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LEVELLING UP

Give back control: Realising the potential of England’s mayors

The Government should unleash England’s mayors to level up growth and boost their electoral prospects.
Adam Hawksbee
June 18, 2022
Give back control: Realising the potential of England’s mayors
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"The Mayoral Experiment must lead now to a Mayoral Moment: stronger mayors, and more mayors."

Rt Hon Michael Gove MP, Secretary of State for Levelling Up, Housing and Communities

 

The UK is one of the most centralised countries in the developed world and, despite the promises and rhetoric of successive Governments, this situation is getting worse rather than better.

As well as being underpowered, regional and local government is also underfunded compared to international counterparts. In the West Midlands the mayor controls just 0.4% of day-to-day public spending, while 84% is still controlled from Whitehall. In the North West, just 3.5% of capital spending is controlled by the Greater Manchester and Liverpool City Region mayors collectively, while 74.3% is decided by Whitehall departments. 

This creeping centralisation has weakened our ability to respond effectively to economic and social challenges such as the need to level up growth and opportunity across the country.  

This paper, endorsed by an influential cross-party coalition of politicians including Andy Burnham, George Osborne, Tracy Brabin, Ben Houchen and Andy Street calls on the Government to change this, and to step back from the micromanagement of England’s cities and counties.

It sets out the problems with England’s over-centralised system and makes 25 recommendations for change, including calling on the Treasury to hand mayors control of 1p in every £1 raised from income tax in their areas. This is equivalent to £6 billion a year – or around £250 million for Greater Manchester and the West Midlands and around £200 million for West Yorkshire.

In return, mayors would have increased scrutiny and accountability, and greater responsibility for running local services including local transport, digital and energy infrastructure. 

Jul 18
11:00-
13:15

Policy recommendations

Fragmented funding

1. Replace dozens of siloed central government transfers to mayors with a Single Mayoral Settlement, agreed every 5 years with the Treasury.
2. Consolidate local funding streams into a single mayoral precept including transport, policing, fire, and other core costs.
3. Abolish Mayoral Capacity Funding after a mayoral combined authority’s first term, to shift accountability from Whitehall to local voters.
4. Fully devolve business rate growth to local leaders and give them flexibilities to cut rates, introduce supplements, and adjust multipliers.
5. Give mayors control of 1p in the pound of the basic rate of income tax, providing a £6 billion revenue stream to underpin Single Mayoral Settlements.
6. Introduce a process for HMRC to evaluate the technical feasibility of any new local tax, tax supplements, or tax cuts that mayors propose.
7. Designate the chief executives of mayoral combined authorities or county councils with devolution deals as Accounting Officers, with responsibility to Parliament for national funds, triggering a range of robust scrutiny mechanisms including NAO audits and select committee appearances.
8. Give mayors reserved powers to use their fiscal levers, include precepts, levies, and Business Rate Supplements, without requiring a majority on combined authority boards.
9. Create stronger Mayoral Scrutiny Panels with councillors expert lay members, and Members of Parliament.
10. Create an “Office for Mayoral Analysis,” with a requirement to produce objective reviews of mayoral performance and mayoral candidates’ electoral platforms.

A Patchwork of Powers

11. Give mayors greater powers over strategic land assembly and housing, in return for greater accountability through the development of a Spatial Development Strategy.
12. Make partnership agreements with Great British Rail a core part of devolution deals, including (a) devolved powers across fares, timetables, and ticketing and (b) the control of local stations and infrastructure.
13. Give mayors responsibilities over digital infrastructure, including the transfer of Project Gigabit contracts to mayors in rural areas and seed funding of barrier busting teams to accelerate 5G and full-fibre rollout.
14. Give mayors a formal role in the development of local energy plans, and responsibility for electric vehicle charging and retrofit delivery programmes.
15. Give mayors consolidated funding and leadership over the adult skills system, along with broader levers over apprenticeships, careers guidance, and employment support for adults.
16. Give mayors an expanded role in economic development including strategic oversight of British Business Bank funds, co-commissioning responsibilities for internationalisation activity, and leadership of innovation accelerators.

A Patchwork of Powers

11. Give mayors greater powers over strategic land assembly and housing, in return for greater accountability through the development of a Spatial Development Strategy.
12. Make partnership agreements with Great British Rail a core part of devolution deals, including (a) devolved powers across fares, timetables, and ticketing and (b) the control of local stations and infrastructure.
13. Give mayors responsibilities over digital infrastructure, including the transfer of Project Gigabit contracts to mayors in rural areas and seed funding of barrier busting teams to accelerate 5G and full-fibre rollout.
14. Give mayors a formal role in the development of local energy plans, and responsibility for electric vehicle charging and retrofit delivery programmes.
15. Give mayors consolidated funding and leadership over the adult skills system, along with broader levers over apprenticeships, careers guidance, and employment support for adults.
16. Give mayors an expanded role in economic development including strategic oversight of British Business Bank funds, co-commissioning responsibilities for internationalisation activity, and leadership of innovation accelerators.

