Phil Jones: Put CBI and business at heart of Yorkshire devolution deal

WE’VE moved quickly in this Parliament to a position of ‘when, not if’ regarding the transfer of powers away from Whitehall with many areas, including the Humber, Leeds and Sheffield city regions currently negotiating deals with the Treasury prior to the Comprehensive Spending Review.

There is a clear view amongst the region’s business community that this is an opportunity that has to be taken very seriously – and the objective is not simply to rewire local government. It is to create conditions that help to stimulate economic growth in the regions up and down the country – not least in the Northern Powerhouse, home to around 30 per cent of England’s population.

If a devolution of some things currently done by the Government can help that wider objective, then it should be a top priority for both civic and business leaders.

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In approaching these negotiations, it is critical to understand how the changes will drive economic growth and support businesses to grow, invest locally and create more and better jobs.

To support this approach, the CBI has identified three tests for ‘growth-friendly’ devolution – all tailored towards boosting economic activity in regions like Yorkshire and the Humber.

The first is a clear assessment of the wider effect a new power may have. The outcome has to be better for country as a whole, not just the region. For example, we need to make sure it doesn’t undermine the UK’s internal single market, where businesses benefit from a common business tax system, shared financial services regulation, a common energy market and employment law framework.

Secondly, the capability has to be in place to handle any new decision-making powers in a way that will help to drive growth. It will be important to answer the question: what is needed to make sure that local bodies are equipped to manage any new powers that may be devolved? Perhaps more specifically, has business got a seat at the table?

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We think it’s clear that collaboration will be crucial to the future success of deals and other devolutionary steps announced so far. Elected representatives in Yorkshire and the Humber will need to work hand-in-glove with the business community to harness what’s on offer from Whitehall to ensure devolution is truly transformational, and not an end in itself.

Businesses have a clear view of what will drive investment to their region and they want to get involved. The feedback from around the CBI community is that, currently, the performance of the existing 39 Local Enterprise Partnerships (LEP), comprising local authorities and businesses, varies widely across the country, so more must be done to make them a prominent and representative voice in every part of the country.

We need to get national, regional and local levers moving in the same direction. Top of the agenda for businesses in Yorkshire and the Humber are investing in transport and digital connectivity, tackling the skills gap and attracting investment to boost jobs and growth. Local action must be complemented by national action – local devolution of powers must be seen within long- term national plans on issues such as infrastructure, skills, exports and tax and all the other important policy levers that contribute to helping make growth work for everyone.

And following on from this is the related challenge of ensuring that further devolution measures reduce, rather than add, complexity and bureaucracy.

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The Government has made good on its pledge to plough ahead with further devolution with the swift introduction of the Cities and Local Government Bill. But it is worth bearing in mind that enhanced powers will not shelter councils from needing to make further savings, particularly with the Comprehensive Spending Review looming large.

With councils facing rising demands for services and lower spending targets, new approaches will be needed to maintain effective public services. What we now need to see is a balanced focus on delivery as well as powers.

To be successful, we will need strong co-operation between the LEP and local authority leaders. The people and elected representatives of Yorkshire and the Humber need to work with business as we stand ready and waiting to help.

We must make the most of the opportunities presented by the unprecedented flow of power from the centre of government to the regions.

Phil Jones is chairman of CBI’s Yorkshire and the Humber Regional Council and chief executive of Northern Powergrid.