Anthony Breach: How to fix the Government’s big mistake on English devolution | Conservative Home

Anthony Breach is an associate director at Centre for Cities, where he leads on housing, planning and devolution.

As you read this, one of the most radical reforms to the state in fifty years is already underway. The local government reforms announced English Devolution White Paper published in December will have profound implications for public services and the economy for decades.

With all the big cities in England now benefitting from devolution – and the Government wisely looking to ‘deepen’ devolution within them – the big political question is how to ‘widen’ devolution out to the shires. Admirably, the Government is moving at pace and trying to accomplish this in a couple of years.

A major barrier to effective local government is that political and economic geography do not match across England. Local economies are vertically fragmented between district and county councils, and horizontally between many different authorities. These unreformed structures are so inconsistent and have such little ability to shape or benefit from a local growth, that more autonomy for them is unlikely to improve either public services or national economic performance

The weakness of the current map explains why the Government is reorganising local government in the shires to push power out of Whitehall. Two-tier district-county structures will be replaced by single-tier unitary councils of at least 500,000 people.

Districts have increasingly become the odd ducks of English local government, with half of the country having already shifted to single-tier structures. Too small to effectively govern local economies while also too big to reflect local communities, districts – and the fragmentation they cause – have become too difficult to justify in a failing system, especially when parish and town councils can play a truly local role.

Yet the efforts to pursue wider devolution do not stop with reorganisation. The Government is trying to extend metro mayors from big cities out to the counties, creating what might be called ‘shire mayors’.

The problem with the English Devolution White Paper is this proposal to create shire mayors. These will sit above the newly reorganised single-tier councils – meaning the Government is abolishing a two-tier system and replacing it with an entirely new two-tier system.

Potentially, it could be defensible to try to end back at square one… if the Government ensured the new map had a tight fit between political and economic geography. But the White Paper’s approach to drawing new boundaries cannot achieve this, for two reasons.

First, ministers are managing the politics of reform by not producing their own map. Instead, councils are being expected to to make their own proposals. Letting councillors mark their own homework certainly generates less controversy, but provides them with few incentives to align the new structures with economic geography.

The incentive of councillors when drawing their own map is often to gerrymander themselves into ‘doughnuts’: highly urban authorities surrounded by extensive suburban and rural authorities, with a shire mayor then popped on top. Examples include Leicestershire, Sussex, and Hampshire.

Doughnut devolution may avoid some political pain. But it effectively recreates the problems that district councils cause all over again, with fragmentation between the urban areas where commuters work and the suburban and rural hinterlands where commuters live. This is unlikely to improve local or national economic performance.

Second, the White Paper emphasises “scale” as more important than economic geography, even though there is no evidence that bigger councils are always better. That size trumps economics means the new shire mayors risk being a worse fit for economic geography than many counties today.

Economic geography is an intuitive idea. Local economies are the area within which a large majority of local graduates live and also work. Also known as High Skill Travel to Work Areas, these graduate commuter areas align to the big cities and roughly county-sized areas in most of England.

Let’s take Gloucestershire as an example of the problems with “scale”. Gloucestershire County Council announced at the start of January that they want to shift from a two-tier to a single-tier structure of 650,000 people. Gloucestershire also happens to be a near-perfect match for the graduate commuting area of that part of England.

For Gloucestershire, a shire mayor either means breaking the rules of the White Paper to create two or more councils below 500,000 people; or, forcing the county council into a sharing arrangement with another county to achieve “scale”, with a worse fit between political and economic geography for both.

Neither is likely to offer better governance than a simple single-tier county council, yet these contradictions have already seen the Government reject proposals for devolution to Norfolk and to Suffolk.

Instead, proposals for “Devonwall” (Devon and Cornwall together) and “Heart of Wessex” (including Dorset, Somerset, and Wiltshire) mayors indicate that in pursuit of “scale”, much of the map will be disconnected from not just local economies but also local identities. Shire mayors atop such rickety geographies are unlikely to enjoy the influence needed to compete with Andy Burnham and Sir Sadiq Khan.

Both of these problems matter for policy and outcomes in the shires, and one of the clearest examples is planning. The White Paper intends for rural authorities to absorb delivery of housing targets of neighbouring urban authorities through ‘strategic planning’ mechanisms ran by the shire mayor.

Strategic planning will inevitably generate political resistance. Previous strategic planning mechanisms have always collapsed upon a change in government and even Greater Manchester has struggled to agree a strategic plan despite decades of council co-operation and trust.

Ultimately, the only justification for strategic planning is the English Devolution White Paper’s own proposal that local housing markets should be fragmented over multiple planning authorities.

An economic geography approach to devolution would not have this problem. If planning authorities matched their housing markets, there would be no need to force councils to absorb the targets of other areas.

The same logic applies across other policy areas, including transport, training and skills, local industrial policy, and reform of local finance. The shires risk being left permanently behind if they end up with a much worse alignment than the big cities between their political and economic geography. With the reform process now moving so quickly, this could occur before the shires even realise this has happened.

So, what does the Government need to do differently to rescue English devolution? Very little – just two changes.

First, the Government needs to reassert the primacy of economic geography as the organising principle of devolution. This can be reached relatively easily if districts are used as the ‘building blocks’ of new authorities rather than upper-tier councils. Proposals from councils that openly violate economic geography, such as ‘Heart of Wessex’, must be rejected.

Second, the Government must recognise that the big cities and the shires are different. The metro mayors were created by and for the big cities to create a strategic tier that they lacked. The shires each have simpler and smaller local economies, and need arrangements that avoid doughnut devolution and internal fragmentation.

Single-tier county councils, that align with graduate commuter areas, satisfy both of these criteria, and should be the basic structure for English devolution in the shires. The White Paper’s 500,000 minimum population threshold can create county authorities that have the strategic scale to compete with the metro mayors. These county councils should enjoy all the powers of both metro mayors and local authorities.

Centre for Cities has previously shown what an ‘Economy First’ map of English local government might look like. The map is less disruptive than the emerging map of shire mayors would be as, like Gloucestershire, many counties are already a good match for local economies. Of the 48 shire and big city authorities proposed, 21 are either identical to the existing structure or have an “obvious” geography (e.g. merging Leicestershire with Leicester). Counties like Somerset, Buckinghamshire, Norfolk, Suffolk, Oxfordshire, Wiltshire, Dorset, Cornwall, Gloucestershire and more would survive in our proposal, and no county council would have a shire mayor above them.

The important thing about the Centre for Cities map is not the specific boundaries. It is that an economic geography framework can give coherence to English local government.

In contrast, the English Devolution White Paper does not provide a map. It lacks a clear framework for organising the geography of English local government. This is why the Government’s current approach to devolution risks recreating the same fragmentation and misalignments of today all over again.

Devolution is a means, not an end.  The map slowly emerging from the current process might squander an historic opportunity to fix the state in every part of England. Instead of rushing, if devolution to the shires is to support prosperity and public services for decades to come, needs an urgent rethink while there is still time.