Over the past 10 years, the government has made a series of devolution deals with local councils across England, transferring responsibility in areas such as transport, housing and skills to nine combined authorities led by metro mayors. This process is continuing as the government seeks to roll out devolution to all parts of England that want it by 2030 – an objective that is supported by Labour.
The Institute for Government welcomes this trend. But – in a new report on ‘The Art of the Devolution Deal’ – we identify three key ways in which Whitehall should improve its approach to devolution.
Government should respond to any formal request for devolution – and be more transparent about its decisions
Demand for devolution usually outstrips supply, as government is only able to negotiate a few deals at a time due to limited ministerial attention and civil service capacity. This gives ministers the power to decide which devolution proposals to prioritise and which to ignore.
In July 2021, when the government invited local leaders across England to signal their interest in a deal, it received 18 formal expressions of interest, opened negotiations with nine areas, and concluded six deals by the end of 2022. The 2015 call for proposals generated an even longer list of 38 bids, leading eventually to the formation of nine mayoral combined authorities.
This decision-making process lacks transparency. The government should respond publicly to expressions of interest and explain why – if that is its decision – it has decided not to enter into negotiations in any given case. As it stands, it is not even on public record which are the nine places whose 2021 expressions of interest were ‘left on read’.
More transparency would better enable areas to understand where and how their devolution ambitions were lacking and help other places to avoid potential pitfalls. For similar reasons, we propose the creation of a formal right for places to request the devolution of any power devolved elsewhere in the country. If the government says no, it should have to justify its decision.
Government should make good on its promise of flexibility in devolution deal-making
The government has set out four principles for future devolution deals: effective leadership, sensible geography, flexibility, and appropriate accountability. These underpin a three-level devolution framework listing the specific powers and funding on offer. The publication of a clear framework is welcome – and in line with past Institute for Government recommendations – but the reality is they leave government substantial freedom to interpret the requirements. One former insider admitted: “The criteria are quite subjective and ministers may want to prioritise a place for noble or less noble reasons.”
The government’s devolution framework in theory offers a choice between three levels of devolution, with the widest set of powers and budgets on offer only for level three mayoral deals, reflecting the firm government view that directly elected leaders provide stronger local leadership. Mayoral deals have been ushered to the front of the queue – no level one or two deals have been concluded since the framework was published, leading to frustration among some local leaders who have put forward proposals for level two deals.
We agree that some powers should be devolved only to mayor-led areas, given the need for a strong single locus of accountability, but Michael Gove has himself acknowledged that there are “some places where [a directly elected mayor] won’t work”. It would be better to conclude a weaker deal than to push so hard for mayoral deals that negotiations collapse – as has happened in several previous cases, such as the North East deal signed in 2015 and abandoned a year later.
So we encourage the government to conclude some non-mayoral devolution deals as a way to strengthen collaboration across local boundaries, with the aspiration that this might lead to deeper mayoral deals in future. This was effectively the path that Greater Manchester took, building on many years of increasingly formalised collaboration before adopting mayoral leadership in 2017. It was also the stated promise of the white paper, which described the devolution framework as “designed to enable areas to deepen devolution over time recognising that, as institutions mature, they can gain additional powers”.
Government should provide capacity support to places negotiating and implementing devo deals
Negotiations are resource-intensive, particularly for a group of local authorities seeking to negotiate their first devolution deal. A former local official told us: “Do not underestimate how much capacity you are going to need to sustain those negotiations. Once they get going they can move really quickly.” But – as shown in the IfG’s annual Performance Tracker of public services – strategic and policy capacity is in short supply in local government, creating a practical challenge for places negotiating deals. The government should bear in mind the resource imbalance in negotiations and offer informal support wherever possible to places working through the negotiation process.
Turning an agreed devolution deal into reality can also stretch local government resources. So the government should make a small amount of capacity funding available during the implementation process too. This would allow local leaders to employ additional staff to conduct the required governance review and public consultation to report to Whitehall on progress. Alternatively, government could send one or two officials on secondment to help navigate the deal through to completion.
But the benefits of staff interchange go both ways: bringing knowledge of how combined authorities work into Whitehall, as well as helping devolved bodies build capacity. As one local figure told us: “We work hard in local government to understand central government – the same needs to be true vice versa.” So the government should invest in a formal interchange scheme for staff between combined authorities and Whitehall departments that are closely involved in devolution, including short-term placements and longer-term secondments.
The Art of the Devolution Deal: How England’s cities and counties can make a success of devolution, was written by Akash Paun, Duncan Henderson and Peter Hourston, and published by the Institute for Government on 7 July 2023. It was produced in partnership with the University of Nottingham’s Institute for Policy and Engagement.