‘The 38 Deals?’

Posted by Peter O’Brien, 21st September 2015

By midnight on Friday 4 September, 38 groupings of local authorities, cities, city regions and local enterprise partnerships in England had heeded George Osborne’s call to submit proposals to HM Treasury for new ‘Devolution Deals’, which local areas hope will result in new powers, resources and flexibilities granted in return for governance reform and commitments by local actors to drive local economic growth, primarily through infrastructure investment and renewal.

So we can add the prospect of 38 ‘Devolution Deals’ alongside 28 City Deals in England and Scotland, 4 further Deals for Greater Manchester, Sheffield, Leeds and Cornwall and 39 Local Growth Deals, which local enterprise partnerships are responsible for delivering; together making a grand total of 110 deals of some form or another. This gives added weight to the argument that we are now in a deal-making world in local and regional development. The sheer volume of deals, in a climate of austerity and significantly reduced institutional and individual resources and capacity, also begs questions about the efficiency and effectiveness of deal-making as a model of implementing decentralisation from the centre to local government.

The 2015 iBUILD Manifesto and Mid-term Review called for infrastructure planning, investment and delivery to be better aligned to city and city region strategies and economies. With City Deals and the potential new Devolution Deals containing strong infrastructure elements, it seems, at least on the face of it, that we are moving in the right direction. However, we should continue to ask whether earlier and more recent developments – through the 110 deals – signal a fundamental shift towards embedding a stronger and longer-term role for local authorities and cities to take greater control over their economies by planning, investing and managing local infrastructure assets and systems? Or are the different variants of Deals simply project and programme-led initiatives, which will last purely for the timescale that particular interventions remain functional?

There are three issues worth considering in the aftermath of the latest dash for devolution. First, with gaps still remaining around the levels of local fiscal autonomy that some cities and city regions want and what HM Treasury is prepared to give, local institutions are increasing searching for new and innovative sources of investment for infrastructure and other capital-intensive activity. These efforts, however, continue to run up against the UK’s highly-centralised political economy, system of governance and Central Government’s deficit reduction strategy.

Second, the Chancellor of the Exchequer, George Osborne, and Secretary of State for Communities and Local Government, Greg Clark, both insist that ‘substantial’ devolution from the latest Deals will only be considered if city regions and others agree to introduce ‘metro-wide’ mayors. This means that localities are faced with the often difficult process of navigating through local sensitivities and concerns that fundamental reforms to local governance are being introduced without public consent or without a cast-iron guarantee of what Central Government will actually give in return for city regions agreeing to elected mayors.

Finally, with 38 new bids on the table, the capacity of Central Government and local institutions to negotiate and agree a large number of new deals will be severely stretched. Expect to see a handful of new Deals agreed in different stages, with the usual suspects ahead of the curve alongside one or two surprises, but equally there will be a large number of disappointed places in the short to medium-term. How Whitehall manages the prospect of initial large-scale ‘gaps on the map’ will be a real test of the Government’s devolution strategy.


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