Deal or no deal? Where next for decentralisation in England…

Posted by Andy Pike, 17th November 2014

Ten years after the rejection of the elected regional assembly on offer to the North East region of England and in the wake of the Scottish referendum result, the governance of England is once more in flux. Elements of an emerging consensus are becoming clearer. The UK and especially England’s governance is overly centralised especially when considered in international context. Whitehall doesn’t know best and can’t run England on a centralised, top-down and ‘command and control’ model. The decentralisation ‘genie is out of the bottle’, the ‘door is open’ and irreversible change has been set in train that can’t easily be ignored by government of whichever stripe. Continued austerity means local government can expect less money from the centre in future beyond the current revenue squeeze. Local government needs to have more and new ways of raising their own money and enhanced flexibilities and freedom in using it. Local government has wide responsibilities but narrow, multiple and fragmented funding sources most of which are centrally determined. More deals are on offer and directly elected and city-regional ‘metro’ mayors and Combined Authorities are the centre’s preferred governance arrangements with which to negotiate and decentralise.

 

So far, so decentralised. Thorny questions remain, however, as the limitations of the piecemeal, ad hoc and – as Deputy Prime Minister Nick Clegg described it at the recent Northern Futures Summit – “higgledy piggledy” decentralisation journey unfold. The latest instalment of which is a new round of bespoke centre-local deals. Our current work as part of the EPSRC/ESRC-funded iBUILD research centre <https://research.ncl.ac.uk/ibuild/> has been reviewing the 29 – and counting – City Deals emerging since 2010. Some positives are evident in providing some (albeit modest) enhancement of decentralisation and encouragement of city-regional strategy-making, prioritisation, innovation, co-operation, joint working and some (conditional) resource. Less welcome are the uneven allocations of resources between and within city-regions, accentuated when local fiscal capacity is tied to uneven levels of local prosperity and tax bases of differing strengths, the lack of information for local actors on what is on and off the table in cutting deals with Whitehall, and the somewhat pragmatic and even selfish urbanism it is promoting as city-regions are compelled to grab what’s on offer ahead of and/or instead of others irrespective of needs. The politics – who gets what, where, when and how (to supplement Harold Lasswell’s classic definition) – seems reliant upon close and regular relations with Ministers and civil servants at the centre and sometimes the high coalition politics of the Quad. How complex and (il)legible it all looks from the outside to those in the investment community attracted to the UK but anxious about political risk is also a concern. Interests at the national centre recognise this uneven and mixed picture. But they counter that decentralisation and localism sets local areas free to act because there is no centralised blueprint cooked up in Whitehall. Local partners are able to develop and make their own propositions to government. A step-wise approach is seen as preferable to the kind of big bang or ‘all at once’ solutions that would encounter stubborn resistance from Whitehall departments. Staged and – what Jim O’Neill’s RSA City Growth Commission < http://www.citygrowthcommission.com/publication/final-report-unleashing-metro-growth/> – called “fastest first” approaches are promoted whereby those most ready, willing and able to receive the decentralisation from the centre are first in line for the powers and resources.

 

Yet, CURDS’ international review for CLG <https://blogs.ncl.ac.uk/curds/files/2013/02/DecentralisationReport.pdf> highlights the different shapes and sizes of decentralisation in terms of powers and money. Decentralisation is not an end in itself. A central question is asking what any decentralised powers are able to achieve. If the desired outcome is sustainable prosperity for people and places then the decentralisation needs to be designed to deliver it. Infamously, decentralisation is a process not an event. Many countries have embarked on the process without a clear sense of the end point. But those successfully proceeding down that path do at least have some kind of vision or – even incomplete – road map. In England, this could provide a sense of direction and speed of travel, reduce uncertainty, lessen the unpredictable and often short-term demands for local partners to articulate their propositions, minimise perpetual reorganisation, and provide a stronger way of changing the structures and cultures of centralisation ingrained in the English political economy. But it seems that only in the UK’s overly centralised governance of England would such a patchy, conditional and centrally orchestrated decentralisation process unfold. Muddling through in the traditional way may soon reach the structural limits of this kind of decentralisation.

 

The Rocky Road to Decentralisation

Posted by Peter O’Brien, 28 October 2014

After twelve months in the making, the RSA City Growth Commission, chaired by the former Goldman Sachs Chief Economist, Jim O’Neill, has published its final report. The Commission was tasked with examining the current and potential future contributions of cities and city regions in the UK to macro-economic growth. The Commission has seized the moment, and provided a valuable contribution. Recent events have led to devolution being more visible to the public than at any point during the last decade.

The final report has a strong Mancunian flavour to it – and this is not simply due to the birthplace of the Commission Chair. In his foreword, O’Neill suggests that ‘some devolution is a necessary but not sufficient condition for stronger national growth’. This begs two questions. First what sort of devolutionary change is the Commission proposing? And second, what other interventions and policies are needed to build balanced and sustainable economic growth and prosperity within and across different parts of the UK? The remit of the Commission means that it has turned the majority of its attention to the first question rather than the latter.

The Commission seeks to outline how cities and city regions could boost total UK output by £79 billion per annum if they were to ‘reach their growth potential’. O’Neill has been consistent that the Commission would only recommend supply side interventions, thus the strong focus on devolved powers relating to infrastructure, skills, planning, housing, digital connectivity, science and innovation and migration. This means that particular questions and subsequent answers were never on the table from the outset. The Commission also leans heavily towards cities and city regions needing to establish appropriate governance arrangements, and using evidence, intelligence and data in a more systematic fashion. In attempting to tackle the long-standing conundrum of sub-national governance in England, the substantive evidence for Metro Mayors, in terms of what they offer in terms of accountability, and direct links to growth, public service delivery, and the catalyst for citizen and community engagement, is inconclusive. It is no coincidence that Metro Mayors tend to be the preferred model for many who favour greater managerial urbanism.

