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In December 2019, the Prime Minister, a former Mayor of London, promised to level up the ‘left-behind’ cities and towns of the UK. Yet, over a year on, it looks as though this promise is in danger of falling by the wayside, as the Government grapples with the ongoing health and economic effects of Covid-19.

This is sadly ironic, as many of the places hit hardest economically by the pandemic are also the places that need levelling up the most. Birmingham, Hull, and Blackpool, for example, have seen some of the largest increases in unemployment since the beginning of the initial lockdown. 

While the measures that the Government has taken will help save many jobs and businesses, it is increasingly clear that it does not have the capacity, the knowledge, or the networks to develop the tailored responses that places will need to rebuild their economies from the damage that Covid-19 has done.

If levelling up is to succeed where previous attempts have failed, then the government will need to improve policy development and delivery at both the national and local level. 

At the national level, this will require sustained and significant central government investment to help places across the country achieve their potential. It won’t be cheap. At the local level, it will require local government to be  reformed and empowered so it can effectively get on with the task. 

While there have been great strides made in terms of the devolution of powers to local areas in recent years, with the creation of nine metro mayors in addition to the Mayor of London, covering around 40% of England’s population, three main challenges remain.

The first is that these metro mayors have limited powers compared to international counterparts, and even compared to the Mayor of London. The second is that many parts of the UK have not yet benefited from devolution. The third is that in many places the powers that local authorities do have to improve the local economy are split across different institutions.  

Take Nottingham’s built-up area, the largest but by no means the only city to face these issues. It’s home to more than 670,000 people, but it doesn’t have a mayoral combined authority – it has nine separate councils, all with responsibilities that affect how the city works. The seven district councils are in charge of new housing and commercial developments, whilst the two counties provide the infrastructure and transport services for these developments. This doesn’t include the Local Enterprise Partnership. 

This fragmented arrangement makes strategic decision making about Nottingham’s future much more difficult than it should be, which has real negative effects. Recent analysis by the OECD suggests that places with more fragmented, less autonomous, and poorer quality local government are less prosperous than places that don’t suffer from these problems.

We can’t keep tinkering around the edges. The time for significant reform and devolution has arrived. The next phase of the devolution agenda therefore needs to be about building more robust local institutions as well as being about the passing down of powers and resources.

So, what does a programme of reform and devolution that addresses the under-empowered, under-funded, and under-bounded problems of the current system look like? I would suggest it needs at least five elements. 

First, England’s existing 349 councils should be reduced to 69 new, larger unitary authorities and combined authorities that incorporate as much as possible the local economic areas in which people live and work. This would make joined-up strategic decision making far easier, and would help build the institutional capacity of local government to better use their existing economic powers, and the extra powers that should be devolved in the future. 

Second, the leader and cabinet model for local government should be scrapped, and the new authorities should be headed by a directly-elected mayor with clear accountability to deliver. 

Third, the responsibility for designing and delivering key areas of the levelling up agenda such as housing, infrastructure, transport, innovation, and adult education should be moved out of Whitehall and put in the hands of the new mayors and their authorities. 

As a result, the fourth strand of the programme would enable the relevant government departments – Business, Transport, Education – to be shrunk to reflect their smaller roles. The Ministry for Housing, Communities and Local Government meanwhile should be transformed into an England Office similar to the Scotland, Wales, and Northern Ireland Offices and be given responsibility for managing the UK Government’s interactions with England’s local authorities. 

Finally, it would be disingenuous to reform local government and give it extra powers and responsibilities, without also providing it with the funding and financing flexibility it needs to make good on these extra responsibilities. Devolving control over how local business rates, council tax, and charges are raised and spent, and giving greater discretion to councils on how they manage their budgets, would give them the flexibility and incentives they need to drive forward improvements in their areas – and would be a welcome relief after a decade of local government austerity.

The tensions that have surfaced between local and national leaders during the pandemic have significantly reduced the Government’s appetite to push forward with the devolution agenda. It would be a regrettable and short-sighted mistake if the Government decides that English devolution just isn’t worth the hassle and shelves the whole idea. As the head of an 80-seat majority government, the Prime Minister has the power to address this situation. Devolution should not be a casualty of Covid-19 – it must instead be central to our recovery from it and to delivering on the big promise to level up.

Andrew Carter is the Chief Executive of the Centre for Cities. This article first appeared in our Centre Write magazine The Great Levelling?. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Daniel Nisbet]