Despite clear progress, England has failed to replicate Scotland's achievements in galvanising democratic debate and action on devolution. This needs to change.
In February the Chancellor George Osborne signed a devolution agreement that will give Greater Manchester (GM) control of the entire NHS and social care budget for the region, worth a combined £6bn. This follows an announcement in November last year to give GM’s Combined Authority significant new powers over economic development, transport, housing, welfare to work and skills. The Budget also awarded GM the right to retain 100% of its business rate growth.
As we argue in our latest report on city growth, ‘Devo Met: Charting a Path Ahead’, the Greater Manchester deal signals a paradigm shift in UK’s system of political governance. The level of centralisation in England is unparalleled in the OECD and this constrains sustainable and balanced economic growth. The RSA City Growth Commission highlighted how regional inequalities are compounded by creaking infrastructure, skills mismatch and low productivity. These create additional social and economic costs as many people and firms remain trapped in a low pay, low value cycle.
The Manchester deal offers the potential to develop a joined up approach to improving a range of outcomes after decades of over-centralisation, fragmentation and poorly coordinated public services. The most exciting opportunity is not just the integration of health and social care, but the chance to create a truly holistic model that integrates public service reform with economic development including employment, housing and skills. Economic growth and health outcomes are deeply interconnected: it is no coincidence that those areas with the most developed economies have healthier people.
Research has established a clear link between health and various social and economic indicators including employment, housing and education. Health inequalities are driven by differences in the social determinants of health: this “social gradient” in health means that the poorer someone is and the more complex social and economic problems they experience, the poorer their health is likely to be. These health inequalities cost the NHS an estimated £5.5bn each year, while the Marmot Review in 2010 calculated annual costs of up to £40bn through lost taxes, welfare payments and costs to the NHS.
The link between health and economic growth more broadly is significant: the wider economic costs of mental ill-health alone in England are estimated at £105.2bn each year. Moreover, the burden of poor health is unevenly distributed, impacting regions such as the North West and North East more than other, less deprived parts of the UK. For example, if you are 65 years old in Salford, you can expect another 7.5 years of disability-free living, compared to an additional 12.8 years in Wandsworth. The percentage of people reporting that their activities are limited “a lot” by a health problem or disability is 10.3% in the North West, compared to 6.7% in London and 6.9% in the South East. With the one-size-fits-all approach to welfare-to-work failing almost 90% of disabled jobseekers, it is little wonder the north of England, where higher proportions of the population have a disability or long-term illness, continues to have problems with unemployment.
Seen in this context, devolution offers Greater Manchester and other regions the opportunity to address deep-rooted health and economic problems that have endured even in periods of high public spending. Devolution allows places to align services, link strategies for economic growth and infrastructure to health and welfare, and use local knowledge and social resources to tailor policy and service delivery to what’s needed locally. Ben Barr, contributor to an independent inquiry into health equity for the north (Due North), argues that devolution can tackle health inequalities by:
- shifting resources to early years and prevention;
- making skills support and welfare-to-work effective for people with chronic conditions and disabilities (who continue to be badly let down) through integrated and tailored support;
- using public spending to influence the local economy, for example through the social value act; and
- developing local partnerships to invest in high quality housing.
But, as Barr notes, to genuinely tackle economic and health inequalities, citizens must be truly empowered to influence and shape the decisions and direction of their place directly. Years of centralised approaches underpinned by practices borrowed from private sector management have hollowed out the voice of citizens, reducing them to passive recipients of services. Many councils, despite positioning themselves as place leaders, continue to act as corporate hubs of service delivery. The dominant language continues to be that of the new public management, with local people commonly described as ‘customers’ and the approach for understanding their needs and preferences using market-based terminology such as ‘customer insight’. This is reinforced by a local democratic deficit, with extremely low turnouts to local elections and limited progress on other forms of participatory democracy.
Unfortunately devolution, so far at least, has simply been a technocratic transfer of power between different arms of the state, dominated by senior leaders in Whitehall and city-regions negotiating deals about economic productivity and public service efficiency. Even the democratic centrepiece of reforms in Greater Manchester, the introduction of an elected mayor, is being pushed through the Chancellor without the chance for public debate.
The first phase of devolution was about convincing central government to let go. It was understandable that this was led by complex policy discussions about making local economies work better and achieving savings, especially when they were up against a hard-nosed Treasury and fragmented central government departments. But for the most part the argument has now been won. The next phase of devolution needs to be much more transformative, with local/regional government taking the initiative to drive democratic renewal and engage their communities to directly influence and shape how these new powers are used – empowering them with the ‘power to create’. A failure to do this could not only undermine the localist argument, but also fail to tackle the very social, economic and health challenges that devolution is presented as providing a solution for.
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