The evolution of devolution

Next year will mark a turning point in English politics. From May, half of the population, more than half of its economic output and most of its development will be under the authority of directly elected mayors. Will this unlock regional growth, as its proponents promise? Or will it add another level of complexity to the already confusing mosaic of regional and local government? For some, like Capital & Centric co-founder Tim Heatley, the mayors are the best tool in the box to spur growth and development. For others, including regeneration expert Jackie Sadek, they run the risk of drawing much-needed resources away from local authorities. In many ways, the rise of the mayors is a modern phenomenon. While London has had a directly elected mayor since 2000, most of the others only date back to 2017. But devolving power to the regions is not a new idea. Winston Churchill proposed devolution of power to England’s regions in 1912. Other political titans have also tried their hand at changing the political map. Speaking exclusively to EG, former environment secretary Lord Heseltine remarks that an attempt at English devolution was one of his first duties in government, as a junior minister to environment secretary Peter Walker. “I had to deal with the Redcliffe-Maud report,” he recalls. The report, published in 1969, had concluded that the UK’s bewildering patchwork quilt of county, borough and district councils was a barrier to growth. “And what Redcliffe-Maud proposed was that you need to, first of all, modernise the agencies of the state. In other words, local government,” Heseltine expands. All well and good, but the practicalities proved rather less simple. Redcliffe-Maud proposed that the 1,300 local authorities should be replaced by 60 unitary authorities. “Well, we took 1,300 down to 300 authorities. So that was a start! But that is broadly where it still is today. There’s a long journey ahead.” Indeed, the combined authorities introduced in recent years were an attempt to reinstate the seven metropolitan county councils that were created in the 1970s in response to the Redcliffe-Maud report. The current crop of 10 areas with mayoral devolution in England – Greater London, the West Midlands, Greater Manchester, Liverpool City Region, West Yorkshire, South Yorkshire, Cambridgeshire and Peterborough, Tees Valley, the West of England, and North of Tyne – are being touted as the best chance for England’s regions to “level up”. Unlocking investment For the developer or investor, they offer an extra layer of security. Manchester-based developer Capital & Centric has had numerous interactions with the city region’s mayor, Andy Burnham, as well as the mayors of other areas, including Liverpool, where it is developing a £70m TV studio in partnership with the combined authority. “We have had super-positive experiences of working in city regions with metro mayors in the North and the Midlands,” says co-founder Tim Heatley. “They have been a positive force for progress when it comes to unlocking investment. “They add benefit in their ability to make more strategic and joined-up decisions that extend beyond council boundaries and the issues that can sometimes fixate decision-makers on hyperlocal opinions,” says Heatley. “They can join up regeneration with regional transport investment, define growth policies that are unique to their region’s character and local issues, and plough their own furrow within the parameters they have so far been given.” Capital & Centric also has new neighbourhoods underway in Stockport, Bolton, Manchester and Sheffield, as well as mixed-use projects in Liverpool and Birmingham. “In Sheffield, the mayor and combined authority are being proactive at both funding and overcoming barriers to get regeneration on difficult sites underway,” says Heatley, “while in Liverpool the mayor and city region are working with us on key commercial opportunities to bolster competitiveness in key industries,” such as the Littlewoods Studios project. Heatley adds that the most important role the mayor can play is in evening out where the investment goes. “There is an oft-seen imbalance in city regions where the city centre’s prime sites suck up all the attention, with the surrounding towns getting the scraps,” he notes. “The mayors are able to be proactive in addressing that head-on, by working collaboratively with the private sector.” Of course, individual councils can do this, too. But, as the Conservative West Midlands mayor Andy Street points out, circumstances like Birmingham City Council issuing a section 114 notice this month – effectively declaring itself bankrupt – can alienate developers. Development vehicles In the Tees Valley, England’s only other Conservative mayor has come under fire for getting too cosy with developers. Ben Houchen is currently under investigation over the 4,500-acre Teesworks regeneration, after transferring 90% of the site’s ownership to local developers. But aside from the controversy, it is arguably Houchen who has been making the greatest strides in terms of development, and showing just how much power the mayor is capable of wielding. Teesworks is a mayoral development corporation, a planning and investment body with much the same powers as the urban development corporations wielded by Heseltine in the Docklands and Liverpool. The legislation for these has been in place for more than a decade – longer than most of the mayors – but in spite of this, only six MDCs exist across England. There are currently two well-established MDCs in London: the London Legacy Development Corporation, focused on the former Olympic sites around Stratford; and the Old Oak and Park Royal Development Corporation in the north-west of the capital. Outside London there are four. One is in Greater Manchester, set up by Labour mayor Andy Burnham in 2019 to regenerate Stockport town centre but without planning powers or property assets. And the other three are in the Tees Valley: Teesworks – officially the South Tees Development Corporation – which was established in 2017 to regenerate the Redcar steelworks; Hartlepool; and, just last month, Middlesbrough. These have proven to be hugely controversial, with Houchen accused by Labour of a “smash and grab” attempt to exceed his powers. But despite this, there is broad cross-party support for this form of regional devolution. Huge power shift In the past, that has not been the case, creating a back and forth that has made progress difficult