Don't dilute devolution - our 7 commandments for meaningful and inclusive local growth
It’s devolution fever out there! A new government has brought new hopes for people who have been influencing and campaigning for fiscal and functional powers to be more local, for communities to have a say and for local growth to be for everyone.
My Government believes that greater devolution of decision making is at the heart of a modern dynamic economy and is a key driver of economic growth and my Ministers will introduce an English Devolution Bill
The King’s Speech 24th July 2024
Just a few days after the election the new Prime Minister brought 12 Regional Mayors into 10 Downing Street for the first of what he promised would be many meetings. A couple of weeks later he used the King’s Speech to set out plans for an English Devolution Bill. As a statement of intent, it couldn’t be clearer — this government is pledging to go further than ever before in devolving power to the English regions.
- Put a more ambitious standardised devolution framework into legislation to give local leaders greater powers over the levers of local growth. This will include enhanced powers over strategic planning, local transport networks, skills, and employment support, enabling them to create jobs and improve living standards.
- Make devolution the default setting, meaning places will be granted powers without the need to negotiate agreements where they meet the governance conditions.
- Make it easier to provide devolved powers quickly to more areas through establishing a simpler process for creating new Combined and Combined County Authorities, to ensure that every part of England can rapidly benefit from devolution. Weight it towards more advanced mayoral systems where there is capacity and ambition to do so
- Improve and unblock local decision making through more effective governance arrangements, ensuring mayors and Combined Authorities can get on and deliver for their areas
- Empower local communities with a strong new ‘right to buy’ for valued community assets, such as empty shops, pubs and community spaces. This will help to revamp high streets and end the blight of empty premises.
Our Expertise
Over the past decade Social Finance has supported local areas to meet the ever more complex needs of citizens, often hamstrung by fiscal powers, restricted by planning laws and a list of other barriers.
Examples include Changing Futures, a £77 million social investment programme overseen by Social Finance which supported 15 local authorities to improve outcomes for adults facing multiple disadvantages, and Kindred which is part of an ecosystem of organisations supporting social businesses in Liverpool City Region.
Growth for all and not growth at any cost
A key challenge for local government will be ensuring growth is inclusive. As the Greater London Authority warned at the launch of its growth plan earlier this month “London should not aim for growth at all costs”- instead inclusive growth that benefits everyone should be the goal. So we’ll need to keep our eyes open to the way our systems prevent good things happening and where they could, despite best intentions, still leave people behind.
Building on our learnings, here are our seven commandments for meaningful and inclusive local growth
While central government is still a key player in many issues that are better tackled locally (e.g. as a legislator, regulator, funder and coordinator), local government will need to be elevated to become decision-making partners alongside Whitehall; equal in stature and voice, and with clear lines of accountability to communities.
The role of Mayoral Combined Authorities (MCAs) will also be key, although they must guard against the risk of becoming another out-of-touch institution. Local and regional governments should work hard to retain ‘local’ ways of working — putting community voices first, resisting one-size-fits-all KPIs, and staying adaptive — to reset their relationship with Whitehall and drive change.
An example of this is the devolution of adult education budgets to MCAs and the Greater London Authority (GLA), who are now positioned to use their insight into the local employers, population needs and the health system to tackle skills and employment shortages effectively at the local level. Drawing on insights from our work with City of London, Croydon and WMCA, we’ve written about the opportunities this presents here and here.
Many of the biggest problems facing local areas demand system thinking and working outside of traditional policy siloes. For example, reducing re-offending, setting children up to thrive in adulthood and tackling violence all involve getting stable housing solutions in place. Getting people into lasting, meaningful work often requires integration with clinical and treatment teams. Hitting local sustainability goals requires investment in green skills and is underwritten by progressive procurement approaches that align government purchasing behaviour with broader values and policy goals.
A good example of how system-thinking approaches can work is Changing Futures. Local government must become expert at ‘seeing the whole’ and resist single-lens solutions.
One of the reasons devolution is so important is because the closer decision-making is to the community, the more it can legitimately reflect community voices and interests.
For devolution to succeed, local government must become champions of community power and voice, and get comfortable with more innovation around embedding community and minority voices into decision-making and policy design.
This could involve radical experiments to bring the community into the design and funding of key clinical services. Two examples, both supported by Social Finance are:
- The Essex Recovery Foundation which transferred decision making power over drug and alcohol services to those with lived experience of addiction.
- Barking and Dagenham Giving which pioneered new approaches to community funding.
It’s also vital that any learnings from innovative projects represent the real needs of communities. For example, in our evaluation of Pathfinder an early help intervention in Birmingham, we brought parent and child voices into the methodology and findings.
Often solutions to the biggest challenges are hidden behind missing data; and worse, sometimes the challenges themselves are invisible. If we can’t see who is not using services or who is falling between the cracks, we won’t be able to reach the parts of the community who might be most in need.
Our Early Inclusion Collective is an example of a pioneering new approach to making visible the experiences of children who are hidden to the system. We know that girls aren’t seen in school exclusions data, young carers aren’t known to teachers, and that LGBTQ+ children are over-represented in the care system but invisible in the data.
Local government must pay more attention to where there might be missing data or unheard voices.
Whitehall can help steward learning about what’s working and what’s not between MCAs and beyond. Local growth plans across the country will have similar themes and challenges but different strengths and opportunities to grow inclusively.
Whitehall can play a role in spotlighting learnings and insights with potential for cross-country impact, and local authorities can explore ways evaluation budgets can be used to drive learning about the system, rather than just demonstrating programme impact ‘after the fact’.
Our report ‘Navigating System Change Evaluation’ explains how evaluation can be used to drive system learning and impact.
While it’s hard (or impossible) to move money away from strained crisis response services, getting creative about ways to invest in prevention at the local level will be essential to achieving the potential of localism.
Some areas are already doing this. For example the North East Combined Authority is designing innovative prevention funds to move more regional investment ‘upstream’ toward prevention-focused activities. In the North East Mayor has pledged to halve the rate of women dying from suicide, drug and alcohol misuse and domestic homicide.
In the health and social care sector, Social Finance and Macmillan are pioneering Community Transformation Funds – a new grant-making and social investment approach, providing sustainable transformation funding that doesn’t require a commercial return on investment. The funds channel investment from impact-focused funders into local outcome partnerships with outcomes payments being ploughed back into the service. For example the End of Life Care Fund set up in 2021 to transform services for over 18s in their last year of life has already shown leverage of 5 times (e.g. for every £1 invested, £5 service value is created).
Further, we know that social impact investment is still untapped in many areas of the country and we welcome signals from government that it wants to change this. Prevention in employment and skills, Violence Against Women and Girls, maternity services and children services are just some areas waiting for it.
Pushing out responsibility to local government must come hand-in-hand with support to build capacity, skills and expertise at a local level. At present, deflated and cash-strapped local councils often lack the right skills, people and strategies to start tackling the big challenges faced by their communities.
Central government and local areas alike should take seriously the challenge of identifying creative ways to boost local capacity to drive change or devolution will be yet another dilution.
Local government should look to skill-up in the system thinking and system change approaches, explore innovative financing options, and share innovations to bring exciting practices on the ‘fringe’ to the mainstream of local government.
