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Powering ahead?

Shared Services 146x219Devolution revolution or a poisoned chalice with catchy names? Simon Goacher analyses the Government's reform of local government.

The rush to agree devolution deals has dominated the local government agenda since the Government stated back in the summer that it wanted authorities to submit proposals in September. A number of high-profile agreements have been signed. But does this signal the most fundamental reform of local government for a generation or is it just shifting money round the system and an opportunity to come up with some catchy soundbites?

As with so many things in local government, Manchester has lead the way. It had the first combined authority and it agreed the first of the wave of devolution deals with the Government. This was the starting point of the devolution agenda and George Osborne soon seized upon the idea of the “Northern Powerhouse.” The Conservatives went into the election pledging to deliver both the Northern Powerhouse and greater devolution to local councils.   

The Northern Powerhouse seems to have caught the public’s imagination (at least in the North) and research conducted by NLGN suggests that it is popular, albeit people do not really know what (or where) it is. It seems to stretch from Liverpool to Newcastle taking in Leeds, York, Sheffield and Hull on the way, though it is not entirely clear whether Lancashire or Cumbria have been invited or want to join.

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So successful was the Northern Powerhouse concept that other areas wanted their own name and the “Midlands Engine” came into being. Cheshire, Staffordshire and parts of Derbyshire became “the gateway to the Northern Powerhouse”.

Whatever happens, it is clear that the devolution agenda has the potential to transform the way in which public services are delivered in England and it will be interesting to see if that potential is realised.

One of the problems is that the details remain sketchy. There has been a lot of fanfare about the devolution agreements signed so far in Manchester, Cornwall, Sheffield, Liverpool and Birmingham but behind the eye-catching headlines the agreements themselves though are essentially heads of terms or agreements to agree.

The legislation which will underpin the devolution deals, the Cities and Local Government Devolution Bill, is still passing through Parliament and had been the subject of criticism and amendment in the House of Lords. The legislation is principally enabling in any event and even when it is passed, much of the detail on how devolution will work in practice will be the subject of regulations and the specific orders which will implement each deal.

The response from local government has been broadly supportive although concerns have been expressed about the requirements for there to be an elected mayor if serious powers are to be devolved. It seems that this has not been negotiable from the Government’s perspective and all those deals which have been agreed, save for Cornwall, have been predicated on there being an elected mayor for the combined authority area.

Another criticism is that the whole approach is just about cities and counties will be left behind: Cornwall is the only county agreement so far. Cornwall’s governance arrangements are unusual however in that it is a County Unitary so does not have the issues which arise in two tier areas. There is an understandable concern that, in two tier areas, devolution means reorganisation by the back door. The provision in the Bill providing for fast track reorganisation has done nothing to allay these fears.

It is not just County and District Council areas who may fear for their futures in the new local government landscape. The unitary authorities in cities where deals have been agreed have been keen to stress that this should be about devolving powers down from central government and not transferring powers up from constituent authorities.

The latest proposal for a combined Nottinghamshire and Derbyshire deal is the largest and most complicated proposal we have seen in terms of the local authorities involved. A combined authority area with a single elected mayor covering the areas of two county councils, two city unitary authorities and 14 district councils. The governance challenges presented by such a structure will be interesting.

It remains to be seen what the end game is for devolution. Is it a genuine attempt by the Government to rebalance the economy and redistribute decision-making on more issues from the national to the local? Or is it driven by soundbites rather than substance and an opportunity to shift very difficult and in all probability unpopular decisions away from national politicians to local ones?

The recent comments of Jim McMahon are interesting. As Leader of Oldham Council he was a key figure in the development of the Manchester devolution deal. However, now that he has become an MP he has voiced “deep unease” about the process.   

Whilst some concerns remain about the detail and the Government’s motivations, local authorities should continue to embrace the possibilities that devolution offers. There is compelling proof that local authorities can deliver the greatest savings in the public sector, whilst managing to deliver more innovative, effective and integrated services. Since the Scottish referendum and evidence of a wider dissatisfaction with national politics, there appears to be growing acceptance and desire for devolution up and down the country. It would seem that the Government is determined that the promised devolution will steam ahead. This will present challenges but it will also give local authorities the greatest opportunity in years to spend money and make savings in ways that suit their local area. 

Simon Goacher is the head of the Local Government team at Weightmans. He can be contacted on 0151 243 9582 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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