UK2070 Commission and Rebalancing the UK Economy

decentralising
governance
in england
Andy Pike, Mike Coombes, Louise Kempton, Danny MacKinnon
and Peter O’Brien consider the UK2070 Commission’s initial
proposals for decentralising governance in England through
trans-regional ‘provinces’, and argue for clarity on what
decentralisation is for, what powers and resources it comprises,
and how it works in England
The UK and, especially, England are among the most complex map and patchwork of different
highly centralised major countries internationally.1 The governance arrangements across England.
UK had a relatively stable level of decentralisation Addressing the central problem of highly centralised
between 1950 and 1986, underwent further governance and marked geographical inequalities,
centralisation until the late 1990s devolution, and this article sets out the definitions, rationales,
has settled at a relatively higher level. In addition, benefits and costs of decentralisation, and considers
the UK and England have long-standing and the UK2070 Commission’s initial proposals for
persistent geographical inequalities in economic and decentralising governance in England. Specifically,
social conditions that are high in an international it examines the establishment of trans-regional
context. While the causal relationship between ‘provinces’ by situating them in their national and
centralised governance and spatial inequalities is not international context in Europe and assesses their
clear and direct, it has been a persistent association appropriateness as governance arrangements
in UK political-economic and geographical history.2 alongside mayoral and combined authorities. It
The need to find appropriate forms of decentralised argues for a more comprehensive and strategic
governance for England has been a recurrent concern.3 approach to clarify what decentralisation is for, what
In the post-war period, decentralisation resembles a powers and resources it comprises, and how it works
pendulum swinging between different geographical in England. A clearer and more transparent policy is
scales and institutional arrangements at the local, needed to articulate and progress this agenda.
sub-regional and regional levels.
The limited decentralisation since 2010 has Definitions, rationales, benefits and costs of
been ad hoc, incremental, and piecemeal. decentralisation
Multiple rationales have been presented, pulling Decentralisation is defined as the allocation of
decentralisation in different directions and powers and resources from national to sub-national
muddling its objectives. These motives comprise levels of government. There are different kinds of
local growth, public service reform, expenditure decentralisation, distinguished by their powers and
reductions, democratic renewal, and addressing resources, ranging from the highest level, devolution,
societal challenges such as ageing and climate to the lowest level, administrative (see Table 1).
change. This episode has been based on the What is called ‘devolution’ in the discussions
informal governance of deals and deal-making in about decentralised governance in England is more
negotiated central-local government agreements accurately termed ‘delegation’ because of the limited
on decentralised powers, responsibilities, and nature of the powers and resources involved.
resources. Differentiated combinations of powers The main rationales for decentralised governance
and resources have been allocated to different are better matching of public expenditure and services
areas. This kind of decentralisation has created a to local preferences, mobilisation of local knowledge

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UK2070 Commission and Rebalancing the UK Economy

Table 1
Forms of decentralisation
Level Form Characteristics
Low Administrative Administrative functions and responsibilities undertaken at the sub-
national levels
Deconcentration Dispersion of central government functions and responsibilities to sub-
national field offices. Powers transferred to lower-level actors who are
accountable to their superiors in a hierarchy
Delegation Transfer of policy responsibility to local government or semi-autonomous
organisations that are not controlled by central government but remain
accountable to it
Political Political functions of government and governance undertaken at the sub-
national level
Fiscal Autonomy over tax, spending and public finances ceded by central
government to sub-national levels
Devolution Central government allows quasi-autonomous local units of government
High to exercise power and control over the transferred policy
Source: Decentralisation: Issues, Principles and Practice 4

