Devolution and Governance Structures in the UK: Lessons from Evidence

This report produced by the Industrial Strategy Council in collaboration with WMREDI aims contribute to the debate on devolution by identifying principles which will support and facilitate successful future devolution particularly at the sub-regional level. To do this:

- The literature was reviewed to understand the benefits from devolution as well as the limitations to successful implementation of devolution.
- The history of devolution in the UK was set out to shed light on why, despite a long history of attempts at devolution, the UK remains an unequal county both within and between regions.
- A range of primary evidence was gathered from stakeholders who engage with or work in sub-national governance across the UK, to understand what works, and what needs to change, regarding sub-national devolution.

Based on the array of evidence gathered the information was synthesised in order to draw sensible lessons from it. Building on the OECD model for decentralisation, which covers fiscal, political and administrative, a fourth pillar covering ‘people and place’ was added. This research and evidence was then translated into a devolution framework. The framework was designed to provide a structure and a set of principles that can survive changes of government and ensure that this process does not have to be repeated. The devolution framework contains two parts policy principles and guiding principles. The policy principles are tangible, actionable recommendations. Good devolution policy will meet all the criteria set out under each of the pillars in this policy framework. The guiding principles are a set of behaviours which should be embodied by those who work with, or in sub-national governance structures. The recommendations identified under each of the four pillars are as follows:

- Political: increase the number of elected leadership positions; transfer powers across a wide range of policy areas (not whole policy areas, only subsets of policy); ensure there are checks and balances particularly over finances and reporting on outcomes
- Administrative: ensure structures and institutions have clear jurisdiction with own agenda to eliminate duplication; inbuilt review mechanisms to ensure power is transferred on the basis of delivering outcomes.
- Fiscal: Long-term certainty of funding for all agreed responsibilities based on an updated and improved Barnett style formula; additional funding available through competitive bidding. This bidding process would need to be more streamlined, less prescriptive and removal of ring-fenced funding; possibility of local tax raising powers over time.
- People and Place: Transparency - public access to information should form part of the formal review mechanism; where necessary boundaries should be redefined to align to policy areas and to ensure economic functionality.