THE BLOG

The Soft Power Behind Devolution

03/04/2015 19:13 BST | Updated 03/06/2015 10:59 BST

The regions are revolting and devolution is in demand. Local authority leaders across England are animated at the prospect of greater power over local decisions and especially at the thought of greater tax raising powers.

They are asking why cites such as London should retain just seven per cent of local taxes, compared to 50 percent in New York or 70 percent in Tokyo. Only through greater tax raising and retention powers, they argue, can Local Authorities secure the consistent and long term approaches to funding and planning needed to deliver long term economic growth.

In my world of tourism, we are also moving to a regional model of developing tourism experiences driven by market insights that are right for individual parts of the country and allow locations to compete with comparable holiday destinations around the world. Critically, this development of tourism will be driven by data and makes the most of a region's tourism assets, rather than being dictated from "the centre".

Creating strong identities for regions through outstanding tourism experiences can deliver a lot more than more visitors. A strong identity can provide soft power support for regions in their struggle for self-determination by building strong local economies. As well as exerting political pressure for devolution, strong destinations promoted by charismatic leaders, can also add appeal to companies looking to relocate or host major events.

Many Local Authorities and Local Enterprise Partnerships cite "nice place to live and work" as a major factor when companies are looking for the next place to base their employees. Tourism can build that brand awareness to position a region as somewhere for work but also a place for rest and play.

Like a snowball rolling down a hill, regional devolution is an idea that is gathering great support and not just for the UK's Power Cities. I recently sat as a Commissioner on the Review for the Local Government Association which examined the future for economic growth and public services in non-metropolitan England.

Our findings identified that if more decision making was devolved to England's non metropolitan areas, almost a million people would find new jobs and the economy outside cities would grow by £8.7bn per year.

Non metropolitan areas - England's counties, towns, small cities and suburban areas - account for more than half of England's economic output. Rather than being sleepy shires, the hinterlands beyond our major cities are home to more multinationals companies and have the highest skilled workforces compared to UK averages.

The Commission's report into the potential for England's non-metropolitan areas recommended greater devolution be considered for everything involved in making places great - including Local Authorities working together to be responsible for housing, transport, skills development, broadband and public health services.

The report also made a number of innovative suggestions such as setting up regional infrastructure investment banks and creating regional "mini embassies" to attract inward investment as ways to accelerate economic growth across the regions.

The mood music is very much encouraging regional authorities to lean in and be assertive about fiscal devolution as a route to more control of an area's long term destiny. Charles Handy, the influential economist and predictor of many trends, has in his latest book, Second Curve, predicted a move towards "the DIY society", with growing "self-responsibility" for companies, the state and individuals. This, he predicts, will lead to top down directed structures being dismantled in favour of ways of working that are created by local civic leaders for local people.

It may well be the case that regional understanding and knowledge makes Local Authorities best placed to direct and tailor funding designed to grow regional economies, in a way that a one size fits all national strategy for growth cannot.

Investment should be informed by what the market wants, rather than always by national policy. At times these will be one and the same, but if not regions and cities must fight to invest over the long term in areas that allow them to respond to global demand and ensure their corner of England remains globally competitive.

The author is Chairman of VisitEngland and a Commissioner on the Local Government Association's Commission on Economic Growth and the Future of Public Services in Non-Metropolitan England.