Gordon Brown and Local Government
1 June, 2007

Dick Sorabji, Deputy Director
Public Finance

Gordon Brown says that his Premiership “starts with governing in a different way”. That offers hope for those in local government, but it is blunted by the current fashion for psycho-analysing the next Prime Minister.

We cannot not know what is in Gordon Brown’s mind, but we can see what has gone into it. Formal statements, politics and the development of Brown’s thinking at the Treasury all point towards incremental but significant devolution.

Brown used his launch speech to promise that, just as he gave up economic power as Chancellor so, as Prime Minister, he will give power to Parliament and forge agreement on a new constitutional settlement.

The political context suggests this priority is carefully chosen. It helps redress Brown’s reputation for central control. It creates a symbolic break from the Blair years, without disowning them. Delivery would surprise the public encouraging greater trust in politicians. It would remove the opposition parties’ best case against the new Premier.

Possibly most important is evidence that Brown and the Treasury have become convinced of the evidential case for devolution. Since 2003 Brown and the Treasury have produced reports and speeches on this theme. In his 2003 speech to the Social Market Foundation Brown argued that devolution was an alternative to public service improvement through markets. In 2004 Devolving

Decision-making made the management case that public service reform required devolution. Today the Treasury review of economic development is driven by the conviction that economic growth depends on devolving decisions to sub-regional levels.

So what early decisions could Gordon Brown take if he plans to become the Prime Minister who modernised by giving power away?

Implementing the short term proposals of the Lyons report would be a start. Swift action to cut targets and specific grants, reform of the hugely complex LABGI incentive scheme and deliver a supplementary business rate would exceed expectations. But these ideas are already on the policy agenda and require some time for the details to be worked out. More dramatic action is possible.

Brown could start to empower Parliament by giving it a role as neutral umpire in negotiations between central and local government. For instance, arguments over central funding for duties imposed on councils have long been a source of tension. Our centralised system of government permits the new Premier to change the rules by administrative fiat instantly empowering Parliamentary Select Committees, advised by the Audit Commission, to assess the cost of centrally imposed duties.

The Local Government Bill is accelerating joined up public service delivery through Local Area Agreements. Disputes will soon emerge over when Ministers should allow locally devised plans to override national targets. Again Brown could give Select Committees the final say. Public scrutiny would encourage both local and national government to raise their game as they develop better public services.

Traditional Whitehall reforms could also signal future change. Our centralised system means that it can happen in the first days of the new premiership.

The restoration of the Northern Ireland Assembly makes a case for a merged Department of the Nations. Yet this might intensify the West Lothian question. Better would be a Department of Devolution including the Scottish, Welsh and Northern Ireland Offices, but also the local government parts of DCLG and the RDAs within the DTi. The autonomy of national assemblies and the Scottish Parliament would require this department to work through influence rather than command and control. Whitehall would benefit from learning new techniques for spreading national policy across the UK.

This would signal future reforms giving local government the kind of formal autonomy already held by national assemblies and the Scottish Parliament. In this way it could help to create the national consensus on a programme of constitutional reform that Gordon Brown has promised.
So much power given away so swiftly has the ring of fantasy football, not realpolitik. For the cynics there is one devolutionary reform that may sound more likely. Since 1997, Brown has used business leaders to conduct his major policy reviews. He has faith in their advice. Yet when multinationals devolve, they do not give up strategic control. Instead they move power both down and up. Down to the front line and up to the HQ, hollowing out middle management.
Applying this approach to the government of Britain suggests not only devolution to local institutions, but also centralisation from Whitehall’s departments to the Prime Minister’s office. Moving the management of Public Service Agreements from the Treasury to the Cabinet Office would give the Prime Minister more strategic control while allowing local institutions more operational power.

Gordon Brown has a chance to have his cake and eat it. He could devolve power and increase strategic control. Will he? We cannot know his mind, but we can see the opportunity.