The English

Devolution

 White Paper

Has Landed.

But So What?



Scott Hunter

23 December 2024

To say that last Monday’s publication of the English Devolution White Paper was heralded with a dribble of publicity would be an exaggeration. A preview in the Financial Times the previous weekend, and the occasional explainer on sites like the Institute for Government and that’s about it. A less than furious reaction to an enormous upheaval in the structure of government.

For people in the Tees Valley, where there is already a devolved authority, two issues are of particular interest. One is what difference this set of proposals will make to the governance of the region; the other, will this set of proposals prevent the kind of controversy that surrounds the Tees Valley Combined Authority from being replicated elsewhere?

Spoiler alert: It looks none too promising.

The Problem of Local and Regional Government

The White Paper laments the fact that government in the UK is highly centralized, which has led to wide regional disparities not only in funding but also in productivity, employment and economic growth. Devolution is intended to give “local leaders control over the levers or growth”.

The introduction of devolved powers to Manchester and the West Midlands in 2015, introduced another layer into what was already a complicated system of local and regional government in England. Over the next couple of years others, including the Tees Valley, were added. What powers each had varied, and funding came principally by applying for ring-fenced grants from different government departments – what this White Paper calls ‘deal funding’. ‘Deal funding’, it finds, is not only inadequate in that it inhibits the development of priorities and planning at regional level, but the need to constantly prepare bids for funding is costly and wasteful. Subsequent box ticking and reporting back to government departments on initiatives is similarly wasteful. Eliminating these are some of the ways in which the White Paper hopes to reduce waste.

At present, some areas are under the control of devolved authorities, while others are not. The system is now to be rolled out across the country, with entirely new funding arrangements.

The New Devolution Settlement

The plan is that, in future, a single grant will be made to each devolved authority, and spending priorities will be decided locally, rather than by central government departments.

Devolved authorities will have responsibility for the following:

·       Transport

·       Skills and Employment

·       Housing and Planning

·       Environment and Climate Change

·       Support for Business and Research

·       Reforming and Joining Up Public Services

The degree of autonomy with which an authority undertakes these varies, however.

Devolved authorities will fall, temporarily at least, into one of three categories based largely on how long they have been in existence. The newbies, which will have the least autonomy, will be mayoral authorities (preferably in regions with a population of at least 1.5 million). The top group is ‘established mayoral authorities’, which are entitled to to an ‘integrated settlement’. The extent to which this mirrors the Barnett Formula that applies to Scotland, Northern Ireland and Wales is not clear. The important point is that the allocation of funds is simple and allows for spending priorities to be decided upon locally.

Between these two are what are to be called ‘Strategic Authorities’, which will be subject to more oversight by Whitehall than the ‘established authorities’. Existing authorities in this group are either recently created ones or, like the Tees Valley, on behaviour report because the auditor refused to sign off the authority’s accounts for 2021 -23.

Oversight: Audit and a Code of Conduct

It is fortunate that the White Paper recognises that there is an issue with local (and devolved) government audit, and unfortunate that when Michael Gove set up the Tees Valley Review in 2023 he did not see the need to ensure that the audit of the TVCA was up to date. In future, it appears, things will be different:

“We will transform the audit system to give greater clarity on the purpose of audit and accounts, and ensure they take centre stage in local scrutiny. The government has already taken decisive action to tackle the audit backlog and will now respond to the recommendations of multiple external reviews, including the Redmond and Kingman reviews that have called for much simpler leadership and regulation of local audit.”

All of this sounds good but is a bit lacking in detail. One of the details that is missing relates to the ability of mayors to set up structures that are beyond scrutiny by the auditor (or anyone else). The authors of the Tees Valley Review had great difficulty obtaining any detailed information about decisions made by the company, Teesworks Limited, as 90% of its shares had been given to local property developers, Martin Corney and Chris Musgrave, by the mayor. Had the affairs of Teesside Airport been within their remit, the Review authors might have encountered similar difficulty there, as the airport is operated by a private trading company (in which local councils have a small shareholding, but no explicit powers of scrutiny) – Teesside International Airport Ltd (TIAL) – while a (bogus) charity owns 25% of the shares in its holding company, Goosepool 2019. As it is not 100% in public ownership, it is not covered by FOI legislation. (Discussion of the bogus charity is here)

While the establishment of a code of conduct and procedures for holding (local and devolved government) members to account sounds as if it will add a degree of discipline to the system, it is unclear how it could function in a situation where the person whose conduct needs to be investigated is the most senior. Were such a code of conduct already in existence in the Tees Valley, it would not impinge on the activity of the TVCA mayor. 

Furthermore, while a generic code of conduct already exists, it has been weaponised in the past at the TVCA and at TIAL (as discussed here and here) to threaten local authority representatives). Here, as elsewhere, trust in the integrity of the mayor, underpins the proposed system. The experience of devolution in the Tees Valley shows that that trust may be naïve.

