Towards the next devolution of power

What if Andrew Adonis and George Osborne are right?  What if the key question for re-balancing the economy (not a phrase Adonis used) was to force through a major new devolution of economic power to the city regions?

What if Michael Heseltine’s was right in his 2012 review into the mix – published with a full-page portrait of the great Liberal reformist Joseph Chamberlain – that Chamberlain’s innovative, entrepreneurial Birmingham in the 1870s is the new model we must aspire to?

It means we will have to learn the lessons of attempts before.  Both the main engines of devolution under the coalition, the Localism Act and City Deals, share the same weakness – they are too often stymied in practice by Whitehall.

In the same way, the Treasury stymied an ambitious plan for tax increment financing (letting cities pay for projects by keeping the tax revenues that result).

In other words, to take these ambitions seriously, politicians need to go further than setting out their ambitions.  They need to say how they will break through the restrictions of Whitehall.

They also need to say, not how this will work in Manchester or Bristol – that much is obvious – but how their plans will transform the economies of Bradford and the other struggling cities.

This isn’t going to work if it is just about how successful cities can capitalise on their success.  The issue then remains about whether the less successful ones are being held back.

I’ve argued before that there is an ultra-micro economics sector emerging – new local banks, new local energy installations, new local enterprise institutions, new ways of procurement, and maybe even new kinds of money.

It is in the earliest stages, and designed to look afresh and what assets any neighbourhood has – wasted land, wasted people, wasted resources – and turning that into a sustainable economy that can provide some measure of economic independence.

Those are questions rather than solutions, though some solutions are beginning to emerge.  This very local economics is potentially a basis for greater self-determination, and it needs to be at the heart of policy.

But what should political parties put in manifestos about it?  The New Weather Institute has published a new report with some proposals, based on work funded by the Joseph Rowntree Reform Trust Ltd.  It is called The Next Devolution and it was published yesterday.


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