Manchester town hall
The former civil servant who was a played a key role in negotiating Greater Manchester’s devolution deal with Whitehall has that central government should not be able to take back control of devolved services without the backing of two-thirds of MPs.
Mike Emmerich, a member of Sir Howard Bernstein’s team that delivered the landmark devolution agreement for Greater Manchester in 2014 and now co-founder of city growth consultancy Metro Dynamics, called for a ‘localism ratchet’ to move powers out of Westminster.
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The Greater Manchester deal created a mayor for the city’s combined authority, with powers over devolved housing budgets, transport planning powers, and responsibility for skills spending. Subsequent deals agreed when George Osborne was chancellor have seen five other areas agree to directly-elected combined authority mayors with similar powers, who will be voted into office on 4 May. The areas are: Cambridgeshire and Peterborough, Greater Manchester, the Liverpool City Region, Tees Valley, the West Midlands and the West of England.
However, Emmerich, who worked in both the Treasury and 10 Downing St between 1997 and 2002, said these powers were ‘small beer’ and would not be enough to tackle the economic underperformance of urban areas in England. Emmerich has caclulated that the deficit between what the 10 biggest cities outside London earn from taxation and what they spend every year amounts to £53.5bn. The funding attached to the mayoral devolution deals amounts to just £7.4bn over 30 years, or £246.5m annually.
He argued that in order to close this gap between spending and revenue, there should be a presumption towards devolution for many more policy areas.
For example, he highlighted that only Greater Manchester has so far taken on further devolved responsibility for health spending, but major cities should be free to seek devolution of any area of public spending that is not judged inherently national in nature.
Devolution should be underpinned by new minimum national standards in public services that devolved administrations will need to meet in areas such as health and education, and the National Audit Office should report annually on the services in devolved cities.
Government intervention in cases of service failure should be a last resort, and only possible with a supermajority of two-thirds of MPs backing the plan, he said, similar to the threshold for calling an unplanned general election in the Fixed Terms Parliament Act.
Emmerich said that current system means that “what parliament gives, so too parliament can take away”. Devolved programmes and resources promised and agreed when Osborne was in Number 11 have already been abolished or reduced, he said.
In order to better fund services, cities should have tax-raising powers, especially business, property and sales based taxes, and the ability to increase them as long as participation in mayoral elections was high. However, local taxation powers would need to be balanced by the existing redistribution of tax revenues from rich and thriving areas to poorer, smaller ones.
“This is the moment to push forward with a new settlement for the UK’s cities. The lessons from the Brexit vote are that the centralised UK economy and state have not served large portions of the population at all well,” Emmerich said.
“City-building involves doing the right thing, at scale and for a very long time. The right policy ideas need to be accompanied by sustained commitment to the achievement of a bold, long-term vision.”