Richard Hatcher answers some pertinent questions about this and asks others.
The neoliberal transformation of local government in England is taking place before our eyes. Not only massive cuts in council budgets, turning them from providers of services to commissioners of services from private providers, but also the creation of a new scale of local government, Combined Authorities (CAs) based on city regions.
The Greater Manchester Combined Authority was established in 2011. Having now accepted a directly elected mayor, it has been granted significant devolved powers and funding streams by the government, including the £6 billion NHS and social care budget.
Combined authorities were established in the Sheffield City Region, West Yorkshire, the Liverpool City Region and the North East in April 2014. Osborne is offering them similar devolved powers if they too accept a directly elected mayor. And CAs are being proposed for other areas including the West Midlands, Derbyshire, Nottinghamshire, Cambridgeshire, the Tees Valley, Greater Bristol, Portsmouth/Southampton/the Isle of Wight, Oxfordshire, and Buckinghamshire/Northamptonshire.
The spread of devolution to CAs marks a historic change in the model of local government in England and a fundamental threat to local democracy.
Why does the government want combined authorities? And why does it want them run by directly elected mayors?
The Combined Authorities policy is not principally about making cuts. Of course the CAs will be instruments in the cuts agenda, along with their local councils, but the government could rely perfectly well on existing councils to continue to carry out government cuts, as they have been doing, without creating elaborate new city region structures. This radical transformation of the local state has a different primary purpose.
Cities and their local regions are giant engines of production, capital accumulation and profit. They compete with each other for investment by capital within the UK, within the European Union and globally. In a previous article I described the huge growth in investment in city centre financial and business services and associated commercial property, using Birmingham as a case study. The Financial Times (30 April) reported parallel developments in Manchester: ‘A record pound(s) 1.7bn was invested across Greater Manchester in 2014, putting it on a par with similar regional economic centres in Europe for the first time.’
In this highly competitive international environment the role of the local state in securing investment in the local urban economy becomes increasing vital. This requires two things.
First, local government needs to operate on a scale that corresponds to that of the local economy. Individual local authorities are too small. For example, the supply chain for Jaguar Land Rover in Solihull stretches right across the 7 urban authorities in the West Midlands, and so does its workforce.
Second, economic competitiveness increasingly requires that every aspect of social life, the entire urban process, is harnessed to and integrated into the needs of the local economy. From this follow four tasks for local government. They are all exemplified in the GMCA by the Greater Manchester Agreement: Devolution to the Greater Manchester Combined Authority and transition to a directly elected Mayor.1
1. To use its powers to enable investment and business development
These include planning regulations, grants to business, and overall strategic planning of the urban environment. The directly elected Mayor will have powers ‘over strategic planning, including the power to create a statutory spatial framework for Greater Manchester.’ The GMCA will have ‘Responsibility for devolved business support budgets, including the Growth Accelerator, Manufacturing Advice Service and UK Trade and Investment (UKTI) Export Advice.’
2. To provide the infrastructure business needs
The Mayor of Greater Manchester will have:
• ‘Responsibility for a devolved and consolidated transport budget, with a multi-year settlement to be agreed at the next Spending Review.
• Responsibility for franchised bus services…, for integrating smart ticketing across all local modes of transport, and urgently exploring the opportunities for devolving rail stations across the Greater Manchester area.’
3. To support the provision of the workforce that business needs
This has several elements. First, skills and ‘employability.’ The GMCA will have:
• ‘Control of the Apprenticeship Grant for Employers in Greater Manchester and power to reshape and re-structure the Further Education (FE) provision within Greater Manchester.
• Control of an expanded Working Well pilot, with central government funding linked to good performance up to a fixed DEL limit in return for risk sharing.
• Opportunity to be a joint commissioner with Department for Work and Pensions (DWP) for the next phase of the Work Programme.’
