In just a few weeks, on 4th May, elections will be taking place for the first time for new directly elected mayors in:
In total, these new mayors (and Combined Authorities) will cover over 20% of the population in England and will be in a position to make lasting change for the benefits of their citizens. Manufacturers are supportive of new mayors as this will help stabilise decisions made at the sub-national level and give regional decisions the regional mandate they need.
Do these elections matter?
Yes. We've written before on the benefits of devolution, which include:
- A greater focus on economic development challenges across 'real' economic geographies rather than smaller political ones
- The focus of devolution has been on boosting investment in local transport and infrastructure, both areas put top of the list as challenges and priority areas for action by manufacturers
- Mayors will also be allowed to add 2% to business rates bills to fund infrastructure projects - something manufacturers support
But not all areas will benefit
While 20% of the population is significant, there are clearly large parts of the country that won’t benefit. This is a missed opportunity to repair the business environment across the UK so that all businesses in all areas are set up for growth.
Our report last year outlined why all areas are not taking advantage of Devolution Deals. While not all Deals need to have an elected Mayor, a crucial requirement is governance models that match the 'real' economic geography of an area (a.k.a. a functional economic area) and not just political council boundaries.
This was the same logic behind the creation of Local Enterprise Partnerships - growth should be supported at the national level, at the local level and, as in this case, at the sub-national level.
Our report last year made the following recommendations for central government:
- Reaffirming that the devolution framework developed by the former Chancellor George Osborne, and the former Commercial Secretary to the Treasury Jim O'Neill, along with Greg Clarke across his various roles in government, remains the same. This would give certainty to local authorities that the rules haven't changed.
- Putting the financial afterburners on devolution by giving significant transport funding and property tax income to local areas.
- Encouraging more council mergers through fiscal incentives so that councils map more closely real economic geographies, negating the need for an elected Mayor and Combined Authority in exchange for a Devolution Deal (this is the case in Cornwall).
The message to local authorities - get busy negotiating a Deal or get ready for a backlash
By the end of this Parliament, the mayors set to be elected this May will have started the journey towards stronger more resilient local economies.
Through infrastructure, housing and public transport programmes they will have started the place shaping to create dynamic and flexible labour markets to improve productivity and living standards.
Their success will also send a positive message to businesses and central government that decisions taken at the local level can add value, with areas at the vanguard likely to be granted more powers in addition to the ones they already have.
Those areas that fail to take advantage will watch from the side-lines – including the people and businesses in these areas – they will wonder why the benefits of devolution have not been taken up by their local decision makers.
The size of the prize is significant. Given the uncertainties that exist around the shape and scope of Britain’s future relationship with the EU, putting the right frameworks in now at the local level to support devolution will enable local decision makers to deliver a stronger business environment for businesses to cushion the uncertainties that lay ahead.
For more information about the upcoming mayoral elections and to register to vote visit www.gov.uk/ourmayor