Rethinking devolution for a stronger future

Regional inequality has been a persistent headache for successive governments. While many have tried to address it, these efforts have often fallen short and, in some cases, the crisis has even worsened. Recently, it was found the average disposable income in London is 43% higher than the national average, a record high.

A range of solutions have been proposed to address regional inequality, and one of the biggest in recent times has been devolution. The government has been looking to harness the potential of devolution, as seen in its The Levelling Up and Regeneration Bill. The Bill, currently making its way through Parliament, states the government’s intention in ‘agreeing new and deeper devolution deals so that more parts of England can see the benefits of empowered and dynamic local leadership’.

It’s positive to see there’s broad consensus on the need for increased devolution and to give more power to councils. Many areas within the bill are already in negotiations with local authorities. But many have heard these promises before and are sceptical. Devolution plans have been implemented before, often with mixed success. Some projects were left incomplete, while complex multitiered governance has hindered both operations and decision making. 

If we’re going to see devolution policies put in place that benefit communities across the country, we will need a number of strategic changes in approach.

Building the right structures and processes

If devolution plans are going to produce maximum benefits to local areas, there needs to be an agreed consensus on how, and what, devolved powers and government structures will work. Currently, the structures and processes between local governments are too disjointed. Roles are often not clearly defined, with some devolved bodies having more levels of power and responsibility than others. There’s also a lack of access to resources and knowledge for councils to implement projects effectively. 

If we want to speed up devolution, there needs to be set standards and processes developed for devolving power to local entities. Technology and digital transformation both have key roles to play in this. 

From a technology aspect, harnessing data can help create a more joined up approach to implementing successful projects across the UK. For example, through creating a centralised database where local authorities can share data and information on successful projects, central government can provide councils with a means to learn from each other, reduce the risks of failures and allow them to standardise approaches to projects autonomously. While this wouldn’t work for every service, for areas like waste disposal or housing management it would prove highly effective. 

But new digital platforms won’t be enough by themselves. There also needs to be a culture change at an operational and political level. We must embrace digital-first ways of working, building ‘fit for purpose’ organisational structures which are designed around the delivery of 21st-century services. This includes appropriate wider sectoral reform and data sharing, especially across healthcare, where there is huge potential for paradigm shifts in improving outcomes and managing down the increasing demand in key services which are financially crippling councils. 

Central government can mandate much of this, or at least catalyse it, through appropriate reform clauses, providing funding, incentives, guidance and access to skills. This would ensure that for any proposed devolution deal, the delivery of that deal is already addressed. Transformation or change could then begin to produce benefits with swifter and more impactful results. 

Adapting to the changing work landscape

Funding for infrastructure projects, housing and healthcare are all vital parts of devolution. But one area that is as important, but less discussed, is addressing the future of work. The rapid advancement of technologies and a growing skills gap could hinder economic growth in areas across the UK. It risks compounding a growing disparity between the skills required for jobs and those available, while businesses could struggle to innovate and remain competitive.

To address this challenge, all tiers of government and partners in the private and third sectors need to come together. Central government needs to work with local authorities to understand where skills are lacking and provide the resources for people to develop. At the same time, councils must work with local industries to understand their changing needs and how best to provide access to the skills and services that enable growth.

Devolution is not just political negotiations and settlements. It could be a game changer for communities across the country and be the starting point to really begin addressing the regional inequalities in the UK. But, if we are going to maximise its potential, changes and action needs to be taken now. We must reform the relationship between all levels of government, both existing and future, harnessing technology, applying systems mindsets and building the workforces of the future. Through this, we can take important steps in the right direction so that towns and cities all over the UK, thrive now and in the future.