The uneven path of City Deal devolution in the North of England

Arianna Giovannini - Research Officer, SPERI

Although, as explained in an earlier post this week, the Greater Manchester Deal has unfolded in an incremental and generally smooth manner, the same has not necessarily been true for other areas in the North.  In the first place, none of the other deals signed so far has powers comparable to the ones granted to Manchester.  Secondly, the imposition of an elected mayor is increasingly becoming a source of scepticism among local authorities, leading Durham County Council, for example, to call for a referendum on this particular issue. Thirdly, the geography of City Deals across the North remains problematic and fragmented. It spans from small to large city regions, with varying degrees of economic and social cohesion and coherence.  Furthermore, only some areas will eventually get a deal, whilst others will inevitably be excluded.  Such a piecemeal approach to devolution could see some city regions flourish, but it could also set local authorities in competition with each other, with the risk of creating new cleavages between ‘deal-haves’ and ‘deal-have-nots’, thereby widening rather than bridging existing economic, political and social gaps.

Nor is this all. Fourthly, City Deal negotiations have, until recently, taken place behind closed doors, taking the form of a series of ‘elite-to-elite partnerships’ driven in the main by central government.  Fifthly and finally, the public has, for the most part at least, has not been involved in this whole debate.  As illustrated by a recent poll commissioned by the BBC, citizens across the North do say they want more devolution to the local level, but they nevertheless remain largely unaware of what the Northern Powerhouse is or might be, with, arguably, the same ignorance applying to City Deals.

In other words, the future of City Deals in the North of England is still surrounded by uncertainties, and is far from being settled. Within this context, the case of Yorkshire is particularly complex and a closer look at this sub-regional setting helps to shine some light on aspects of the devolution debate as a whole.

Back in September last year, three areas across the Yorkshire sub-region submitted City Deal proposals to the government: Sheffield City Region, Leeds City Region, and Hull. An analysis of the bids shows how, from the beginning, these were characterised by profound differences in terms of their remit and scale.  Sheffield City Region’s proposal was quite positive in its outlook and focused on the economic potential that the deal would unleash, especially for business support, transport, employment and services. However, the geography of the Sheffield City Region remains compound – covering South Yorkshire, as well as Chesterfield and some bits of Derbyshire. The pitch made by Leeds City Region stressed too the desire for greater control over local affairs, but emphasised also how this city region is an ‘economic powerhouse’ in its own right, with dynamic urban and rural areas, a coherent geography, a self-contained labour market and existing synergies between its cities. Based on these claims, the proposal included a series of ambitious ‘asks’. By contrast, Hull submitted a more controversial bid, arguing for the creation of a ‘Greater Yorkshire Deal’ and asking, in the absence of consensus on this, to become part of the Leeds City Region devolution proposal.

So far, only the Sheffield City Region Deal has been signed – although, as many local leaders have repeatedly stressed, this is not ‘a done deal’ but a ‘proposal’. Before the final deal is accepted, all the Councils included in the area will have formally to approve it.  It’s not at all clear that this will actually be an easy task, as reservations seem to be growing among local authorities, especially with regard to the potential powers of the elected mayor.  The deal is also subject to a programme of consultation with residents and businesses in the City Region.  This has attracted many criticisms from external observers and civil society groups.  In their view, the consultation process has been hurried, will be conducted over a very short period of time (from December 2015 to mid-January 2016) and is based excessively on an online survey made up of open questions which require a level of ‘technical knowledge’ that the average citizen may not necessarily possess. In short, Sheffield’s Deal is proving to be more problematic than expected, and we will have to wait at least until April to understand how it will unfold.

Meanwhile, the much anticipated signing of the Leeds City Region Deal continues to be postponed, and is again surrounded by contentions. No official announcement has been made, but the feeling seems to be that Leeds is seeking an ambitious deal, with clear terms and conditions set by the City Region, that can benefit all the local authorities in the area.  Yet here too the role and powers of the mayor are a key concern.  In short, Leeds is indicating that it will not just sign any deal that suits the needs of central government and, instead, expects the latter to engage in a real negotiation process and be open at least to accept some of its demands.  The alternative is no deal – a situation that could hamper from within not only the City Deals policy but also the Northern Powerhouse agenda.

Finally, Hull continues to call for a ‘Greater Yorkshire Deal’, primarily to avoid being relegated to the ‘deal-have-nots’ camp and thus missing out on the opportunities offered by devolution. But, so far, it has received very little reassurance both within the region and from the UK government that this could ever become a feasible option.

In sum, we can see that the debate over devolution in Yorkshire has quickly come to be underpinned by growing tension. If the initial negotiations were decidedly led by the government, new pressures are now rising from below.  Local authorities have started to realise that City Deals present a mixed bag of opportunities and risks and they want to have a stronger voice in the final agreements.  Maybe as well, they have also begun to appreciate that the economic devolution they are seeking through these Deals cannot be simply imposed from above, but requires real support from the bottom – from Councils, businesses, civil society and citizens.  At the beginning of 2016, then, it still remains unclear whether City Deals in Yorkshire will flourish or wither.  Either way, the road ahead looks perilously rocky.