Devolving £20bn is a big deal. Is Labour sure local councils can handle it? Really?

by Atul Hatwal

Implicit in Ed Miliband’s big devolution speech today was a very, very large assumption.

When he promised that a Labour government would devolve £20bn of funding to partnerships of local authorities in the English regions, the Labour leader was assuming that local authorities are the best vehicles to distribute and administer the new funds.

This is far from proven.

It’s notable that the speech was made in Birmingham and marks the interim stage in Lord Adonis’ growth review. 

The track record of Birmingham council in typifies the sorts of problems that can occur when regional revival is left to traditional local authorities. Here’s none other than Lord Adonis on the subject, from earlier in this parliament,

“Let me give you my frank opinion, as one who has dealt with Birmingham City Council a good deal in recent years. The city needs to raise its game significantly in terms of leadership, performance and strategy…the city council has had…Weak strategic leadership alongside average (at best) improvement in the public services under its direct control.

Take education, which I know only too well from constant interaction with the city council…promoting reform to secondary education in the city has been like pulling teeth.”

Lord Adonis made these comments in a speech to the Lunar Society in March 2011, as Birmingham was preparing for a referendum on whether to move to a Mayoral system of local government.

Although the referendum was lost, the points made by Lord Adonis in favour of reforming the current system of local government still stand; all the more so if Labour is considering devolving such substantial amounts of funding to groups of local authorities.

In his 2011 speech, Lord Adonis succinctly outlined the importance of more directly accountable and robust local government leadership to overcome past failings,

“It is hard to be an effective leader if people do not know who you are. Do you know anyone who can’t name the Mayor of London? I barely ever meet anyone outside Birmingham who can name the Leader of Birmingham…In politics profile is not all. But to wield significant democratic power and influence, people have got to know who you are, and they have got to believe that you can make a difference. Invisible leadership doesn’t generally work in democracies.

What difference could Mayoral leadership make?…Let me tell you also about my experience as Transport Secretary. I can say with absolute certainty that London would not have got and kept Crossrail without Ken and Boris…Then there is the Olympics, which I very much doubt London would have won without Ken guaranteeing that transport and other infrastructure would be sorted. Nor, without a Mayor, do I think it conceivable that there would now be a congestion charge, nor a transformation of the bus network, nor the Boris bikes – if Barclays thought they would be known as the Barclays bikes, they were rather naive.“

The issue with big unreconstructed local authorities like Birmingham is that the lead councillors for departments, such as economic development, become more beholden to their council groups than the voters.

It is these council colleagues who determine whether their priorities can be enacted and whether they have a job at all.

Anyone who has dealt with large local authorities will be familiar with this dynamic, where the need to secure agreement in often fractious groups becomes the dominating driver. It fillets innovation and boldness from programmes, embedding the status quo in a stultifying shared presumption against change.

When Birmingham’s governance problems are combined with the competing demands of other similarly constituted authorities across the West Midlands, the dangers for Labour’s big devolution pledge are self-evident.

Here’s Lord Adonis again on the structure of Birmingham council and its leadership role in the West Midlands,

“There are other issues to be considered in Birmingham’s governance. Does the City Council really need 120 members – 20 more than the United States Senate? Parliamentary constituencies in the Commons don’t each have three representatives – if they did, the House of Commons would have 1,900 members.

Then there is the relationship of Birmingham’s government to the new Greater Birmingham and Solihull Local Enterprise Partnership, to the Integrated Transport Authority Centro, and to the new West Midlands Police and Crime Commissioner to be elected in May 2012. All these relationships are important, sensitive and problematic. I would just make one general point. If you have a strong, effective Mayor, the promotion of the interests of the city regionally, nationally and internationally will be significantly enhanced. Not only Birmingham, but the West Midlands at large, will benefit.”

Traditional rivalries across the West Midlands have meant that the various local authorities haven’t even begun the process of creating the type of combined authority that Labour envisages as needed to administer any newly devolved funds.

Just last week, Uncut reported on a serious bust-up on Merseyside in the establishment of their version of a combined authority.

And even Greater Manchester, so often cited as an exemplar for the combined authority model, was criticised earlier this year in an independent report by the Centre for Cities for “punching below its weight.”

Reform of local government would not solve all problems. Sometimes, different cities have different interests. But that negotiation would be easier if it was held between 5 or 6 local bosses with executive authority rather than council leaders who then have to return home to secure the backing of legions of local councillors.

In 2011, out of the 11 cities that voted on whether to opt for a Mayoral system of local government, 9 voted against. A new generation of Mayors is off the table for the forseeable future, but the problems that they would have addressed, remain.

One last quote from Lord Adonis on Birmingham,

“In the 19th century, Birmingham was famously described as the best governed city in the world. Very few would echo that sentiment today.”

In an age of continuing austerity, devolving £20bn is a big deal. Is Labour sure local councils can handle it? Really?

Atul Hatwal is editor of Uncut

Tags: , , , ,

8 Responses to “Devolving £20bn is a big deal. Is Labour sure local councils can handle it? Really?”

  1. Tafia says:

    Provided that Council Officers will (not might or could) face summary dismissal for Gross Misconduct if they mess up then fair enough, long overdue.

  2. Mark Colburn says:

    There is the whole unsolved problem of the metro councils abolished by Thatcher. Replaced with joint-boards and now the combined authorities. The mayoral referendums wouldn’t have solved any of that because they were proposed to replace the city and borough councils that comprised the joint-boards.

    It shouldn’t be beyond anybody to come up with a proposal to reinstate directly elected city regions and slim down its constituent councils to a handful (7 or 9) councillors. They could act together politically instead of trying to be elected chief executives of a department and becoming trapped by departmental self interest.

  3. bob says:

    If the debacle over the Liverpool City region is anything to go by, you need to REMOVE £20bn. Trust some local politicians, not a chance, you never know where the money will go except to empire build.

  4. swatantra says:

    Give them the money and they’ll do the job.

  5. Tafia says:

    The one thing most people don’t realise is elected councillors have very little power. Council Officers routinely overrule decisions councillors have voted on, particularly in budgets and planning.

    Councils are not in the mess they are in because of elected councillors, they are in the mess they are in because of non-elected non-accountable Council Officers.

  6. Ex Labour says:

    My local Labour council is a basket case who fritter away cash on pet schemes usually some “right on PC cause”. Equally my local Labour councillors couldn’t muster a GCSE between them. The thought of giving an authority like mine even a small piece of the 20 B fills me with dread. A political disaster awaits for Labour if this is ever adopted.

  7. Madasafish says:

    I recall Liverpool. Taxis for sacking anyone.

    I see Birmingham City Council cannot organise a drinking session in a brewery.

    Anyone who seriously thinks Local Councils – especially large metropolitan ones run by one party for decades with no effective opposition will spend money wisely clearly has not read history and is an economic naif.

    If you want a way to ensure large metropolitan cities go bust , then this is the way to go.

  8. bob says:

    Madasafish says: You are so correct in your comments, that the red lights should be flashing over this.

Leave a Reply