The QT

Tuesday 18 June 2024

A big year for devolution

Bob Hudson has been researching and writing about a range of public policy issues for over 50 years. Here he examines the potential impact of the upcoming mayoral elections in the North East and Tees Valley
Bob Hudson argues that there are some serious questions to answer around funding, accountability and, indeed, the very concept of devolution

The date of the next General Election might still be uncertain, but one thing we can be sure of is that this year will witness several significant mayoral elections across England. Once the preserve of constitutional scholars, English devolution is now political centrestage, and nowhere more so than here in the north east where two titanic contests are taking place on May 2.

The established contest is in Tees Valley where the incumbent — Conservative peer Ben Houchen — is seeking a third term of office. Already the politics surrounding the contest are sparky, with long-standing allegations of corruption at Teesworks, the industrial development within the government’s high profile freeport project

A review ordered by levelling-up secretary, Michael Gove, has done little to quell controversy – although allegations of corruption and illegality were rejected, the report expressed major concerns about systems of governance and finance. The apparent release of £1 billion of HS2 monies to fund transport in the area has only served to heighten the political tension. Houchen secured a resounding 73% of the vote in 2021 and will start as the front-runner, but attitudes towards the Conservative Party are much less favourable than three years ago.

Things are constitutionally more complex in the rest of the region where — after years of protracted negotiation and disagreement — a new North East Mayoral Combined Authority (NEMCA) will replace the current North of Tyne Combined Authority and the North East Combined Authority. 

The North East mayor will be keen to acquire the same ‘trailblazer’ status as Greater Manchester, with a ‘single pot’ of money available for flexible use

Bob Hudson

The new authority will be huge with a population of two million across Northumberland, Durham, Newcastle, South Tyneside, North Tyneside, Gateshead and Sunderland. A newly elected North East mayor will provide leadership to NEMCA, a body that will also consist of a representative from each council (forming a mayoral cabinet), the chair of the Business Board and a representative of the community and voluntary sector. 

Following agreement with the government in late 2022, a £1.4 billion devolution budget was established to cover powers relating to growth, adult education and skills, housing and regeneration.

Despite constituting a new entity, the political sparks are already flying here too. In June 2023 the Labour mayor of the North of Tyne, Jamie Driscoll, announced that he had been excluded as a party candidate for NEMCA without any explanation. A month later the Labour party announced that it had selected Kim McGuinness (the current Northumbria Police and Crime Commissioner) as its candidate. The political fallout has been massive. Driscoll quit the party, announced his intention to run for office as an independent, and set up a hugely successful crowdfunding campaign. In protest at his exclusion, around half of 22 constituency Labour parties in the region declined to endorse any mayoral candidate. The contest looks set to be very bitter and, with the election being held on a first-past-the-post basis, the outcome is far from clear.

Despite this political turbulence it seems that constitutionally there is finally a settlement on the establishment of a new layer of government between Whitehall and England’s local councils. Both main parties, moreover, are indicating they will create more devolved authorities should they win the general election. 

Previous travails in the region such as the short-lived Tyne-Wear County Council in the 1980s and the ill-fated attempt by John Prescott to create an elected north east assembly in 2004  can seemingly be consigned to history; we can now look ahead and immerse ourselves in the new arrangements. 

This, however, would be a mistake. The reality is that despite the brouhaha about Gove’s devolution deal for the North East (and elsewhere) there are some serious questions to answer around funding, accountability, and indeed the very concept of devolution.

Labour’s NECMA candidate Kim McGuinness

On funding, the sums coming into the region from the devolution deal are obviously very welcome. These include: an investment fund of £1.4bn over 30 years to support economic growth and regeneration; around £1.8bn for adult education and skills over 30 years; and a £563m transport budget. Even leaving aside the very long-term nature of these sums, several funding caveats need to be entered. 

Most notably there have been savage cuts to council budgets in the region by central government over the past fourteen years – an estimated £15 billion overall since 2010, losses that dwarf the sums in the new devolution deal. This has resulted in councils in the NECMA region racking up debts totalling more than £4 billion, while in Teesside, Middlesbrough council is on the brink of declaring itself bankrupt. 

These financial predicaments are unprecedented and a stark contrast to previous support for the region. For example, the old Regional Development Agencies (abolished by the Conservative government in 2012) provided financial support for economic development. Our own agency – known as ONE North East – had a substantial budget of £222 million for 2010/11 alone. Additionally, there has been a loss to the region following the departure of the UK from the European Union, with all English regions (except Cornwall) receiving around £78m less from the UK Shared Prosperity Fund than they would from the previous European regional development fund (ERDF) and the European social fund (ESF).

 Constitutionally, the creation of elected mayors raises new issues of accountability. Unlike London, where there is an elected Greater London Authority, there is no elected legislature to scrutinise and legitimate the work of the mayors. The experience in Teesside (and the conclusions of the review) certainly suggest inadequate accountability on the part of the mayor, raising the dangers of a concentration of power in few hands. The ways in which the mayor and the other members of the combined authority open up their decision-making to the wider public will be vital.

The political sparks are already flying

Bob Hudson

Political dilemmas could further complicate governance relationships. Will tension between the mayor and the leaders and members of the constituent local councils be high? The chemistry could be very different, for example, in the cases of a Labour mayor, a Conservative mayor and an independent mayor respectively. An important role here will also be that of the CEO of the new authority, a role currently held (on an acting basis) by the experienced Dr Henry Kippin. And this sort of tension could be replicated at national level in the event of a change of government. The ‘family’ of Labour mayors might expect a very different relationship with a Labour government than they have experienced with a Conservative government; a Conservative mayor might find a less fulsome relationship than is currently the case; and an independent mayor who was previously a Labour mayor will prove to be an interesting experience.

There is one final paradox: the upcoming wall-to-wall coverage of the mayoral elections belies the fact that, by international standards, the powers being devolved are still limited. Particularly in the NECMA region, the post holder is essentially tasked with delivering priorities set by central government, will have no fiscal tools to raise revenue or borrow against assets, and must implement an agreement that has been centrally determined.  

Independent NECMA candidate Jamie Driscoll

However, the experience of Andy Burnham in Greater Manchester, is that the ‘soft power’ that comes with being a regional leader can serve as an important asset in securing greater independence. The North East mayor will be keen, for example, to acquire the same ‘trailblazer’ status as Greater Manchester, with a ‘single pot’ of money available for flexible use.

Michael Gove himself has said that: ‘Devolution is all about letting leaders who live and breathe the region decide what is in their best interests, for their people and their businesses’.  The strings attached to his deal for the North East do not measure up to this aspiration, but since the mayoralty model is the only horse in town the task ahead is to work towards this end. Much of this is about process – networking, bringing people and organisations together, and ensuring that the whole is greater than the sum of the parts. This implies that the personality and connections of the new mayor will be as important as the new funding. Whoever gets it, the task is massive and the challenge daunting.

Bob Hudson is Visiting Professor in Public Policy at the University of Kent. Bob was born and raised in Sunderland and lives in Durham.

Gateshead College are one of the partners chosen by the Prince’s Trust to deliver Ant & Dec’s making it in Media course, offering employer led training for those hardest to reach in the community

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