Underdeveloped Capability

17. Mayors should form and fund an empowered “National Mayors Association” which is focused on building the shared capability of mayors and their teams.
18. Mayors should develop a bespoke training programme at the Leadership College for Government focused on practical leadership at the subcentral level, learning from the successful Bloomberg-Harvard model.
19. The Government should expand the remit of the Government Commercial Organisation to include senior public servants working in Combined Authorities.
20. The new National Mayors Association should work with the UK Infrastructure Bank to launch a priority programme on mechanisms to channel private capital into public infrastructure, working closely with domestic and international investors.
21. The new independent body in England focused on local data should deploy grants and engage in capacity building activity for mayors and combined authorities to accelerate their data analytic capabilities.
22. The Government and England’s mayors should establish a number of “Joint Delivery Taskforces” on specific challenges that require local and national partnership.

Policy recommendations

Fragmented funding

1. Replace dozens of siloed central government transfers to mayors with a Single Mayoral Settlement, agreed every 5 years with the Treasury.
2. Consolidate local funding streams into a single mayoral precept including transport, policing, fire, and other core costs.
3. Abolish Mayoral Capacity Funding after a mayoral combined authority’s first term, to shift accountability from Whitehall to local voters.
4. Fully devolve business rate growth to local leaders and give them flexibilities to cut rates, introduce supplements, and adjust multipliers.
5. Give mayors control of 1p in the pound of the basic rate of income tax, providing a £6 billion revenue stream to underpin Single Mayoral Settlements.
6. Introduce a process for HMRC to evaluate the technical feasibility of any new local tax, tax supplements, or tax cuts that mayors propose.
7. Designate the chief executives of mayoral combined authorities or county councils with devolution deals as Accounting Officers, with responsibility to Parliament for national funds, triggering a range of robust scrutiny mechanisms including NAO audits and select committee appearances.
8. Give mayors reserved powers to use their fiscal levers, include precepts, levies, and Business Rate Supplements, without requiring a majority on combined authority boards.
9. Create stronger Mayoral Scrutiny Panels with councillors expert lay members, and Members of Parliament.
10. Create an “Office for Mayoral Analysis,” with a requirement to produce objective reviews of mayoral performance and mayoral candidates’ electoral platforms.

A Patchwork of Powers

11. Give mayors greater powers over strategic land assembly and housing, in return for greater accountability through the development of a Spatial Development Strategy.
12. Make partnership agreements with Great British Rail a core part of devolution deals, including (a) devolved powers across fares, timetables, and ticketing and (b) the control of local stations and infrastructure.
13. Give mayors responsibilities over digital infrastructure, including the transfer of Project Gigabit contracts to mayors in rural areas and seed funding of barrier busting teams to accelerate 5G and full-fibre rollout.
14. Give mayors a formal role in the development of local energy plans, and responsibility for electric vehicle charging and retrofit delivery programmes.
15. Give mayors consolidated funding and leadership over the adult skills system, along with broader levers over apprenticeships, careers guidance, and employment support for adults.
16. Give mayors an expanded role in economic development including strategic oversight of British Business Bank funds, co-commissioning responsibilities for internationalisation activity, and leadership of innovation accelerators.

A Patchwork of Powers

11. Give mayors greater powers over strategic land assembly and housing, in return for greater accountability through the development of a Spatial Development Strategy.
12. Make partnership agreements with Great British Rail a core part of devolution deals, including (a) devolved powers across fares, timetables, and ticketing and (b) the control of local stations and infrastructure.
13. Give mayors responsibilities over digital infrastructure, including the transfer of Project Gigabit contracts to mayors in rural areas and seed funding of barrier busting teams to accelerate 5G and full-fibre rollout.
14. Give mayors a formal role in the development of local energy plans, and responsibility for electric vehicle charging and retrofit delivery programmes.
15. Give mayors consolidated funding and leadership over the adult skills system, along with broader levers over apprenticeships, careers guidance, and employment support for adults.
16. Give mayors an expanded role in economic development including strategic oversight of British Business Bank funds, co-commissioning responsibilities for internationalisation activity, and leadership of innovation accelerators.

Underdeveloped Capability

17. Mayors should form and fund an empowered “National Mayors Association” which is focused on building the shared capability of mayors and their teams.
18. Mayors should develop a bespoke training programme at the Leadership College for Government focused on practical leadership at the subcentral level, learning from the successful Bloomberg-Harvard model.
19. The Government should expand the remit of the Government Commercial Organisation to include senior public servants working in Combined Authorities.
20. The new National Mayors Association should work with the UK Infrastructure Bank to launch a priority programme on mechanisms to channel private capital into public infrastructure, working closely with domestic and international investors.
21. The new independent body in England focused on local data should deploy grants and engage in capacity building activity for mayors and combined authorities to accelerate their data analytic capabilities.
22. The Government and England’s mayors should establish a number of “Joint Delivery Taskforces” on specific challenges that require local and national partnership.

Endorsements

Former Chancellor of the Exchequer, the Rt Hon George Osborne CH, said:

“This report from Onward is bustling with ideas that any government, or opposition, serious about devolution should study carefully.”

