Broad political consensus is a relatively unusual event. So when it takes place – or at least appears to take place – the natural reaction is often a mixture of relief and suspicion.
Whichever emotion dominates following the UK’s “Local Growth Deals” announcement, the seemingly inexorable march towards devolving spending responsibility for projects and related infrastructure investment is one such area of gathering political agreement. Indeed, it seems the only major area of disagreement is “How far?” and “How fast?” But behind the announcement, the picture is more complex and that’s where the grounds for possible suspicion lie.
Overall, Prime Minister Cameron’s announcement is good news; not just allocating the entire £2 billion (€2.5 billion; $3.4 billion) Local Growth Deal funding for 2015/16 but also committing to a further £4 billion from future years’ allocation for high-performing local enterprise partners (LEPs). There can be little doubt that devolving spending responsibility to local bodies can lead to significant benefits. It is argued by many that Whitehall [UK government administration] can be remote, bureaucratic and (or so the regions believe) unfairly London-centric.
Where regional bodies have taken the lead on major projects, the successes have been tangible and often transformational. It’s almost certain that the development of regional projects such as the Metrolink public transport network in Greater Manchester would not have been as successful if it had been managed from Whitehall. In addition, the longer term nature of the Local Growth Deals announcement gives more certainty for projects that inevitably take a few years to deliver.
There are challenges, however, and while these should not be reasons to stall progress, they are issues that must be addressed if the devolution project is to deliver real benefit and not just be seen as another piece of political window dressing.
Virtually all investment in regional infrastructure has an element of integration – often substantial. Regeneration-led projects mean that transport, housing, education, utilities and health schemes are part of a wider integrated whole. Unfortunately, capacity and capability shortages exist in local government across the whole of the UK, in some places more than others. It is vital that a joined-up approach to programme delivery, rather than just a list of projects and schemes, is developed and that the necessary skills and talent are brought on board by regional and local bodies early enough in the development process.
Local Growth Deal funding cannot be seen in isolation. Projects beginning in 2015/16 are expected to be matched by local contributions worth double those from central government. In order to unlock this, the private sector needs to be engaged from the very beginning and clear criteria set out to enable and facilitate private sector funding, ranging from a commercial approach to risk transfer and allocation, right through to reform of local planning processes. Failure to do this risks crowding out private sector funding with public funding.
While it is encouraging that robust measures have been put in place to check the viability and acceptability of approved schemes in the first round of Local Growth Deals, rigorous assessments of value-for-money and applicability to wider regional strategic priorities must be maintained. Too often in the past, regional strategies have amounted to little more than a consolidated list of ‘pet’ schemes without a binding, overarching objective.
There will inevitably be some concern that when it comes to delivery, Whitehall bureaucracies will devise ever-more creative ways of keeping their hands on the purse strings, unwilling to really trust the regions to get the job done – irrespective of any political pronouncements. Politicians of all parties must therefore remain ever-vigilant to ensure that the good intentions of the devolution agenda do not become mired in red tape.
No matter which party wins the general election next year, one thing appears certain; the current debate around empowered localism for investment looks set to continue and will gather momentum. Whether devolved monies transferred away from Whitehall amount to £10 billion, £30 billion or more, the challenge now is for regional and local bodies, whether LEPs or local authorities, to think strategically, focus on outcomes and then resource with the required skills and capabilities to ensure good governance, and value-for-money delivery.
The prize for doing so could be a genuine renaissance in the delivery of regional infrastructure and the creation of regional economic powerhouses on a scale the UK’s Victorian forebears would have approved of.
*Steve Bromhead is UK head of infrastructure, industry and utilities at built asset consultancy EC Harris.