Opinion: Decentralisation to the London Region – the case has yet to be fully made

Before the recent Scottish independence referendum, promises squeezed out of the ‘Westminster establishment’ over more decentralisation of power to Scotland. The independence referendum was a close run thing. Now those in favour of full independence for Scotland are in a majority, and it seems that this will be reflected in the coming UK General Election.

The UK government has also conceded to a small increase in the powers of the Welsh Government.

On independence and devolution, Scotland has form, of course. But there are more modern reasons for the recent rise of pro-independence sentiment.

The long march to the UK’s extraordinary administrative centralisation, unique in the developed world outside city states, accelerated 35 years ago under Prime Minister Thatcher. The Council tax system, including all the labyrinthine grant formulae, seemed to complete a long process, and resulted in 70%-85% of local financing coming from Whitehall.

This is not the whole story. A system of central control and extreme micro-management has evolved to such an extent that local government in the UK is more a branch of central government. After all, ’he who pays the piper calls the tune’.

The symptoms of ‘local’ in England have kept the inefficiencies of centralisation from public view. Not so in Scotland. History & nationalism, a separate legal system, oil, concentrated land ownership, the 2007+ recession, and greater state dependence, have all contributed to Anti-Whitehall feelings. Even then, the promises of further decentralisation are notably fuzzy, and negotiations towards clarity are interrupted by a UK General Election.

There is no parallel for such factors in London. A few scraps of decentralisation have been mooted, limited to minor elements of budget freedom, which leave the systems of micro-management intact. Ideas about direct London-region control over tax revenues are being craftily led by the nose over a cliff called ‘the need to transfer funds from rich to poor areas’.

Decentralisation without public support is likely to lead to tokenism. Survey data suggests that Londoners are fuzzy about the precise problem that decentralisation is supposed to address.

However, over-centralisation UK-style is extremely damaging to London and the UK as a whole. It affects financing, as central government prefers queued-up mega-projects wholly state-funded or worryingly opaque ‘private partnership’ stitch-ups. It affects transport planning, police supervision, housebuilding, economic development, employment issues and environmental improvements. In UK-style centralisation, decision-making over London’s urgent needs is utterly sclerotic.

To take one small example; low income and employment abuses across London. Centrally, HMRC enforces the minimum wage, whilst the Health and Safety Executive enforces working hours, the Gangmasters Licensing Authority regulates ever-expanding gang labour providers, and the Employment Agencies Standards Inspectorate enforces rules for employment agencies… and so on. This is a senseless way to solve London-specific problems, and the same mess applies for much of London’s special problems.

Thus, decentralisation to London region is not a policy wonk nicety. Whitehall is standing between London and its future, and must step aside if London is to survive as a global centre. This is contingent on public support. First, Londoners must have a good understanding of the actions necessary if London is to have its future. Second, Londoners must acquire a clear understanding of exactly why the centralised system is incapable to taking such actions…. As people seemed to have concluded in Scotland.

These two factors must be addressed if London is to have its future. They have not yet been addressed, and the case has not yet been fully made. Politicians, including ours, need to make strong proposals which address Londoners’ priority problems, and then reveal the truth about how Whitehall stands in the way. If there is no proper gasp of what needs to be done, there can be no grasp of why decentralisation is imperative.


* Paul Reynolds works with multilateral organisations as an independent adviser on international relations, economics, and senior governance.

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  • What London lacks is democracy.

    The Blair government imposed the combination of the elected “Mayor” ideally suited for a publicity-seeking buffoon but not much good for democratic accountability and the rather odd Greater London Assembly, which is at best opaque and lacking in powers and at worst a fig-leaf to hide the lack of any real democratic representation or public involvement.

    What is odd is that some people think that replicating such an inadequate system in Manchester and Sheffield would be a good idea. Or are they just ‘nodding dogs’ for their Coalition masters?

  • “The symptoms of ‘local’ in England have kept the inefficiencies of centralisation from public view. ”

    We’ve just had another example of this in this mornings news, with the Tory’s (central government) announcement for 200,000 new homes being sold with up to 20% discount. The discount being ‘afforded’ by (central government) “waiving the fees homebuilders have to pay to local authorities”.

    So yet another example of how central government is being very free with taxpayers monies that are off it’s books.
    So for decentralisation to mean anything, a first step is to drastically limit what central government can do with local government monies.

  • Tony Rowan-Wicks 3rd Mar '15 - 9:45am

    The London problem is shown best by the majority of active voters electing a joker rather than a worker. Funny man, doesn’t bring anything new to London – just fills a space in an office and delivers sound-bites. There is no new principle for the majority who live here to get behind so everything remains as the status quo in London, Thatcher-style, just as the Tories like it. Londoners should be envious of Scotland’s new-found ability to vote for another future, despite the obvious lack of democratic freedom which Scotland has always had, until now.

    We have to wish Scotland well but there will be tears if a huge SNP majority renders the country as another undemocratic region – as London is already. Large majorities do not suit this isle.

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