After all the warm words and soft soap on Lord Heseltine’s No Stone Unturned report, in an interview with The Northern Echo, Business Secretary Vince Cable broke ranks this week and poured cold water on any great hopes of any significant new devolution deal.
In the Budget in March the Chancellor of the Exchequer offered general approval for Heseltine’s plans stating that more details of the government’s response, not least the amount of departmental funding that would be channelled into the Single Local Growth Fund, would be announced in June’s Spending Review.
Heseltine has identified departmental funding pots to the tune of nearly £50 billion which he has argued should be devolved to Local Enterprise Partnership (LEP) areas; but Cable has confirmed what many cynics suspected, that such sums are pie in the sky. The Business Secretary’s principle argument is that LEPs simply don’t have the capacity or the desire to be responsible for such large sums of money. This is true but it is also ironic given that it was Mr Cable himself who, together with Communities Secretary Eric Pickles, ordained that LEPs should be such powerless, ‘light touch’ bodies.
Vince Cable may also be right that handing such large amounts of public funding to an unelected body would be inappropriate too. But a lack of democratic accountability should not foreclose an argument for greater devolution. For a start, the lion’s share of his departmental funding continues to be handed to research bodies, quangos and catapult centres; rarely does anybody question their accountability or transparency.
But it is also the case that in Greater Manchester, Greater Leeds, the North East and elsewhere, ‘combined authorities’ are emerging with all the legal status necessary to receive large sums of public money and with a degree of public accountability. We would like to see them go further with metro mayors where that model suits, but if Cable really wanted to devolve key aspects of public funding, he could easily find a way without having to hand it over to LEPs alone.
But, whilst the Business Secretary seemed keen to cling on to precious departmental funds at the centre, he also hit out at Heseltine for not being radical enough! Pointing beyond the need for decentralised hand-outs from London, Cable argued for greater tax and borrowing powers for local councils. This is something IPPR North has long supported but fiscal decentralisation is no quick fix either, as the Scottish example demonstrates, for Scotland has never used these powers that it has been granted.
This may appear a storm in a teacup, but come 26 June and the Spending Review announcement, if Cable is right, Tarzan may just roar for one last time.
* Ed Cox is Director of IPPR North.