Strayside Sunday: Is the £540m Devolution Deal good enough?

Last updated Aug 5, 2022

Strayside Sunday is our political opinion column. It is written by Paul Baverstock, former Director of Communications for the Conservative Party.

This week my former colleague Greg Clark, then Director of Policy for the Conservatives, now Secretary of State for the tongue-twisting Levelling Up, Communities and Local Government signed-off and handed down North Yorkshire & York’s much anticipated devolution settlement. The 32-page document awarded the area £540m over the next 30 years, along with devolved powers to help the region develop the skills, housing, and transport infrastructure it needs. Whether this represents, as the government claims, “a once-in-a-generation chance to help tackle regional inequalities by not only reducing the North South divide nationally, but also helping to resolve economic differences that are being felt between urban and rural area,” remains to be seen.

What we do know is that the money comes with the promise that we’ll get a Combined Authority, likely next year, with an elected Mayor to follow in 2024. This must be a good thing, with the shining examples of Tees Valley’s Ben Houchen and the West Midland’s Andy Street demonstrating the positive leadership possibilities an elected Mayor can bring. Both have used the special powers of the office to create special purpose Mayoral Development Corporations to buy land and assets to drive local economic regeneration and employment, to great effect. Houchen famously returned Teeside Airport to public ownership and, just this week, Street announced Birmingham as the new home for a large portion of the BBC’s production capabilities, testament to investments made in vital property infrastructure. Tracy Brabin, West Yorkshire’s elected Mayor, still relatively new in post, is yet to find her feet.

Whether or not North Yorkshire’s Mayor is a success will rest on strength of personality and imagination. Will they have the vision, communication skills and drive to push the limits of their newfound powers and make the most of them? Let’s hope so. They’ll need to be more persuasive than North Yorkshire Council’s representatives who made the bid for devolution. Last week’s settlement was significantly less than the “ask”. £750m over 25 years had been requested, versus the £540m over 30 years received. Net, the new Mayor will have £18m per year to spend on their agenda, rather than the £25m per year hoped for. The bid also hoped for £47m to redevelop the much-maligned Harrogate Convention Centre. Much to Harrogate Borough Council Leader Richard Cooper’s disappointment this was turned down flat – with Westminster civil servants giving a “very strong steer” it would not be funded and should not be part of the devolution settlement. The money for that will now have to be found from other means, with an application to Boris Johnson’s Levelling Up Fund in the works. The Convention Centre’s future remains uncertain, not least because with the coming change in Conservative Party leadership there is no guarantee that existing spending commitments will hold.

And that’s part of the problem here. £540m sounds like a big sum but, in truth we can’t be certain it represents new money. We have little idea how it fits with the existing local government grant and public spending commitments. What we do know is that it seems certain that tax cuts will be on the government’s agenda following the change of Prime Minister. That, plus the most ominous macro-economic climate in a generation (recession, soaring inflation and rising interest rates) means that coming downward pressure on public spending seems locked in. Whoever becomes Mayor of North Yorkshire and York will have their work cut out for them.

The same of course is true for the new Prime Minister. It now seems likely (if polls are to be believed) that Liz Truss will win comfortably the Tory Party leadership contest and assume office. Assuming I get a non-hacked voting paper from the Harrogate & Knaresborough Conservative Association I’ll be putting a cross next to Rishi Sunak’s name. If Liz Truss does win it will be another example of the maxim that “he who wields the dagger never yields the prize”, Sunak having led with Sajid Javed the avalanche of ministerial resignations that finally put paid to Boris Johnson.

For the life of me I can’t see the logic of the aggressive tax cuts that Liz Truss proposes. To paraphrase Maurice Saatchi’s famous “Labour isn’t working” political advertising slogan from the 1980’s, an argument can be made that “Britain isn’t working.” The NHS has moved beyond perpetual ‘crisis’ and is now in real trouble, with waiting lists soaring for everything from cancer treatment to mental health treatment, nary an ambulance in sight when you need one and chronic staff shortages. It takes an age to get a passport and, when you do, the airports are carnage. The DVLA can’t get a driver’s license organised for love nor money and with a series of national train strikes and 7-hour queues to take a ferry to France, travelling in this country is becoming a Kafka-esque challenge. Planes, trains, and automobiles indeed. I haven’t even mentioned the disaster that is immigration policy and our handling of the small boats influx on our shores. Reform may well be part of the answer but setting all these right needs real money and competent grip. Economists who support Ms. Truss’ plan to tax cut our way to economic growth to fund all this are thin on the ground. Like North Yorkshire’s coming new elected Mayor, Ms. Truss’ real task is to find imaginative policy solutions to our problems, from skills to housing, from transport to health and then find a way to run them properly. And that takes public money, gobs of it.

That’s my Strayside Sunday.