Devolution: challenges for Whitehall within England

The session was introduced and chaired by Alun Evans, Chief Executive of the British Academy, and former senior civil servant including as Director of the Scotland Office in his final three years in Whitehall. He had also worked in the Cabinet Office, the Department for Communities and Local Government (DCLG) and what is now the Department for Business, Energy & Industrial Strategy (BEIS).

Mr Evans introduced the three speakers: Sir John Elvidge, who was Permanent Secretary to the Scottish Government under First Ministers Jack McConnell and Alex Salmond; Tom Walker, who works as lead official on devolution to city regions at the Cities and Local Growth Unit across DCLG and BEIS; and Dr Jo Casebourne from the Institute for Government, who has conducted research on metro mayors and devolution more broadly.

The first speaker outlined that the drive for devolution in England began in the summer of 2014 when Rt Hon George Osborne first unveiled his ‘Northern Powerhouse’ vision. Greater Manchester reached a devolution deal with central government later that year and several other areas made deals before the 2015 election.

In 2015, 38 areas submitted proposals for devolution by a September deadline and several reached agreements between October and March 2016, including the Liverpool City Region, the West Midlands and the North East. Before the EU referendum, George Osborne, Rt Hon Lord O’Neill of Gatley (Jim O’Neill) and Rt Hon Greg Clark MP all played a central role in driving the process.

Since the EU referendum some ambiguity has arisen as to whether devolution in England is a priority. There have been conflicting messages over the Government’s commitment to the process. George Osborne is no longer in Government and there does not appear to be the same commitment from the Chancellor Rt Hon Philip Hammond MP. Lord O’Neill left his position as Commercial Secretary to the Treasury in September 2016 and the extent to which Rt Hon Sajid Javid MP is supportive of the policy is unclear.

The BEIS Industrial Strategy Green Paper in January 2017 and the DCLG housing White Paper in February 2017 both emphasised  the new metro mayors’ important role in these areas, however, the March 2017 Budget made mention of the new arrangements only twice, compared to the 43 mentions in the March 2016 Budget.

One third of the English population (including London) now has a directly elected metro mayor, though the mayors have a range of powers. One speaker argued that the benefits of the metro-mayor model are that; (i) metro mayors are at the right scale for the issues they are dealing with; (ii) they will be visible and accountable; (iii) they will be outward facing; (iv) they will be able to wield ‘soft power’ and; (v) they are the best chance for sustainable devolution, with the mayor of London having gained more power over time for example.

Going forward, the 2016 Conservative manifesto stated that “we will consolidate our approach, providing clarity across England on what devolution means for different administrations so all authorities operate in a common framework.” There was also a concession that mayors will not be necessary for deals in rural areas.

However, with the Conservative Party having lost its majority, many manifesto pledges are likely to be dropped and the current Government is unlikely to prioritise devolution. Furthermore, the Chancellor and Secretary of State for DCLG have stayed in place, which suggests there will be no change from the approach taken over the last year. DCLG can continue with its current programme, as the Government is focusing on Brexit, but it is more likely that more powers will be granted to existing mayors than the creation of new ones.

A second speaker voiced concern about an absence of joined-up thinking in Whitehall about devolution. This speaker stated that, before 1999, Whitehall was dominated by an explicit ‘control psychology’ where the needs of England were prioritised. The beginning of Government action on devolution was with a manifesto commitment, therefore the initial discussions on this issue concerned the degree of control which would be retained by Whitehall. After 1999, the instinct to control was accompanied by an instinct for indifference towards the devolved administrations.

There remains a lack of mature discussion between administrations. Since 1999, it was argued, the devolved nations came to be seen as irrelevant to many officials in Whitehall, who saw little value in coordinating with the other administrations. Brexit has given a practical reason to engage with the devolved administrations but it continues to be on a ‘problem by problem’ basis. Whitehall is capable of networked thinking so there is no reason why the group of civil servants who have a profound understanding of this issue have no traction with their colleagues. This is compounded by a lack of interest in thinking of England as a separate entity.

The third speaker highlighted three main starting points: (i) the UK (or England) is one of the most centralised of Western democracies; (ii) there is a strong regional imbalance in its economy and; (iii) no one expected devolution to actually happen. The speaker stated that it is possible to be more positive about what has happened and to recognise the success of what has been achieved, although the devolution process has unfolded unevenly due to the varying commitment to devolution shown by different departments.

