Blog: RSA City Growth Commission One Year On: A view from the North East

The RSA City Growth Commission’s final recommendations, published one year ago, represented a critical step in a longer journey towards devolution in England. As with many Commissions, the process of enquiry is as important as the final report. The visit the Commission took to Newcastle, to listen and learn about the challenges we face, and to contribute to the local debate, was an important staging post in our own drive to devolution.

The North East’s position within the Growth Commission report was encouraging, but in part also dispiriting.  We were described as an area which, with some progress, could soon be ready for devolution, although less so than Leeds and Manchester.  The Chair, Jim O’Neill’s advocacy of the clumsy name of ManSheffLeedsPool, to illustrate the agglomeration potential of the Northern cities, seemed to place Newcastle, and the 2 million population of the North East, unfairly on the periphery.  And the emphasis on retaining the proceeds of growth, while welcome in principle, brings with it the risk that areas with a more buoyant business base will scoop the available resources.

We have since confronted these issues, setting out ambitious proposals to put the region back at the forefront of devolution, where it belongs.  The emphasis has been on securing our position within the North, facing outwards to the global economy, and refusing to be seen as a forgotten and neglected corner.  And so, on October 23^rd, seven local labour leaders and George Osborne joined Jim O’Neill, now ennobled as Commercial Secretary, to sign a provisional agreement for a substantial devolution of funding and responsibilities, overseen by an elected Mayor embedded within the constitutional structures of our Combined Authority.

The mayoral model itself remains controversial:  for most, a price worth paying for a deal, rather than an end in itself.  But the broad consensus is that this move marks a historic step for the region: good for local democracy, good for business, and good for the long-term future of public services. 

There remain fundamental barriers.  England is one of the most centralised countries in the Western world, and people with power really don’t give it up that easily.  Devolution appears high on the agenda of ministers.  But in practice – in negotiating specific powers to be passed to local level – individual departments are still overly attached to national frameworks and models of commissioning which make local variation difficult to secure. Impersonal national systems are failing to support those with multiple barriers to work and wellbeing, as the experience of the Work Programme has made clear.  And yet government can’t quite bring itself to let go. Anything that touches on the education system is off limits for devolution.  Even DCLG, the department of devolution, has resisted our attempts to prise from it the assets and funding held centrally, but critical to local delivery of housing and regeneration. 

The other major barrier lies in the interface between the devolution and austerity agendas.  “Fiscal neutrality” (on a narrow definition of the term, set by the Treasury), is the starting point for all devolution discussions.  Devolution therefore shifts the focus of cuts from national to local level, and tasks local politicians with the job of fronting them up to the public.  You can see the attraction to ministers.  The calculation of our local politicians isn’t that they will have more money to play with, but that they will make a better fist of managing those resources than Whitehall would; delivering difficult choices with greater empathy and understanding for local communities, greater innovation and flexibility; just as individual local councils in the region have been doing for the last five years. 

This is a long-term game.  We’re not seeking devolution to make life easier immediately.  Far from it.  We’ll focus instead on preparing our region for the next generation.  Hence our emphasis on the need for long-term funding certainty, the ability to invest for the future and to affect large scale transformational change of our economy and public services.  Current investment funding is absurdly short-term, dispensed from government to projects selected by ministers, and with different strings attached by different departments.  Now in October, we still don’t have local growth funding agreed from next April, for infrastructure and housing programmes we should be planning over a 30 year time horizon.  How can this be the basis for the long-term transformation?

There’s no doubt the RSA City Growth Commission captured a mood and set the terms of a debate that has deepened since, and been carried to every corner of England.  But with so many barriers still in the way, we’ll need to continue into the future to achieve the sustainable policy change the Commission so clearly demanded.

Andrew Lewis is Assistant Chief Executive of Newcastle City Council