The Week 7 July 2023

You’d be forgiven for thinking that the NHS — 75 years old on Wednesday — was the only subject for English policy debate this week (read the thoughts of our own Seb Rees?here ). But, far more quietly, some big steps have also been taken in the world of devolution and local government.

Last year’s?Levelling Up White Paper ?set out an ambitious stall for local government as part of what amounted to a full-scale domestic policy agenda. This included promises to expand devolution, strengthen local leadership, and build capability in data, monitoring, and evaluation for the sector. This week, we learned more about how the Government’s approach is evolving in all these areas.

First, the purpose and role of the Office for Local Government (Oflog) has finally been launched – albeit without a permanent Chief Executive yet in post. In his?speech to the Local Government Association ?this week, Michael Gove, the Secretary of State at DLUHC, pitched Oflog as both a way for early identification of “outlier” councils that might require intervention, and as a kind of resource for local authorities themselves. It will do this by gathering data, building transparency and ease of comparison between councils, improving metrics over time, and facilitating the exchange of good practice between different places. Sounds good.

But old suspicions die hard. Shaun Davies, the incoming chair of the LGA,?is wary ?that this approach is representative of the fundamental asymmetry between central and local government. Shouldn’t Oflog, or something like it, also increase transparency about how well central departments work with councils? An interesting thought for anyone who thinks, as we do, that Whitehall itself needs to adapt to enable the greater devolution that will be required to achieve better outcomes locally and a more strategic centre.

Others express concern that Oflog is essentially a reboot of the old Audit Commission, even though?Government’s policy paper ?is keen to escape the comparison with a body associated with “micromanaging and inspecting local councils [sic] … hindering local transparency and scrutiny.” By contrast, Oflog promises that it “will not add new responsibilities onto local government or seek to establish an expensive compliance regime” in competition with local democratic accountability.

If Oflog can become genuinely useful to the sector as it seeks to improve itself — and do this without being counterproductively intrusive — then it will be welcome indeed, particularly if it builds the confidence that central government clearly needs to feel in order to agree the most ambitious devolution deals.

That brings us to a second important development: Michael Gove?has confirmed that ?the devolution of some powers will remain firmly contingent on the introduction of a directly elected mayor. This means that significant influence over policy like infrastructure decisions, policing, or locally-raised taxes will always be reserved for Combined Authorities with mayors. This will dash the hopes of some places that don’t want a mayor: see the controversy surrounding the introduction of a Mayor for the North East region, set to be elected in May next year. It also raises more questions about Government’s insistence on individual, direct accountability as a precondition for devolution of power.

Further progress on streamlining the funding arrangements for localities, meanwhile, is very promising.?Ten local authorities ?will become pilot areas for an approach with more flexibility over how they spend money that would usually be allocated via competitive funding pots, and with far less need for approval from a Whitehall department. We, and many others,?have been calling for ?the simplification and consolidation of such funds for some time, and avoiding the waste of time and resources often created by competitive bid-in processes would be welcome. Even here, though, a tension exists: Gove?has made it clear ?that he still believes that “an element of competition in the allocation of funds can help to encourage innovation.” Finding a way of keeping some competitive practices going while also allocating with more efficiency will be a challenge.

With Labour?once again reiterating its promise ?to further empower local authorities, these developments are shaping a policy debate that will be at the heart of the next general election.