A young person is10 times more likely to be in employment in Cambridge than in Hull. You’re more likely to get five GCSEs at A* to C in London than in Stoke-on-Trent.
One of the most common criticisms of city devolution – as well as last week’s announcement that from 2020 all business rates will be kept by local councils – is that it will create a postcode lottery, in which only the strongest economies thrive. But here in the most centralised country in the developed world, we already have one.
The status quo has not achieved standardised outcomes, so what might devolution mean instead?
Devolution is about taking decisions about economic growth, public services and public investment closer to where those decisions have an impact. Five years ago decisions about extending Manchester’s tram system were being taken in Whitehall, with council leaders having to go cap in hand to make their case. Now Greater Manchester – which includes 10 neighbouring councils – has powers and funding enabling it to make its own decisions about the tram, the bus network and an Oyster-style smart card system. It will also have control over health and social care and greater influence over how money is spent and decisions are taken. That will make it easier to wrap public services around people, rather than requiring residents to deal with multiple bureaucracies operating in Whitehall silos.
It’s true that devolution looks different across the country. The major deals have been agreed with big city-regions in London, Manchester, and Sheffield (which include suburbs and rural areas in their partnerships), with more likely to come from the north-east, Leeds, the West Midlands and Liverpool. But some counties are also likely to get deals; Cornwall already has one and I expect more to emerge in the weeks ahead. Each deal looks slightly different because it is responding to what each place wants and feels ready for.
Sheffield differs from Manchester, for example, in that it has not asked for control over health and social care, and has a different set of arrangements around skills. Small, fast-growing cities tend to be more interested in investment and making better use of funds, so the city deal in Cambridge focused on managing a highly successful but very congested city with high house prices. It will continue to ask for devolved powers over managing funds so it can make long-term investments, for example to improve local transport.
Some of the biggest concerns around the retention of business rates are voiced about cities with weaker economies. It’s true that Grimsby’s business-rate retention will be lower than that in Milton Keynes and over time the gap will grow. But it’s also true that there’s a safety net in place for cities. The current approach of top-ups for areas that raise less in business rates than they need in public spending – and tariffs for areas that raise more than they need – will continue. Places generating vast amounts of business rates, such as the City of London, will continue to contribute towards the overall pot, supporting poorer areas.
We’re not moving towards a US-style system of cities fending for themselves, left to thrive or go bust. What we are moving towards is cities being empowered to control more of their own money and do more to make their particular economy and public services work – as well as encouraging cities to work more with neighbours that have complementary economic strengths.
Devolution involves taking risks, but it’s no more risky than sticking with a status quo that’s not working. Having decisions made in Whitehall hasn’t stopped people in Oxford struggling to afford houses, or those working in manufacturing facing shrinking job prospects. But it has stopped places taking decisions that might help them attract new businesses or ensure people have the skills that local businesses want. As long as there are safety nets in place and lots of checks and balances, devolution seems to be the best way to shift from our current postcode lottery towards more innovation and freedom for places to tackle the big challenges they face.
Sign up here for your free weekly Guardian Public Leaders newsletter with news and analysis sent direct to you every Thursday. Follow us on Twitter via @Guardianpublic
