In his first post-election speech George Osborne has set out ‘revolutionary’ plans for English cities to get powers over housing, healthcare, transport, planning and policing.
Chancellor of the exchequer George Osborne
A Cities Devolution Bill will be in the Queen’s Speech later this month. The legislation will be steered by James Wharton, the 31-year old MP for Stockton South, who was this week named junior minister at the Department for Communities & Local Government with special responsibility for the Northern Powerhouse.
Also working to being the vision to life will be former Goldman Sachs economist Jim O’Neill who has joined the government specifically to get big infrastructure projects out of the ground.
Lord O’Neill, as he is to become, has been appointed commercial secretary to the Treasury to bring the Northern Powerhouse vision to life. He replaces Lord Deighton in the role that some call ‘infrastructure tsar’.
Closing the north-south divide is a key ambition of the government, particularly chancellor George Osborne, who represents a Cheshire constituency.
On 27th May the Queen’s Speech will include a new City Devolution Bill designed to give Manchester and other cities that apply a whole new level of economic autonomy.
In a speech in Manchester yesterday Mr Osborne said: “This law will pave the way for Greater Manchester – and, importantly, other cities as well, to take greater control and responsibility over all the key things that make a city work, from transport and housing to skills, and key public services like health and social care. It means by the end of this year the legal framework will be set so that any city can proceed to implement a mayoral devolution deal.”
The chancellor said of Jim O’Neill’s appointment: “He was the chair of the City Growth Commission, whose work has inspired the thinking behind the Northern Powerhouse. He’s one of the world’s top economists. And he’s the man who invented the term ‘the BRICs’ and changed the way everyone viewed emerging economies.”
Now inside the Treasury, Lord O’Neill will “work to deliver the big infrastructure investments and links to emerging economies our country needs,” Mr Osborne said.
Expanding on his vision and the Conservative election manifesto promise for regional devolution, Mr Osborne said: “We will deliver the devolution to Scotland and Wales we promised. But today I can tell you we will go much further and deliver radical devolution to the great cities of England. I say to these cities: it is time for you to take control of your own affairs. So a central part of our Queen’s speech will be a bill to enable a radical new model of city government.
“Here’s the deal: We will hand power from the centre to cities to give you greater control over your local transport, housing, skills and healthcare. And we’ll give the levers you need to grow your local economy and make sure local people keep the rewards.
“But it’s right people have a single point of accountability: someone they elect, who takes the decisions and carries the can. So with these new powers for cities must come new city-wide elected mayors who work with local councils.
“I will not impose this model on anyone. But nor will I settle for less. London has a mayor. Greater Manchester has agreed to have a mayor as part of our Northern Powerhouse – and this new law will make that happen. My door now is open to any other major city who? wants to take this bold step into the future.
“This is a revolution in the way we govern England.”
Institution of Civil Engineers (ICE) director general Nick Baveystock thinks it’s all a great idea. “The devolution of transport powers is an opportunity to be seized and this renewed commitment from government is encouraging,” he said. “Scotland and London have shown that locating transport powers closer to those it affects can lead to greater investment and better decision making – and this bill should pave the way for others to also benefit from greater autonomy.
“There is however no ‘one-size fits all’ devolution model. Government must therefore resist the desire for standardisation and instead be guided by the needs, ambition and capacity of each area. Local areas also need to rise to the challenge – demonstrating how they will make the best use of powers and contribute to UK wide goals.”
Freight Transport Association (FTA) regional policy chief Christopher Snelling is less sure: “FTA has concerns over the future role of elected Mayors in these authorities. Personality politics can lead to actions led by political image concerns rather than good policy making processes.”
Pinsent Masons infrastructure partner Jon Hart said that ere are limits to what we should expect from regional devolution. “The thinking between what has been dubbed ‘the Northern Powerhouse’ remains admirable – local empowerment and economic regeneration. Devolution could boost northern economies making Britain stronger economically,” he said.
“Jim O’Neil appointment as the commercial secretary to the Treasury is encouraging news in terms of long-term infrastructure strategy and planning for devolution and the Northern Powerhouse.
“Elected mayors could further support this initiative but devolution will not be an easy transition and will require a degree of political buy in from local government. It is this political subtext which may end up getting in the way of delivering on infrastructure improvements, given potential local resistance as to the terms of any deal to be done with the Treasury in terms of releasing local autonomy. The need to rebalance the economy is a national need – it is for the benefit of those in London and the south just as much as those in the north.
“Devolution will assist local transport and housing but the very largest nationally significant infrastructure schemes such as HS2 need approval by government hybrid bills, which are examined in parliament by a mix of public and private bill procedures.
“For example if HS3 — the east-west rail link to complement HS2 — were to go ahead it would certainly need the involvement of parliamentary agents, probably both to promote and oppose. So, devolution would work only to a certain point. Central government will always need to be involved especially on economic and social nationally significant infrastructure projects.
“However, the bigger issue is how this is going to be achieved given that the plans will necessitate massive long-term investment in the region’s infrastructure, at a time when public spending will be significantly cut.
“Longer term international finance conditions – including potential Chinese investment – would seem to offer good opportunities, but our policymakers need some innovative thinking in order to attract that cash to the north of England.”