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2 November 2014updated 20 Aug 2021 1:44pm

How devolution to Manchester could work

Jonathan Carr-West of the Local Government Information Unit reviews Respublica's recent report.

By Jonathan Carr-West

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English devolution is on its way, announced by the prime minister the morning after the Scottish referendum, and all of a sudden the north is politically fashionable.

George Osborne is personally championing northern devolution with his “northern powerhouse” scheme, Nick Clegg has a rival “northern futures” project, and influential think tanks are arguing for central government to give power to northern regions and cities.

If ever a city demonstrated both the need and the potential for English devolution, it is Manchester.

It has a successful history of collaboration between the ten authorities that comprise the city region. it has already created the Greater Manchester Combined Authority. It was one of first and largest of the government’s City Deals with an innovative “Earn Back” mechanism for forward-funding infrastructure investment.

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And, of course, we could equally cite twenty years of successful regeneration and a much longer history of radical politics and of civic and commercial innovation in the city.

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To truly tackle regional disparities, we need a new type of devolution

If ever a city demonstrated the potential for English devolution, it is Manchester.

At the same time there is a £5 billion fiscal gap between the money Manchester earns and the money it spends. Funding is provided by more than 50 different central bodies and, as in the rest of that country, the vast majority of that money is spent on responsive public services rather than on the preventative measures that would improve people’s lives and help reduce that £5 billion gap.

This is the framework through which Respublica’s recent report, Devo Max – Devo Manc, examined Manchester’s potential and the challenges it faces.

The report calls for a place-based settlement in which all public services and all £22bn public spending are devolved to Manchester, and for fiscal devolution in which property taxes and even income tax are managed and partially retained locally. It claims that these proposals “are perhaps the most radical yet made for city-based devolution”. Certainly, they go further than many in placing income tax and health under local control.

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Jonathan Carr-West is Chief Executive of the Local Government Information Unit. This piece is provided by the Think Tank Review, a new site bringing you the best ideas, policies and proposals from the think tank world.