City deals were driven by the need to stimulate local economic growth through strengthening local leadership. The turnout in the recent mayoral elections was higher than expected and dialogue continues as to what comes next. The new mayors each have a range of different powers so this will play out differently across the country. In some cases they are already demanding more powers, for example London and Greater Manchester.

The speaker therefore concluded that mayors, at both city and city-region scale, will play an important role in driving the industrial strategy and addressing economic imbalances. The speaker felt that the ‘Northern Powerhouse’ (Manchester, Leeds, Liverpool and Sheffield) is of a suitable scale to compete on the global stage with much larger cities in countries like China, where a number of cities have populations in the millions.

Q&A

The panel reflected upon Whitehall’s superficial consideration of devolution issues, noting that policy submissions to ministers would often be almost entirely about England, with just a single, short paragraph at the end on the impact on the devolved nations. The panel were asked for their proposals on what Whitehall should do differently to make ‘joined up thinking work’.

One speaker recommended breathing life back into the Joint Ministerial Committee structure, which brings together ministers from the UK and devolved governments to discuss issues of shared interest, arguing that this mechanism still had potential to function well. The speaker suggested copying other countries and said that Germans were thoughtful on this set of issues, thinking clearly about the national and the subnational, and respecting the roles of different players. Another panel member advised observing what other mayors are doing around the world to inform the actions of the new metro mayors. However, a different panellist emphasised that the devolution deals in England had happened organically rather than being imposed and expressed support for a more subtle approach than copying models from other countries.

The first question from the floor suggested thinking more about the scale of devolution. It was suggested that regional devolution would bring England closer to the scale of China, the US or certain European countries. One panellist responded that the devolution deals have been focused on economic geographies, explaining that local services tend to cover slightly different geographic areas and that cities have therefore provided a sensible starting point. A panellist added that Whitehall preferred neater boundaries to the current ‘patchwork’ of geographies.

The second question from the floor asked about the potential for joint working with Whitehall in the city region devolution deals, for example on adult education and health, and how it has affected the relationship between the regions and the departments. A panellist explained the deals include a long list of experimental reforms, for example the devolution of the skills budget and transport funding, and that this process has been based on relationships rather than a government plan. it was felt that the 2004 North East referendum demonstrated that top down imposition does not work and that a bespoke, tailored process was necessary.  

The third questioner asked about the role of historical examples in these debates over devolution. One speaker noted that, in the West of England, the unpopularity of Avon County Council, which was perceived to have been dominated by Bristol before its abolition in 1996, was an obstacle to finalising an agreement, due to concerns that the new structure would replicate this feature.

The fourth question suggested a problem exists with the language of “devolution”. this, it was felt, implied that Whitehall was deciding to give something away and didn’t recognise the demand-side from the receiving areas. The questioner also challenged the emphasis in the conversation so far on the economic logic for devolution and the lack of acknowledgement of the desire for areas to have a stronger voice and to fashion an identity. One panellist responded that the conversation around devolution in England focuses on the economic reasons because this was the initial driver: the need for local leadership to encourage inclusive growth in England’s regions. Another speaker agreed that it is important to talk about power rather than devolution, adding that the role of mayor would be an opportunity to bridge the disconnect between the lives of citizens and the government.

The fifth question from the floor concerned how Whitehall can address the problems that Brexit has highlighted on issues of governance over certain issues. One speaker acknowledged existence of a cultural problem of London centrality in Whitehall, but added that the Government was trying to achieve a lot at the moment and so needed to be defended. Another panellist argued that Whitehall fails to distinguish between when an English response and when a UK response is necessary. He said that people forget that England and the UK are not the same, and suggested training and education on this matter as another dimension of professional skills.

The sixth question concerned plans to abolish the rate support grant and enable most of the funding of local authorities to come from business rates and council tax. One panellist acknowledged that the Local Government Finance Bill was not in the Queen’s Speech and explained that, currently, a great deal of resource is focused on responding to the Grenfell Tower disaster. The speaker stressed that there was wide recognition that more tax raising powers were likely to be devolved but added that the uneven tax base in the UK would possible exacerbate the issue of a ‘postcode lottery’, which would make the devolution of tax raising powers controversial. Even if 100% of business rates were retained, there would be a need for redistribution.

The seventh question from the floor said that devolution had been presented as a good thing but questioned its purpose. They said it had been described as leading to better decisions and better use of public money but asked what power the new authorities will have to deliver on its new responsibilities. One speakerresponded that this was an experiment and that it would be important to evaluate public spending in these cases, adding that it was equally important to evaluate how public services provided by central government perform.