Table 2
Potential benefits and costs of decentralisation
Potential benefits Potential costs
Devolved policies better reflect Additional administrative costs of additional layers of
territorial preferences (allocative government and/or governance institutions
efficiencies)
Loss of scale economies in policy formulation and delivery
Improved knowledge of territorial
economic potential (productive Increased ‘rent-seeking’ by interest groups better able to
efficiencies) influence sub-national territorial rather than national
institutions
Democratic accountability improves
efficiency of policy formulation and Weaker disciplines of monitoring and evaluation (national
implementation; fosters innovation finance ministries as tougher drivers of efficiency than
territorial institutions)
Fiscal autonomy provides hard budget
constraints, and (where applicable) tax- Budget constraints increasingly tied to territorial fiscal capacity
varying power allows marginal changes Weak incentives due to lack of a mechanism linking public
to taxation and spending spending with tax revenues raised within sub-national territories
Lower co-ordination and compliance Reduced co-ordination with the rest of the national territory,
costs vis-à-vis the rest of the national with possible negative spillover effects both on and from sub-
territory national territories
Source: Adapted from B K Ashcroft, J K Swales and P G McGregor: Is Devolution Good for the Scottish Economy? A Framework
for Analysis. Devolution Briefings No. 26. ESRC Devolution and Constitutional Change Programme, Mar. 2005.
[Link]

on economic potential and costs, and increased The UK2070 Commission’s proposals for
accountability of local governments to citizens. decentralisation
Depending upon its form and combination of powers Addressing the problem of intermediate governance
and resources, decentralisation can generate in England and the complex patchwork of current
potential benefits and costs (see Table 2). While arrangements, in the UK2070 Commission’s first
there are other countries, such as France, Italy and report 5 proposals for ‘effective devolution’ comprised:
Spain, that have asymmetrical or geographically ● increasing devolution of powers and resources to
uneven decentralised governance systems with the ‘local’ level, to a ‘comprehensive framework’
different powers and resources allocated to different of mayoral and combined authorities and rural
areas, the degree of asymmetry in England is acute. counties;
Asymmetrical forms of decentralisation have specific ● setting up four new ‘trans-regional arrangements’
potential benefits and costs, too (see Table 3). for ‘provinces’ for the North, the Midlands, the

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 UK2070 Commission and Rebalancing the UK Economy

Table 3
The benefits and costs of asymmetrical decentralisation
Potential benefits Potential costs
Accommodating diverse preferences for autonomy across regions Lack of accountability and
transparency
Adapting the institutional and fiscal frameworks to the capacities of
sub-national governments Complexity and co-ordination
costs
Advanced form of place-based policies
Lack of clarity for citizens
Experimenting
Potential risks of increased
Sequencing decentralisation disparities (in capacities)
Providing the enabling institutional environment to design territorial Secession and autonomy
development strategies more targeted to local needs
Tailoring solutions for special challenges
Source: Adapted from Asymmetric Decentralisation: Policy Implications in Colombia. OECD, 2019.
[Link]/colombia/Asymmetric_decentralisation_Colombia.pdf

South East, and the South West, constituted from Investment Bank’s regional arms, and, following the
existing local leaders and aiming to ‘complement’ examples of the Northern Powerhouse and Midlands
strategic planning for pan-regional issues at the Engine, overcome lower-scale rivalries between
local and joint or combined authority level; and cities and towns. In terms of governance and
● decentralising national government functions, democratic accountability, the proposal is that each
responsibilities and budgets covering England to Economic Executive would be governed by a new
‘align with’ the ‘local and trans-regional devolution’. Regional Council, elected indirectly from their
constituent local authorities. Proposed funding
Similar proposals were originally outlined in the arrangements would be based initially on a block
Institute for Public Policy Research (IPPR) Commission grant from the UK Treasury and then a new and
on Economic Justice recommendations to create a more decentralised fiscal framework for England.
‘new tier’ of ‘English regional authorities’ or ‘economic
executives’ that would be ‘responsible for regional English ‘provinces’ in context – regional
economic and industrial strategy’ and ‘able to deploy governance geography in Europe
significant assets and capabilities’.6 The proposed In the context of past regional governance
Northern and Midlands Economic Executives would geography in England, the proposed ‘provinces’ are
be created from the existing Northern Powerhouse remarkably large. This can be demonstrated by
and Midlands Engine institutions.7 National comparing them with the nine standard regions,
consultation was suggested for the new South East now only used for statistical purposes but until 2010
and South West Economic Executives. constituting the regional tier of decentralised
Focused on economic development functions at institutions in England. Two of the provinces (North,
the regional level, the proposed responsibilities for South East) each group three standard regions, and
the Economic Executives included: one other (Midlands) combines two. This geography
● regional industrial strategies, including innovation raises the question of whether such large provinces
clusters, supply chains and inward investment, and are out of line in comparison with regional institutions
regional infrastructure planning, including transport, with similar economic development responsibilities
energy, communications, and environmental and in comparable countries in Europe. Table 4 identifies
resource management; the five larger European Union countries comparable
● regional immigration policy, and regional spending to the UK in terms of size measures of population,
of a new ‘Inclusive Growth Fund’; economy, and land area. Table 5 then identifies each
● oversight of inter-city rail networks and franchises, country’s regional tier of institutions with decentralised
and a proposed new ‘major road network’; and economic development responsibilities, reporting
● oversight of the regional divisions of a new their number and their average size on each of the
‘National Investment Bank’. three parameters.
This comparison suggests that the English
The proposed Economic Executives were seen as provinces, when taken along with the other UK
large enough to represent their regions internationally nations (Scotland, Wales, Northern Ireland) which
in order to attract investment and people, exercise they are proposed to sit alongside, are rather out of
a political voice to secure resources from central line when their average size values are compared
government, borrow to invest through the National with those of the principal regional institutions in

