Richard Hatcher explores the answers:
Neoliberalisation entails both the roll-back and the roll-out of the local state: the roll-back of traditional welfare state structures and functions and the roll-out of new neoliberal ones. Osborne’s Combined Authorities are the latest development. First was Greater Manchester, then several others based on the city regions of the north of England and the West Midlands, with more than two dozen more in the pipeline. They are transforming the landscape of local government in England, creating new sites of struggle, and presenting new challenges to trade unions and communities.
The resolution of the TUC on devolution, agreed by the TUC Congress in September 2015, states that when proposals “have real democratic accountability at their heart, devolution can have benefits” with “properly funded public services” and a “mandate from the public through the ballot box combined authorities could usher in a new era of public service delivery in England that is more responsive to local need”.
But Osborne’s model of devolution meets none of these criteria:
- It is a one-sided business agenda driven by private profit not local need
- It is a threat to public services, jobs and conditions
- It is deeply undemocratic
Why the government wants Combined Authorities?
The government claims that the primary purpose of Combined Authorities is economic growth. Three mechanisms lock the Combined Authorities into the imperatives of private sector profit. One is control by central government. Claims that the new Combined Authorities represent decentralisation disguise the reality that they are a new form of highly centralised power. It is the government that decides what policies, what structures and what funding, and holds the Combined Authorities to account.
The second mechanism is the key role of local big business in the governance of each Combined Authority through the Local Enterprise Partnership, the LEP. Its representatives are seated alongside the Cabinet of elected councillors and the directly elected mayor (if there is one), and although they do not formally have a vote in effect they exercise a veto, since the whole Combined Authority project is driven by the local economic strategy that they define. A case in point concerns local business rates. The Combined Authority has the power to set them, but can only raise the rates with the agreement of the LEP.
The third mechanism is the consequence of the government’s decision to end the block grant funding of local councils by 2020 and make them largely dependent for income on the retention of the business rate. This will compel councils to tailor their policies even more closely to local business interests and the imperative of attracting external investment, in competition of course with other Combined Authorities.
This has an additional political advantage for the Tories: it locks the Labour councils that make up and their leaders who govern most Combined Authorities even more firmly into the neoliberal agenda.
The economic growth agenda is linked to an agenda for the continuing neoliberal reform of public services. Combined Authorities will be, like local councils, instruments relaying the ongoing savage cuts in public sector budgets, and that contributes directly to their economic agenda through providing opportunities for private profit through outsourcing and privatisation.
But Combined Authorities are an instrument not just for cutting and outsourcing public services but also for reshaping and integrating them more closely into the economic agenda. The West Midlands Combined Authority, for example, will be responsible for the formation of the workforce from age 16 onwards through ‘employability’ and ‘skills development’, for housing, transport, land use, the police (taking over from the Police Commissioner), the fire service, and ‘mental health’. The Greater Manchester Combined Authority is the exception, so far, in being responsible for the whole NHS and social care budget, but the intention is that all Combined Authorities will take over more devolved powers over time. In short, Combined Authorities are overarching socio-economic projects which seek to integrate much of the lives of families and communities more closely into the interests of capital.
Taking power from councils
Contrary to what is claimed, Combined Authorities are taking over many powers from councils, and will increasingly do so. Just one recent example: housing. In December 2015 the government added an amendment to the Housing and Planning Bill which enables the Secretary of State to ‘invite’ a Combined Authority to call-in any local authority development plan within their local area if it is considered to be inadequate.
Why government and employers want directly-elected mayors
The government’s preferred decision-making structure for Combined Authorities, which offers them the most benefits in terms of powers and access to funding, comprises a directly elected Mayor and a Cabinet of the leaders of the constituent councils. This model has the advantage of presenting the appearance of public accountability without the mechanisms which could make it a troublesome reality. In particular, the Mayor and Cabinet are not held accountable to an elected Combined Authority Assembly.
A directly-elected mayor is a presidential form of local government, accountable only in direct elections every four years with no right of removal. It means the government can deal with a single leader and one not tied to local political parties as a council leader is – an arrangement that suits the private sector too. Directly-elected mayors ideally suit the media’s fondness for reducing politics to personalities. And there is the possibility of a Tory mayor, or at least an independent, being elected in Labour-dominated urban areas.
Claims for economic growth and jobs
The government and the Combined Authorities themselves make big claims for economic growth and job creation. These need to be rigorously questioned.
- What is the strategy for economic growth?
