My Lords, I welcome the opportunity to discuss this issue. As a member of the APPG on the constitution, I also welcome the chance to contribute to the report of the inquiry into better devolution for the whole UK chaired by the noble Lord, Lord Kerslake.
As a former leader of Bristol City Council, I want to focus on devolution at a local level, particularly in England. We see devolution as the transfer of power and funding from national to local institutions, meaning that decisions are made closer to the local people, communities and businesses that they affect. Governments have been slow to recognise the frustration suffered at a local level. Powers and funding are controlled by central government and the local authorities that people vote for are seen as little more than a means of delivering government policy at a local level.
Anyone who has knocked on doors in elections knows that the major issues raised are not decided at a local level. Investment in housing, transport, jobs and social care is not determined locally; it is controlled by the far-reaching grasp of the Treasury. French local government raises three times more of its own finance locally than English local government; in Sweden, it is 12 times as much. As we have heard, 9% of local government income in England is raised locally.
There is huge potential to increase economic growth through local devolution. We have heard today about HS2, the failure to invest in the regeneration of Liverpool and other northern cities and the shortage of investment in transport across and between the northern cities. Myriad reports from different sources—such as the City Growth Commission, the London Finance Commission and the non-metropolitan commission, which produced the Devolution to Non-Metropolitan England report—testified and have examined evidence to show how much can be achieved by giving more powers to local government. The issue of whether that happens at a regional level, for example through metro mayors, needs to be looked at by a constitutional convention.
The Government’s response of creating combined authorities and elected mayors has improved circumstances in some cases, but compared with many international cities that raise their own long-term finance, the level of powers devolved to English cities is derisory. In a quote in the London Finance Commission report, the Mayor of London said that when he explains to the mayor of New York or Berlin that he must go, cap in hand, to the Government to seek funding for major infrastructure improvements, they are incredulous. When I was a city leader working with core cities in Europe, there was incredulity at the minimal powers that city leaders and mayors in this country have.
More devolution has been given to metro mayors but it is controlled by a web of government lawyers and civils servants. The restraints are time-consuming and extremely frustrating. As the APPG report I referred to says, devolution is not just about economic benefits. Professor Vernon Bogdanor states:
“The fundamental case for devolution is the stimulus it gives to local patriotism and pride in the development of services, a patriotism and pride which can well stimulate improvement in services”,
as well as much better public satisfaction. The possibility of a constitutional convention could be a means of enabling central government to listen and act upon the aspirations of people in the cities and regions of our country, but it would have to be backed by resources and a commitment to real change if that is what people want. Any new constitutional settlement must start from the grass roots. A rolling programme of consultation could go some way to answering the anger and frustration we are seeing increasingly across the country. The problems are particular to different areas. The cost of living in London is unaffordable for so many people, yet jobs and investment growth are concentrated in the south-east. There are huge differences in income and the quality of services across the country.
If a new settlement is to be achieved it must be based on a contract with the people of this country, not determined centrally by Whitehall. It also has to be based on a real commitment to give power. If we are really to have devolved democracy across our country we must make sure that it is firmly rooted in the needs and circumstances of the people in the regions, cities and counties of this country. Any new settlement must be transparent so that people and groups can and will participate and, better still, hold it accountable. It also must have real powers, including fiscal devolution, that enable real investment and economic development. Without these it will continue to be no more than an outpost of central government.