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UK2070 Commission and Rebalancing the UK Economy

Table 4
Selected size measures of the UK and five broadly comparable countries
Population 2019, GDP 2018, Area,
million billion euros square kilometres
France 67.0 2,346 635,300
Germany 83.0 3,387 354,800
Italy 60.4 1,756 296,900
Poland 38.0 490 307,200
Spain 46.9 1,216 506,300
United Kingdom 66.6 2,399 244,700
Source: Calculated from Eurostat data

Table 5
Average size of regions with devolved economic responsibilities
Number of Population 2019, GDP 2018, Area,
regions million billion euros square kilometres
French mainland regions 13 5.2 180.5 48,900
German Länder 16 5.2 211.7 22,200
Italian regioni 20 3.0 87.8 14,800
Polish voivodeships 16 2.4 30.6 19,200
Spanish autonomous regions 17 2.8 71.5 29,800
UK nations/provinces 7 9.5 342.8 35,000
Source: Calculated from Eurostat data

the five comparator countries. The key reason is that Table 6 ranks by population the seven proposed
there are only seven provinces/nations, whereas provinces/nations, alongside all the regions with
the other countries are divided into around two-to- devolved economic development responsibilities in
three times more regions. The one size measure on the five comparator countries whose populations are
which the UK regional average is not larger than all 5 million or above. France has seven such regions,
the comparators is land area: the highest average is Germany five, Italy four, Spain three, and Poland just
that of the French regions, while the Spanish one. This might suggest that the proposal for the UK
equivalent is close to that of the proposed seven is not out of line with practice elsewhere, as not
authorities in the UK. only Germany but also France has more regions
Although land area size might not seem very with over 5 million residents than would the UK,
relevant to economic development policy, its with its four English provinces together with
significance stems from the long-term trend for the Scotland. It is significant that France has the highest
integration of previously distinct local economies. number of larger-population regions: several of
An authority with a narrowly defined area, such as these are recent amalgamations of previously
a single city, might independently deliver some separate smaller regions, and this is an example of
economic development policies (for example land a trend towards larger regions that is in part a
use), but delivering a comprehensive regional response to economic relations and processes
economic strategy (and perhaps having some tax- operating over wider areas.
raising powers) is usually given to an authority Table 6, taken together with the count of regions
covering a larger and self-contained territory, such in Table 5, offers some support for an alternative
as Scotland. This is the economic geography of interpretation. Only two of the seven proposed UK
subsidiarity: the appropriate size of regions depends provinces/nations – and none of those in England –
on the extent and nature of the powers which are to have fewer than 5 million residents, whereas in four
be devolved to them. The high level of interactions of the five comparator countries over two-thirds of
across the boundary of a geographically small their regions are of this smaller size. Even in recently
region, such as London, means that policies reorganised France the proportion is almost half. At the
operating solely within that boundary are unable to other end of the scale, three of the four provinces
match the scale of the key relations and processes proposed for England have populations of 10 million
determining regional economic development. or more, a proportion unmatched in any comparator

