Devolution is happening: How to make it count

Public sector governance across England is undergoing a transformation due to devolution, meaning the transfer of powers and funding from central government to local and regional authorities. “Muscular localism” as coined by Eric Pickles via the Localism Act 2011 began this journey by giving local authorities more responsibility and additional powers, however central government still ultimately held the reins, both fiscally and in decision making.

The Conservative government announced “trailblazer deeper devolution deals” in its Spring Budget 2023. However, just eight months into the new Labour government we have a White Paper and multiple announcements on the implementation of Integrated Settlements. Two existing Mayoral Combined Authorities (Greater Manchester and West Midlands) – soon to be known simply as “strategic authorities” – will receive an Integrated Settlement from April 2025, with the North East, South Yorkshire, West Yorkshire and Liverpool City Region being eligible from 2026. And earlier this month, the government announced a further 6 areas which will be brought into the devolution programme in later phases. 

These strategic authorities will receive funding in a consolidated, flexible pot, boosting local autonomy. From skills and employment, to housing, regeneration and transport, these areas will have genuine power and flexibility on how to invest and, in doing so, can make greater efficiencies and more impact in addressing regional priorities. 

Firstly, each new strategic authority must set its direction. When central government steps back, so too does the national direction. It is crucial to define your strategic focus and ensure that your population understands and supports your vision. Good communication between local authorities is key, and this will happen most effectively where collaboration is already occurring organically across key issues like housing delivery, energy transition, and transportation. 

Secondly, local authorities must justify their decisions and accept trade-offs. With more power to choose where to focus funds, difficult trade-offs will ultimately need to be made. After setting the vision and objectives, determine how to deploy money with this newly acquired autonomy. What will you invest in first? Working with partners to implement decision support tools and build an evidence base can help make informed investment decisions. These tools can quantify costs, identify suitable areas for new housing, and justify the necessary trade-offs between competing priorities. 

Once priorities are set and decisions justified, the focus must shift to action. This is an opportunity for regional leaders to demonstrate the benefits of localised decision-making. Strategic investments in key areas can drive meaningful change, enhancing the quality of life for local communities. 

Lastly, it is important to review and refine your tactics regularly. Implementing new powers and funding streams is complex and won't all go to plan the first time. Transparency, open communication, and a willingness to identify areas for improvement are crucial. Regular reviews and refinements will help capitalize on this golden opportunity. As noted in the White Paper, strategic authorities will be able to propose additional functions or pilot new approaches locally to drive innovation. Evaluating processes helps understand successes and areas for improvement. 

Strategic authorities are the right scale of governance to address local issues while maintaining a broad enough perspective to make impactful decisions. Devolution grants regional powers the ability to implement more tailored policies, with outcomes that can be seen both regionally and nationally. We see plenty of opportunities for areas to accelerate progress.  

However, devolution is complex, and it is crucial for the next tranche of strategic authorities to implement the right plans and tools ahead of time to maximize this opportunity. By setting a clear direction, justifying decisions, delivering effectively, and learning from experience, strategic authorities can make the most of this transformative period. 

At Hatch, we’re supporting our clients to prepare for and make the most of new devolution powers, across the country. Contact Alastair to find out more about our advisory services and how we can support your approach to devolution.