The Chamberlain News

Untangling the devolution web: what’s really happening in the West Midlands

Chamberlain News’ exclusive story last week revealing that Black Country council leaders have given Birmingham until Christmas to join forces and establish a Combined Authority quickly became one of this site’s best read blogs. Here, chief blogger Paul Dale looks at the tangled web of devolution, and asks ‘what’s actually going on?’

The announcement by Sandwell Council leader Darren Cooper that he and his fellow Black Country council bosses would give Birmingham until Christmas to decide yes or no to a Combined Authority amounts to a game-changing moment in the history of the West Midlands.

Or, does it? There have been so many false starts since local government reorganisation in the mid-1970s and the subsequent abolition of the West Midlands county council that those of us who have been kicking this particular ball around for a very long time are entitled to express some scepticism.

It is fair to say that Cllr Cooper’s declaration took Birmingham by surprise. And it is pretty certain that the deadline will not be seen as entirely helpful given the delicate nature of negotiations going on behind the scenes between Birmingham and Solihull councils.

Solihull, it is said, is not at all keen on joining with Birmingham and the Black Country in a combined authority, even though the Government has made it pretty clear that some type of amalgamation of the West Midlands councils is essential if the region is to benefit from the devolved powers and budgets that we are promised will come on stream after next year’s General Election. Some hope relatively new people in the posts of both chief executive and leader, Nick Page and Bob Sleigh, will lead to a change of heart in the borough.

Birmingham and Solihull councils have formed a joint economic unit and they hope that the Black Country councils will buy services from the unit. Birmingham council’s Marketing Birmingham is already carrying out inward investment activity for the Black Country, funded through a European programme. Cllr Cooper sits as an observer on Marketing Birmingham’s board.

Meanwhile, does anyone remember Coventry, who were for a time at least part of the city region partnership? Would they want to be part of a new Combined Authority covering the metropolitan West Midlands? They are part of the new West Midlands Integrated Transport Authority (WMITA) which itself could be a precursor to a Combined Authority, not least transport is one of the core elements of such a partnership.

But all of this amounts to little more than tentative courtship. There’s no sign yet of a formal marriage between Birmingham, Solihull and the Black Country.

There is a wider question, too, about the future of the Greater Birmingham and Solihull Local Enterprise Partnership which includes six boroughs in Staffordshire and Worcestershire. These councils – Tamworth, Redditch, East Staffordshire, Bromsgrove, Wyre Forest and Cannock Chase – sit outside of the former West Midlands county area. As Combined Authorities must include membership from all local authorities in the area, what would happen to these districts from neighbouring counties? Then, how would the Black Country LEP fit into all of this?

A spokeswoman for Birmingham council leader Sir Albert Bore refused point blank to talk, either on or off the record, about Cllr Cooper’s ultimatum. That is strange since Sir Albert went to great lengths recently to tell Cities Minister Greg Clark that he saw merit in combining the GBSLEP area with the Black Country LEP area, so you might think he would welcome Cllr Cooper’s commitment.

Sir Albert told a meeting of the City Growth Commission that GBSLEP represented perfectly the functional economic geography of the West Midlands running from north to south. “What’s missing is the east-west link and we need to bring Birmingham and the Black Country into that functional economic geography”, he added.

In response, Mr Clark made it clear that he regards Combined Authorities as the best vehicle for groupings of councils to share devolved responsibilities for areas such as economic development, transport and skills and the tax-raising powers that may or may not be handed down by Westminster following the Scottish independence referendum last month.

Sir Albert’s reluctance to comment, or perhaps that should really be his spokeswoman’s refusal to ask him whether he wished to comment, indicates a degree of nervousness. But this is odd given that shortly after regaining control of the council in 2012 one of Sir Albert’s first actions was to woo Cllr Cooper and the Black Country leaders in a ‘glasnost’ dinner to discuss closer working arrangements.

We should note that Cllr Cooper’s latest intervention began on Twitter where the Sandwell council leader said: “We can’t wait for Birmingham for ever.” The Christmas deadline emerged in an interview I conducted with Cllr Cooper, and contrary to suggestions from Birmingham council, he was not prompted or tricked into setting out a timetable. It was clearly something that had been on his mind. I was as surprised as anyone by his ultimatum.