Although firmly buying into the narrative of agglomeration, the Commission does flirt with the subject of small cities, which is sensible because of the preponderance of such places in UK. But it avoids some of the tricky questions about unintended consequences and negative externalities of urban growth. However, the Commission does, at least, recognise that a mix of people and place-based interventions form the foundations of successful local development strategies.

Initially, the Commission identified fifteen cities and city regions for scrutiny during the course of its review. This was understandable given the time constraints the Commission faced. However, by being perceived to employ a ‘league table-type’ methodology, the Commission has received criticism from some quarters. In reaching its conclusion that only two city regions are ready for devolution (e.g. Greater Manchester and West Yorkshire), there are echoes of where we were seven years ago when Manchester and Leeds were chosen by the then Labour Government as statutory city regions. In their favour, both city regions can point towards years of intra-city regional working, they have scale, local capacity and have produced and implemented evidence-based strategies and investment plans.

During the launch, in London, of the Commission’s final report, Lord Heseltine linked further devolution in England, Scotland, Wales and Northern Ireland to ‘English Votes for English laws’. He also suggested that significant machinery of government changes would be required in parallel with greater devolution from the centre. Jim O’Neill reminded the audience that the Commission had considered cities and city regions across all parts of the UK, but the final report, at times, does not take sufficient account of the variegated devolved landscapes in which Glasgow, Cardiff and Belfast are located and operate within. Sir Richard Leese, Leader of Manchester City Council, said that fiscal devolution should be separated from further policy and resource devolution, and that whilst some tax powers were needed at the local level, there was a risk that Whitehall grouped further devolved powers with substantive fiscal autonomy and placed both firmly into the ‘too hard to do box’.

But has the City Growth Commission’s work, and other similar studies, captured the mood of the Scottish Independence Referendum, if indeed such an atmosphere exists in the rest of the UK? The Scottish Referendum ignited interest in renewed civic engagement and demands for a different relationship between political institutions, economic decision-makers and citizens, and a yearning for new solutions to some big economic, social and environmental challenges. City region devolution, in its current guise, feels as though it is being driven by structuralism, the tweaking of politics per se and the implementation of existing economic orthodoxies, albeit at new spatial levels. Perhaps O’Neill is right, ‘some devolution is a necessary, but not sufficient condition…’

Post-referendum blues?

Posted by Andy Pike, 3rd October 2014

A sense of irreversible change pervades the atmosphere in the aftermath of the referendum on Scottish independence. Metaphors of cats out of bags and genies out of bottles abound in public commentary. While the details and timescale of what additional powers and resources will accrue to Scotland in the wake of the ‘no’ vote are worked out, the deep ramifications of the result for the rest of the UK and especially England are only beginning to be comprehended. The thorny issue of how England – as the largest demographic and economic part of the UK – could or should be governed remains a lingering conundrum. The pre-referendum ‘vow’ on further decentralisation by the leaders of the national political parties served only vigorously to stir up longstanding discontent about the unevenness and perceived unfairness of the decentralised arrangements in the UK. Particularly acute are the feelings of disadvantage and marginalisation felt in northern cities and regions, wedged between what some have called the city-state of London and the Greater South East on the one hand and a set to be even more devolved Scotland on the other.

Voices amongst the leading city-regions in England are calling for further powers and resources, challenging central government to proceed at the same rate as Scotland. For them, discussions about the territorial discontinuities of which MPs can vote on which issues are national political questions distinct from questions of decentralisation within England. Central to their argument is that Whitehall is dysfunctional because of its centralist and top-down world views, vertical departmental silos and lack of cross-governmental co-operation. City-regional groupings of local authorities, they argue, have demonstrated their competence and ability to provide a place-based focus to the design and delivery of public policy on growth, skills, transport and public service reform when trusted and given appropriate kinds of decentralised powers and resources. Further such technocratic fixes can still the waters demanding change while any more thoroughgoing political decentralisation can follow, especially given the difficulty of resolving George Osborne’s enthusiasm for city-regional ‘Metro Mayors’ with the widespread democratic rejection of Mayoral models outside London in 2011.

While lively and substantive public debate about how we are governed is welcome, there remain some big questions to be addressed and deliberated. Will the Scottish referendum become another episode of constitutional tinkering, improvisation and muddling through in the long history and tradition of British political economy, civil service and public administration? This moment has fomented and expressed demands for sweeping, radical change. It prompts discussion of whether and when the UK should attempt to codify a written constitution, whether it should become a federal state and what new kinds of decentralisation might be explored. Innovative institutional fora bringing together the civic, private and public spheres can channel and stimulate further deliberation, enabling further debate from a newly (re)engaged citizenry and political class struggling to make sense of the shifting landscape. Can the outpouring of political interest from the Scottish vote spill-over and be sustained in England? Will a drift back to political apathy and distrust simply be accelerated if tangible change remains distant? Experience suggests entities such as constitutional conventions can be inclusive, demonstrate legitimacy and find consensus but take time to mobilise, deliberate and articulate participants’ views. Such a process might better have started back in 2012 when the referendum was agreed.

Can an asymmetrical structure of government and governance involving entities with different powers and resources decentralising at different speeds be designed and made accountable, legitimate and workable? This messy, moving patchwork is exactly the direction in which the UK has been heading since devolution and constitutional change in the late 1990s. Decentralisation settlements have varied between Scotland, Northern Ireland and Wales, London and the rest of England. Arrangements for political leadership, local democracy, decision-making and funding have diverged. While incremental review and enhancement of devolved arrangements have been undertaken for the devolved administrations in Scotland, Northern Ireland and Wales, the parallel reviews in England have been narrower and struggled meaningfully to impact government policy. Evidence from beyond the UK is that while what are called ‘multi-level governance’ arrangements may be untidy, fluid and ongoing they can provide workable systems of government and governance interpolating myriad public, private and civic actors the local, city-regional, regional, national and supra-national levels. Drawing on the experience of Australia, Brazil, Canada, Germany and the US, one model of multi-level governance in particular warrants further scrutiny (article in The Conversation). In a comparatively old state like the UK with an oversized England dominant in economic, demographic, political and cultural terms, a federal solution for the UK demands serious examination. Unearthing long buried strands of federalist thought from Gladstone and others, the critical issue for the UK is federalisation not just between its constituent sub-national units but consideration of what kinds of entities would be needed within England. Discussions on city-regional and county level structures in England are part of this.

