Devolution: business dominance against local democracy – the case of the West Midlands Combined Authority

by Richard Hatcher

Devolution to Combined Authorities could provide the opportunity for local citizens to have more power over the policies that shape their daily lives. But Combined Authorities are a neoliberal economic and social project dominated by business interests and excluding democratic public participation.

There are two interrelated processes of the neoliberalisation of the local state, “roll-back” and “roll-out”. Roll-back neoliberalism refers to the ongoing cuts and privatisation in local authority services. But neoliberalism is not just about shrinking the local state, it is also about transforming its structure and functions, and it is exemplified by the roll-out of Combined Authorities.

I want to describe one – the WMCA – in some detail to show the dangers they represent but also the opportunities they offer to open up debates and campaigns around issues of economic and social policy and of power and democracy at the local level that include but also go beyond defensive campaigns against cuts.

The agenda of the WMCA

The West Midlands Combined Authority comprises seven metropolitan councils, five of them Labour: Birmingham, Solihull, Coventry, and the four Black Country authorities: Wolverhampton, Walsall, Sandwell and Dudley, with a population of 2.8 million. It also has a number of surrounding authorities as non-voting members. The WMCA is responsible for housing, land use, transport, employment and skills, some health issues including mental health, and youth justice issues. It is due to take over responsibility for the police and the fire service. Devolution is an ongoing process and it is expected that there will be further devolved responsibilities.

The attraction of devolution for local councils, in the context of highly centralised government control of local government and the ongoing unprecedented cuts in their grants from government, is the additional powers and funding, however limited, that it offers. The WMCA will receive £36.5 million year for 30 years, and this will leverage an £8 billion 30 year investment programme. In total that averages around £300 million a year. The WMCA also has some limited fiscal powers: to retain 100% of any additional business rates income raised through economic growth, to increase business rates by up to 2% to fund investment in infrastructure schemes, and to raise the council tax.

The primary purpose of the WMCA is economic growth, made explicit in the “Statement of Intent” published by the seven councils in July 2015: “Our objectives must be to amplify the competitiveness, productivity and profitability of private sector enterprise”.

Integral to the economic agenda is an agenda for “public service reform”. It has a target: the “Current deficit between taxes raised and public expenditure in the area eliminated” by 2030. This deficit amounts to £3.9bn a year, to be eliminated by a combination of cuts in spending on public services and whatever increased revenue accrues to the CA from business rates.

But public service reform is not just about cuts. Neoliberalism continually requires the roll-out of new policy fixes to attempt to deal with the dysfunctional consequences of its economic and social policies. A case in point is the WMCA’s policy for “troubled individuals”, headed by the creation of a Mental Health Commission, which has just produced a report, ‘Thrive West Midlands’. It may have some positive proposals for action but it makes no mention of the context of the austerity offensive either in creating and exacerbating mental health problems or in cutting the funding to address them – including the cuts that the WMCA itself is making in social spending. In fact the WMCA resolutely ignores the deep social inequalities which pervade the West Midlands. Its Strategic Economic Plan, far from offering an analysis and solutions, doesn’t even mention issues of racial and gender inequality and discrimination.

The governance of the WMCA

Claims that the new Combined Authorities represent decentralisation disguise the reality that they are a new form of highly centralised power. Government sets the economic agenda and targets and evaluates the Combined Authorities on their performance.

The strategic decision-making body of the WMCA, the Board, comprises as voting members a Cabinet composed of the leaders of the seven metro councils and, after May 4, the directly elected Mayor. The WMCA, like all the other Combined Authorities, is not held accountable to an elected assembly, in contrast to London and to local authorities.

The most innovative feature of roll-out neoliberalism embodied in the WMCA is that business representatives have places within its leading bodies. As well as the council leaders and the mayor the WMCA Board also includes the chairs of the three Local Enterprise Partnerships, the organisations representing employers in the West Midlands. They have voice but without vote, with one exception: they have a veto over raising the business rates. But in reality they have the determining influence over WMCA policy since they wrote its economic strategy and its performance is evaluated by their friends in government.

That is why it attracts powerful business leaders. For example, the representative on the Board from the Black Country LEP is Simon Eastwood, managing director of Carillion Developments. Carillion is one of the largest construction companies in the UK, with headquarters in Wolverhampton. (It is notorious for having to pay out millions recently for blacklisting union activists.)

The LEPs also have representatives on all the other key strategic decision-making committees. For example, the Strategic Economic Plan Board has a membership of six: three councillors and the leaders of the three LEPs, with voting rights, one of whom is chair of the Board. The same pattern of exclusionary power is evident in the CA’s Commissions. For example, the WMCA claims that the Land Commission is independent, but it comprises just five members, all involved in property development.

Holding the WMCA to account?

