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Power to the regions

Written by David Adams
Oct/Nov 2016

Devolution within England could have dramatic effects on public service delivery. It is supposed to take power from London and distribute it to regional and local government bodies. It should mean that decisions that will affect services and infrastructure can be taken by people with better direct knowledge of local conditions. The potential benefits for charities and voluntary organisations that deliver public services, and for the people who rely on them, are obvious.

In practice, however, English devolution will be a daunting challenge, with intense budgetary pressures facing central government departments, local authorities and third sector organisations; and a backdrop of political and economic uncertainty. There have been some suggestions that Theresa May might not be as committed to the devolution agenda as were David Cameron and George Osborne. But assuming devolution does continue, what will it mean in practice for the English charity and voluntary sector?

Deals

Bespoke devolution deals have now been created for areas in England, including Greater Manchester, Cornwall, Greater Birmingham and Solihull, Bristol and the West of England; and the regions around Leeds, Liverpool, and Sheffield. Some entail the introduction of directly elected mayors to lead devolved administrations.

But while those areas that accept the deals will gradually assume full responsibility for using the proceeds of business rates and local taxes, plans for public spending cuts that Osborne put in place in 2015 will drastically reduce the financial support central government provides to local government by 2020. Will the devolved regions be able to raise the revenue they need?

The fear that a region may be cut adrift like this, particularly now that Brexit is likely to remove or reduce infrastructure and regeneration funding previously provided by the EU, is one of the reasons why some politicians have rejected devolution proposals. In early September, four out of seven Combined Authority councils in north-east England withdrew their support for the deal offered to Newcastle and the surrounding region. Councillors said they were concerned by a lack of reassurance from central government about future funding.

Devolution has progressed furthest in England in Greater Manchester. Alex Whinnom is CEO at the Greater Manchester Centre for Voluntary Organisation (GMCVO), which is helping to coordinate the sector’s response to devolution in the region. He says that a majority of third sector organisations in Greater Manchester are broadly in favour of devolution, in theory. “The message from city leaders is that third sector activity and engagement are critical to the success of the whole venture,” Whinnom says.

In September, a group of organisations seeking to coordinate the response to devolution by charities and voluntary organisations of all types and sizes working across England organised a summit to discuss the subject. Locality, the Charity Finance Group (CFG), Children England and the National Association for Voluntary and Community Action (NAVCA) led the event, which was attended by representatives from over 30 other organisations. They produced a list of 16 principles that would ensure devolution really does benefit local communities throughout the country, not just in the big cities.

The principles included a statement that no financial settlements should be agreed until there has been an opportunity to assess local needs and resources. They stressed that some element of national redistribution of resources must remain to protect devolved areas against the consequences of sluggish economic growth. Principles relating to public service reform included an undertaking that there should be agreement between devolved authorities, elected officials and the sector about service design, commissioning, funding and delivery; that local services should be co-designed and reviewed by local service users, commissioned on the basis of long term social outcomes, not short term financial pressures; and funded by the simplest mechanism possible.

Regional differences

Locality CEO Tony Armstrong says that the organisations who attended the summit provided accounts of a very mixed picture as to the progress of devolution across the country to date. “Lots of local authorities are doing bits of good things, engaging with local authorities, or having a good commissioning system,” he says, citing Leeds, Liverpool and Calderdale as examples.

CFG head of policy and engagement Andrew O’ Brien suggests other organisations would do well to emulate some of the work being done by GMCVO and other organisations in Greater Manchester. But the state of play in a very different region, Cornwall, highlights the potential problems and opportunities devolution could offer. Under Cornwall’s devolution deal, signed in July 2015, Cornwall Council and the Isles of Scilly are working with NHS Kernow on integration of health and social care services, while the deal also covers transport, employment and skills, management of EU funding, support for business, energy, the public estate (including coastal and flood defences); and heritage/culture.

As anyone who has ever been there knows, Cornwall has a very strong cultural identity, which is one reason why there is broad support for devolution there. Devolving control of public services to Cornwall is also more straightforward than would be the case in many other regions in England. It borders only one other county and with the exception of a significant number of people who sometimes cross into Devon to access healthcare services in Plymouth, its public services are self-contained, with almost none of the overlaps with other counties or unitary authorities usually found elsewhere.

Nonetheless, the future course and success of devolution in Cornwall remains uncertain. The most pressing problem is the fact that the NHS Kernow Clinical Commissioning Group has been placed under legal directions by NHS England after a poor financial performance during 2015.

“So at the moment the fine words and the rhetoric are not matched by reality on the ground,” says Ian Smith, chief executive at Cornwall Voluntary Sector Forum.

“On the positive side, there’s a real will to look at redesigning services and for there to be a much greater role for charities and civil society in general. But how that’s going to play out over the next few years, with money really tight, I don’t know. The scary point is 2020, when the block grant from government comes to an end, so the size of the public sector will then be determined by local government income. A rural county has a smaller tax revenue base than a metropolitan city.”

The other big challenge will be ‘double devolution’: the devolving of powers from Cornwall Council to local and parish councils. Some councils, notably Falmouth and Truro, are already actively preparing for this transition. “But obviously a lot of the smaller parish councillors haven’t got a lot of resources,” says Smith. “There’s a lot of nervousness about how services will be joined up at local level.”

Engagement

Locality’s Armstrong believes third sector organisations could make a real difference in overcoming similar problems across England, if central and local government engages more effectively with and supports those organisations, helping them and local communities to design the services they need. Local organisations must also be given, then have a fair chance to bid for and run, those services rather than allowing them to be gobbled up by larger private sector service providers.

Brexit – whatever form it might take – is a further complicating factor, with implications for funding streams, as well as for the wider economy.

“European structural funds and the European Social Fund are critically important in places like Wales and the north,” says CFG’s Andrew O’Brien. “There have already been some attempts made in some places to get the government to maintain those services, but that will be a challenge.”

In Manchester, Whinnom remains positive overall about the response of the sector to devolution – and to Brexit – to date. But he is concerned by ongoing financial pressure. “You need extra money to go through this sort of transition and we’ve all got less money,” he says.

Nonetheless, he urges charities and voluntary organisations across England to work towards grasping the opportunities devolution could offer.

“What I would say to the sector is for God’s sake, engage. It’s very tempting not to – it’s complicated and everyone’s so busy, but it’s really important to get involved. It’s irresponsible not to try to give your area the best possible shot of making a success of devolution, for everyone’s benefit.”

David Adams is a freelance journalist



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