The workforce, at its various levels, also needs appropriate housing. The Mayor will have ‘Control of a new £300 million Housing Investment Fund.’ And the economy requires a reasonably healthy workforce. That’s the economic logic behind the devolution of the NHS and social care budget to Greater Manchester. ‘The GMCA and Greater Manchester Clinical Commissioning Groups will be invited to develop a business plan for the integration of health and social care across Greater Manchester, based on control of existing health and social care budgets.’
In short, the aim is the closer integration of social reproduction into economic production. And of course health, social care, housing and education are also themselves sectors of the capitalist economy. In the case of health and social care, the devolution of the £6 billion budget to the CA also has the potential attraction for government of enabling them to devolve with it the responsibility and blame for future cuts and failures in provision, as well as perhaps comprising a convenient package for future privatisations.
4. A city environment that will attract investors
The ‘gentrification’ of the city centre, exemplified by Birmingham and Manchester, involving upmarket city centre apartments, high-end shopping and restaurants, and prestige cultural facilities.
‘The real party of working people’
While the central driver of CA policy is economic there are also potential political and ideological benefits to be gained. The devolution of powers to city regions is intended to give credibility to a Conservative discourse of democracy and local empowerment and alleviate hostility to centralised control from Whitehall. It is a strategy to attempt to convince working-class voters in the largely Labour-run CA urban conurbations of Cameron’s claim that the Tory party is ‘the real party of working people’, as these business consultants note in ‘“Blue Collar” Conservatism & The Northern Powerhouse’: 2
“The politically strategic nature of the Northern Powerhouse becomes even clearer when considered in the context of ongoing austerity. Further cuts pose a huge threat to the blue collar agenda. It is well documented that cuts in the last parliament disproportionately affected those on low incomes, many of whom live in the less affluent North. With £12 billion of welfare cuts as yet unspecified, and a commitment that pensions will be left unscathed, the majority of those cuts will likely come from working age benefits. This will squeeze precisely those aspirational blue-collar workers that the Conservatives are so keen to win over, particularly in the North.
The Northern Powerhouse has the potential to dull some of the pain of cuts. It can be presented as a radical transformation in the way services and investment are controlled and delivered, with power placed in the hands of northern communities who have felt disenfranchised from the “Westminster elite” for so long. The visible changes it will instigate in the delivery of local services may engender a sense of real and proactive change, from which the Conservatives could reap the benefits.”
What sort of model of local government is needed to run the new Combined Authorities?
It requires two defining features. On the one hand a close partnership between local government and business, including the direct involvement of the Local Enterprise Partnerships. On the other, a structure that distances the CA’s political leadership from the pressure of popular opposition resulting from the crises and contradictions of the neoliberal economy and the further massive cuts that are on the way.
The ideal is a powerful directly elected mayor, hence Osborne’s insistence. But what is deeply anti-democratic about the Greater Manchester model is that there is no elected assembly to hold the Mayor accountable. At least Boris Johnson has to answer in some way to an elected London Assembly, which has a two-thirds veto. All the power in the GMCA lies in the hands of the Mayor and a Cabinet of the 10 leaders of the councils that make up the CA, who can over-rule the mayor if two-thirds vote against, but have not been themselves directly elected to that position and are not answerable to an elected GMCA Assembly. (Nor has there been any public consultation about these fundamental changes.)
There is a real danger that the GMCA model sets a precedent for other CAs, because it is in the interests of government and of business and is – disgracefully – being supported by Labour councillors who prefer bureaucratic power to democratic accountability.
What is our alternative?
Should we simply flatly oppose the whole CA policy? In my view, while recognising its neoliberal project, we shouldn’t, because it is actually in the popular interest that there is coordinated planning across a coherent urban conurbation on a larger scale than individual local authorities can achieve. (The exceptions would be CAs that artificially yoke together disparate areas.) The advantages would apply to, among others, economic development and therefore job creation, the transport infrastructure, post-16 education and training, environmental issues, and housing. Of course, what more coordinated policies are adopted is a matter of class interests and contestation.