- What is the evidence? Research studies don’t provide strong evidence of devolution as a driver of growth
- Will devolution increase regional inequalities?
- What kinds of growth? Why do Combined Authority Agreements make no mention of the green economy and environmental issues?
- Will Combined Authorities cause losses as a result of cuts and merging services?
Low productivity and “skills deficit”
The question of strategy for growth is the Achilles heel of the Combined Authorities’ economic policy. In a nutshell, this is what it argues. What is holding up growth is low productivity. The main cause of low productivity, it claims, is low skills. The solution is programmes of skills development to meet local employers’ needs, and this becomes a major priority for each Combined Authority. It is already under way with each Combined Authority leading a Post-16 Area Review of provision aimed at gearing FE colleges even more tightly to local employers and involving more private providers through “recommissioning” provision.
While there are undoubtedly skills shortages in certain specialised sectors, this is not the major cause of low productivity. The UK Commission for Employment and Skills (UKCES) published their Employer Skills Survey 2015 in January this year. The vast majority of employers (86 per cent) reported that they had a fully proficient workforce. A bigger problem is under-utilisation of existing skills. 30% of employers reported that they had staff whose skills and qualifications were above those required for their current role. 2 million workers are reported to be under-utilised in this way, and this is almost certainly an underestimate.
We have detailed evidence from the Greater Manchester Combined Authority in a recent report from New Economy, its research and policy unit:
“there are problems with skill utilisation. There are more level 4 qualified people than ‘level 4 jobs’ available. […] a worrying 39% of unemployed people have level 3 and above skills (19% have a level 4 qualification). […] This shows that qualifications are not necessarily a guarantee of work. Many unemployed people have valuable skills.”
But the British economy is structurally a low skill low wage economy. One graphic indication is the spread of zero-hours contracts. According to a report by CIPD in December 2015 the number has increased from about 1 million in 2013 to about 1.3 million in 2015. The real cause of Britain’s low productivity compared to other major economies is not lack of skills it’s lack of investment. Larry Elliott succinctly put it like this in The Guardian 14 March:
“Britain’s recent growth has been heavily biased towards low-productivity jobs that do not pay very well. Businesses would rather employ cheap labour rather than spend more on new kit, which explains why investment as a share of GDP is still well below where it was before the recession. Higher investment is the bedrock of a more successful economy. It boosts productivity, leading to higher wages, a bigger tax take and a smaller deficit.”
The solution, not mentioned in any of the Combined Authority propaganda, is a radical change in government strategy, as argued for by Jeremy Corbyn – a National Investment Bank.
In February this year the House of Commons Communities and Local Government Committee published a report on the Combined Authorities programme: Devolution: the next five years and beyond. It delivers a damning judgement on the exclusion of public participation:
“Conclusions and recommendations
- For devolution to take root and fulfil its aims, it needs to involve and engage the people it is designed to benefit. There has been a consistent very significant lack of public consultation, engagement and communication at all stages of the deal-making process.” (p53)
The profoundly undemocratic character of the Combined Authorities is ensured by their governance structures, where a handful of council leaders and a directly elected mayor have the monopoly of power with no accountability to an elected Combined Authority Assembly. The government’s view is that the public accountability of a Combined Authority is ensured by its scrutiny arrangements. Greater Manchester is the model: a Scrutiny Committee composed of local councillors meeting once a month, with the option of additional review panels. This is entirely inadequate to hold the Combined Authority power-holders to account across the huge range of complex policy areas they will be responsible for. However, the Devolution: the next five years and beyond report notes:
“77. As the DCLG says, the overview and scrutiny requirements in the Bill are an initial framework to be used as a basis for more robust provisions […]. These should be developed […] as a result of deliberate efforts to hold active discussions at local level, with residents involved in designing new and more open methods of scrutiny.” (p34)
The key demand, as we have said, is an elected Assembly, and there is a precedent: the scrutiny arrangements in London, where the mechanism for public accountability of the directly elected mayor and the Greater London Authority is the 25 elected members of the London Assembly. But it isn’t a case of an elected assembly or nothing: a step in the direction of more democracy is to open up the Combined Authority scrutiny committees to co-opted members elected from trade unions and community organisations, and both the Greater Manchester and West Midlands constitutions specifically permit this.
Labour Party view?
