Viewpoint: What do combined authorities mean for the future of local government?

Angelica Gavin, a solicitor in the Government & Infrastructure Team at Browne Jacobson LLP, looks at some of the implications of local devolution.

Reinvigorated by the Scottish independence referendum, calls for devolution to the English regions have been increasing in recent years. For local authorities, the impetus for greater devolution is the idea that at least some decisions are better made locally, combined with the pressure of increased demand for services and reduced central government funding as a result of the 2008/2009 recession.

One key effect of the pressures upon local government is the rise of regional groups of authorities which are lobbying central government for greater spending powers. The current popularity of combined authorities is a fascinating development in the devolution debate, but the consequences that authorities forming such groupings for the local authority landscape as a whole are not altogether clear.

The combined authority (originally a Labour policy intended to provide a structure for collaboration on joint regeneration and transport projects) is proving to be a powerful vessel for devolution of spending powers. Some are already realising powers far wider than were originally envisaged. The Greater Manchester Combined Authority has been granted control of a £6bn health budget and the opportunity to keep 100% of additional growth in local business rates. Many other authorities are now on the path to becoming combined authorities, with agreements for the Sheffield, Liverpool, North East and West Yorkshire recently being reached; although no combined authority has as yet been granted powers which are as significant as those granted to Greater Manchester.

The vision for those in favour of combined authorities is that they are the path to greater spending powers, greater control over local decision making, and perhaps ultimately a move towards local authorities becoming self-sufficient, using funds raised locally through taxation and other fiscal measures to provide services to a wider regional area.

However, the powers being devolved to combined authorities so far tend be increased abilities to spend budgets allocated by central government rather than powers to raise taxes or borrow. Despite many arguments that merely decentralising budgets will not be sufficient to meet the funding needs of authorities in future, devolution of further powers to raise taxes is politically unpopular and we have not seen evidence from any of the major parties to suggest that further powers of this nature are likely to be granted at any time in the near future.

Devolution to the regions raises issues which are wider than those relating to the funding of local authorities by central government. Many commentators argue that local government should be formed around a regional economy which covers both city and rural areas. Combined authorities are in some ways redrawing the local authority boundaries around a functional economic area which can be used by the authority to draw tax revenues and redistribute funding to those areas which need it most. With the addition of significant new powers to spend and consolidation of local authority functions into the combined authority, they have the potential to form the basis of a rationalised and simplified local government landscape.

Without consolidation of the local government landscape, combined authorities risk becoming an unwieldy additional tier which increases bureaucracy and complicates decision making. Many are in favour of a wholesale reorganisation of the local government landscape, and in some ways this may be attractive for a government looking to rationalise and reduce public spending. However such a radical move would be widely unpopular and would require significant consideration before any steps were taken to implement any strategy of this nature.

Despite their current popularity, combined authorities are unlikely to become the method of choice for all authorities seeking greater spending powers (absent some other imperative to adopt such a structure). The establishment of such an entity may require years of negotiation between authorities, followed by a lengthy process of planning, consultations and ministerial approvals. Even then, a combined authority without an elected mayor is unlikely to be sufficiently democratically accountable to receive significant powers. However, elected mayors have proved unpopular with the electorate where the post has not come with significant spending powers.

Currently, combined authorities seem to be the route to greater powers for local government, but where they may lead is not clear. Certainly it could be argued that they are a step towards a single tier of local government, but that discounts the value that small local authorities with intimate local knowledge bring. The devolution debate throws up a huge array of issues which remain to be addressed. Combined authorities are only one part of a complex web of considerations. However, we believe that the opportunities for both local and central government as a result of devolution are significant.

On 26 February 2015 Browne Jacobson held a round table event to discuss the effects of devolution on local and central government. We invited industry experts, policy influencers and local and central government leaders and got the view from those at the centre of the debate. The conclusions reached at the round table presented a challenging view of the future for both local and central government. You can download a copy of the report here.

Photo Credit: Cindee Snider Re via Compfight cc

    1. I feel that the combined authorities will become top laden with current leaders fitting themselves into highly paid positions. Also that it is also a method of allowing national government to get away from its responsibilities by offloading and reducing costs on to the authorities.

    2. Pearl Baker says:

      I work in Mental Health where the concentration is on ‘Integration’ of Health and Social Services. We have the Care Act 2014, and the 1983 MHA including the right to free aftercare under section 117. Carers have legal Rights for the first time. Services for the above group have been cut to practically Zero.

      The Government are putting everything into Dementia at the expense of the above group who have legal rights.

      I am an Independent Mental Health Advocate and Advisor/carer, where after a considerable ‘fight’ this LA have accepted they have charged my client illegally for years, this has set a precident for others in the same position.

      My question is can we justify yet another change, when millions have been spent on Conferences to identify problem area in ‘integration’.

      The problems are Central Government have divided up the amount of money they give to each authority, regardless of size or demography. WBC and Wokingam are taking the DOH to the High Court on this very subject.

      We should continuing to identifying unjust areas, and poor ‘integration’ not change the system again.

      I would like to remind you, at one time we had ‘fund holding’ GP Practices, all the patients and GP enjoyed the freedom to commission within their surgeries. The problem being if they all became fund holders somehow the advantages were lost, resulting in no GP fund holding Practices anymore.

      There needs to be a more proactive approach to the Voluntary Sectors involvement, where considerable savings can be made. It is long overdue that individuals of thirty years experience are seen as equal partners.

      I have just set up a Gardening Project. I have funded this myself, and provides a small number of mentally ill individuals something to do, and look forward each week. There are many individuals like myself in the community, we can help help the LA and Health make a difference, until we are seen as equal partners nothing will change.

      Any thought of a lier of Authority being able to raise taxes, should first understand how it operates now, and in the future if the Conservatives regain power. Plans to tax the poor and vulnerable purely to make ends meet, while reducing the taxes for the wealthy will have a significant impact. The problems we have at present is too little is really known on what ‘integration’ really is or means. It is not just about health, ccg, LA there is a much bigger picture. Housing, mortgages, debt, welfare benefits, and how this in itself integrates with each other.

      At present this is very little monitoring of anything, or even an acceptance that laws have been broken, how will a new concept of Holistic approach make any difference? I say make your case for inadequate funding by Government, and concentrate on what they have spent millions on ‘integration’

    3. Peter Palmer says:

      Could not devolution to regional government be simply a step along the road to a federal EU, as central government, controlling regions rather than states.

      As it stands at present, Scottish devolution is a disaster for the rest of the UK. We have the absurd situation where a self-governing region could hold the balance of power over the rest of the UK. The West Lothian issue gone mad.

      Democracy for the common people is all but lost.

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