How will especially northern England work with Scotland in the new dispensation? A degree of ‘post-devolution blues’ have been evident since devolution and constitutional change in the late 1990s. In economic development, Scotland has benefited from relative stability, long-term strategy and planning and greater resources. Its institutional structures are more coherent, legible, responsive and effective. On the other side of the border, limited institutional capacity and resources plus endemic institutional churn and disruption has left a legacy of fragmentation, incoherence and ineffectiveness. The period since 2010 and the dismantling of regional structures has presaged hiatus and, as our national survey of LEPs demonstrated (SERC Discussion Paper 150), bequeathed as yet unresolved structural dilemmas concerning centralism and/or localism, competition and/or collaboration, agility and/or “bureaucratisation” and limited (albeit incrementally growing) capacity and resources. Disquiet over the lack of a level playing field on both sides of the border has spilled over in the competition for inward investment projects as high profile projects have ended up in Scotland.

Momentum has built upon the growing and widening consensus about the basic rationales of decentralisation in more efficient matching of resources to local preferences, the mobilisation of local knowledge and bringing decision-making closer to citizens. The Scottish referendum result has stimulated a political dynamic skating over any lingering concerns about what research from CURDS and LSE found was mixed international evidence of decentralisation and its impacts on public policy and wider outcomes (Decentralisation Report).  Yet, in the highly centralised context of governance in England, centralisation rationales are deeply entrenched (Research papers RP14/43) and Whitehall is distrustful of the capability of local actors and partnerships. In the context of austerity, there remains fear of the impact of uncontrolled local authority spending on macroeconomic policy and stability, the need for accountability in centre-local relations given central government grant funding to deliver statutory services, and the service provision role of local authorities and equity implications of any ‘postcode lottery’ in access to public services. What concrete degrees and kinds of decentralisation in England this unprecedented and uncertain amalgam brings to bear are difficult to discern.

 

The Value of Infrastructure

Posted by Peter O’Brien, 22nd July 2014

Readers of the CURDS blog series will be aware that, as part of the national EPSRC and ESRC-funded iBUILD Infrastructure Project (https://research.ncl.ac.uk/ibuild), CURDS is conducting research into the governance and regulation of local infrastructure funding and financing. Two recent reports produced by the RSA City Growth Commission and the Institute for Public Policy Research (ippr) examine the role of infrastructure in local growth and development, and together pose questions about how we define and measure the value of urban infrastructure.

Last week, I attended the launch, in London, of the City Growth Commission Report Connected Cities: The Link to Growth, the latest publication by the Commission that is investigating the growth potential of UK cities, chaired by the former Goldman Sachs Chief Economist, Jim O’Neill. The report, which cites the activity of iBUILD, claims that “high quality infrastructure is a critical driver of productivity and growth”. Few would disagree with this statement, although economic geographers would also suggest that infrastructure is not the sole determinant of productive local and regional economies, as the OECD affirmed in its 2012 study, Growing all Regions. Rather, infrastructure is one component of successful development strategies, alongside human capital, innovation, enterprise and effective institutional governance. However, policy-makers and researchers are understandably seeking to acquire greater knowledge and understanding of how and where infrastructure drives particular forms of growth and development, and how public and private infrastructure investment decisions can be better informed by technical appraisal and assessment.

The Growth Commission rejects what it calls the current “inefficient, centralised model” of local and regional infrastructure investment and governance, and outlines five recommendations for change:

1. The development of a stronger, urban-focused Infrastructure UK.
2. The creation of a fairer and more flexible funding system based on fiscal devolution to cities and city regions.
3. The introduction of a flexible and innovative planning system.
4. Better appraisal techniques that reflect more accurately the costs and benefits of infrastructure investment.
5. Strengthening of city governance and local government capacity.

The Commission also identifies a critical issue that was flagged up in a previous CURDS blog on Fiscal Devolution, which concerns how UK national accounting frameworks should measure and interpret certain forms of local growth as additional contributions to the national economy and not as displacement between local areas.

One of the Commission’s headline proposals is that, as a counterbalance to London and the South East, investment in transport infrastructure between northern cities should be prioritised, in an effort to create a large ‘alternative agglomeration’ in the north of England. This differs from the conclusions reached by other studies, such as the Eddington Transport Review in 2006 and the Manchester Independent Economic Review in 2009, both of which argued that transport investment within cities should be the immediate priority.

The Growth Commission’s work is a useful and timely contribution to the existing discourse on cities and infrastructure. However, very little is said about the social and environmental value of infrastructure in shaping, making and re-making urban economies and places. Whilst the report is accurate in its assessment that the private financing of infrastructure in the UK has, in part, led to fragmented or splintered urban infrastructure networks, the Commission could have been more explicit in its critique of the current market failures in infrastructure planning and investment. The report, for instance, could have highlighted how cities outside of London require a consistent policy line from Central Government on urban transport management and governance if they are to assume greater responsibility for the planning, funding, financing, delivery and regulation of local transport infrastructure. For example, Whitehall views London’s bus regulatory and over-sight system as a success, but the Government is seemingly reluctant to show the same level of support for similar models being advocated in other urban areas in England.

The baton on cities and infrastructure ownership and control is picked up by ippr in a new report, City Energy: A new powerhouse for Britain. The report suggests that cities could play an important role in fixing what the think-tank calls the ‘broken market’ in the UK’s energy sector, which, as the Public Accounts Select Committee concludes, is demonstrated by the fact that consumers are paying (and are forecast to continue to pay) higher bills and therefore disproportionate contributions towards industry capital investment.