And therefore there are two key principles that have to be fought for. First, no directly elected mayors, because that is too much power in the hands of one person rather than collective leadership, because they are elected for four years with no possibility of removing them, and because their policies can only be overridden by a two-thirds majority not a simple majority. The first step is a local campaign for a referendum on a directly elected mayor, along the lines of the one in the Manchester area, backed by the Greater Manchester Association of Trades Councils and the NWTUC.3
Second, and most importantly – and whether or not there is an elected mayor – the leadership of these new Combined Authorities must be democratically accountable to an elected CA Assembly.
There are precedents here we can draw on. London has a directly elected Assembly of 25 members. Wales, with a population of 3 million, little more than the 2.7 million of the GMCA or the West Midlands CA, has an elected Assembly of 60. Both these Assemblies also have an element of proportional representation, one-third. Of course we can argue for more democratic models than these, but they set a precedent for the case for democratisation which can win wide support.
A campaign based on these two principles of democracy would provide a space in which radical alternative policies can be developed and argued for about what the CA should do: local policies for the economy, social provision, the environment etc that are geared to social need not profit.
1. HM Treasury and Greater Manchester Combined Authority, 3 November 2014.
2. Westminster Advisers website http://www.westminsteradvisers.co.uk/2015/05/blue-collar-conservatism-the-northern-powerhouse/#. 21 May 2015.
3. See https://www.facebook.com/devolutionreferendumcampaign
This resolution on the proposed West Midlands Combined Authority was passed unanimously by Birmingham Trades Union Council on 4 June 2015
BTUC notes the proposal to establish in the near future a West Midlands Combined Authority (WMCA), comprising Birmingham, Dudley, Sandwell, Walsall, Wolverhampton, Solihull and Coventry.
BTUC resolves that the WMCA represents a fundamental change in the model of local government in England, represents a threat to public services, their users and workers, and further undermines local democracy.
It notes that the Greater Manchester CA is regarded by the government as the template for CAs, and that the GMCA has the following features:
• A directly elected mayor imposed by Osborne in spite of a recent referendum vote against DEMs in Manchester;
• The Mayor elected for 4 years with no electoral mechanism to remove the incumbent in the interim;
• A ‘cabinet’ comprising the 10 leaders of the councils comprising the GMCA;
• Power over devolved services is in the hands of the Mayor, whose decisions can only be vetoed by a 2/3 majority of the ‘cabinet’;
• No GMCA elected assembly to hold the Mayor and ‘cabinet’ accountable;
• No public consultation about these fundamental changes in local government;
• The transfer of services from central government to the Mayor transfers the immediate responsibility for further cuts to the local level, and aims to avoid the government being blamed;
• The devolution of the NHS and social care budget, worth £6 billion, to the GMCA puts at risk the existence of the NHS as a national service, and may also make it more vulnerable to privatisation under the TTIP (Transatlantic Trade and Investment Partnership)
BTUC recognises that this model is likely to inform the proposed WMCA and therefore calls for opposition to the proposal on the following bases:
1. No to a directly elected Mayor.
2. The creation of an elected WMCA Assembly, comprising either directly elected members or councillors from the constituent councils, in either case to be on the basis of proportional representation. (The population of the WMCA would be around 2.7 million. The population of Wales, with an elected Welsh Assembly, partly constituted by proportional representation, is not much larger at 3 million.)
3. The creation of an elected WMCA ‘cabinet’ based on the above;
4. If a directly elected Mayor is imposed, the Mayor to be subject to the decisions of the Assembly and ‘cabinet’;
5. The establishment of powerful Scrutiny Committees at the WMCA level, comprising Assembly members together with lay members including trade union representatives.
6. No transfer of public services such as to put at risk equality of provision on a national basis.
BTUC calls for a period of full consultation on any proposals for a WMCA, including a referendum with alternative proposals included.
BTUC also calls, in view of the moves towards a WMCA that are already under way, for a West Midlands People’s Convention to be held in the near future to discuss the proposal and responses to it.