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Centralism is like Santa Claus

Simon Parker is the Director of the New Local Government Network and the author of Taking power back, out in October 2015. This is his very quick response to this and is published alongside my response here.

The most important part of any debate is usually the unspoken starting point of the participants. In debates about devolution, most people start with the assumption that the status quo is pretty much fine and needs no justification, whereas plans to devolve power must pass all sorts of evidential tests and solve all sorts of problems before they become acceptable. This is understandable: Britain has been so centralised for so long that we just accept it as natural, even as our overly centralised system visibly crumbles around us.

So the case for decentralisation starts by pointing out what ought to be obvious: the current system doesn’t work. Britain is an absurdly over-centralised country: over 90 pence of every tax pound is controlled by the chancellor, a level which puts us in the company of tiny nations like New Zealand and former dictatorships like Hungary and Greece. There is no commonly-accepted measure of political centralism – the extent to which power rather than money is monopolised by the nation state – but it is a fair bet that we would top the league table there as well.

Centralism is like Santa Claus.

Centralism is like Santa Claus. No one really believes in it, but plenty of people use it as a convenient way to win arguments with the kids. The number of people who are prepared to mount a positive case for power hoarding are vanishingly few. If you can find one and pin them down, they will probably make two arguments.

First, centralism is the only way to ensure fairness and equality. Why, then, has Britain become one of the most unequal countries in the developed world? Why are health inequalities at a level higher than during the great depression?

Second, centralists argue that power hoarding is more efficient. This requires us to believe that expensive national screw-ups like Andrew Lansley’s health reforms, the connecting for IT programme, or the implementation of universal credit were a good idea. The centralist creed is, essentially, fail often, fail big and then create a political culture which does not allow us to admit we have failed, still less to learn from the experience.

If it is broken, we should fix it.

From housing (we don’t build enough) to skills (too many of the wrong sort) to healthcare (we spend all the money on treatment and only 4% on keeping well) central attempts to create sophisticated national systems to meet the needs of wildly differing regional and local economies have failed miserably. We have had the better part of 40 years to make centralism work. This is not a system that is perfectible. It is an accident of 1980s political culture that has become a horribly failed experiment. It is time to let go of the pretence that centralism does anything other than lead to unrealistic promises, exhausted politicians and a cynical electorate.

But rejecting centralism is not the same as making a case for localism. We need a positive case as well as a negative one. Let’s start by tackling some things that localists do not claim. I actually do believe that devolution to cities is part of a solution to the West Lothian question, but I am in a minority not much larger than one. The government has explicitly rejected this idea and gone for EVEL instead. Localism does mean more money for cities – in the form of retained business rates, the ability to earn back some national taxes and increased control of national infrastructure funding – but we are not talking about large amounts, certainly not in the short term. Local government will be subjected to swingeing cuts no matter what happens, but at least devolution means that decisions about those cuts can be taken by local people, not imposed from Whitehall.

So what will localism achieve?

At a high level, there is international evidence that decentralisation is related to higher levels of GDP, more efficient local government, higher levels of subjective wellbeing and, in some circumstances, higher levels of economic equality.

The first thing devolution should deliver for Britain is more economic growth and a fairer social settlement for the northern cities. Before 2010 Greater Manchester had very little power over transport and infrastructure planning, skills and education, housing or healthcare. Most of these functions were run from Whitehall in their own policy silos. The pitch from GM is that by integrating these powers into a single economic strategy, the city can create a more supportive policy environment for growth.

Manchester’s challenge is that its agglomerations of high productivity tech and cultural industries float in a sea of low skilled labour. The city’s model is to create better jobs in south Manchester, use public services and better transport infrastructure to link people to those jobs, and thereby create a virtuous cycle of social and economic progress. It is hugely ambitious, but it is compelling and it can only be achieved if the city takes its own decisions about growth.

The second part of the story is public service reform. We know that the only way to put the NHS on a sustainable footing is to move towards a system that puts more energy and funding into community services and prevention. The only way to make this happen is for health and local government to work together to shift resources into initiatives that encourage healthier behaviour, a better built environment and reduce inequality. Only 20% of our lifetime health outcomes are driven by clinical care, yet we spend almost all of our health money on treating people. That has to change, and it is far more likely to do so at the level of a conurbation with all the relevant partners in the room.

It is possible to tell a similar story about skills, where a supposedly market-based system has resulted in the vast over-production of hair and beauty technicians and the under-production of construction workers. It must be possible for partnerships of employers, local authorities and colleges to plan a system that will better meet the needs of cities for growth. Greater Manchester now has the chance to prove that it can be done. And that is really what is on offer here: we don’t know that localism can make a huge difference because we haven’t tried it before, but we do know that more of the same old failed centralism won’t fix anything.

Preparing Britain for the future

All of this sits within a broader story about the future of British democracy. It is true, as Herbert Morrison once argued, that if we pick off any individual public service we can make an argument that it would be more efficient to deliver it nationally. But this argument ultimately leads us in the direction of enlightened dictatorship. When we look at services together, when we consider the outcomes they deliver and when we consider their impact on democracy, then the case for devolution becomes much clearer.

And if you still have any doubts, just remember that this really isn’t all that radical. All the localists are asking for is that we move very slightly closer to the arrangements you’d find in countries like Australia, Germany, France or the States. Decentralisation is normal: it’s Britain that’s weird.

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