In the past, UK cities were responsible for building and maintaining infrastructure assets, reflecting what Adam Smith regarded as the third duty of government. Recently, cities, such as Munich (referenced in the ippr report), Melbourne and New York, have developed new forms of community and public urban renewable energy provision. In 2013, voters in Hamburg agreed to the city’s energy grids being brought back under public ownership, part of a broader trend that has seen 170 German municipalities, since 2007, buy back energy grids from private companies. The citizens of Boulder, Colorado, USA, have also agreed to move the city’s energy grid into municipal ownership despite strong opposition from the state’s largest utility company.

The Greater London Authority and members of the Core Cities Group are keen to enter into the energy supply market, and ippr believes that there are five business models that London and other UK cities should consider:

1. Fully licensed supplier: a city sets up and runs an independent supplier, taking full responsibility for delivery and meeting licence conditions.
2. Joint venture: a city works with one or more third parties to set up and run an independent supplier.
3. Licence-lite: a city becomes a ‘junior supplier’ with responsibility for some aspects of delivery and meeting licence conditions, while a partner ‘senior supplier’ is responsible for the rest of the business.
4. Partnership: a city works in partnership with an existing, licensed supplier and takes responsibility for some operational aspects of the supply business in its area.
5. White label: a city licenses use of its brand to an existing supplier who uses it to market to customers in the local area.

On the vital question of funding and financing, ippr recommends that: cities work with the Green Investment Bank on low carbon energy investment; cities support the Local Government Association’s proposals to establish a collective Bonds Agency; the fiscal rules laid down by Treasury should be designed to ensure that debt for local authority capital expenditure does not count against legitimate targets to bring current spending back to balance in the medium term; and local authority pension funds should comply with the Principles for Responsible Investment.
The ippr analysis adds additional weight to the assertion that how we choose to define and measure the value of infrastructure can shape public, private and community involvement and participation in infrastructure planning and delivery. Although most UK infrastructure is privately-owned, there is an increasing international trend of private infrastructure assets, particular in the water industry and energy sector, returning to public ownership. The move to (re)municipalisation is driven, in part, by the failures of existing regulatory arrangements, and other factors, including:

• Concerns about the funding of infrastructure in the aftermath of the Global Financial Crisis.
• A desire on the part of governments to achieve public service and community objectives.
• A move to rebalance stakeholder and shareholder interests.
• Notable private sector failures in infrastructure provision and delivery (particular in management and corporate governance).
• A call for greater transparency and openness in procurement, investment and finance decisions and plans.
• Greater regard for environmental and sustainability considerations.
• Recognition that infrastructure is a broader societal and economic asset.
• A move by cities to re-think the use of public realm and spaces within urban contexts.

Professor Dieter Helm, an infrastructure expert at the University of Oxford, claims that the issue now is not whether the state should intervene in infrastructure, but how. In CURDS, we would also declare a specific interest in identifying where the state should deliver interventions within and across different spatial levels. These questions, along with others, are providing some of the context for new research by Glasgow University’s Professor Andy Cumbers on alternative economic strategies and infrastructure ownership models. A deeper exploration of these intricate patterns and processes, drawing upon emerging analysis and initial findings from the iBUILD project, and parallel CURDS research on cities and devolution, should help us to arrive at a clearer definition and measurement of the economic, social and environmental value of urban infrastructure assets and systems, which ultimately will then inform crucial long-term investment decisions.

For the UK economy to blossom outside of London, politicians need to get sharing

Posted by Andy Pike, Newcastle University, 15th July 2014

An economic recovery has emerged in the UK that is unbalanced in social, geographical and sectoral terms. Whether or not decentralisation can improve this might well come down to simple questions of trust and stability.

It is against this backdrop of uneven growth that Lord Andrew Adonis has launched his growth review for the Labour opposition. Adonis argues for a more coherent national growth strategy prioritising innovation, skills, growing companies and decentralisation to cities and county regions.

The review has familiar echoes with Michael Heseltine’s growth review produced for chancellor George Osborne in 2013. Politically, this highlights the coalition government’s somewhat lukewarm response to Heseltine’s recommendations, especially on the extent and nature of shifting money and power outside the corridors of Westminster.

The Adonis review adds some substance to the vibrant public debate around what to do (if anything) about the dominance of London and the South East and its growing disparities relative to the rest of the UK. It emphasises the qualitative as well as the quantitative extent and nature of growth. It focuses attention on the creation of better quality jobs with training and career development prospects as well on stronger and more sustainable companies able to innovate and export. Drawing on less visible government intervention in the US, it underlines too the need for a “smarter” and more entrepreneurial state, rather than a larger and higher spending state. Doing more with the money government already spends and invests to achieve better outcomes is the trick. Such ideas are challenging for those who advocate simplistic arguments about smaller and less government.

Power to the people

One thing given prominence is the need to boost the local and city-regional dimensions of growth as the route to a more balanced economic recovery. Adonis wants us to meaningfully enhance the powers and resources available to cities and county regions especially for infrastructure, transport, housing and skills. He also advocates a strengthening of the existing Local Enterprise Partnerships in England, and the encouragement of integrated governance structures – the so-called Combined Authorities. These have been established around Manchester, the North East, West Yorkshire, Sheffield and Merseyside, and have given those regions the ability to retain more of the business rates generated in their local economies. There is much in common – if not always acknowledged – between the coalition’s approach and the ideas advocated in Adonis’ Review for Labour. More crucial though might be a key difference in the extent and nature of decentralisation.

Some thorny issues remain in several important areas. First, the decentralisation envisaged requires a shift in how the state works at both local and national levels. The often overlooked issue is what needs to happen in Whitehall and Westminster to make such decentralisation a reality and to make it work.


Seats of power.
UK Parliament, CC BY-SA

Austerity politics in what is still a highly centralised system in England has made this more difficult. It helps dissuade politicians from releasing more powers and resources to the local level and it acts as a disincentive to trust local politicians and officials to develop credible plans, wield power in accountable ways, spend their money wisely and deliver policy effectively.

