Over the past two decades, successive governments have embraced the concept of devolving powers away from Westminster. While devolution initiatives have been badged differently, a common thread has been a desire to rebalance the economy and move away from an overreliance on London and the South East as the primary engine of economic growth.
In 2004, the Northern Way was a collaboration between the three northern regional development agencies. The basic premise was to address the estimated £30bn output gap between the North and the average for England as a whole by focusing on cross-regional boundary issues, notably transport infrastructure. The Northern Way ended with the election of the coalition government and the demise of the RDAs in 2011.
The coalition’s take on devolution was the Northern Powerhouse, with an initial focus on the core cities of Hull, Manchester, Liverpool, Leeds, Sheffield and Newcastle and the local enterprise partnership areas of the North of England. Again, the aim was to rebalance the UK economy by harnessing the benefits of agglomeration.
Prior to the election of the current Labour government, devolution was a key component of the levelling-up agenda. The February 2022 white paper Levelling up the United Kingdom was described as “the catalyst for delivering a long-term programme of change to unlock the potential of people and places in every part of the UK…[which]… will create jobs, drive productivity, improve people’s quality of life and help restore their pride in the places where they live”.
The current government’s approach
Understandably, given its close association with the previous administration, the new government has quickly dropped the “levelling up” tag, but has signalled its intention to continue to address the economic imbalance across England. It has also not completely abandoned the legislative infrastructure around levelling up.
The indications are that it will take forward key planning measures set out in the Levelling-up and Regeneration Act 2023, including reforms to local plan making and the introduction of national development management policies. However, there is to be new legislation. The King’s Speech announced the English Devolution Bill. This offers the prospect of a standardised devolution framework and a move away from the “ad hoc” devolution deals of recent years, which have resulted in an asymmetrical and inconsistent approach to devolving powers.
The suggestion is that greater powers will be on offer for combined authorities and metro mayors over the levers of local growth. This will include enhanced powers when it comes to strategic planning and new powers and duties for local leaders to produce local growth plans.
The emphasis is also on extending devolution to all of England, approximately half of which is not currently covered by devolution arrangements. Deputy prime minister Angela Rayner has written a letter to all leaders of county and unitary councils without existing devolution deals, encouraging them to “partner with the government to deliver the most ambitious programme of devolution this country has ever seen”.
A new English Devolution white paper is to be formulated. At the October 2024 Mayoral Council, Rayner sought the views of the metro mayors on its development. The indications are that it will “set out a presumption in favour of devolution with an enhanced devolution framework, giving local leaders the tools they need to deliver for their communities, alongside stronger governance structures and clearer accountability”.
The challenges to success
There is clearly a determination to continue the devolution project. Looking back over the past 20 years there are some important lessons to be learnt from earlier attempts.
Right place, right powers Devolving powers should be rooted in a genuinely spatial approach based on longer-term strategies reflecting economic geographies. The lack of a clear and consistent spatial focus is one factor that reduced the impact of the levelling-up agenda. In March 2024, the cross-party Public Accounts Committee considered the progress of the £10.5bn funding identified for levelling up. It concluded that only 10% had been spent.
The committee received evidence from South East councils that characterised the bidding process for funds as a “begging bowl” culture where authorities were required to spend too much time and money to meet ever-changing demands of ministers, rather than planning for the long term to truly deliver for their communities.
There is a compelling case for incorporating national and regional priorities for growth in spatial plans so that the devolved authorities can focus on schemes that are most likely to attract funding and have the best chance of boosting productivity.
Invest 2035: The UK’s Modern Industrial Strategy green paper offers some encouragement that a longer-term, place-based strategy will inform future investment. Under the heading “place” there is a further acknowledgement that the UK’s economic performance is skewed towards London and the South East, while other city regions have historically underperformed.
Spatially, the industrial strategy will concentrate efforts on places with the greatest potential for growth sectors, including city regions, high-potential clusters, and strategic industrial sites. Invest 2035 acknowledges that the success of the industrial strategy’s growth-driving sectors can only be achieved if these clusters reach their full potential, supported through a place-based approach to policy and articulated through 10-year local growth plans. The green paper also suggests that the industrial strategy can be a “lens” for informing the recommendations for new town locations, planning for large-scale settlements in places where high housing demand operates as a constraint on the delivery of high-potential clusters.
In order to maximise the impact of local growth strategies and ensure that they are truly spatial, they need to be embedded into mainstream planning policy. The devolved administrations offer examples of how this could work in practice. For example, Future Wales is a national spatial strategy which sets the direction for strategic development plans at regional level together with local development plans at local authority level. While its policies are (inevitably) couched at a high level of generality, it does offer a longer-term, place-based vision for Wales which is enshrined in the highest tier of the development plan.
Turning to the choice of functions to be devolved, nothing is to be gained from duplicating powers that can be better discharged at local authority level. Devolved powers should only be contemplated if they are the best means of delivering a “wider than local” priority. Again, spatial plans developed with input from local areas will help to determine which tier of local administration is best placed to advance growth plans and will also minimise the prospect of a political fallout over who should be responsible for delivery at a local level.
Good governance Devolved administrations are the trustees of public assets and will need to operate – and be seen to operate – in the public interest. The need for transparency and accountability has been highlighted by the independent review into the Tees Valley Combined Authority’s oversight of the South Tees Development Corporation and its project to redevelop the former Redcar steelworks.
This involved a public/private joint venture company, Teesworks Ltd, which was part owned by STDC. While the review found no evidence of corruption or illegality, the panel’s report criticised the lack of detail in some reports to the TVCA and a dearth of clear explanations of the consequences when it came to some important decisions. The report also flagged up tensions between transparency and confidentiality at Teesworks Ltd when it came to responding to freedom of information requests. These had been regularly refused on the basis of commercial confidentiality in circumstances where a public interest justification was not immediately apparent.
Final thoughts
Planning has been characterised as a constraint on growth in a number of government statements and Invest 2035 is no exception. However, the positive role that planning can play should not be overlooked. As the introduction to Future Wales highlights, the system is an important component in ensuring that places are “healthier, fairer and more prosperous.” Devolution will only succeed if local plans for growth are in lockstep with planning policy. Also, as is illustrated by events on Teesside, in order to maintain public confidence in decision making, devolution should be promoted within a robust and transparent governance framework.
Bob Pritchard is a professional support lawyer in the planning team at Shoosmiths LLP
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