“Devolution is a chance to open up politics and renew our democracy” say Labour’s shadow ministers for Local Government Jon Trickett and Steve Reed (Huffington Post 15 November 2015). This is the opposite of what is actually happening, but there has been little or nothing from the Labour leadership criticising it. And meanwhile Labour councils have colluded uncritically with the government’s boosterism of the Combined Authorities. And recently Lucy Powell, shadow minister for education and a Manchester MP, has gone much further, advocating that “In Greater Manchester and Liverpool, for example, mayors should be given powers and a key role in turning these cities into centres of educational excellence, helping to deliver the change in standards that local pupils deserve. It no longer makes any sense to leave schools outside the localism agenda.” (Guardian 23 February).
The resolution passed at September’s TUC conference calls for devolution proposals to “have real democratic accountability at their heart”. But of course they don’t, and one indication of the marginalisation of trade unions is that the formal Agreements between the government and the WMCA and the GMCA make numerous mentions of ‘business’ and ‘employers’ but the word ‘union’ does not appear once in either.
Of course unions will be involved in negotiations with the Combined Authorities and agreements over pay and conditions – the NWTUC has already signed a Protocol with the GMCA. But there is no sign of the unions being involved at the level where the key strategic decisions are taken. Greater Manchester, as a model which other Combined Authorities may well follow, provides a warning:
“There are two high level groups who currently have oversight of the skills agenda in GM. They are the:
- Skills and Employment Strategy Group, and the
- Skills and Employment Programme Board.
The Strategy Group is accountable to the GMCA and the GM LEP. Its role is to agree GM’s priorities and strategic direction around skills and employment.
The Programme Board is accountable to the Strategy Group and is responsible for implementation of the Partnership’s delivery plan.”
There is no trade union representative on the Strategy Group, but there is one – though only one – on the Programme Board. So there is union involvement, but it is only in the committee concerned with the implementation of policy decided elsewhere – there is no union involvement in the committee responsible for the making of policy itself.
What is the TUC’s strategy to deal with the situation of profoundly undemocratic Combined Authorities? It can be found in an internal TUC Executive document published on 7 July 2015 and headed ‘Confidential’: Decentralisation and devolution in England. The section headed “A framework for action at the sub-national level” begins “The TUC should advocate three key elements that could be applied to devolved structures that emerge in any given region.” The two key ones concerning participation are as follows:
- “Public service workforce partnership councils, co-terminus with the relevant devolved authority bringing together employers, councillors and unions from across the public sector…
- Civil society partnerships, co-terminus with the relevant devolved authority, bringing NGOs, voluntary and community groups, trade unions, businesses, academia and others together to:
- Set out the key outcomes that devolution will deliver for the devolved region, including equality, anti-poverty, decent jobs, strong public services, tackling exclusion;
- Set out new ways of partnership working, replacing failed markets with collaborative forms of engagement between civil society and the public sector, using new forms of finance and grant making.” (p11)
The problem here is that social partnership is not the same as “real democratic accountability”. It implies that there is a basis for consensus which can be achieved through negotiation.
It is being said explicitly by local TUC leaders that you can’t criticise and challenge the Combined Authorities because otherwise they won’t allow you a seat at the table. This is a recipe for capitulation, because there are fundamental conflicting interests at the heart of the Combined Authorities between private profit and social need, and between top-down power and participatory democracy. That is why campaigning pressure by unions, communities and citizens is essential to democratise the Combined Authorities and make them prioritise social need, coupled at the same time with ensuring that we get the best deal possible from them as they are.
Time to challenge neoliberal Combined Authorities
Combined Authorities are a further stage in the Tories’ neoliberal transformation of England. They need to be understood and their key policies challenged and opposed. Up till now the organisations of the labour and community movements have been largely silent. Knowledge about what Combined Authorities mean is not widespread. But as they spread and their undemocratic character becomes increasingly apparent public opposition will increase. The following three principles provide a way forward:
- A critical challenge to the claims for the economic strategy of the WMCA, and for an alternative primed by government investment and based on meeting social priorities and the promotion of the green economy.
- Defence and improvement of public services, the protection and improvement of jobs and conditions and the involvement of workers and service users in policy decisions.
- A radical democratisation of the Combined Authorities with the full participation of citizens, communities and employees at every level of policy making and implementation so that it is genuinely democratically accountable.
All of these issues need to be put on the agendas of trade union bodies, community organisations, local Labour parties, etc, and resolutions passed to build pressure for change. We need public meetings to spread awareness of the Combined Authorities among users of services and local communities and how they can be challenged and democratised. And the candidates for mayors of the Combined Authorities need to be challenged to give their support to policies for their radical reform.
You can find a longer version of this article, with all the references and links here.