Second, Adonis reiterates the strong argument for empowering people at local level to arrange their own investment in infrastructure, skills and economic development. Critical to this is creating what the OECD calls “fiscal space”: the capacity and flexibility for local governments to raise and deploy resources to address particular local concerns.

Our work reviewing the City Deals in England as part of the EPSRC and ESRC-funded research centre on innovative business models for local infrastructure delivery (iBUILD) has thrown some light on this. It shows that city authorities in England are indeed trying to pool, upscale and tailor resources for long-term investment, and use the private sector in the process, but they are hampered by restrictions within the current system. Retaining a higher level of business rates, then, is but one step on a much longer journey toward meaningful fiscal decentralisation.

Third, the review draws on some of our own national survey findings to pick apart some of the problems with the current system of Local Enterprise Partnerships. In brief, they lack the staff and resources to meaningfully shape growth in their local economies (although this is changing slowly); their geographical coverage is sometimes mismatched with functional economic areas, and their ability to mobilise and orchestrate local partnerships of business, public and civic sectors is mixed.


Keeping them on their toes.
Addison Berry, CC BY

More fundamentally, institutional churn and instability is a hallmark of sub-national economic development in England. The pendulum has swung between regional and local arrangements in the post-war period and institutions have come and gone. We have seen Regional Planning Councils, Local Enterprise Agencies, Urban Development Corporations, Regional Development Agencies, Government Offices for the Regions and Regional Chambers.

Seeing quite how we break out of this cycle to move towards more continuity and stability is tough. And it’s hard to imagine, for now, how we can incorporate the kind of longer-term strategic and integrated economic development and planning of the kinds pursued in cities and city-regions in Germany and Sweden. Constant change has produced problematic structures that then spark calls for yet more change.

Follow the leaders

Last, Adonis’ blueprint for Labour rightly places an emphasis on the need for better local and regional leadership. We need strength, far-sightedness and civic sensibility in leaders, he says, as well as an ability to develop ambitious, visionary and credible plans which work in partnership with the public, private and voluntary sectors. This is all laudable stuff, but is it not entirely clear where the “new generation of Joseph Chamberlains” will come from. The politics at local and city-regional level remains constrained by England’s highly centralised governance system.

More decentralisation could usher forth a new generation of local leaders. Directly elected Mayors only found favour in Bristol and Doncaster but not in Birmingham, Bradford, Coventry, Leeds, Manchester, Newcastle, Nottingham, Sheffield or Wakefield. And if that won’t bring forward candidates of the type Adonis craves, then some other institutional innovations are needed to encourage their emergence.

The dangers of a two-speed country dominated have been front and centre of political debate all year. But the enduring point from the Adonis review, and perhaps from Heseltine’s before it, is that inequalities between people and places are both a cause and a consequence of unbalanced growth, and demand not just a stimulant, but a genuine structural remedy if we are to make progress.

The Conversation

Andy Pike does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published on The Conversation.
Read the original article.

Fiscal Devolution

Posted by Peter O’Brien, 11th July 2014

There has been flurry of activity recently in local and regional economic development policy. In the last month, the Chancellor of the Exchequer, George Osborne, has spoken about High Speed 3 (HS3) investment in the north of England, Lord Adonis has published his Growth Review, the Deputy Prime Minister, Nick Clegg, has launched a Northern Futures Project, the Coalition Government has allocated Local Growth Fund resources, the Labour Party has published a report on a ‘New English Deal’ for local government, and the Communities and Local Government (CLG) Select Committee has set out the conclusions and recommendations of its Inquiry on Fiscal Devolution to Cities and City Regions. CURDS submitted written evidence to the Inquiry, and in February this year CURDS Director, Professor Andy Pike, gave oral evidence to the Committee.

The CLG Select Committee Inquiry has particular resonance for work that CURDS is undertaking on the governance and regulation of urban infrastructure funding and finance, as part of the national EPSRC and ESRC-funded iBUILD infrastructure project. Through an empirical exploration of the City Deals process, we are examining how cities and city regions are able to raise and deploy public funding (i.e. revenue), alongside private finance (i.e. capital), in order to invest in infrastructure assets and systems.

Following an exploration of some of the complex and wide-ranging matters relating to local government funding and finance, economic development, governance and macro-economic fiscal policy, the Select Committee comes out strongly in favour of fiscal devolution to cities and city regions in England, with greater local control over business rates, stamp duty, council tax and income tax recommended. Beyond the headlines, there are four inter-related issues in the Committee’s Report that are worth initial consideration, and which reflect some of the questions CURDS raised in its evidence to the Inquiry and that are being posed in the iBUILD project.

First, the Select Committee argues that fiscal devolution and decentralisation of spending should form part of an integrated approach to local and regional policy. Alongside the continued need for equalisation and specific measures designed to address spatial disparities, fiscal devolution alone may not be sufficient. Instead, the bigger prize for cities and city regions may rest in their ability to shape and deliver reformed public services and expenditure in line with local needs, and to plan and secure agreement for how any subsequent efficiency gains and savings could be retained by local areas.

Second, by calling for fiscal powers to be devolved to groups of local authorities, covering a recognisable and functional economic area, which are able to demonstrate collaborative activity, the Select Committee suggests that fiscal devolution may not be appropriate for all places at the same time. This would build upon the existing asymmetric framework of devolution in the UK, a model that also exists in other countries, such as Spain. The likelihood, therefore, is that not all places in England will get the powers and resources they want. The London Finance Commission reached a similar set of conclusions last year.

Third, the Committee advocates that strong, locally agreed governance models will be needed if Government is to devolve fiscal powers to cities and city regions. Although the Committee eschews being prescriptive about specific governance typologies, it is increasingly apparent that the Coalition, as well as the Labour Party, see Combined Authorities as a form of sub-national governance they have confidence in. However, it is early days for the Combined Authorities and it will be important to see how effectively they work and add value to the decision-making and policy development and delivery processes.

