As part of their research on public expenditure, planning and control in these complex times, Dave Richards, Sam Warner, Diane Coyle and Martin Smith seek to explore a potential emerging paradox in the British government system - centralised financial control in an era of governmental fragmentation.
When, in 1983, Billy Bragg penned the line ‘I don’t want to change the world, I’m not looking for a new England’ he was probably not thinking about English governance. Yet this plaintive lyric unwittingly reflects the drift and ineffectiveness that is the hallmark of forty years of inadequate and sclerotic reform of English governance. This approach has been shaped by an aloof, power-hoarding mindset towards governing held by Westminster’s political and administrative class, underpinned by a disdainful, often patronising distrust towards the potential that an effective regional governance model might offer.
These might seem strong sentiments, but they are borne out of a sense of frustration following the completion of another well-meaning inquiry by The Public Administration and Constitutional Affairs Committee [PACAC] on Governing England. Its report into the current state of governance arrangements for England identifies ‘significant and pressing problems that have been neglected by successive Governments for too long’. Six main areas of concern are highlighted, which for those who have long-critiqued the Westminster model, reads like a ‘greatest hits’ of central government pathologies. England’s governing structures are too complex [i], leading to a patchwork structure that is ‘confusing and opaque’ to the detriment of clear lines of decision-making and accountability [ii]. England [and the UK more widely] possesses one of the most centralised systems of governance of any liberal democratic state [iii], in which decision-making is asymmetrically informed by a dominant centre leading to ‘sub-optimal’ outcomes. Current funding arrangements for local government are ‘ineffective’ [iv], sustained by a Treasury approach of centralised control and compounded by an ineffective and inefficient grant bidding system. This in turn contributes towards the ongoing, deep-seated issue of geographic inequality [v], which current approaches to ‘levelling-up’ fail to properly address. Collectively, these issues contribute to a low sense of political efficacy [vi], whereby individuals feel ‘their voice is not being heard’.
We have been here many times before. Indeed, only a week earlier, the All-Party Parliamentary Group on Devolution [APPGD] published a similarly-themed report Inquiry into the Levelling-Up White Paper. It offers a range of recommendations to the UK Government, including: devolving as much power as possible to local communities and expanding the devolution framework; reviewing the directly elected mayor model to increase devolution based on a framework that allows ‘local areas to negotiate deals which fit within their existing institutional structures’; reforming the process for local areas to access central government funding; and aligning any future rollout regarding an integrated health care system. The synergies between the two reports are clear, yet unsurprising. They form part of a long litany of similarly themed reports into the shortcomings of the governance of both England and the wider UK.
‘Disjointed experimentalism’ is the apt descriptor employed by Michael Kenny to past and present governments’ approach to reform. It complements our own analysis set out in a new article for the Cambridge Journal of Regions, Economy and Society where we argue UK intergovernmental relations reform over forty years has shifted from what Jim Bulpitt posited as a ‘dual polity’ to what is now an ‘incoherent state’.
Why has this come to pass? Governments have sought to retain, rather than overhaul, the existing constitutional arrangements of the Westminster model. Reform has thus been shaped by an approach based on grafting on incremental, often ad hoc, adaptations, culminating in an incoherent governance landscape. Often decisions are made for political rather than strategic or democratic reasons. An overlapping, at times contradictory, policy delivery system has emerged involving a mix of local governance bodies, both public and private, with different territorial boundaries, powers and confusing lines of responsibility and accountability.
Our critique was in fact echoed in the February 2022 White Paper on levelling up, which contained a frank appraisal of UK governance arrangements. It argued that successive governments had no anchoring philosophy regarding the relationship between hierarchies, networks and markets. It contrasted the UK’s central government dominated governance model with more devolved European and Asian systems which combined the roles of private and public sectors in a consistent way to deliver long-term economic success. This chimes with a 2019 OECD report suggesting policy implementation in decentralised systems based on greater subsidiarity, subnational capacity and regional coordination of governance arrangements, often benefits from the ‘information advantages’ provided by local expertise and, in turn, improved allocative efficiency and innovation. The UK’s incoherent state offers the worst of both worlds; an overly dominant, but disconnected, centralised, policymaking approach, overlying a contradictory, often overlapping, service delivery landscape.
The foreword to the APPGD Report argues that: ‘The appetite for new devolution deals is very clear, and we know from our evidence that where they are right, they can be transformative’. Yet, the past evidence of incremental reform suggests that while this might extend to many areas, it may not crucially include the key agents of change – Westminster’s political class. Michael Gove, the prime driver behind the recent Levelling-up White Paper, and recently reinstated to the Sunak Cabinet with responsibility for this portfolio, reflected in his evidence to the PACAC inquiry that over the fundamental issue of reform to Local Government funding: ‘…by definition, all Finance Ministries guard control over tax-raising powers and policies very jealously. If I may, I might come back to the Committee in due course and say a bit more about our emerging thinking on this’.
The Inquiry noted that no further information has subsequently been provided. This comes as no surprise, given the Treasury’s at best lukewarm views on the levelling-up strategy and its deeply held reticence towards granting fiscal autonomy. More widely though, the issue is one of an entrenched Westminster/Whitehall culture which is unwilling to relinquish its power-hoarding tendencies. As Michael Heseltine noted to PACAC: ‘Turkeys don’t vote for Christmas. Everybody is clinging on to the past structure that suits their careers, their experience and their way of working, and there simply is no will’.
Our article concludes by arguing that addressing complex, multi-dimensional policy challenges such as levelling up, requires much more than just another layer of redesign for local government. This is a necessary, but not sufficient, condition of success. Systemic transformation is contingent on a new governance framework in which decision-making and policy implementation properly accommodate de-centred forms of network governance. It requires the meaningful transfer of power from the centre, as part of a wider growth strategy to address the UK’s regional imbalances and associated ‘geography of discontent’. A new framework – not tinkering with old as has previously been the case – is required that reframes the role and functions of central government departments and ministerial responsibility, with actors at the local level being responsible (and accountable) for policy failure or success over clearly defined and delineated, joined-up jurisdictions.
A rethink of funding arrangements and the associated lines of accountability to local citizens is a pre-requisite of overcoming the existing fragmented and incoherent landscape of English governance. A New England is possible, but it is wholly contingent on the actions of those currently empowered to deliver meaningful change. Yet despite the growing consensus on the need for an effective process of devolution there is little sign that Westminster’s political and administrative class is yet willing to relinquish its dominance.
This article draws on our research project Public Expenditure Planning and Control in Complex Times funded by the Nuffield Foundation.