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 UK2070 Commission and Rebalancing the UK Economy

Table 6
Regions with devolved economic responsibilities and populations of more than 5 million people
Country Regions/UK provinces/ Population 2019, Area,
nations million square kilometres
UK England: South East 22.7 39,800
Germany Nordrhein-Westfalen 17.9 34,100
UK England: North 14.9 38,200
Germany Bayern 13.1 70,600
France Île-de-France 12.1 12,000
Germany Baden-Württemberg 11.0 35,800
UK England: Midlands 10.1 28,600
Italy Lombardia 10.1 23,800
Spain Andalusia 8.4 87,300
Germany Niedersachsen 7.9 47,600
France Auvergne-Rhône-Alpes 7.9 69,700
Spain Catalunya 7.5 32,100
Spain Madrid 6.7 8,000
Germany Hesse 6.2 21,100
France Hauts-de-France 6.0 31,800
Italy Lazio 5.9 17,200
France Nouvelle-Aquitaine 5.9 84,100
Italy Campania 5.8 13,700
France Occitanie 5.8 72,700
France Grand Est 5.6 57,400
UK Scotland 5.4 77,900
Poland Mazowsze 5.4 35,600
UK England: South West 5.3 23,800
Italy Sicilia 5.0 25,800
France Provence-Alpes-Côte d’Azur 5.0 31,400

UK Wales 3.1 20,800

UK Northern Ireland 1.9 14,100
Source: Calculated from Eurostat data

country. All these three provinces also have land difficult. Since 2010 in England, the approach has
areas whose sizes put them at the upper end of the been to prioritise ‘functional economic areas’, for
range among the large-population regions in Table 6. example reflecting ‘travel-to-work areas’. However,
England has been ‘regionalised’ by government effective regional governance requires the support
several times previously, but none of these regional of citizens. Questions of local and regional identity
boundaries have been widely accepted, partly because matter because boundaries need to pay attention to
none had the historical authenticity and cultural a shared sense of place and patterns of belonging
and political identities of regions such as Bayern, and attachment.8
Lombardia, or Catalunya. The relatively large population Successful democratic polities operate across
and area size of the proposed English provinces might territories that are understood to have real meaning
be seen as a realistic structure designed to tackle to citizens and voters. Where this is not the case,
processes operating over large areas in a highly it can be a recipe for indifference, discontent, or
integrated national economy. Yet it is also arguable dysfunction. Centrally determined boundaries, which
that the provinces are a technocratic proposal may make sense in national government departments
that is fated to fail as a result of a lack of popular in Whitehall in London, can produce regions that have
identification with its new amalgamated regions. little popular affiliation. Such regions may dispense
Finding the appropriate balance and geography large amounts of tax-payers’ money in ways which
is challenging. Drawing lines on maps to limit appear opaque, distant, and unaccountable. Equally,
jurisdictions is relatively straightforward, but creating the deal-making approach to decentralisation can
meaningful local and regional boundaries is more produce regions that are neither functional nor popular,

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UK2070 Commission and Rebalancing the UK Economy