Finally, the Select Committee suggests that Central Government should establish a general framework within which fiscal devolution can take place. This raises one of the critical points in the Committee’s Report, amplified by current deficit reduction policies, and which could either make or break fiscal devolution and related attempts to develop innovative approaches to the funding and financing of local economic development and infrastructure investment. This centres on how official national accountancy rules on public expenditure are unable to accommodate additional growth and expenditure (including investment) in one locality without calculating it as displacement and contributing to overall public expenditure and public debt. The Committee concludes that a mechanism is needed that differentiates investment expenditure as opposed to day-to-day spending, and at the same time recognises that certain places can grow but not necessarily at the expense of somewhere else (in the UK). What seems like a minor technical issue has, in fact, become a major stumbling block for some cities and city regions that have been seeking to secure greater fiscal freedoms and flexibilities through the City Deals process.

Giving evidence to the Select Committee, the Cities Minister, Greg Clark, urged the Committee to look at how the current “conventions did not allow for the association of growth and revenue with particular places”. One suspects that unless this matter is resolved then any effort to introduce substantial fiscal devolution to cities and city regions in England will stall.

‘From Brown Ale to ‘blandscape’

Posted by Andy Pike, 26th June 2014
from-brown-ale-to-blandscape-1
In the recent era, cities have been marked by the search for distinctive differentiation in the increasingly international competition for investment, spectacle events, jobs, skilled labour, students, residents and visitors.

It has been a struggle for many places to find, articulate and project what’s different and attractive about their city. What’s authentic? What’s interesting and even unique? Many places have succumbed to what urban commentator Bruce Katz in the American context calls “Starbucks, stadia and stealing businesses” – adopting the same approaches and focus to their economic development.

Ivan Turok bemoans this situation where cities trying to find distinctive differentiation end up pursuing the same types of strategies. Sharon Zukin too wonders how unique cities can be when they are following similar approaches of “programmed authenticity” across the world. Anna Klingman calls the results “brandscapes” to capture the ways in which apparently ubiquitous brands have been let loose by city authorities to dominate the cities in which we live, work and learn. Our colleague, Alastair Bonnett, goes further and calls them “blandscapes”: generic zones where the particularity of place is lost, places start to appear more like each other and – as Sophie will discuss shortly in relation to attachment and belonging – people find it hard to develop relationships with them.

Celebrated as part of this important and timely exhibition, Newcastle Upon Tyne has many rich historical assets that configure its distinctiveness. One such was – and remains – Newcastle Brown Ale and the Tyne Brewery: a successful export enjoying double-digit sales growth over the last 15 years, now sold in over 40 countries around the world and entwined with its historic home in the city. Newcastle Brown Ale and the Tyne Brewery provide powerful and resonant images that have long constituted part of the distinctive DNA of the city and served as envoys of its unique reputation and culture.

But a substantive opportunity has been squandered following Scottish and Newcastle’s decision to close the Tyne Brewery in the western city centre in 2004, relocating Newcastle Brown Ale production first to Dunston, Gateshead, and eventually to Tadcaster, Yorkshire, prompting dismay at its shifting origination.

Reflecting the deeper currents of modernisation shaping the city and echoing some of its 1960s antecedents, the approach to redeveloping the Tyne Brewery site can be characterised as ‘fast development’. Newcastle City Council, the then Regional Development Agency ONE North East and Newcastle University were quick to acquire the site with the aspiration of deploying the land as part of their ‘Science City’ regeneration vision of urbanising the knowledge economy.

The disappearance of 180 manufacturing jobs from a sizeable 6 hectare city centre site was even welcomed by some as a once in a generation chance for renewal and reconnection of the city’s disadvantaged West End with the city centre.

Estimates of between £33m and £50m have been made of how much public money was paid for the site by the three local actors. S&N benefitted by repeating the trick first undertaken with the Fountainbridge Brewery in central Edinburgh of closing a city centre production site and liquidating a valuable fixed land holding into cash at a substantial profit. As the Brewery Manager at Dunston remarked at the time: “that is a lot of profit in beer…it would take us a lot of years to make that kind of profit” (Author’s Interview, 2007).

The pursuit of ‘fast development’ meant local actors rushed to clear the site and demolish the brewery buildings to create a clean slate for the new vision of science and technology-led urban renewal.

But, in their haste, they erased what was internationally resonant and put Newcastle on the map as the ‘Home of Newcastle Brown Ale’ – irrespective of where the beer is actually brewed since the geographical associations to the city still provide the originated meaning and value of the Newcastle Brown Ale brand on its international travels. Lost too were facets that were architecturally interesting and significant about the historic site where beer had been brewed since 1868. Such elements of authenticity and uniqueness could have made valuable and meaningful contributions to the broader differentiation and regeneration of the city. The Campaign for Real Ale agrees, recognising how breweries are important cultural heritage in cities including buildings of historical significance and calling for their protection when being converted to uses which don’t celebrate the building’s past. This is not an argument for indiscriminately preserving everything but taking the time properly to assess what could be salvaged of distinctive meaning and value.

Instead, noteworthy and unique things were lost. Artefacts of industrial archaeology were destroyed. Forever. Interesting buildings were demolished that could have been refurbished and revalorised as new uses for the wider community or even to house the coffee shops and eateries to service the consumption practices of the new knowledge workers envisaged to occupy the site.

Historical markers of people and events were abandoned. With a historic wall plaque containing the Blue Star logo commemorating the lives of 36 brewers who lost their lives in World Wars I and II rescued by St. Andrew’s Church, Newcastle.

Given its rapid rhythm and desire to quicken the circulation of capital, ‘fast development’ brooks little dissent and encourages no reflection. A rearguard ‘Save the Blue Star’ campaign was led by Northumbria University architecture student Lee Boxall. He argued that “Re-using industrial buildings, even just retaining key facades would not scupper the redevelopment, but would enhance it” and sought to retain and redevelop at least some of the Tyne Brewery as an internationally visible attraction along the lines of the Guinness Storehouse visitor centre in Dublin.

