This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
The Deputy Prime Minister discussed decentralisation at the launch of a new report by IPPR (Institute for Public Policy Research) North.
First, let me congratulate IPPR North for their work on this report, as well as their impeccable timing. If ever there was a time to push for action on decentralisation, it’s now.
[Political content removed] You only need look at how the Scottish Referendum debate has re-energised people’s interest and engagement in politics, over the last few weeks, to see that this is an idea whose time has come.
Despite their fundamental differences, both the Yes and No camp in Scotland are sending a message that they want more powers. And what a lot of Scottish people on the campaign trail tell me is that they want greater powers for Scotland, whilst also retaining the security and stability of being part of the UK’s family of nations.
For me, that’s the best of both worlds. But it’s a balance I think we need to strike right across the UK, including in England. In many ways, this is the forgotten part of the puzzle. Over the last few decades, we’ve seen a wave of new powers shifting out to every nation of the UK, but less so in England.
How can we create an economic core in the North? Send in your idea or join the debate at Northern Futures.
Four years ago, in the wake of the terrible financial crisis of 2008, it was clear that this old model had failed. For decades, we’ve had successive governments, from both the left and right, concentrating power in Whitehall and relying too much on the City of London’s profits to power the rest of our country’s economy.
Instead of helping our great cities like Sheffield to stand on their own 2 feet – by driving private enterprise and creating opportunity across every region – governments recycled the revenues from an overheated banking and financial system, a bit like a sticking plaster: subsidising an unsustainable boom in public sector employment.
This meant that when the City’s engine went into meltdown, it took the rest of our economy with it.
The facts speak for themselves - for every 10 private sector jobs created in the South under 10 years of the last government, there was only 1 job generated in the North. At the same time, the importance of British manufacturing was allowed to decline 3 times faster than it did under Margaret Thatcher.
When we joined this coalition, my party and I were focused on changing that: rebalancing the UK’s economy to ensure that every city, town and region has the necessary resources and support they need to succeed.
This included giving more powers and controls back to our local leaders and communities: most critically, to shape their own economic future.
We’ve always believed that the people who live and work in a local community know far more about the strength, character and needs of that area than any minister or official shut off in Whitehall ever could.
When I first launched the City Deals, which have given city leaders further powers to strengthen their area’s competitiveness, I said that I wanted to fundamentally recast the relationship between central government and our cities – unleashing an unprecedented transfer of power.
It hasn’t always been easy. We’re trying to overturn decades of power grabs and diktats from the centre.
Yet we have succeeded, unlike so many governments before, in starting to deliver real power and control to local areas.
We’ve passed the Localism Act: giving more legal powers to local people, communities and councils to help them do what they think is best for their local areas. We’ve localised business rates, enabling communities to benefit more as their local economy grows. Our Tax Increment Financing Reforms give local authorities the opportunity to borrow funds for vital local infrastructure projects against future business rates.
Building on that, back in the summer, I announced the first of our new Growth Deals. These innovative deals extend the powers that we’ve already given to our cities’ leaders more widely across the whole country, with access to a £12 billion pot of funding in the coming years.
Here in Sheffield, we’re already seeing the impact of that work, with ambitious plans to use the city’s £300 million Local Growth Deal to create 8,000 jobs, 5,000 homes and training for 40,000 people.
This includes supporting over £790 million worth of infrastructure projects such as improvements to the City Centre, boosting transport links and building new housing, as well as creating a new £130 million Skills Bank.
Every one of these measures is helping us to hit rewind on those long years of centralisation. Yet, we know, this is just the start of a long, long journey to hardwire localism back in to Britain’s political DNA.
IPPR North’s excellent report shows us how much further we could go in the years ahead. With a new consensus now emerging amongst the UK’s 3 main political parties to extend devolution and decentralisation in the future, I believe we can push forward in realising our ambitions for a stronger, fairer Britain.
The reality is that our great cities like Sheffield, Newcastle, Glasgow and Leeds aren’t just competing with each other for investment. They’ve also got to stand up against other global cities like Frankfurt, Sao Paulo, Madrid and Shanghai.
Just a couple of weeks ago, I was in Bangalore and what I saw there was a city ambitious for its future: investing in the infrastructure and people it needs to become the world’s leading tech city.
In the same way, here in the UK, we need to think about how we can exploit the greater local powers we’ve created to accelerate economic growth across the North. That’s why I’ve launched our new Northern Futures Project.
This is an open call to local leaders, businesses and experts in housing, transport, planning, science and education across the North of England to answer these fundamental questions: How do we build on the strengths in the North to create an economic core in the heart of the region that can compete with the biggest cities and regions in the world?
All of us have ideas. IPPR’s new report is full of them and I want to ensure that government can capture and develop them with you. For me, 3 main points stand out: firstly, the need to take an asymmetrical approach to decentralisation. This is what we’ve tried to do with our City and Growth Deals.
Secondly, the report highlights the importance of accountability. I believe this can come in many different forms. It doesn’t necessarily need to be the introduction of elected city region mayors. I think the best solutions need to be pragmatic and driven by the local people they impact.
Finally, financial decentralisation: we know that there will be no return to the big public spending of the past any time soon, whichever party is in power. As a result, central government has to give local leaders the greater flexibility they need to support their communities in the best way they can during these constrained times.
Over the coming weeks, we’re holding a series of events across the North to gather people’s views on these and other issues: culminating in an economic summit to be held in November. I hope to see you all there.
So let’s start that conversation today. I want to hear your ideas about how we can kick-start and sustain this revival of our great Northern giants.