What devolution (really) means for the UK’s regions

22 June 2016 -

From austerity to autonomy, CMI’s director of external affairs looks at the truth behind devolution in the UK

Petra Wilton

You’d be forgiven for being confused about the decentralisation, or devolution, agenda.

On the one hand, chancellor George Osborne says that Britain is on an unstoppable journey towards regional autonomy. All local authorities will be responsible for 100% of their funding by the end of this parliament, he promises.

But, on the other hand, it’s local government that has suffered most through austerity.

While jobs in central government have stayed (relatively) steady since 2010, local government has felt the axe. And central government still controls 72% of public spending, making the UK one of the most centralised countries in the OECD.

While handing over responsibility for gathering and spending £27bn of business rates to local regions does sound democratic, its effect is diminished by the reductions in business rates announced in the budget.

In truth, devolution is complex and highly political.

Real, meaningful numbers get lost in a fog of grants, rebates and financial jiggery pokery. It’ll be months before the boundaries of a new, devolved Britain are drawn.

Managers, however, do not have the luxury of delay.

If you work in the public sector, you may already be negotiating contracts under new auspices. Forward thinking private-sector managers will be looking at this emerging landscape and wondering how to find an edge.

CMI has been busily involved, listening to businesses and engaging with the local enterprise partnerships (LEPs) that will, to a large degree, make devolution a reality.

At this year’s LEP Conference, there was much talk about city growth deals, under which infrastructure, housing and other funding will be combined and go direct to local authorities and businesses.

Mayoral elections are a hot topic, too. Many English regions have previously rejected them, but this time round, if they want the full responsibilities and resources of combined-authority status, they’ll need to elect a mayor.

Skills and economic diversity are probably the biggest issues.

For devolved regions to thrive, they’ll not only need the right mix of businesses, they’ll also need a high quality workforce to sustain them.

This is where awareness of apprenticeships, and of degree apprenticeships such as the Chartered Manager Degree Apprenticeship, will be so important.

Each region will need a bedrock of excellent, professional managers, and a pipeline of new talent.

Our research shows that only 17% of small businesses are aware of degree apprenticeships. But plenty of innovations are already on the table, such as the proposal that small businesses might pool resources and take collective responsibility for developing specific technical and professional skills.

In Germany, apprenticeships don’t generate the controversy they do in the UK. We should aspire to that kind of stability.

Looking ahead, I’m hopeful that the devolution debate will get into the detail and be a lot more practical.