The eighth questioner asked whether there should be a constitutional convention to address the ad hock nature of British politics, the government and the constitution, with one speaker responding by emphasising the need for a consensus over what a convention was seeking to achieve. It was suggested that now might be an appropriate time if Scotland was committed to making the UK work. The speaker also criticised the way the UK has approached fundamental constitutional change by seeking simple majorities rather than broad consensus.

One event attendee stressed that few people in Whitehall reflect upon whether they are acting as the government of the UK or of England alone. The attendee argued that this has posed a challenge for intergovernmental workings on Brexit, particularly in the debate over UK-wide frameworks over areas of devolved competences, for example, agriculture, fisheries and the environment. They said the devolved administrations’ view that the four nations need to come together to agree this, with the UK Government acting for England, was fundamentally different from the view of the UK Government i.e. that it would be acting for the UK as a whole. He called this a “clash of cultures”. One panellist observed that this was consistent with Whitehall logic that powers will flow back from Brussels to Whitehall then, if appropriate, to the devolved administrations. He said this was a result of Whitehall being under-informed about the differences in the rest of the UK.

A locally elected representative outlined the concern in Bradford that they have been left out of devolution. He asked for the panel’s views on Bradford’s options going forward. A panellist explained there was uncertainty over further devolution for many places, both in some of those areas which submitted proposals in September 2015 as well as others which may have another opportunity to submit proposals. The speaker recommended communicating with other areas which have begun to act on plans without a formal devolution deal.

The final question concerned the beliefthat devolution to the city regions had been described as a process rather than an event, which was different to the experience of Scotland. The questioner suggested new vocabulary would better reflect the complexities and differences between these forms of “devolution” and implied it wasn’t appropriate language for the experience in England. One panellist agreed that they were two fundamentally different discussions and that using the same language confused the issues. He suggested ‘subsidiarity’ was an alternative for the English context. Another speaker agreed that new language was needed; however the third panellist acknowledged that there were tactical reasons for using “devolution” in this context due to the political realities of the language.

The session was introduced and chaired by Alun Evans, Chief Executive of the British Academy, and former senior civil servant including as Director of the Scotland Office in his final three years in Whitehall. He had also worked in the Cabinet Office, the Department for Communities and Local Government (DCLG) and what is now the Department for Business, Energy & Industrial Strategy (BEIS).
 
Mr Evans introduced the three speakers: Sir John Elvidge, who was Permanent Secretary to the Scottish Government under First Ministers Jack McConnell and Alex Salmond; Tom Walker, who works as lead official on devolution to city regions at the Cities and Local Growth Unit across DCLG and BEIS; and Dr Jo Casebourne from the Institute for Government, who has conducted research on metro mayors and devolution more broadly.
 
The first speaker outlined that the drive for devolution in England began in the summer of 2014 when Rt Hon George Osborne first unveiled his ‘Northern Powerhouse’ vision. Greater Manchester reached a devolution deal with central government later that year and several other areas made deals before the 2015 election.
 
In 2015, 38 areas submitted proposals for devolution by a September deadline and several reached agreements between October and March 2016, including the Liverpool City Region, the West Midlands and the North East. Before the EU referendum, George Osborne, Rt Hon Lord O’Neill of Gatley (Jim O’Neill) and Rt Hon Greg Clark MP all played a central role in driving the process.
 
Since the EU referendum some ambiguity has arisen as to whether devolution in England is a priority. There have been conflicting messages over the Government’s commitment to the process. George Osborne is no longer in Government and there does not appear to be the same commitment from the Chancellor Rt Hon Philip Hammond MP. Lord O’Neill left his position as Commercial Secretary to the Treasury in September 2016 and the extent to which Rt Hon Sajid Javid MP is supportive of the policy is unclear.
 
The BEIS Industrial Strategy Green Paper in January 2017 and the DCLG housing White Paper in February 2017 both emphasised  the new metro mayors’ important role in these areas, however, the March 2017 Budget made mention of the new arrangements only twice, compared to the 43 mentions in the March 2016 Budget.
 
One third of the English population (including London) now has a directly elected metro mayor, though the mayors have a range of powers. One speaker argued that the benefits of the metro-mayor model are that; (i) metro mayors are at the right scale for the issues they are dealing with; (ii) they will be visible and accountable; (iii) they will be outward facing; (iv) they will be able to wield ‘soft power’ and; (v) they are the best chance for sustainable devolution, with the mayor of London having gained more power over time for example.
 