Former Deputy Prime Minister, the Rt Hon Lord Heseltine CH, said: 

“I strongly endorse the thrust of this argument. I have myself made very similar proposals to government. It is so sad that the devolution agenda has lost all sense of urgency or direction.”

Lord O’Neill, Vice Chair of the Northern Powerhouse Partnership and former Treasury Minister, said:

“This report is one of the most thorough and well argued pieces published about the role of elected Mayors and the devolution agenda, and I really hope the government- and opposition- take note.

“As is clearly articulated, the case for more substantive devolution in both places yet to seize any opportunity and those who have led the way, is overwhelming and the sooner it happens, the better.”

Andy Street, Mayor of the West Midlands, said:

“Making levelling up a reality and securing lasting economic growth must be at the heart of everything Government now does. As this far-reaching report persuasively sets out – and as we’ve long argued in the West Midlands – further devolution of powers and fiscal freedoms from Westminster to Mayors and MCAs will be critical to achieving these twin aims.

“With this devolution of course must come heightened accountability – but as is rightly argued here, this is nothing to be afraid of: it is in everyone’s best interests. Let us lead and we’ll make sure we deliver.”

Ben Houchen, Mayor of Tees Valley, said:

“This is yet another timely and clear-sighted report from Onward. The ‘devolution experiment’ launched by George Osborne and then Northern Powerhouse Minister James Wharton has proven successful and is allowing directly elected mayors, like me, to deliver the priorities of local people.

“This report lays out how, by giving mayor’s new powers, we can put rocket boosters under our local economies, drive growth and deliver a tsunami of good-quality jobs for local workers.”

Rt Hon Andy Burnham, Mayor of Greater Manchester, said:

“This report sets out a clear and compelling argument for the ‘next phase’ of Mayoral devolution. It makes a clear case that more empowered Mayors and Combined Authorities can do more to tackle some of the major challenges facing the country.

“There are some important ideas here: from giving us the levers we need in areas like the rail system, adult skills, and housing, to fixing the patchwork way we’re funded. And it sets out a firm but fair trade: greater freedom should come with greater accountability.

“As both we and the West Midlands begin our ‘Trailblazer Devolution Negotiations’ with Government, I know we’ll be drawing heavily on the recommendations set out here.”

Tracy Brabin, Mayor of West Yorkshire, said:

“Devolving further powers to mayors over skills, transport and climate will be necessary if we are to truly level up and close regional inequality gaps. Having to constantly bid into centrally controlled funding pots for relatively small amounts of money does not allow the long-term investment that our region needs. Onward’s proposal for a Mayoral Settlement, providing a multi-year single budget, is something I fully support.”

Rt Hon Sadiq Khan, Mayor of London, said:

“This report is a timely reminder of the benefits that Mayors have brought and the need for the Government to deliver on its rhetoric – not just expanding the Mayoral system to new places, but deepening and strengthening the role of Mayors where they already exist.”

Steve Rotheram, Mayor of Liverpool City Region said:

“Real levelling up comes not from the top down but by empowering local communities to take control of their own destinies. It’s something we’ve seen across the country with the election of mayors of all stripes. Reports like this clearly showcase the difference made by elected leaders, so it is imperative that we double down on devolution, not row back.”

Oliver Coppard, Mayor of South Yorkshire, said:

“This is an important contribution to the debate about how we must go further and faster in empowering the communities and the Mayor’s and Council Leaders that serve those communities with the powers and tools needed to improve lives and rebalance the country.”

Dan Norris, Mayor of the West of England, said:

“From Brunel, to Concorde, to Wallace and Gromit, my region is amazing and local people have wonderful expertise and pride in their communities. Metro Mayors could be transformational but we need London-style powers otherwise we will remain stuck with local government bickering as strategic, long-term projects are delayed and sacrificed.

“True devolution means trusting directly elected mayors with genuine powers to deliver and trusting voters to chuck us out if we don’t. This report is an important contribution to the debate.”

Ben Bradley MP, Leader of Nottinghamshire County Council and MP for Mansfield, said:

“The Prime Minister has been clear that devolution is a key mechanism to deliver on the Levelling Up agenda, and those working at a local level know that there is so much more they could do if central Government loosened the reins.

“It’s absolutely obvious that different areas face different challenges, and have different priorities, that can’t be tackled by generic national policy. This excellent report examines the potential and the opportunity that could come from a bold, ambitious devolution agenda. In my view, the bigger the better!”

Andy Haldane, Chief Executive, RSA, and Chair, Levelling Up Advisory Council, said:

“This paper prompts just the sort of debate, and provides just the sort of analysis, needed to accelerate the debate about decentralising powers in the UK to the local level.  This means debating local taxation as well as spending powers, with simplified, long-duration funding to Mayors who are then held openly and directly accountable for their performance. 

“With this as the North Star, we can begin charting am ambitious devolution path, building the capacity and capability locally to support this path and, ultimately, sowing the seeds of success in levelling up the UK.”

 

 

To read more of our Levelling Up research, click here.

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