speri.comment: the political economy blog

‘Devo Manc’: ‘Northern Powerhouse’ or ‘Northern Poorhouse’?

Centralisation has certainly failed, but the promise of devolution to Greater Manchester is being massively hyped

Professor Mick Moran, Professor Emeritus of Government, Manchester Business School, & Professor Karel Williams, Professor of Accounting and Political Economy, Manchester Business School

moran-williamsManchester is a great world city which has long divided observers.  In the mid-nineteenth century, what was for de Tocqueville a ‘foul drain’ and for Taine ‘Babel built of brick’ was for the Edinburgh Review, by contrast, ‘foremost in the march of improvement, a great incarnation of progress’.  Most recently, with ‘devo Manc’, the city of 1980s de-industrialisation and indie music has been transmuted into a symbol of post-industrial regeneration and devolved government.

All this is being talked up as a matter of electioneering by the Treasury and Westminster politicians.  After all, the coalition government must be seen to have a policy on ‘rebalancing the economy’.   Devolved government initiatives in 2014 and 2015 for Manchester and the so-called ‘Northern Powerhouse’ are now being pushed as follow-ups to George Osborne’s 2010 ‘march of the makers’ (a march of course that never happened).  After day trips to Manchester, London-based journalists are obligingly hyping it all.  The planned devolution of responsibility for health and social care to statutory organisations in Greater Manchester was carefully choreographed; and the papers were then filled with admiring profiles of the Manchester deal-makers who had allied with the Chancellor to create the ‘Northern Powerhouse’.

The Manchester deal-makers have real achievements to their credit, but these do not signal a decentralisation of power or resources; they derive more from the shrewdness with which a small group around Howard Bernstein and Richard Leese (respectively Chief Executive and Leader of Manchester City Council) have played the game of extracting resources from a Treasury that manages what is just about the most centralised system of local authority funding in Western Europe.  The planned devolution of social and health care is all of a piece with the Town Hall’s established style of deal-making.  Devolution in Scotland followed a decade-long debate involving a wide range of organisations in civil society; ‘devo Manc’ is the result of confidential bargains between the Treasury and a small group of local deal-makers, mostly on the City Council.

The absence of any consultation with anyone in the area of Greater Manchester is the more remarkable because the current health and care deal is a gigantic pig in a poke.  None of the details are yet clear, but one thing is certain: in envisaging an integration of health and care budgets, decision-makers at the metropolitan centre are devolving desperately hard choices away from Whitehall at a moment when social care funding has been cut to crisis level and more cuts are required.  The idea that the care system can solve the problem of NHS hospital ‘bed-blocking’ is also naive, not least because health is free at the point of use and care is explicitly means-tested.

In ‘devo Manc’, such views as have been expressed by citizens have generally been brushed contemptuously aside.  An integral part of the latest measures is the introduction of an elected city-region mayor. This proposal fits with Whitehall and Town Hall ideas of a leadership that gets things done; just as infrastructural improvement within and between Northern cities fits with Whitehall ideas about agglomeration.  Better transport is popular, but a proposal for an elected Manchester city mayor was rejected by voters in the referendum of 2012.  Voters will not get a second opportunity to judge this initiative, for the very good reason that the deal-makers fear a second rejection.  Rather like not very bright students set a test they are deemed to have previously failed in, the electors will be denied the chance of a referendum resit.

‘Bringing decision-making closer to the people’ is a rhetorical claim which does not bear examination.  And that is a tragedy because imaginative and radical policies with a popular mandate are required to deal with the problems of Greater Manchester.  The leafy southern suburbs are doing alright, but the city itself and Northern satellite towns like Oldham or Tameside are not a ‘powerhouse’ at all, but are actually more of a ‘poorhouse’ containing  some of the most deprived parts of the UK.  Other deprived cities have council leaders who make ‘jaws of death’ presentations about rising demand for service areas vs limited revenues that produce problems with the funding of statutory services.  By contrast, Manchester City Council leads the Association of Greater Manchester Authorities which welcomes devolution and has a strategic plan for escaping the ‘jaws of death’ by getting more of the population back to work.

That ambition is hardly credible because the property, retail and leisure model that has transformed the central city area in the past twenty years has created a new parallel economy, rather than sorted out the disemployment consequent upon deindustrialisation in east Manchester, Wythenshawe or Oldham.  The city was hard hit by the post-2008 downturn. The number of people claiming Jobseeker’s Allowance (JSA) in Greater Manchester almost doubled from 41,845 in January 2008 to 79,275 in June 2013.  Young people were especially severely affected: one-quarter of JSA claimants were aged 16-24 and the unemployment rate for that group rose from 6.3% to 9.8%.  What’s more, many social problems are getting worse because the austerity politics pursued since 2010 has been just as disastrous for Manchester as for other Northern cities.  In the years 2010-15 the City Council suffered (largely central government-initiated) cuts of £250 million.   In the latest round  Manchester will have seen its funding  cut by over £247 per home; the comparable figure for the South-east is as little as £12 per dwelling.

Manchester’s problems need to be set in context as part of intractable and growing problems of regional inequality in the UK.  These have defeated central policy-makers with their orthodox policies of infrastructural improvement and training.  The Centre for Cities audit of city performance in the ten years to 2013 makes sobering reading.  Cities in the South grew at double the rate of cities elsewhere; growth in the number of businesses in the same group was nearly double that of those in the North between 2004 and 2013.  For every 12 net additional jobs created in cities in the South, one was created in cities elsewhere in Britain.  Private-sector job creation actually went into reverse in the North.  The scale of the de-industrialisation challenge was such that, by 2013, Manchester still had 90,000 fewer jobs than it had in 1951.

Such evidence indicates that the problem is historically deep-seated, which means that it is highly unlikely that devolution in its present form will give the city region of Manchester the financial resources, administrative capability and policy imagination to manage these genuinely structural problems.  We could argue about what needs to be done.  But the fundamental point is that ‘devo Manc’ is not doing enough if it only offers bits of money and devolved authority to an elected mayor whose role will be to manage more cuts and preside over unsolved structural problems.  Centralisation has certainly disappointed, but this kind of ‘devo Manc’ decentralisation is bound to fail.

The authors are members of the Manchester Capitalism research group at the University of Manchester Business School.  See http://www.manchestercapitalism.co.uk/

Print page

Categories: Development, Economics, Politics and policy, Social science, SPERI Comment | Tags: , , , | 2 comments

Articles and comments posted on this blog reflect the views of the author(s) and not the position of SPERI or the University of Sheffield.

Comments (2)

  1. A very similar critique could be offered in relation to developments in the North East of England. Until there is a detailed debate on what the state can/should do or cannot/shouldn’t do and how it will perform its role, then any initiative will fail. It’s also important that the sub-regions within the umbrella concept of “the North” try to communicate to ensure that there is some cohesion/sharing of ideas in terms of plans and proposals.

  2. I would not disagree with any of the article, including the insular dominance of the governing clique – a duo now in continuous power since (correct me) 1996. Bernstein a little longer with the previous leader (disappeared without trace). Someone once called it ‘enlightened despotism’. Enlightened? However, Manchester sure is victim (indeed, one of the better off victims) of the restructuring of the UK economy and, I would say polity, towards the state servicing of the global financial sector, now completely intertwined with the state. Like many other countries – one thinks of Russia – there is simply no need for most of the population of the UK. They have no claims on the state anymore, other than forlorn hopes of some economic revival based on culture (good luck with that) and advanced manufacture (ditto). In this context Bernstein and Leese are probably doing the right think in their book: better to be screwed by one of your own than an unknown stranger from the metropolis.

Leave a reply

Required fields are marked *