Going forward, the 2016 Conservative manifesto stated that “we will consolidate our approach, providing clarity across England on what devolution means for different administrations so all authorities operate in a common framework.” There was also a concession that mayors will not be necessary for deals in rural areas.
 
However, with the Conservative Party having lost its majority, many manifesto pledges are likely to be dropped and the current Government is unlikely to prioritise devolution. Furthermore, the Chancellor and Secretary of State for DCLG have stayed in place, which suggests there will be no change from the approach taken over the last year. DCLG can continue with its current programme, as the Government is focusing on Brexit, but it is more likely that more powers will be granted to existing mayors than the creation of new ones.
 
A second speaker voiced concern about an absence of joined-up thinking in Whitehall about devolution. This speaker stated that, before 1999, Whitehall was dominated by an explicit ‘control psychology’ where the needs of England were prioritised. The beginning of Government action on devolution was with a manifesto commitment, therefore the initial discussions on this issue concerned the degree of control which would be retained by Whitehall. After 1999, the instinct to control was accompanied by an instinct for indifference towards the devolved administrations.
 
There remains a lack of mature discussion between administrations. Since 1999, it was argued, the devolved nations came to be seen as irrelevant to many officials in Whitehall, who saw little value in coordinating with the other administrations. Brexit has given a practical reason to engage with the devolved administrations but it continues to be on a ‘problem by problem’ basis. Whitehall is capable of networked thinking so there is no reason why the group of civil servants who have a profound understanding of this issue have no traction with their colleagues. This is compounded by a lack of interest in thinking of England as a separate entity.
 
The third speaker highlighted three main starting points: (i) the UK (or England) is one of the most centralised of Western democracies; (ii) there is a strong regional imbalance in its economy and; (iii) no one expected devolution to actually happen. The speaker stated that it is possible to be more positive about what has happened and to recognise the success of what has been achieved, although the devolution process has unfolded unevenly due to the varying commitment to devolution shown by different departments.
 
City deals were driven by the need to stimulate local economic growth through strengthening local leadership. The turnout in the recent mayoral elections was higher than expected and dialogue continues as to what comes next. The new mayors each have a range of different powers so this will play out differently across the country. In some cases they are already demanding more powers, for example London and Greater Manchester.
 
The speaker therefore concluded that mayors, at both city and city-region scale, will play an important role in driving the industrial strategy and addressing economic imbalances. The speaker felt that the ‘Northern Powerhouse’ (Manchester, Leeds, Liverpool and Sheffield) is of a suitable scale to compete on the global stage with much larger cities in countries like China, where a number of cities have populations in the millions.
 
Q&A
 
The panel reflected upon Whitehall’s superficial consideration of devolution issues, noting that policy submissions to ministers would often be almost entirely about England, with just a single, short paragraph at the end on the impact on the devolved nations. The panel were asked for their proposals on what Whitehall should do differently to make ‘joined up thinking work’.
 
One speaker recommended breathing life back into the Joint Ministerial Committee structure, which brings together ministers from the UK and devolved governments to discuss issues of shared interest, arguing that this mechanism still had potential to function well. The speaker suggested copying other countries and said that Germans were thoughtful on this set of issues, thinking clearly about the national and the subnational, and respecting the roles of different players. Another panel member advised observing what other mayors are doing around the world to inform the actions of the new metro mayors. However, a different panellist emphasised that the devolution deals in England had happened organically rather than being imposed and expressed support for a more subtle approach than copying models from other countries.
 
The first question from the floor suggested thinking more about the scale of devolution. It was suggested that regional devolution would bring England closer to the scale of China, the US or certain European countries. One panellist responded that the devolution deals have been focused on economic geographies, explaining that local services tend to cover slightly different geographic areas and that cities have therefore provided a sensible starting point. A panellist added that Whitehall preferred neater boundaries to the current ‘patchwork’ of geographies.
 
The second question from the floor asked about the potential for joint working with Whitehall in the city region devolution deals, for example on adult education and health, and how it has affected the relationship between the regions and the departments. A panellist explained the deals include a long list of experimental reforms, for example the devolution of the skills budget and transport funding, and that this process has been based on relationships rather than a government plan. it was felt that the 2004 North East referendum demonstrated that top down imposition does not work and that a bespoke, tailored process was necessary.  
 
