Turbocharging Growth and Spending
Will Rachel ‘let go’ and unlock full fat devo? Gill Morris and Taya Clarke talk about devolution in the light of the Spending Review….
In the wake of the Devo Agency’s fabulous Devo North Network Soirée and the Government’s Spending Review it is timely for us to pick up some common threads and unravel what full fat devolution could mean for the Great North.
Last year, the Labour Party promised change and were handsomely elected in parts of the country it wouldn’t usually reach. Its 5 missions and plan for change are all about delivering rapid economic growth and money into our pockets. Whilst the Chancellor’s sharp refocus on the reality of the legacy fiscal challenge she inherited certainly put a damper on things - there was a smattering of hope after she changed Britain’s debt rules last October allowing billions to be injected into big infrastructure projects. BUT what about investment in the ‘social infrastructure’ we need? Investment in skills, education, social care are equally important to a strong and fair economy? It remains to be seen if the Spending Review will turbocharge growth in the North, or simply plug the gaps from years of being left behind. One thing is certain, it is our Northern Mayors who are primed and ready to be the agents of change - working to drive socio-economic growth and unlock the North’s full fat potential.
The Government’s Spending Review allocated a whopping £600 billion annually to be spent on public services. Three years of plans for department-level day-to-day spending, and four years of plans for investment spending have been committed. BUT a real term increase for one sector means real term reduction in another. It’s clear that the Government can’t do everything, everywhere, all at once which begs the question, who will be the real winners and losers in 10 years time?
Re-committing to existing or ‘shovel ready’ projects has left the North on the edge of its seat with excitement, with Northern Labour Mayors getting lots of green lights from the Government.. BUT full fat devolution requires a Government who genuinely wants to let go. If it wants to go further and faster to deliver growth, our Metro Mayors need the powers “to do things differently”. A fully devolved North with Mayors with real power will improve access to - and attainment in - education; attract, recruit and retain talent for great jobs, generate skills for the future and harness the innovation needed to build and retrofit great homes and improve connectivity in all parts of the North. What’s not to like?
The Chancellor’s goal to “invest in Britain’s renewal” by spending an extra £113billion on infrastructure and the £10billion allocated to the North could be game changing. Capital investment in infrastructure has been too low for decades. By coming down firmly on the side of investment in infrastructure and regional spending - the Chancellor can unlock the North’s cities and towns and enable them to build the skills and labour market needed to deliver growth.
Angela Rayner and Ed Miliband’s joint efforts delivered a good win for the North’s homes and places. Miliband’s £13.2 billion for warm homes plan remains untouched. Finally, we can kick start the retrofit revolution and make our homes energy efficient, healthier and greener. Rayner’s plans to build affordable, healthy homes will hopefully unlock housing finance and lower the capital cost for housing developers which is great news too! BUT despite things looking up for housing, the 1.5 million new homes promised by the next election really does look like a stretch.
There are now, perhaps, reasons to be cheerful and room for optimism. The Chancellor has adopted an intentionally positive - and welcome - narrative in the past few weeks and long may this continue. BUT if we are really going to go further and faster in the North we need the BIG WIN, the thing which will have the biggest economic impact. It was music to every Northerner's ears to hear the NPR acronym mentioned in the Spending Review. Now the North’s Mayors, MPs and Peers need to collaborate and make it happen. We can’t be short changed. Anyone who lives, works or plays in the North knows how rubbish our transport actually is. Simply a disconnected North will not deliver the growth we need.
The changes to the Fiscal Rules can be applauded BUT will they leave Rachel Reeves in a tight bind? Although democratic accountability is important, long term financial growth is essential. This Government’s ability to look beyond the Parliamentary term and prepare for a fully devolved North needs urgent attention, engagement and a new narrative - ahead of the Devolution Bill. Devo literacy is low. What’s coming is a huge change to how we are governed. Local government reform and a mixture of devolved power in all parts of England is not to be ignored. It’s a massive opportunity and one which needs to work. It feels like our Metro Mayors are leading the charge BUT the Council for the Nations and Regions is not an accountable body. It's a forum for Government and Mayors to come together and a good PR opportunity. So while the Devolution BIll will be revolutionary it is currently hard to see who the accountable body for Metro Mayors is or will be - other than the MHCLG. Whilst central control in Whitehall is important, that can’t be right moving forward. Without the combined Mayoral ability to spearhead growth and be accountable, question marks will remain about what Mayors are for, what they are responsible for and whether they can deliver much needed change.
Regional investment creates greater opportunity, realises ambitions and unlocks potential. With proper vision, collaboration and trust, Rachel Reeves can re-grow the economy, evaporate the debt and help the North go further and faster. In terms of what they can deliver for the Chancellor the North’s Metro Mayors deserve a better exchange rate.
