Ben Lucas, Mike Emmerich and Sarah Whitney were interviewed by The Municipal Journal (MJ) on the devolution agenda. In the article they discuss the progress made and the opportunities and challenges the deals face.
The full article can be read below.
The devolution agenda has created a paradigm shift in local government. Heather Jameson interviews the key players
In June 2014, local government faced a paradigm shift when George Osborne first delivered his Northern Powerhouse speech in Manchester.
He pledged it was a starting point for ‘serious devolution of powers and budgets for any city’. And he promised this: ‘I will work tirelessly with anyone across political divides in any of these great cities to make the Northern Powerhouse a reality.
‘For this plan is bigger than any one of us – and it’s worth it for us all.’
Ben Lucas, one of the founder directors of devolution and economic development consultancy Metro Dynamics, says: ‘June 2014 speech was a game-changer. When the chancellor gets it, it’s very much on the agenda. [George] Osborne becoming convinced of the case for the Northern Powerhouse was a moment in time.’
One of his co-founders, Mike Emmerich, agrees. ‘It was astonishing to see the most powerful institution in the UK [The Treasury] throw its weight behind this.’ It is the Treasury’s commitment which has pushed the agenda forward at breakneck speed.
This is, however, more than just a political hobby horse or a selfless gesture for Mr Osborne – this is a plan to stop our great Northern cities draining the public purse and get them back to being net contributors to the Exchequer.
‘In my view, London is a macro economic issue,’ Mr Emmerich says. It drives the UK economy almost singlehandedly. ‘I think cities are like micro issues. The challenge is what can the cities of the North and the Midlands do that will lead to a real increase in GDP.’
For the UK to compete on a global scale, ‘the Government has got to re-enterprise,’ he says.
Metro Dynamics was set up in the wake of the drive towards devolution and rebuilding the UK cities’ economy, created by three founding directors who were at the heart of the agenda. Mr Emmerich, a former civil servant, was latterly chief executive of New Economy in Manchester, and a key architect of the Manchester approach to growth.
Mr Lucas, was previously chair of public services at the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) and set up the City Growth Commission, with a long career in public policy and communications.
The third founder, Sarah Whitney, is a finance and consultancy expert and most recently led the government and infrastructure team at public sector investment advisory firm CBRE. She was the architect of the North West Evergreen Fund and helped structure the first tax increment finance project in Glasgow.
Between the three of them, they each cover a specialism – economics, public policy and finance – which make up the key elements for devolution and economic growth, and cover the ‘lack of corporate capacity’ in some authorities when it comes to negotiating devolution deals.
As they sit in their London offices talking about the current big agenda they are animated and engaged, each with a nod towards their respective backgrounds.
While many areas have set up a combined authority for the sake of devolution, there is still a gap in what that will really mean in the future – a point raised in the recent Communities and Local Government Select Committee report.
As Ms Whitney explains: ‘Those devolution deals are just agreements to agree. It’s like having a baby. No-one tells you what you are going to do for the next 30 years.’ She suggests that authorities are in ‘a scary position’, now that they have done a deal – now they have to make it work. ‘The smart cities are already working through implementation.’
And none are smarter than Manchester, the Devo darling of the Treasury. Mr Lucas says: ‘It has a very effective administration, but it’s going to have to evolve into something different.’ It got first-mover advantage, but that’s not enough in the long-term.
On its third deal already, Manchester will have to keep pushing forward on devolution to stay ahead. And as Mr Emmerich suggests: ‘Even Manchester could do with having bigger ideas.’
Given the previous ‘parent/child’ relationship that has existed for so long between central and local government shifting to devolution is a new space and for some there is a temptation to copy existing deals – to say ‘we want that too’. But for it to work, the point is that the model needs to be about the place. And it is those areas that think of themselves as places, rather than municipal entities or groups of authorities, which have a head start.
Having a clear vision of place and realistic ambitions is key. As Mr Emmerich says: ‘Most places want to be a bio-tech centre or something – it’s bollocks. But former mining communities often have very specialist engineering companies.’ That, he suggests, is their specialist selling point which they can grow.
For now, Ms Whitney suggests foreign investment money fails to get any further than the capital, but it needs to go further for a more stable economy. ‘The North East needs to declare itself open for business and working with overseas investors,’ she says.
In the North East, as Mr Lucas points out, the devolution deal focuses on ‘human capital’ ‘That is really interesting. How do you engage people in that?’ It is trying to address inter-generational issues on a political timetable.
The four-year cycle has it problems for foreign investment too. Ms Whitney says: ‘Investors need certainty.’ It doesn’t exist in all areas as the political pendulum swings, but in Manchester, there is stability.’
And while the chancellor is in post, the national political push for devolution and economic growth will continue to go full steam ahead.