But this protest made no dent in the rush for the glass and steel ‘blandscape’ of Science City and the imperative of commercial property development in competition with cities elsewhere in the UK and Europe. Under a different owner, only the old S&N office block was saved and converted into a hotel, where the Blue Star logo remains as the only marker of its former use.

Little if any thought was given to more considered approaches – what we might contrast as ‘slow development’ – that are evident elsewhere in the UK and internationally. Where time has been taken properly to consider what can be salvaged that is of distinctive and wider value and meaning. Rustbelts elsewhere in the world have managed and with far more problematic sites than that occupied by a city centre brewery. The re-use of the old Zeche Zollverien coal mine buildings in Essen in the Ruhr in Germany is but one example.

And, closer to home, the re-use of the headquarters of the former Tetley Brewery in Leeds as a new art gallery following its closure in 2011 after 189 years has proven successful. As well as being a distinctive feature and attraction for the city, it has been delivered for £1.5m – a fraction of the public money being invested in Science City and a presumably cost effective solution appealing for our austere times.

So a historic and one-off opportunity was missed. No proper scrutiny and reflection on distinctive assets was considered in this fast development project. The question is, then, when there was an alternative route and much to recover, why did we go from Brown Ale to a ‘blandscape’? And are we perhaps heading for something even worse…?

My Newcastle – Sense of Place Study E-Survey Pilot

Posted by David Bradley, 2nd April 2014

David Bradley and Mike Coombes having successfully piloted ground breaking research involving young people from two Tyneside primary schools in ‘sense-of-place’ work, involving the use of GPS enabled cameras have taken the project design one step further. By working in partnership with two north east companies – innovative web designers Durham Associates and on-line database specialist Bryan Latty the team have designed an online survey suitable (hopefully) for young children. It is hoped that this innovation will make sense-of-place work with schools more easily replicable.

Holystone Primary school volunteered to pioneer the use of the new online sense-of-place survey and to test the use of a range of digital equipment including GPS enabled cameras and an i-pad. The aim of the research was to help young people to appreciate more and understand better their local environment, and to value those buildings and spaces that others including their peers regard as important.

This research built on our recent experience of working with primary schools in Tyneside funded by the Catherine Cookson Foundation to develop the local pride and place attachment of young children. The project adds to our national research for English Heritage on the impact of the built environment on young people’s sense of place involving young people aged 13-15. For more information about these research projects see http://www.english-heritage.org.uk/publications/historic-buildings-young-people/ . This research built on earlier national level CURDS research on “Sense of Place and Social Capital and the Historic Built Environment” which was summarised in the 2009 Heritage Counts Report. http://hc.english-heritage.org.uk/Previous-Reports/HC-Sense-of-Place/

This pilot work has helped to develop a teaching framework which it is hoped will continue to prove successful in engaging with young people, making a valuable contribution to increasing their pride in and awareness of their local historic assets. The project involved 57 year 4 pupils attending Holystone Primary School in North Tyneside (slightly more than the 50 planned). Data was successfully captured in relation to:
• Which buildings and spaces in the local area are important to them
• What is it about them that is important
• Which buildings and spaces do they dislike
• Where are these buildings in relation to where the young people live
• Are there any patterns to the characteristics of young people and their choice of buildings and spaces in the local area

The results of these pilot studies suggest that a full national study could be expected to reveal fascinating differences in the preferences of different aged children living in different residential environments. The success of these pilots with young children indicates the potential to go beyond finding out what aspects of the built environment children regard as important. With further research funding the aim is to create a web-based teaching framework and suggestions for activities that will successfully engage young people, actively increasing their appreciation and understanding of their local environment.

The findings of this research are summarised in Bradley DP. Buildings, Monuments and spaces that are important to young people and the contribution of the historic built environment to young people’s sense of place. Regions Magazine 2011, 284(1), 5-8. (1.10 MB)

Fiscal Devolution for Cities and City Regions?

Posted by Peter O’Brien, 12 February 2014

Sparked by the ongoing debate led by the Core Cities Group and others, as well as recent and ongoing independent commissions established to consider devolution, local funding and finance, the House of Commons Communities and Local Government Select Committee has launched an Inquiry into whether and how fiscal and financial powers could be devolved to London and cities in England http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/inquiries/parliament-2010/cities/

The Select Committee is seeking evidence on the concept of fiscal devolution as well as attempting to gather specific examples of the tools that cities and city regions would need to embrace greater financial autonomy from UK Government. The themes under consideration reflect research that CURDS has begun recently – as part of the national i-BUILD project – into the business models, and governance and regulatory arrangements of city and urban infrastructure.

In written evidence to the Inquiry, which proceeded oral evidence given to the Select Committee, by the Director of CURDS, Professor Andy Pike, on Monday 4 February 2014, researchers from CURDS set out a number of issues that the Committee might wish to consider:

• The UK has a highly centralised system of taxation and expenditure, in an international context. Consequently, the UK needs to consider appropriate forms of fiscal decentralisation and public policy reform as a set of tools to help cities and city regions build sustainable and successful places, businesses, jobs and communities.

• Places are more likely to be successful if they possess effective, sound and high quality institutions and leadership driving forward effective visions and evidence-based strategies.

• Central-local government relationships in England would be stronger if they were underpinned by more formal (and perhaps even constitutional) arrangements.

• International evidence suggests that decentralisation alone may not generate an automatic economic dividend. However, overt centralisation of activity and governance is likely to stifle local and regional innovation, decision-making, governance and development. Decentralisation should be seen within the context of the continued importance of national-local government relationships.

• If the geography of fiscal decentralisation is fixed at too small a scale there are risks of inequalities in resource and policy outcomes. Cities and city regions need to consider carefully the geography of areas seeking greater fiscal autonomy – and if necessary improve and build effective collaboration.

• Property taxes are most likely to be decentralised by Central Government, and in line with developments in Scotland and Wales. Yet, the experience to date suggests that any further fiscal decentralisation in England is likely to be incremental.

• The UK Government is best placed to borrow at the most competitive rates from the international capital markets. However, if the policy is for local institutions to be encouraged to show innovation in their financing arrangements their endeavour should be supported by appropriate decentralised autonomy and support.