Sir Albert will be addressing a State of the City/Think Birmingham event at the Birmingham Council House on October 20 where issues around devolution will be discussed. It seems unlikely that he will be able to duck questions about Cllr Cooper’s intervention.

Whatever happens, like most aspects of the English constitution, the arrangements for Greater Birmingham and beyond are unlikely to be neat and tidy.

The Birmingham-Solihull-Black Country dynamic is but a bit player in the great devolution debate.

It is worth recalling how the landscape between Westminster and the English regions and cities has already changed and continues to change. The aftermath of the Scottish referendum, with David Cameron pledging to “set the cities free”, quickens the pace somewhat.

placed decentralisation at the heart of the coalition government’s thinking. Heseltine envisaged a single pot of about £60 billion being handed by Whitehall to the regions through Local Enterprise Partnerships. The figure finally agreed by the Chancellor was £10 billion. The Greater Birmingham and Solihull LEP bid for £508 million and was awarded £357 million for a range of regeneration schemes including expansion of the Midland Metro tram system and rapid transit bus services.

It should be stressed, however, that the slight loosening of the Whitehall shackles since 2010 is not devolution in the broadest sense. The City Deals and Local Growth Fund are simply new ways devised by Whitehall to hand out money to the cities and regions, with a stipulation that the Government makes the final decision about which projects to fund. This is a start, but it does not remotely amount to central government setting local government free.

The Localism Act 2011 removed rules about how councils organise themselves and run their affairs and enshrined new powers and responsibilities for local government in legislation.

The first wave of City Deals was signed in July 2012 with the Core Cities, the eight largest cities outside of London: Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. Bespoke deals negotiated between cities and Government, they negotiated funding and flexibilities for cities in key growth drivers.

This included greater influence in finance and investment, greater powers and levers to deliver skills and jobs and infrastructure and business support.

Birmingham agreed to create a joint investment plan which combines city and Homes and Communities Agency assets to stimulate housing development.

Greater Manchester agreed an ‘earn back’ scheme: a new payment by result model that incentivises the city to invest in growth in return for a £30 million per year share of the additional national tax take.  Newcastle, Sheffield and Nottingham were given the freedom to borrow against future business rate income in key development zones.

The second wave of City Deals were offered to additional cities and signed between September 2013 and August 2014. These were designed to increase the ability of cities and wider areas to boost economic growth. A majority of the deals included a focus on skills and business investment.

A Black Country City Deal agreed a demonstration project to reduce welfare dependency which brings together employment support services, community support, housing and financial incentives to ease the transition to work – learning from successful programmes in the USA.

The second wave of City Deals also offered economic investment funds, greater influence over Regional Growth Fund and EU Structural Funds and devolution of transport funding.

• Glasgow and Clyde Valley’s infrastructure fund is the largest agreed as part of the City Deals, with the UK and Scottish governments each committing £500 million in capital funding.
• The City Deal Investment Fund in Preston will aim to unlock housing development, with a £100m local allocation from the Lancashire Pension Fund.
• Transport for Lancashire received a 10 year transport funding allocation and will oversee the allocation of resources to deliver critical highway infrastructure improvements as part of the Preston deal.

The next steps along the devolution road will inevitably be influenced by the Government’s response to the Scottish independence referendum result. David Cameron has also launched in inquiry into how English policy issues at Westminster can be voted upon by English MPs only.

Cameron’s initiative, which may or may not involve creating some form of English parliament, is not to the liking of Labour leader Ed Miliband. For one thing, an English parliament would pretty much always have a Conservative majority.

Labour has said Mr Miliband will convene a constitutional convention to discuss the future of  and power at Westminster. The convention will be a form of semi-representative assembly going beyond elected MPs.

Each region will produce a report outlining a series of recommendations, covering for example: how sub-national devolution can be strengthened; how the regions can be given more of a voice in our political system; and how we can give further voice to regional and national culture and identity.

This would be followed in autumn 2015 with a constitutional convention to determine the UK-wide implications of devolution and to bring these recommendations together.

In addition to this, Mr Miliband has promised that a future Labour government would devolve £30 billion of spending to the English regions. He wants local authorities in major cities to band together to create economic “powerhouses” to rival the capital in creating jobs.

In a recent speech, he insisted he did not want regional assemblies – Labour’s last major attempt to devolve power in England, which was rejected by voters in the North-East in 2004.