The strongest metros: the vanguards for change

The City Growth Commission takes a predominately economic approach.

As Jim O’Neill, the chair of the Commission, rightly points out in his foreword of our latest report Powers to Grow: City finance and governance:

“What happens in the likes of Bristol, Cardiff, Edinburgh, Glasgow, Leeds and all of the other 15 metros we defined in our first paper will be more important for UK economic growth than what happens in the rest of Scotland combined”

While the Scottish independence referendum has sparked a new debate in government and across the country about the importance of local decision-making and accountability, the focus on economics is vital when talking seriously about devolving powers down from central government, given the risks associated with devolution, particularly in this age of austerity.

Yet, the politics of the Scottish debate show devolution of finance and powers is inherently a political issue. This is why we argue for an independent City-Region Devolution Committee to evaluate metros’ bids, using transparent criteria, and why we insist on robust accountability and government structures (alongside economic potential/performance - see the Devolved Status Venn diagram below) as important criteria for determining whether a metro is ready to shoulder the burdens of devolution. Without these we can't devolve risk - political or financial.

This does not, however, preclude other metros or localities moving towards future further decentralisation or devolution – in fact we propose our Committee meets every 5 years to reassess metros - the key is to focus on the strongest metros first as the vanguards for change.

Our recommendations then follow this line, with proposals of ground-breaking reform for:

-          All in central government and cities, including tax and Whitehall reform;

-          Those cities granted further decentralisation, including multi-year finance settlements and freedom to spend grants without ringfencing; and finally

-          Cities who are granted ‘Devolved Status’, most notably the proposal to raise and retain funding through existing and city-introduced taxes.

At our seminar launch yesterday, our focus on the economics was lauded, even by HM Treasury. Murmurs of agreement rang around the table - the logical argument in favour of devolution seems now to have been won: “relying on the success of London is not enough”.

What appears to be key now is to keep this momentum going, pushing talk of devolution beyond pre-election gambits to long-term policy change. It will be messy and difficult, but if done correctly and with a strong focus on economics, stable governance and the capability of metros, it can be the start of long-term change towards greater economic growth and prosperity for the UK as a whole.

Julia Wilcox is Senior Policy Advisor at the City Growth Commission. You can follow her @ju_wilcox

This article was originally published by the City Growth Commission. Follow the Commission’s work on Twitter@CityGrowthCom