Tories plan "radical power shift"

It's official - the Conservatives now want to be the party of local government. Today's green paper Control Shift: returning power to local communities sets out how the Tories would shift power from the centre to local people and councils.

This repositions the Tory party as most definitely pro-local government. Quite a change from two decades ago, when most Thatcherite Tories saw local councils as the enemy. But given they now control three times as many councils as the other parties put together, it's no surprise that David Cameron is a "confirmed localist".

Which presents quite a challenge to the Government, and its incremental devolution agenda. John Healey today said there was "little new" in these proposals, and he's partly right. He also said that Labour is already devolving, which is also true - but progress has been painfully slow.

The problem is that Gordon Brown isn't talking about this, and David Cameron is. Given the opportunity to talk up cities and local government the other week, Gordon gave quite a disappointing speech to the NLGN. Presentationally, this leaves the Tories looking like the great devolvers - and Labour appearing to be top-down centralisers. Time to put that right, Gordon. 

Launching the paper in (Tory-controlled) Coventry, David Cameron today called for a programme of "radical decentralisation", including (crucially) more financial powers for local councils and (hurrah) more city mayors:

• All regional planning and housing powers will be shifted from regional government, to local councils
• "New enterprise partnerships" will take on the economic development functions of RDAs
• Councils that build new houses will get a slice of the increase in council tax revenues
• Councils will be able to cut business rates - and businesses would have a vote on the new Business Rate Supplements
• Capping council tax will be scrapped - instead, council tax increases above a certain limit could trigger a local referendum (and then vetoed)
• And 12 big cities will be able to vote on whether to have an elected mayor

We agree with much of this. The UK is far too centralised, and we need a step-change in power away from the centre. Cameron is right that "more decisions made and money spent at the local level" would result in better local services - which was Gus O'Donnell's test last week. Real financial incentives, to promote local economic growth, are the right way forward - as are local authority bonds, to help finance development projects. We need more focus on this, to reward those councils that go for a pro-growth agenda.

We like the clear pro-mayor position, with plans for referendums in 12 big cities on the same day - Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle, Nottingham, Sheffield and Wakefield. It also sounds like the referendums will be designed to encourage a "yes" answer. But there's still a lot of scepticism about mayors, so Cameron will need to push hard to persuade his own party and the wider public. Michael Heseltine will help define the powers of these new city mayors, by the way.

We'd rather have mayors that cover "whole cities", not just core city councils. There's not much point Richard Leese becoming mayor of Manchester, if the other nine Greater Manchester councils stay the same. Better to have a mayor for the whole of Greater Manchester, with powers over the whole area. But that was a step too far for this green paper.

The Tories have a real go at regional government: "Sprawling tiers of regional bureaucracy, distant and remote from local communities, have no place in our vision of local government." And they take several swipes at the "woeful performance" of the 8 Regional Development Agencies outside London. 

But RDAs would still continue - just about. Their powers over planning, housing and regional spatial strategies will be handed over to local councils. And councils that share the same real economy (i.e. sub-regions) will be able to form "new enterprise partnerships", and take over economic development from their RDA.

This isn't quite giving RDAs the chop, as Eric Pickles suggested last autumn. It's more like chopping them up into small pieces, and throwing them to local councils.

Comments

[Willy]

Is this a complete smokescreen? the RDA budget is £2.31 billion this year - representing less than one-half a percent of total public expenditure.

Divide £2.31 billion (the combined RDA pot) by 488 (the number of councils in England) - that's about £600,000 for each council for economic development. Would this lever in a major development or investment? would it get us another Nissan in Sunderland, Olympic Games in London, or co-finance European Programmes such as the Leader Programme? - unlikely. It wouldn't even be the basis of a bond or local infrastructure fund.

The money needs targeted - based on need, some local authorities would quite plainly get nothing from the RDA pot. If RDAs are abolished, which minister is going to tell the local authorities left with zero economic development and regeneration budget this? (most of these authorities will be Conservative Controlled).

[Dermot]

You're right that RDAs have only a tiny fraction of total public spend. And others like the Homes & Communities Agency and Skills Agencies will have far more cash.

But RDAs do still occupy a pivotal position in the regions, and benefit from very strong Ministerial support. So the Tories' proposals to balkanise them are significant, and would mark a real step-change away from the regional level.