Going it alone

Before Christmas, the government announced that two regions – Leeds and Manchester – had won greater devolved powers. Neasa MacErlean examines what this means in practice.

If you take a train from Leeds to York you can pay £10.40. But if you travel from Ilkley to Leeds, a trip of about the same distance, your ticket will cost you closer to £3.50.  

This is an example of the way “government arrangements are distorting economic factors”, according to Paul Rogerson, barrister and chief executive of Leeds City Council. And it is one of many examples why he and colleagues have been pushing for greater devolution of powers over the last decade – and why they were finally rewarded with the launching of the Leeds City Region Pilot Programme in November.

The ticket between Leeds and York is three times as expensive because it crosses crucial local authority boundaries. While London and certain other urban authorities have tried to keep travel prices low for commuters, the policy of neighbouring authorities may well be different. Ordinary residents may, therefore, find themselves paying far more for a ticket simply because of a quirk of location. While the comparison between ticket prices can be made fairly quickly, in other areas of service – from housing to skills training – it may not be so obvious if policy varies from one location to another. So people may be losing out without ever realising it.

In the Leeds area, 11 local authorities – represented by leaders from all three main political parties – have been working together over the last few years to try to iron out the anomalies, achieve economies of scale and produce a £7bn dividend of “Value Added” in the decade to 2016. Making exact calculations are perilous but, in theory, this would work out at an extra £2,300 of Value Added for every one of the three million citizens in the region.

The announcement in November is little short of a triumph. It is a recognition from the government that the great economic powerhouses of the north should get more control not just over resources but over how they use those resources.  

Leeds and Manchester are the two regions selected by the government for city region pilot status and they both get powers other areas do not have. Both, for instance, will have control over the skills budget which was previously handled by the soon-to-be-abolished Learning and Skills Council.  So they can decide which kind of skills training suit their local workers and employers, rather than getting a national solution handed down to them from central government.

The agreements with Leeds and Manchester cover a range of other budgets from housing and regeneration to transport, innovation and sustainability.  Although these schemes are called “pilots”, there is no sense in which they are being done for a trial period. “The idea is that we keep going and test the boundaries of how far we can go,” says a spokeswoman for the Department for Communities and Local Government. And other city regions will be eager to become pilots themselves after the dust settles on the forthcoming general election. “We know there are other places queuing up,” says Paul Raynes, programme director of the Local Government Association.

Nevertheless, there will be many questions to answer in practice. “This will be a good fit in many places,” says Stephen Matthew, projects partner at Nabarro. “But how does it work, by extrapolation, in rural areas? Let’s not forget them.” Denis Cooper of the Eversheds local government team adds: “These can enhance economic development simply because you have authorities working co-operatively rather than competitively. But there is the danger of one authority being dominant over the neighbouring authorities. And, only if there is genuine co-operation, will city regions work.”  

Peter Hill of TPP Law is more pessimistic: “Whether it can really be made to work in practice is questionable.” He fears that city regions could be squeezed between the ever-dominant central government structure of the UK and the insistence from that same central government that local government respond to the citizenry. “An awful lot of compromise has to happen somewhere in the middle,” he says.

But Rogerson is sounding optimistic in a tough-eyed kind of way. “We’ve seen a good level of collaboration across all 11 authorities,” he says. “That doesn’t mean there won’t be hard decisions.”

The Leeds area has been working on ideas of co-operation for nearly a decade now, and set up its Leaders Board in 2007. So it has a considerable amount of experience. It is not being thrown off course by issues that could baulk less experienced devolutionists.  

For instance, Denis Cooper of Eversheds believes that central government is going overboard in setting out how governance issues will work, not least through the new Local Democracy, Economic Development and Construction Act 2009. “The regions have been working together well and suddenly they are faced with a whole tome on how to do it,” he says.  

The Leeds City Region seems to be ahead of the game on this, however, and Rogerson sees the Act as an opportunity, not a restricting factor. “The Act is looking at different ways of integrating regional and economic strategies,” he says.  

Experts in the field accept that the future is far from clear, particularly in view of the looming general election and big question marks that hang over the new policy of the next government. Huge parts of the jigsaw could change. Regional development agencies may just have been the subject of a new government paper, Partnerships for Growth, setting out how they should work with local authorities but it would be no surprise if, under the next government, they ceased to exist.  

But no-one expects that the Leeds and Manchester city regions will lose the power that they have just gained. They are not, after all, working in isolation.  These two city regions represent a success for the whole development of MAMs (Multi-Area Agreements) and other ways of co-operative working that have gradually become widespread in local government.

If Leeds and Manchester can bring about big gains through these initiatives, the next government will find it hard to turn down other areas.  “We are saying the government has got to be bolder,” says Rogerson.  “This is an agenda that will run.”