Our economy doesn’t work for ordinary people because we have been on the wrong path for far too long. The consequences have been corrosive: a loss of trust in institutions, people feeling left behind and forgotten. The truth is that we have too often been timid – tinkering around the edges of a broken system.
But by avoiding structural change, we risk confirming the right-wing populists’ narrative: that “the establishment can only do more of the same”. When the British people voted in a Labour government just two years ago, they voted not just against a Tory government that did not stand up for their interests but for political change that touched their lives. They were disillusioned by a system that is rigged against them, and which they want us to transform.
We have since then too often left the impression that we found ourselves defending the status quo rather than challenging it. Leaving the seeds of anger, frustration and resentment to be harvested by those promising something far more toxic. We cannot build a new economy here without addressing one of the root causes of the old one’s failure.
Too many decisions affecting the many are made by too few. We are one of the most over-centralised countries in the developed world. Regional leaders across the country lack the tools they need to build fair and sustainable economies for their people. Too few even have a regional leader to play this role at all. The consequences of this are not abstract – they hold us all back.
While the machinery of national government has grown – particularly since the pandemic – local government is threadbare, struggling even to fulfil its statutory responsibilities. This is bad for councils and the communities they serve.
But it’s bad for all of us. The whole country suffers when so many places – and their people – are not meeting their potential. The answer is devolution: real devolution, not the begging-bowl culture of the past, where regional politicians came to Whitehall with their caps in hand, asking permission to run their own bus routes.
It means someone is genuinely accountable for getting things done, so the buck cannot be passed any more. Labour governments of the past have made it their mission to put more power in the hands of communities and regions across the country – laying important foundations.
Under the last Labour government, Gordon Brown and the late John Prescott were responsible for devolution settlements for Scotland and Wales, overseeing the creation of the mayor of London and Transport for London.
Hazel Blears created Combined Authorities, after Greater Manchester proposed the model. And Labour administrations of today are proving what this can deliver for people.
The English Devolution and Community Empowerment Act I was so proud to introduce to parliament last year built on those foundations – and was designed to unlock the biggest transfer of power in a generation, out of Whitehall and into our regions and communities. Giving mayors new powers over planning, housing, transport, and economic development. To get the genuinely affordable and – yes! – council homes our country so desperately needs built.
Creating integrated funding settlements so that mayors receive one flexible stream of resources rather than hundreds of wasteful, ring-fenced grants. Rebuilding local government so it can once again deliver the services people rely on.
And critically: making devolution the default. Not something places have to fight for, but something that flows naturally, with a duty on government to respond to requests for new powers rather than blocking them.
I am proud of the enabling legislation I introduced, which has laid the groundwork and created a framework for the next phase of our devolution revolution. But the country needs a much deeper cultural change, and the scale of that challenge can’t be underestimated. Because the institutions of central government are part of the problem.
We have the worst combination of micro-management and control from the centre, without the resources or focus to make it effective. Whitehall empires hoard their own power. And layers of governance and bureaucracy, developed with the best of intentions, too often end with the triumph of process over purpose. I want to see that purpose restored.
To truly get growth in every corner of the country and put more money into people’s pockets, we must rewire England by devolving power and money to the country as a whole. There was institutional resistance to fiscal devolution throughout my time in office. But we have shown it can be overcome. We faced them down in announcing an Overnight Visitor Levy. We can do so again.
The Devolution Act gives all mayors London-style planning powers – a new framework that can be expanded and built upon. New planning powers to raise the mayoral community infrastructure levy, which has generated over £1 billion since 2012 in London and, alongside investment and leadership from Sadiq Khan, has helped to fund the Elizabeth Line.
With the expansion of their remit, the Act will allow mayors who choose to raise a precept to spend it on the full range of functions, ensuring that local taxes are spent on local priorities. Together we grew mayoral leadership, and with a fair wind the whole of the North will soon be covered, alongside new mayoralties across the South and East of England.
The Act is the beginning, not the end, of breaking away from the command-and-control culture of Whitehall that has held us back for too long. The devolution revolution has hit the ground running.
But it will only reach its full potential if central government changes too, with No 10 driving it as a core mission; and local government supported as the foundation on which devolution is built. This needs a much deeper cultural change across Whitehall – and the scale of that challenge can’t be underestimated.
To take just one example, the people of Leeds and the mayor of West Yorkshire have decided a tram is right for their region. All secretaries of state agree. Yet officials in Whitehall can still overrule it. Centralisation isn’t dead; it is alive and well – holding our economy back and creating politics that hoards power.
Everyone can dodge responsibility and hide behind process. But people elect governments to make decisions and improve their lives. The government can and must clear the bureaucratic barriers to the Leeds Tram and back Tracy to deliver it as quickly as possible.
Why spend yet more money and time on a pointless new business case when there is no real question about the need for it? And this problem isn’t just isolated to Leeds.
