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You Say You Want Devolution?

27/07/2016 12:44 | Updated 27 July 2016

The referendum result, the appointment of a new prime minister and a reshuffle may have briefly muted think tanks, but not for long. Devolution was very much on the agenda this week - but why?

At Think Tank Review, we've been tracking the effects of Brexit on the machinery of central government with our partners at the Institute for Government. Of the twenty projects covered in the latest update, only four are progressing. Is it the time for local government to lead? At NGLN, Simon Parker argued that Brexit could "could usher in a moment of genuine constitutional change" which finally replaces the UK's centralised model of economic development. But the constitutional settlement around localism and its economics are connected, and both depend on political appetite for change.

This year's Cities and Local Government Devolution Act makes devolution to combined authorities legally possible, but does not specify the terms of negotiation. This makes the process dependent on political personalities and deals behind closed doors. In Greg Clark, the Department for Communities and Local Government has lost one of the ruling party's most fervent supporters of devolution. The new Secretary of State, Sajid Javid, faced a brief but focussed grilling on devolution in parliament on Monday. He gave no commitments on how EU regional funding would be replaced, but insisted that local government would have a seat at the table for Brexit negotiations. He reiterated the government's broad commitment to the project, and asserted there was "no need to reconsider any of the deals". Peers approved draft orders for the election of mayors in Sheffield, Liverpool and the West Midlands this week, but they are already expressing doubt over the potential financial benefits of devolution.

For David Cameron (now 'chillaxing' on the backbenches), devolution was a key principle guiding a smarter state. He argued it was "a proven reality that money spent closer to people is often money spent wiser". Theresa May's 2013 speech to Conservative Home has been obligingly edited this month - but she appears to still be in favour of a "small, strong, strategic state". This is roughly in line with what British voters say they want - in 2012, two-thirds of respondents to a YouGov/ConHome poll preferred a state with "a limited role in society, providing services and a safety net in hard times but where we largely rely on families, education and job creators to create a good society."

Sajid Javid insists that "it is not right for central Government to impose deals on any area". Yet Osborne had shaped the process by insisting on metro mayors as a precondition to devolution deals. As a Public Accounts Committee report concluded last year:

The rhetoric surrounding devolution is that local areas are the driving force behind the deals. However in practice central government is stipulating certain requirements, such as around local governance, without making them sufficiently clear up front.

The act itself also grants the Secretary of State powers over the governance arrangements of local authorities, the constitution and membership of local authorities, and structural and boundary arrangements. LGiU has previously voiced the concerns of smaller local authorities that devolution may actually amount to "restructuring by another name".

There are now ten devolution deals agreed, but there is reason to be concerned about how many more are forthcoming. George Osborne was personally invested in the devolution agenda. However, as a National Audit Office report noted in April, only seven officials in the Treasury were assigned to "directly negotiating and supporting devolution deals". We can only wonder what their workload is looking like now.

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