The WMCA is supposed to be held publicly accountable by its Scrutiny Committee, but the arrangements are hopelessly inadequate: just four meetings scheduled a year. But perhaps the most remarkable instance of business colonisation of the WMCA is that alongside the councillor members it has three places for representatives of the LEPs. One of them, and vice-chair of its Productivity Select Committee, is Paul Brown, Director of Government Services for Ernst & Young, one of the world’s big four accountancy companies and closely involved in the UK in the formulation and delivery of government policy. He is also a member of the WMCA’s Investment Board. The potential for collusion of interest is obvious.

There are places as well for representatives of the LEPs on lower-level bodies concerned more with the implementation of policy than with strategic policy-making. These also have places for representatives of trade unions, for example the working groups on Productivity, on Health and Wellbeing and on Mental Health. When the WMCA was launched in June 2016 there were no representatives of the trade unions on the Board to counter-balance those of the employers, but in February this year the Board agreed to one non-voting WMTUC representative after pressure from unions and campaigners.

The WMCA is governed by an exclusive alliance of elite business leaders and leading local politicians sharing a depoliticised consensual culture. It is indicative that the SEP’s 57 pages contains 181 mentions of the word ‘business’ but just one mention of the word ‘union’, and no mention at all of service users, community organisations, public participation or democracy.

A comparison with the Greater Manchester Combined Authority

Compared to the WMCA the business-political elite partnership which governs the GMCA takes a different organisational form. There are no representatives of the Greater Manchester LEP on the Board of the GMCA (and no union representative). Instead the Board of the Greater Manchester LEP is a key site of the business-councillor partnership which leads the GMCA. It comprises nine private sector members and the chair and three vice-chairs of the GMCA. But while the LEP is external to the formal structures of the GMCA it has a central role in its strategic leadership:

Greater Manchester’s Local Enterprise Partnership is a private-sector led, voluntary partnership whose core function is to provide strategic leadership (alongside the GM Combined Authority) to deliver the conurbation’s growth ambitions. Their joint strategic plans – the Greater Manchester Strategy and Growth and Reform Plan – set out these ambitions. The GM LEP and the GMCA are jointly responsible for making sure these plans are delivered. (GMLEP, 2015, Assurance Framework for Local Growth Funding)

The representation of employers on strategic GMCA bodies varies. For example, there are none on the Greater Manchester Health and Well Being Board and the Transport for Greater Manchester Committee. But they are represented on other key committees. For example, the Greater Manchester Planning and Housing Commission has four employer representatives and no union representatives. Like the WMCA, the GMCA permits trade union representation on lower-level bodies.

Towards a more democratic WMCA

The key starting point is to recognise that the model of devolution that the government has imposed does not prevent reforms being made at the local level to make the WMCA more democratic and participatory. The power to do so lies in the hands of the local politicians who govern it. But they won’t unless there is pressure from both outside and inside the CA. The unions can play a leading role in that, from outside and through their representatives inside the CA.

The most inclusive and democratic reform would be an elected West Midlands Combined Authority Assembly. If it’s right for London why isn’t it right for the West Midlands? The constitution of the WMCA doesn’t exclude the option of establishing an elected Assembly.

But it is not a question of an Assembly or nothing, there are other reforms which would open up the WMCA to more democratic participation. If there are to be representatives of employers on its Board and committees then there should be equal union representation. The largely toothless Scrutiny arrangements of the WMCA need radically strengthening, including the removal of the LEP representatives because of potential collusion of interests with their LEP colleagues on the policy committees. All these bodies should also be opened up to representation from community organisations and service users.

All of these reforms are permitted by the WMCA constitution through co-option. All that is preventing it is lack of political will by the council leaders who run the WMCA. The majority of them are Labour, and local democratic reforms should be one of their aims. But it isn’t.

In a speech to Labour supporters in August last year Jeremy Corbyn promised a “radical devolution of power” from Whitehall to local councils, regions, and the devolved administrations. People would be given a greater say in their local communities through “democratic participation in budgeting, online democracy and control of local services” (Daily Mirror 22 August 2016). But there seems have been no mention of the role that Labour councillors could play right now to democratise Combined Authorities. It’s a big missed opportunity – people want more say in and control over the local decisions that shape their lives. And it lets Labour candidates for the mayor elections on May 4 off the hook, so in the West Midlands Sion Simon can agree with his Tory businessman rival that he’s against an elected assembly – public accountability just means an election for mayor every four years and occasional consultation meetings in between.

That means that the challenge is for the unions in the West Midlands to take the lead. Inside the WMCA they need to ensure that all the places available for the WMTUC representatives are taken up, and by delegates who are accountable and capable of challenging the consensual business-dominated culture of the Combined Authority. And outside the WMCA they need to be building campaigns along with communities and citizens for a radical change of direction of its policies.

For a detailed analysis of the policies of the WMCA, including how business interests shape its economic policies, see ‘The West Midlands Combined Authority: business dominance against local democracy’ on the Birmingham Against the Cuts website here. here