short term combined authorities do seem to be the way things are going. In recent years we have seen local authorities coming together and lobbying for greater devolution of powers. This appears to be showing results. Many commentators argue that without devolution to the regions, public service provision will not continue in the form we know it. Following the election, a new government looking to reduce the deficit may well look to local government to take the burden of local decision making. This will have its risks and challenges for both sides of government. Ultimately, however, the real key to unlocking greater regional devolution will be political willingness to trust and support local government to make the decisions that matter.

Angelica Gavin is a solicitor at Browne Jacobson. She can be contacted on 0115 976 6092 or This email address is being protected from spambots. You need JavaScript enabled to view it..