setting back the aims of democratic decentralisation. match public expenditure and services to citizen
The recent experience in France demonstrates preferences at the local and trans-regional levels?
considerable dissatisfaction at the amalgamation of Would they gain enhanced knowledge on economic
historic regions (for example Alsace, Lorraine and the potential and costs? Would the arrangements
Champagne becoming the new region Grand Est). increase the accountability of local governments
The conclusion is that while the proposed English to citizens? Indirect election is a feature of the
provinces are relatively large on average, the only proposed new arrangements at the local and trans-
one notably out of line with regions in comparator regional levels, potentially echoing the charge of
European countries is the South East (as it includes weak accountability and scrutiny levelled at the
both London and its wide hinterland). It is critical to Regional Assemblies/Chambers in England during
recall that the appropriate size of regions depends the early 2000s.
on the extent and nature of the powers that are to Considering the political feasibility of the
be devolved to them. Large regions such as the proposals raises difficult issues given the history
proposed provinces may be appropriate for a highly of decentralisation in England and its ad hoc and
integrated economic geography such as that of piecemeal evolution of institutional arrangements
England, but perhaps only if each province is since 2010. The pendulum swings have created
entrusted with powers similar to those of Scotland, churn and disruption, described as ‘compulsive re-
including the ability to raise its own taxes. organisation’ and ‘perpetual restructuring’.10 Further
reforms and the establishment of new mayoral and
Mayoral and combined authorities and rural combined authorities and rural unitary counties in
counties and trans-regional ‘provinces’ as areas currently without them may encounter
governance arrangements for England resistance and would take time. Changing current
The UK2070 Commission’s initial proposals for two-tier local authority areas into single-tier unitaries
decentralisation aimed to move from the current will face political resistance, potentially from shire
patchwork towards a kind of multi-level governance counties confronting reorganisation and especially
system in England that is evident in other comparable from shire districts facing abolition and amalgamation.
countries. The proposals would effectively fill in In other countries with asymmetrical decentralisation,
the map of England with mayoral and combined such as Spain, the evidence is that areas seek the
authorities and rural counties at the ‘local’ level and powers and resources they see granted to other
introduce a new level of trans-regional economic places; and as new areas gain, the existing areas
executives at the level of the four new provinces. This push for even greater levels of decentralisation.
reform would potentially create a more comprehensive Setting up new executives at the trans-regional level
and even coverage of governance arrangements would be similarly challenging. While building upon
across England. What kind of decentralisation this existing institutions in the Northern Powerhouse area
represents depends upon the powers and resources is a potential way forward, this is likely to be more
decentralised to the existing and new mayoral and difficult for the Midlands Engine, which lacks an
combined authorities and the rural counties and institutional and legal basis and capacity in its current
provincial economic executives (see Table 1). form. Crucially, this approach would be much more
Questions of the size of the regions would then need problematic in the South East and South West, given
to be related to their purpose, powers, and resources. their histories and more recent antipathies to trans-
Evaluating the potential effectiveness of regional collaboration. Existing co-operation – such
decentralisation confronts difficult issues. Establishing as the Cambridge-Milton Keynes-Oxford Arc – is
whether or not decentralised governance enables thematically focused and working on different and
better decision-making and generates benefits for fuzzier geographies. Indeed, the description of the
economic and social outcomes and delivers on public regional executives as a ‘new tier’ of institutions
policy objectives is not a straightforward question. This and administration would likely attract criticism from
is because of numerous problems: the development opponents who may characterise it as another layer
of appropriate proxies relevant to particular national of administration and bureaucracy and a talking
contexts; assembling available data of appropriate shop for politicians – re-using the arguments from
quality, historical coverage, and international the campaign against the elected Regional
comparability; disentangling and isolating the specific Assembly in North East England in 2004.11
effects of decentralisation; and attributing causation The proposed arrangements would encounter the
among decentralisation’s multiple relationships with issue of how to align, co-ordinate and integrate the
broader economic and institutional change.9 new institutions between and across different spatial
Key questions emerge in considering the proposed levels. How will their aspirations and visions, strategies
new governance geography for England. Can these and spending plans be aligned, co-ordinated, and
new arrangements maximise the benefits and integrated? Where will the legitimate locus of power
minimise the costs of decentralisation, and what to prioritise reside? How will new institutions and
would the net outcome be? Could they better activities mesh with existing institutions? If the new

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 UK2070 Commission and Rebalancing the UK Economy