The third questioner asked about the role of historical examples in these debates over devolution. One speaker noted that, in the West of England, the unpopularity of Avon County Council, which was perceived to have been dominated by Bristol before its abolition in 1996, was an obstacle to finalising an agreement, due to concerns that the new structure would replicate this feature.
 
The fourth question suggested a problem exists with the language of “devolution”. this, it was felt, implied that Whitehall was deciding to give something away and didn’t recognise the demand-side from the receiving areas. The questioner also challenged the emphasis in the conversation so far on the economic logic for devolution and the lack of acknowledgement of the desire for areas to have a stronger voice and to fashion an identity. One panellist responded that the conversation around devolution in England focuses on the economic reasons because this was the initial driver: the need for local leadership to encourage inclusive growth in England’s regions. Another speaker agreed that it is important to talk about power rather than devolution, adding that the role of mayor would be an opportunity to bridge the disconnect between the lives of citizens and the government.
 
The fifth question from the floor concerned how Whitehall can address the problems that Brexit has highlighted on issues of governance over certain issues. One speaker acknowledged existence of a cultural problem of London centrality in Whitehall, but added that the Government was trying to achieve a lot at the moment and so needed to be defended. Another panellist argued that Whitehall fails to distinguish between when an English response and when a UK response is necessary. He said that people forget that England and the UK are not the same, and suggested training and education on this matter as another dimension of professional skills.
 
The sixth question concerned plans to abolish the rate support grant and enable most of the funding of local authorities to come from business rates and council tax. One panellist acknowledged that the Local Government Finance Bill was not in the Queen’s Speech and explained that, currently, a great deal of resource is focused on responding to the Grenfell Tower disaster. The speaker stressed that there was wide recognition that more tax raising powers were likely to be devolved but added that the uneven tax base in the UK would possible exacerbate the issue of a ‘postcode lottery’, which would make the devolution of tax raising powers controversial. Even if 100% of business rates were retained, there would be a need for redistribution.
 
The seventh question from the floor said that devolution had been presented as a good thing but questioned its purpose. They said it had been described as leading to better decisions and better use of public money but asked what power the new authorities will have to deliver on its new responsibilities. One speakerresponded that this was an experiment and that it would be important to evaluate public spending in these cases, adding that it was equally important to evaluate how public services provided by central government perform.
 
The eighth questioner asked whether there should be a constitutional convention to address the ad hock nature of British politics, the government and the constitution, with one speaker responding by emphasising the need for a consensus over what a convention was seeking to achieve. It was suggested that now might be an appropriate time if Scotland was committed to making the UK work. The speaker also criticised the way the UK has approached fundamental constitutional change by seeking simple majorities rather than broad consensus.
 
One event attendee stressed that few people in Whitehall reflect upon whether they are acting as the government of the UK or of England alone. The attendee argued that this has posed a challenge for intergovernmental workings on Brexit, particularly in the debate over UK-wide frameworks over areas of devolved competences, for example, agriculture, fisheries and the environment. They said the devolved administrations’ view that the four nations need to come together to agree this, with the UK Government acting for England, was fundamentally different from the view of the UK Government i.e. that it would be acting for the UK as a whole. He called this a “clash of cultures”. One panellist observed that this was consistent with Whitehall logic that powers will flow back from Brussels to Whitehall then, if appropriate, to the devolved administrations. He said this was a result of Whitehall being under-informed about the differences in the rest of the UK.
 
A locally elected representative outlined the concern in Bradford that they have been left out of devolution. He asked for the panel’s views on Bradford’s options going forward. A panellist explained there was uncertainty over further devolution for many places, both in some of those areas which submitted proposals in September 2015 as well as others which may have another opportunity to submit proposals. The speaker recommended communicating with other areas which have begun to act on plans without a formal devolution deal.
 
The final question concerned the beliefthat devolution to the city regions had been described as a process rather than an event, which was different to the experience of Scotland. The questioner suggested new vocabulary would better reflect the complexities and differences between these forms of “devolution” and implied it wasn’t appropriate language for the experience in England. One panellist agreed that they were two fundamentally different discussions and that using the same language confused the issues. He suggested ‘subsidiarity’ was an alternative for the English context. Another speaker agreed that new language was needed; however the third panellist acknowledged that there were tactical reasons for using “devolution” in this context due to the political realities of the language.