Devolution: An opportunity for place-based investment

The English Devolution White Paper grants mayors control over strategic planning, housing, transport, and skills, bypassing the layers of bureaucracy in central government. The aim is to equip local leaders with the tools they need to deliver growth in their regions, boost opportunity, meet housing targets, and shape local transport systems.

Devolution could be a springboard for place-based innovation and development. By transferring powers and funding from central to local government, decisions can be made closer to communities. This can lead to more tailored and effective solutions for local issues, fostering economic growth, community engagement, and improved public services.

Local authorities can engage more effectively with their communities, ensuring that residents have a greater say in the decisions that affect their lives. Different regions can choose approaches that are right for their unique circumstances. For example, some areas might prioritise increasing the supply of social housing, while others may focus on improving the quality of existing housing stock.

How can more autonomy improve infrastructure and services?

With devolution, local governments often receive consolidated funding which gives multi-year certainty for place-based projects – reducing the risk of funding envelopes changing during a phase of project development. The power to focus on their constituencies’ needs brings several key benefits that can improve the quality and efficiency of public services, such as healthcare, education, and transportation.

Making strategic planning easier

Devolution gives local authorities improved tools and autonomy to address community issues more effectively, and implement plans that are closely aligned with their specific needs and priorities.

This can lead to more effective land use and better integration of housing, infrastructure, and economic development. The transfer of powers and resources from central government presents an opportunity to deliver truly integrated and locally responsive strategies – combining areas like housing and transport into the same project.

For example, the Greater Manchester Spatial Framework 2020 (GMSF) is a strategic plan aimed at managing land use, housing, and infrastructure development across the area. It has since evolved into the ‘places for everyone’ plan, which continues the goals of the GMSF with a focus on sustainable growth and development.

Meeting local communities’ needs

With devolved powers, local authorities have more autonomy to drive housing targets that reflect local demand and conditions. This flexibility can enable them to address housing shortages more effectively and ensure that new developments contain more affordable homes, as well as meeting the requirements of residents.

However, this benefit is often challenged by commentators in the sector – for example, Manchester’s leaders have faced criticism for the levels of affordable housing delivered, often noting pushback from developers as a blocker, despite the increased flexibility that devolution should bring.

Delivery of services

By having greater control over budgets and decision making, local government can tailor services to better meet the needs of their communities, whether it's in housing, transportation, or social services.

The West Midlands Combined Authority (WMCA) has taken significant steps to improve transport services. Devolution has enabled better coordination of public transport, leading to initiatives like the West Midlands Metro expansion and improved bus services.

Improving infrastructure: spotlight on rail

The development of local transportation assets should be a key priority. Regions with devolved rail powers often see higher levels of investment in rail infrastructure and services – from this, we can see a clear case for devolution leading to improvements in service quality, station facilities, and overall passenger experience. The WMCA investment strategy has boosted local economies and improved connectivity.

The Railway Industry Association (RIA) views stations as vital gateways for communities and devolution has the opportunity to unlock their potential to drive local economic development and connectivity.

The Devolution White Paper signals a fundamental shift in how rail services and skills are managed, granting metro mayors unprecedented powers to shape local transport systems.

RIA Policy Director, Robert Cook said:

“Train stations will be instrumental to the Government’s ambitions to construct new towns and build more than 1.5 million homes over the current Parliament. For example, analysis suggests over one million homes could be built around England’s rural stations with only a one per cent decrease in the green belt.”

What challenges does devolution bring?

Although the benefits of devolution are clear, there are some hurdles for combined authorities to navigate. While the reforms provide an opportunity to bring substantial improvements, their success depends on legislative progress and effective collaboration between central and local government.

Although local authorities will have more control over their policy decisions they must still align with national policies and frameworks. This can sometimes create tension between local and central government priorities. Similarly, as the programme involves the creation of combined authorities, member expectations need to be managed as personnel from each may bring different cultures and levels of challenge. Consideration needs to be given to how the new local authority will make decisions and how new policies will be distributed across the boroughs.

On a local level, communication between mayoral authorities and local authorities is vitally important to the success of devolution. The unification of multiple authorities into one creates a larger geographical area with more problems to address. The ability to deliver across it may be more costly and logistically more challenging, and not all local authorities will have the capabilities to do it. Equally, there are questions around the financial impact of local government reform, such as the management of different business rates and council tax bases as different geographies merge together, alongside the differing levels of reserves and borrowing capacity.

Local infrastructure will be central to the success of the Government’s plan. However, to harness this opportunity careful planning and negotiation is needed to ensure a coordinated approach that realises the full benefits of it.

For any insights and guidance, get in touch with Helen Dryburgh.