regional executives are tasked with writing a set of general election in 2017, afflicted by ‘Brexit blight’
economic and spatial strategies, how will they and lack of political and administrative capacity
connect with the existing institutions and plans? The in Parliament and Whitehall, and despite the
fundamental test is whether the new governance appetite for decentralisation in parts of England.
arrangements would make people’s lives better. A ‘Devolution Framework’ could have provided
some elements of a road map. Meanwhile, further
Future decentralising of governance in England devolution deals were agreed with the government
Given the ad hoc, incremental and piecemeal in 2019-20.
nature of the recent episode of decentralisation in The new government formed in December 2019
England and the difficulties in assessing its impacts, stated its ambition on ‘levelling up’ economic and
a more comprehensive and thoughtful approach is social conditions across the UK. This includes ‘levelling
needed to thinking through and implementing up’ the powers and resources of decentralised
further decentralisation in existing and new areas governance institutions, enabling more to benefit
yet to be allocated powers and resources if the from the mayoral combined authority model deemed
potential benefits are to be maximised and the costs successful in London and Greater Manchester and to
and risks reduced. There is a need for clarification of exercise their voice in housing, infrastructure, public
the rationales and principles of decentralisation, with services, and transport policy. A new Devolution
a road map and process to provide some clarity to White Paper was in the Queen’s Speech in December
the vision, direction, purpose, principles and strategy 2019 and was under development as the Brexit
for decentralised governance of England in the transition period started and the pandemic struck in
round.4 The current ad hoc, incremental and early 2020, delaying its potential publication into 2021.
piecemeal governance needs to move towards a Where decentralisation in England goes next – its
more planned, transformative and comprehensive form, nature and resources – is critical. There is a
approach. It will, however, need to resolve the need for the meaningful decentralisation of powers
patchwork of the different geographical scales, and resources to enable places to tailor place-based
institutions of governance and funding streams that institutions, policies and public services to address
have emerged in England since 2010. their particular combinations of aspirations and needs.
Evident in government’s moves on devolution
policy, the current episode of decentralisation in
‘Where decentralisation in England and its deal-making approach are reaching
England goes next – its form, their zenith. First, areas that secured deals in earlier
waves are increasingly seeking further deals in a
nature and resources – is bid to acquire additional powers and resources,
critical’ reproducing governance by deals with all its benefits
and costs.12 Second, areas putting forward deal
This is not an argument for a top-down blueprint proposals are having to wait for Ministerial and civil
designed and delivered from Whitehall. It is a call for servant consideration and response, demonstrating
an open, transparent and systematic approach. Such the lack of political prioritisation and administrative
a road map would provide greater fairness and equity capacity at the national level, or receiving rejections
in setting out what kinds of powers and resources for not meeting unstated criteria. ‘One Yorkshire’
are on offer for places. For those areas in the early proposals in 2018, for example, were rejected by
stages of thinking about what decentralisation might the then Secretary of State James Brokenshire
mean for them, it would provide a normative sense because they did ‘not meet our devolution criteria’.13
of the kinds of powers and resources that specific Yet no such criteria have been published.
types of areas should be seeking. Such a road map Third, knitting together the strategic aims and work
would remove the existing opaqueness and lack of the decentralised institutions and their differentiated
of accountability of the current deals designed, powers and resources within the broader patchwork is
formulated and made between particular political becoming more difficult as it becomes more complex
leaders and senior officials at the local and national and heterogeneous. While there is evidence of
levels at specific points in time. Otherwise, the co-operation and joint announcements among the
problems and costs of co-ordination, integration and higher-profile metro-mayors,14 evidence is limited
alignment between governance actors and institutions that the overall system of governance in England is
will be reproduced and, potentially, multiplied as working as coherently and effectively as it might in
further pieces are added to the existing patchwork. improving public policy outcomes and people’s lives.
Given the changes in government in 2019, the
impact of the 2020 pandemic, and Brexit, it is difficult Conclusion
to assess the current administration’s commitment The argument here is not against further
to decentralisation in England. Decentralisation decentralisation, especially given the highly centralised
slowed following the EU referendum in 2016 and system in England and the UK. Nor is it a call for

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UK2070 Commission and Rebalancing the UK Economy

further caution and a slower approach, or for a faster, 3 D Marlow: English Devolution and Intermediate Tiers of
radical and revolutionary ‘big bang’ strategy. Instead, Governance. LGiU Briefing. LGiU (Local Government
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english-devolution-and-intermediate-tiers-of-governance/
think through and clarify what decentralisation is for,
4 A Pike, L Kempton, D Marlow, P O’Brien and J Tomaney:
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9 A Pike, A Rodríguez-Pose, J Tomaney, G Torrisi and
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13 James Brokenshire, quoted in J Elledge: ‘James
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● Professor Andy Pike, Emeritus Professor Mike Coombes, 12 Feb. 2018. [Link]/politics/james-
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