for investors or developers, as when Labour’s planned regional assemblies were scrapped, the regional development agencies killed off by the coalition or the demise of local enterprise partnerships. According to Andy Pike, chair of regional development studies at the University of Newcastle, there have been 51 interventions over the past 40 years, all aimed at solving the regional wealth problem. But now there is a broad consensus. Sir Keir Starmer has promised that a future Labour administration will further devolve power within England as part of “a huge power shift out of Westminster”. And this version won’t be so easy to get rid of, says North of Tyne mayor Jamie Driscoll. “An RDA can be dismissed at the stroke of a ministerial pen,” he says, “but this is the first time you’ve got a directly elected individual. No government wants to set the precedent that you can just abolish an elected official midway through a term, trust me!” Devolution is getting deeper, too. Both the Manchester and West Midlands “trailblazer” agreements, signed in March, endowed those regions with more powers and more money, and, vitally, treated them more like a government department, with a single funding pot rather than ring-fenced, short-term grants. Following the announcement of those deals, Liverpool’s metro-mayor Steve Rotheram asked for “guarantees from the chancellor that the Liverpool City Region will be top of the list to next receive these additional powers”. The mayors of both West and South Yorkshire swiftly joined the queue, with negotiations over deeper devolution deals this year. Devolution is also getting wider. Levelling up secretary Michael Gove has promised that by 2030 “every part of England that wants one” will have an expansive devolution deal, along with a simplified, long-term funding settlement. May 2024 will see the first elections for mayors in the East Midlands and York & North Yorkshire, as well as votes in Norfolk and Suffolk and the merging of the North East combined authority with the North of Tyne. Earlier this year, Gove announced that Hull and East Yorkshire would be next in the queue for devolution deals, along with Cumbria, Lancashire, Cheshire and Warrington. Plans are also being developed for Essex, Lincolnshire and Devon. But 2024 will also see the picture become more complex. The East Midlands, which is seeking a deeper devolution deal worth £1.14bn, will be a different beast to the others – a combined county authority. So will Norfolk and Suffolk, but their deals will not lead to elected mayors, as the counties have opted for an elected leader instead. Cornwall has decided to settle for a less extensive tier 2 devolution deal, again without a mayor. Despite the fanfare, there are far more uncertainties about the rise of the mayors than advocates like Michael Gove would care to admit. In June he acknowledged that “not everywhere” will be suitable for a mayor. “You have to ask if this extra layer is just filling the gaps left by the local authorities after years of underinvestment,” says Jackie Sadek. “Are we not better off with properly resourced, properly empowered local authorities? That’s where the planning power is. “Do we need an extra layer of government, or do we just need to properly fund what we have already?” Driscoll is sceptical of this argument. “Is this another layer of government? Well, no, it isn’t,” he says. “I mean, if you look at the new North East area in total, there are 526 councillors in upper-tier authorities, 22 MPs and two police and crime commissioners. One extra mayor is not a layer of government, it is a person.” Tense relationships The model for the modern mayor is often held to be Sir Howard Bernstein in Manchester in the 2010s. As the leader of the city council, he had to win the agreement and support of colleagues in Salford, Bury and Oldham to get anything done. When Andy Burnham became Greater Manchester mayor in 2017, there was already a sizeable staff and infrastructure. Other mayors were less fortunate. “When I walked through the door, we had three permanent members of staff and we were outnumbered by camera crew,” Driscoll recalls. “I said, ‘Right, let’s get some work done.’ They said, ‘We haven’t got any pens for the whiteboard.’” As the Institute for Government concluded: “[Mayors] do not have strong executive powers.” Mayoral decisions can be rejected or overturned by the combined authority. Big decisions often require two-thirds support. Unanimous agreement is required for spatial plans on housing and infrastructure. And the creation of an MDC requires the support of the leader of that council. To push through the one in Middlesbrough, Houchen had to appeal to Gove to force the council to accept it. Andy Street won two terms as the Conservative mayor of the West Midlands, but its seven constituent authorities are ruled four to three by Labour. Street may be the directly elected mayor, but he governs through the West Midlands Combined Authority council, which comprises four Labour members and four Conservatives, including the mayor. Even though he says the authorities are “united by a desire for growth”, there is considerable tension between them, as evidenced by his attacks on Birmingham City Council’s Labour leadership this month following its declaration of effective bankruptcy. Even within parties there is instability. As the incumbent, and with a solid record of delivery, Driscoll stands a good chance of becoming mayor to the enlarged North East fiefdom. But earlier this year Labour announced that he would no longer be its candidate, prompting him to run as an independent. But, as Driscoll says: “We’re talking baby steps.” Despite next year being a watershed for mayoral devolution, in truth it is still just the beginning. And Street believes those baby steps have taken them further than expected. “We have only been at this for six years, and you could probably say we have come further than we thought we would.” For Heatley, things just need to bed in. “Given that the mayors are relatively new roles in the grand scheme of things, and there are varying levels of devolved powers among them, I’d say it took some time for them to get to operating temperature and carve out a defined regeneration role that differentiated them from the local authorities in their patch. “But I’d say the mayors have found their stride.” In fact, he goes further: “The next step has to be more devo.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo by imageBROKER/Shutterstock