'˜Devolution gap' looms if region fails to act fast

Business leaders now need to galvanise the devolution debate, says Chris Hearld.Business leaders now need to galvanise the devolution debate, says Chris Hearld.
Business leaders now need to galvanise the devolution debate, says Chris Hearld.
THE weekend sees the country's first six metro mayors reach 100 days in power since their elections in May.

They now lead those city-regions that have agreed devolution deals with the Government, securing the ability to make far-reaching decisions that impact the citizens and businesses in their area.

While Yorkshire and its city-regions go without, there is the risk that a devolution gap will emerge, in terms of economic prosperity, between the haves and the have-nots when it comes to these deals.

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The private sector will be directly affected by the decisions that flow from the transfer of powers and funding from central to local government.

Its implications for economic policy-making relating to planning, transport infrastructure, housing and skills leaves me in no doubt 
that devolution – and the lack of it in this region – is a critical business issue.

Devolution presents business leaders with an opportunity to contribute to the direction of public policy.

They are sure to have views that should be influential. For example, should the emphasis be on supporting apprentices, extending planning powers, reducing regulatory burdens or developing infrastructure?

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Tailoring local skills provision can improve the quality of the workforce and help get more people into better-paid jobs by matching training courses with the needs of local employers.

Giving business leaders a greater say over infrastructure projects will help to improve the quality of delivery.

New planning powers for cities and counties can help to free up public sector land to build more homes, provide developers with the confidence and stability they need to invest and ensure that new housing projects dovetail with new infrastructure, and in places with workforce opportunities.

The election of mayors in places including Greater Manchester, Liverpool City Region and Tees Valley has not only given their devolution deals the green light, but are giving the areas a leadership and visibility boost.

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All have been granted 30-year investment funds while some are already beginning to negotiate their next deal – for example the West Midlands Combined Authority.

The ambitions of the new mayors are bold not only in securing economic growth, but achieving more cohesive communities and tackling the root cause of inequality.

In time metro mayors will establish themselves as leading figures for the political, community and business groups in their regions. Think about the influential role that Mayor Andy Burnham played in the immediate aftermath of the terrorist atrocity that affected Manchester.

They will be able to use their position and growing links with central government and the media to influence the direction of public policy on business issues, whether to argue for more investment into the transport network, to promote skills specific to local industries or to champion their local industries in future trade negotiations.

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As the London experience has illustrated, they will act as ambassadors and advocates for their city-region, promoting inward investment and trade relationships with other countries.

International relationships have always been critical for many businesses; post-Brexit the role of mayor has the potential to take on additional significance, as the UK seeks to strike multiple trade deals and each part of the UK surely must pull its weight economically.

I encourage those who lead Yorkshire’s businesses to talk to their locally-elected representatives about their wish to share in the benefits of devolution here in Yorkshire. It could be a helpful influence on those charged with agreeing the terms of any deal or deals.

The recently announced ‘coalition of the willing’ may prove to represent a step forward in terms of collaboration between many of the local leaders in this region, though whether this will convince the Government to flex its vision for metro – as opposed to regional – mayors will have to be seen.

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The key is to get the ball rolling on serious conversations about a model that is workable and broadly acceptable to local and central stakeholders, aiming to reach a start point that is in the interests of the citizens and businesses of this region.

It won’t be perfect; it won’t be ideal for all, but right now, isn’t there a significant danger that Yorkshire will fail to improve its productivity and achieve its economic potential because it is unable to complete with other areas that are behaving more cohesively in economic geographies, making more dynamic decisions and are firmly on the radar of a central government keen to develop an industrial strategy with regional impact?

While much of its focus is on negotiating Brexit terms, it is to be hoped that the Government is willing and able to carve out some resource to work with those leading Yorkshire’s local government bodies to agree 
a devolution deal that allows 
this region more control over 
its destiny.

Brexit should not be the only deal in town.

Chris Hearld is KPMG’s North Region chair and Leeds office senior partner.