But the code of conduct is not the only measure in which the White Paper exhibits a misplaced trust in the integrity of the mayor. There is also the matter of the ability of the mayor to appoint commissioners.

The Mayor and the Commissioners

The White Paper does not explicitly discuss the risk of devolved authorities becoming bureaucratic, and therefore slow to act, but its provision to allow a mayor to appoint commissioners who have specific expertise but will not themselves be members of the strategic authority, suggests that they wish to keep the system of government as flexible as possible. There are two issues here. The first is the risk of cronyism, evident in the recent conduct of the Tees Valley mayor.

One of the recommendations of the Tees Valley Review was that a chief operating officer be appointed to the South Tees Development Corporation as a means of limiting the possibility of conflicts of interest. Houchen quickly acted on this recommendation, but put in post an individual who shares extensive business interests with both of the property developers who control Teesworks Limited (as detailed here).

To make matters worse, at a recent meeting of the TVCA cabinet, an item appeared less than 24 hours before the meeting describing the selection process for a COO for Hartlepool and Middlesbrough Development Corporations. The item states “The panel compromised of Group Chief Executive South Tees Development Corporation Chief Operating Officer and the Tees Valley Mayor” [sic]. No member of the board of either development corporation was involved in the selection process, and the TVCA cabinet was invited simply to approve the panel’s selection. Some may view this as another example of the Tees Valley mayor acting as a law unto himself (some previous instances of this are discussed here), using the STDC COO in a process where, by rights, he has no business.

There is a permanent risk that the power to appoint commissioners will be used to bring in allies rather than expertise. Which brings us to the second issue, which concerns impartiality.

One of the (legitimate) criticisms laid against devolution is that Whitehall, the bête noire of populist government, is home to civil servants who have both a duty of impartiality and considerable expertise in administration. It is questionable whether a devolved administration could, at short notice, attract comparable expertise.

When Middlesbrough Council held public consultation meetings (about their draft budget) recently, one of the issues officers raised was the difficulty in recruiting suitably qualified staff, particularly, in their case, specialist accountants. Both trying to entice experts to come to this region, and training a new generation on site, present their own difficulties.

It is perhaps in tacit recognition of this problem that the White Paper considers that a devolved authority should ideally have a population of around 1.5 million. The Tees Valley’s population is less than half that size. It is an issue that requires detailed consideration before the plan is rolled out any further.

The Role of Local Media

While we are otherwise squeamish about the populist demonisation of ‘Whitehall’, we have to make an exception for the authors of the section of the White Paper devoted to local media. They’ve clearly heard somewhere that the regional press is in a dire state, but, although entirely unaware of what the problem at first hand, they are happy to present us with the fruits of their ignorance:

“Local press and media play a crucial role ensuring decision making at local level is accountable to the people they serve and not just to national government. The sustainability of local journalism is an area of particular concern for this government. Our vision is a thriving sector that can continue to play an invaluable role by reporting on the issues that matter to communities, helping counter disinformation locally by being a source of trustworthy information, and keeping communities informed about local issues and decision making. The Secretary of State for Culture, Media and Sport will shortly develop a local media strategy. As part of that strategy, we will explore whether there is more that local authorities can do to support the vital role that local media plays, for example through increased openness in providing local journalists with access to information.”

The deficiencies of the local press, and its willingness to be a part of Houchen’s well-oiled propaganda machine, we have commented on from time to time over the past four years (just a couple of examples here and  here, encompassing the publication of ‘news’ that turns out to be no more than fantasy and the avoidance of reporting on events that the mayor may disapprove of).

In addition to that, we might wish that ‘as part of that strategy’ MHCLG recognise the need not just for local authorities to support ‘the vital role’ but to do so themselves, so that the next time we ask them to update us on the progress of their investigation into Houchen we get something a bit more informative than

“We are considering the mayor’s latest update and will respond in due course.”

To be honest, if the devolution White Paper serves as the standard of policy initiative we can expect from this government, then we do not have high hopes for the local media strategy to be constructed by the Secretary of State for Culture, Media and Sport. 

The Paper is correct to identify that a robust fourth estate in the regions is essential to ensure that devolved government receives the same level of independent scrutiny that Westminster does, but the starting point has to be the recognition that in places like the Tees Valley critical evaluation of local politics barely exists in the mainstream media at all. Are Reach plc and Newquest going to revive it? We think that’s unlikely. But we question whether the Secretary of State for Culture, Media and Sport thinks the same.

For the avoidance of doubt, we wish to declare that we agree that devolved government will help to alleviate the inequalities that have arisen through overcentralisation. Our issue is not with devolution itself but with the need to ensure that the system put in place is robust enough to deter rogue actors and also that devolved administrations have access to the necessary expertise to operate effectively. As it stands, the White Paper skirts round too many of the problems that such authorities may face and appears to allot to mayors too much power without accountability.