Devo Met for England – It’s the economic imbalance stupid!

What’s clear is that we are now at the beginning of a new process of constitutional change that won’t just be about Scotland. As David Cameron has made clear, not only will new powers now have to be negotiated for Scotland, a similar process will have to take place with Wales and the English question will need to be answered.

What’s clear is that we are now at the beginning of a new process of constitutional change that won’t just be about Scotland. As David Cameron has made clear, not only will new powers now have to be negotiated for Scotland, a similar process will have to take place with Wales and the English question will need to be answered.

In his statement, the PM rightly said that the English question is both about parliament and about the distribution of power across England. The good news is that we don’t need to look for new English structures to answer the big questions of power and economic imbalance. They already exist in the metropolitan city-regions that have been established from London to Newcastle.

The RSA City Growth Commission has been looking at how to unleash the potential of our great English cities.  Most of us live and work in our cities. Our metropolitan economies are the concentrations of productivity, innovation and creativity that can drive our future prosperity.  But Whitehall centralization has held back progress and fossilized economic inequality.

London is by far our most successful city and has a population almost twice that of Scotland, yet it only controls 6% of the revenue raised in the capital and has to spend years negotiating infrastructure projects with the Treasury, when other global capitals just get on and do it.  And too many of our other major cities are forced to depend on Whitehall redistribution rather than being empowered to forge their own social and economic destiny.

All over the world, it is cities that are now driving growth. Successful countries of the future will be those that recognize that power is about collaboration and distribution, not about holding on to everything at the centre.  In the UK, the aftermath of the Scottish vote creates the opportunity to begin the process of ‘Devo Met’ – a substantial devolution of economic power to our major metros.

Many of these city regions have already taken the initiative to form combined authorities across their metro areas, so that they can collaborate to drive growth and create better opportunities for their people. But they need substantial new powers if they are to really achieve their potential and transform their economies.

The four major city regions spanning the Pennines (Manchester, Liverpool, Leeds and Sheffield) have a combined population of nearly 7m people, not much smaller than London and quite a bit bigger than Scotland. What’s required to enable this area to become a Northern- or ‘Pennine Powerhouse’, like Germany’s Ruhr valley, is policies that can accelerate what economists call agglomeration benefits – that’s why improved connectivity (HS3) will be much more transformative than HS2, but it’s also about better broadband, and a concentrated focus on transforming scientific excellence into commercial innovations and new economic opportunity. And this needs to be underpinned by a relentless focus on developing the talents of all their people, so that skill levels are transformed.   The same sort of determined strategy could also work in the North East and in the Midlands.

What will enable this is a recasting of our fiscal and public service settlement. Many metro city-regions are ready to switch the focus in public expenditure away from paying for the cost of failure towards promoting social and economic productivity.  That’s why they want to be able to control public spending in their places, so that they can mobilize their whole resource base to make their places fairer and more prosperous rather than having to administer Whitehall’s fractured and nationally determined priorities.

This is a once in a generation, perhaps once in a century opportunity, to change the course of a country and to enable its cities to achieve their potential.  It’s a big challenge both for central government and for our cities. Their plans will have to be big, bold and ambitious and they will have to carry public support and engagement.  But now is not a moment for tinkering or platitudes, only Devo Met on a significant scale can redress the economic imbalance that still threatens the Union.

Ben Lucas is a Commissioner for the City Growth Commission. Follow the Commission on twitter @CityGrowthCom