Cities across the country have had to fight tooth and nail against a centralised Whitehall to get mass transit, from Manchester, Edinburgh, Nottingham to Birmingham. Government could simply say: if any major city wants a tram or metro system, they should have one. There should be no second-guessing, no need to prove and re-prove it.
As it stands, the Department for Transport can block local transport projects above a low threshold. But if places can make their own plans, raise their own funding from their own taxes, they should be able to get on and build them. But this isn’t about cutting regions loose and seeing if they sink or swim.
This is about reaching a mature settlement, where central government works hand in glove with regional, local and communities – as well as civil society.
Devolution’s biggest success story outside of London has been the Bee Network, reversing the destructive Thatcherite invention of multiple private bus companies running expensive, unreliable services in a single city. As with so many other things, if we know we want to do it, we should just get it done. Thanks to the Better Buses Act spearheaded by Louise Haigh, it is easier for local leaders to take control of their buses and put passengers first – with more routes and lower fares.
But it still takes years of endless process for areas to be able to take control of their buses. Mayors are understandably frustrated at the slow pace of change.We should draw a line in the sand, being clear that central government will back every mayor who wants a franchised bus network to have it by the end of this parliament.
People across the country deserve regular routes, affordable fares, and a simple system like London’s Oyster card to pay for it. Mayors are crucial to taking back control and handing back power to the public – so public services are run for the good of communities, forcing out the scam artists.
This doesn’t just apply to big infrastructure, like water, energy and transport. Local economies across our country are in the grip of profiteering, and mayors are uniquely placed to break this business model.
It isn’t right that working people’s taxes are being sent off by foreign private equity companies and multinationals profiteering from those who need help from the state. Whitehall abandoning communities and allowing perverse market forces to take over.
As a result, England is full of local economies working in the interests of vested interests – landlords, private equity vultures and international capital. That has to change. There is no worse example than in children’s social care. Councils are paying up to a million pounds a year to place a single child in care – in substandard conditions – because private equity companies have been allowed to turn vulnerable children into profit centres. The New Economics Foundation’s research has laid this crisis bare. Eighty per cent of the largest care home providers in the UK that are owned or backed by private equity firms have owners in tax havens, while one in five care workers live in poverty and 12 per cent of care workers experience food insecurity.
So, we have the absurd situation of taxpayers’ cash going to investors who don’t themselves pay tax. We have the power to cap the profits of these companies, and we should use it. But ultimately public control is the answer – letting mayors build their own children’s homes for their councils and use their buying power to squeeze out the profiteers.
Every part of England should have a Regional Care Cooperative by the end of the parliament to do this, and we should switch as much of our spending on private placements to fund publicly owned homes as possible. And it isn’t just children’s homes where centralisation has left communities abandoned to the whim of vested interest. Right now, our towns and cities are littered with derelict buildings that have been left to rot by absentee owners.
I think of beautiful old buildings like the Old Town Hall in Sheffield and the Theatre Royal in Manchester that are falling apart. They’re signs of neglect that every day, when you walk past them, tell you that the powers that be don’t care about you and your city.
When buildings have been left to rack and ruin by distant investors, mayors should be given the power to put them up for compulsory sale or lease, so someone else can have a shot – whether that’s the council, a local business, or a community group. Building on the work we’ve already done to strengthen the powers available to communities to take control of assets of community value – and the introduction of a Community Right to Buy – we can take greater steps to put power in people’s hands.
That’s what real devolution should look like. The work has started but has not been finished. The scale of the challenge demands we go further and faster. This week Andy Burnham put forward a vision of good growth in every British postcode – and hope in every heart. That means an economy that serves people, their places and our planet – not the other way around. Today, more than ever, it is a vision worth fighting for.
[Further reading: Andy Burnham’s crucial three weeks]
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Subscribe here to commentWhile I totally agree with Angela’s thrust of argument I would just sound a note of caution.
In 2015 the Tories, stupidly, closed down the Audit Commission, the only body monitoring the value for money of actions of Local Councils.
It is imperative to recreate an organisation on similar lines. You only need to see the mayhem in Teesside to appreciate the need.
However a replacement need not be Treasury linked as the old body. To create a Value For Money subset of the new Manchester PM office would provide some of the tools Andy will need to fight off criticisms of the new structure.
Ms Rayner makes a great argument for devolution and reversing the destructive forces that have shaped our society since Thatcher.
But, amazingly, Ms Rayner supports FPTP, the very voting system that allowed Thatcher to transform our country into the right wing horror show that it is today.
For the entire 18 years in the 80s and 90s, when the Tories were transforming our society to their twisted Tory world view, the majority of voters were voting for social democratic parties; were voting to continue the Post War Consensus.
FPTP is the sole reason for Thatcherism. FPTP is the reason why there may well be a Farage government in 2029.
Ms Rayner and her FPTP supporting ilk in the Labour party refuse to accept proper democracy and it seems, would rather see a neo-Fascist government than work with other social democratic parties.
Shame on them!