• There are a range of initiatives that cities and city regions can introduce to raise new finance. As the municipal bond market has been relatively inactive in the UK, councils will need expert advice on how to engage with what is a costly and complex model.

• Decentralisation should build on the inherent strengths of all cities and regions to the benefit of the national economy and not exacerbate spatial disparities.

Devolution in the UK context has been – and will continue to be – a process, and not an event, and any future fiscal devolution to cities and city regions is likely to come in different shapes and sizes.

Through i-BUILD and other current CURDS’ research projects exploring cities, local government, decentralisation and growth, a wide range of empirically-led analyses will examine what sort of fiscal capacity places have, and whether they have a vision and strategy, and the means to manage and assess risk properly and to borrow prudentially. This should help us to arrive at a set of evidenced-based and informed conclusions on the precise merits of fiscal devolution and what kind of powers could be devolved to what places and when.

Population Census: indispensable for local geography

Posted by Mike Coombes, 19th December 2013

This month sees the end of a consultation about the possibility of replacing Britain’s Population Census with an unproven alternative based on linking administrative data and sample surveys. It is well known that such a change would severely harm our ability to study neighbourhoods, but it is not so widely recognised that it would mean there will no data on the patterns of commuting and migration flows. This will not only prevent academic studies of places as ‘spaces of flows’ but prevent any definitions of the meaningful areas that have proved vital for:
• accurate targeting of local policy, plus the evaluation of labour market programmes
• research into uneven growth, and the delivery of appropriate housing and economic development
• providing a statistically consistent geography for the whole country and
• informing inward investment.

Research into the patterns of commuting and migration – ‘flows’ – depends entirely on data from a Census, because only a Census in the traditional form is able to provide robust flow data covering all small areas. One consequence of any decision to curtail the Census would be that it would mean the end of over 30 years of policy use of Travel-to-Work Areas (TTWAs). TTWAs have since the 1970s been defined for the government by analysing the fine-grain commuting data from each new Census. So why is this important?

Many policy decisions rely on comparing statistics on areas, so using appropriately-defined areas makes for better policy decisions: an area can miss out on large sums of public funds if the boundary around that area is not drawn appropriately. In the absence of TTWAs local data analyses rely on administrative areas, but their idiosyncratic boundaries distort the comparison of areas. TTWA boundaries are widely used by the UK government and others because they accurately map economic geography, and so allow comparisons of areas to be valid. Many recent urban or regional policies called for delivery by ‘functional economic area’ and the accepted definitions of such local economies is the TTWA.

The following points illustrate just some policy-related current uses of TTWAs.
• Several series of Official Statistics are reported by TTWAs, some on a monthly basis, and these are widely used for labour market policy or analysis (as shown by ONS’s Nomis database supporting many thousand TTWA-based downloads each year).
• Government policy use of TTWAs includes guidance in the Treasury Green Book on how to assess the case for government intervention: TTWAs are cited in explaining how analyses should use areas that approximate local labour markets, and worked examples are given for one application, the assessment of proposed transport investments in Scotland (Transport Scotland 2008).
• The major policies that have for a decade focussed on cities was evidenced by the State of the English Cities research which relied on TTWAs (Parkinson et al 2006); recent key developments include the announcement of City Deals that based its choice of cities on TTWAs, even though the policy is explicitly aimed at local authorities (HM Government 2011).
• Local Enterprise Partnerships were created to represent functional economic areas and the relevant policy documents repeatedly reference TTWAs as template for such areas (HM Government 2010).

A parallel development has been the need for housing market area (HMA) definitions so that housing policy is implemented across appropriate sub-regions (which potentially cut across administrative boundaries). Research for the National Housing and Planning Advice Unit has identified consistently-defined HMAs following analyses using small area data on migration as well as commuting. Even though the coalition government has shifted the scale of housing policy, it recognises that “[t]hese areas will help local planning” (Department of Communities and Local Government 2010).

There are no effective alternatives to the Census providing data on local flows of commuting or migration. Experiments by ONS to see whether APS could provide the data on commuting needed to update TTWAs found that reliable results were unobtainable. Alternative sources based on surveys are limited by their sample size that precludes data on small geographical areas – and especially impacts on flow matrices – as was confirmed explicitly by Skinner et al (2013: section 5.2.4) in their report for ONS.

Thus the availability of the Population Census small area data on commuting and migration flows remains an absolute pre-requisite so meaningful areas can be defined, making it possible to target local policy accurately, and deliver appropriate economic development, and study uneven growth.

Department of Communities and Local Government (2010) Geography of Housing Market Areas: Final Report and Summary www.gov.uk/government/publications/housing-market-areas

HM Government (2011) Unlocking Growth in Cities Cabinet Office, London www.gov.uk/government/uploads/system/uploads/attachment_data/file/7523/CO_Unlocking_20GrowthCities_acc.pdf

HM Government (2010) Local Enterprise Partnerships Letter from Secretaries of State BIS & CLG to local authority and business leaders www.gov.uk/government/uploads/system/uploads/attachment_data/file/5649/1626854.pdf

Parkinson M, Champion T, Evans R, Simmie J, Turok I, Cookston M, Katz B, Park A, Berube A, Coombes M, Dorling D, Glass N, Hutchins M, Kearns A, Martin R and Wood P (2006) State of the English Cities ODPM, London webarchive.nationalarchives.gov.uk/+/http://www.communities.gov.uk/publications/citiesandregions/state4

Skinner C, Hollis J and Murphy M (2013) Beyond 2011: independent review of methodology” Report to ONS www.ons.gov.uk/ons/about-ons/who-ons-are/programmes-and-projects/beyond-2011/reports-and-publications/methods-and-policies-reports/beyond-2011–independent-review-of-methodology.pdf

Transport Scotland (2008) Developing a Case by Case Approach The Scottish Government, Edinburgh www.transportscotland.gov.uk/stag/td/Part2/Economy/9.4.4.1