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How 'historic' is Andy Burnham's new deal with the government?
'It's not even explaining it to an alien that would be hard, it’s explaining it to any citizen of Western Europe'
By Joshi Herrmann
The negotiations lasted less than a year, but in that time the emissaries sent by Greater Manchester to extract new powers from the government had to deal with three different administrations. The talks began with a government led by Boris Johnson, continued during the brief days of Liz Truss and then concluded in the era of Rishi Sunak.
Trying to persuade Whitehall to agree to give up new powers and funding streams to Greater Manchester and the West Midlands — the city regions that were offered enhanced “trailblazer” devolution deals in last year’s Levelling Up white paper — was never going to be easy. But the chaotic nature of Westminster politics made it even harder to predict which of Andy Burnham’s big asks — including new powers around transport and skills, as well as a significant change to the way this region is funded — would be forthcoming.
Back in Manchester, key figures received progress reports on the talks: a sheet of the key demands marked in green, amber or red, along with updates from the negotiators. “They're finally agreeing to give us this,” they said, or “We're hitting a brick wall. They're not in our space at all.” At the start, the sheets had a lot of red, but slowly Greater Manchester’s envoys started to notch some wins.
“There were very few moments where there were serious kick-offs — it was pretty constructive,” says one senior figure close to the talks, who says Levelling Up secretary Michael Gove was “pivotal” in the process, working on other ministers in Westminster to take the idea of devolving powers and money seriously.
The worst moment came soon before the negotiations were supposed to finish — which was just weeks ago, when the government made an unexpected demand: Greater Manchester would have to contribute to the costs of HS2 if it wanted any concessions on transport, a demand not made of any other area along the route. “That kicked off entirely and then the government backed off,” says one person involved. The issue was dropped and the deal was agreed.
Blazing a trail
“The signing of this deal marks a new era for English devolution,” said Andy Burnham, while the MEN called it a “historic moment”. Levelling Up minister Dehenna Davison, up in Manchester for the day to sign a non-binding piece of paper alongside Burnham, said: “Manchester is once again blazing a trail for others to follow.”
The joint document released earlier this week described the deal as “unprecedented in both breadth and depth”. What does it do? It “equips the Mayor and Greater Manchester Combined Authority with additional tools to unlock the economic potential for Greater Manchester for their residents and businesses and demonstrate levelling up in action.”
But what does that mean? What are the wins? (We’ll come to the disappointments in a second). In our conversations with half a dozen insiders and local leaders in the past week, everyone pointed to one aspect of the deal as the most important bit. Unfortunately, for the purposes of The Mill’s house brand of exciting, immersive storytelling, the aspect they pointed to is one that sounds exceptionally dry: a change to the mechanism for how Greater Manchester receives its funding from the government, known as the “single settlement”.
In order to psych yourself up to care about the single settlement, it’s worth noting that in any conversation you have with senior political figures in this city, a common theme is that their actions are highly constrained by their lack of hard powers (Britain, as we know, has an unusually centralised political system) and by the fact that their government funding comes down to the Greater Manchester Combined Authority (GMCA) in chunks of money designated for a specific purpose (skills for under-18s, transport, employment support) and with a specific timescale. The single settlement changes that, by promising that in the future Greater Manchester will get one chunk of money which Andy Burnham can spend with much more autonomy.
“It changes the nature of devolution from 'a mayor with a couple of things he does' to 'the mayor actually can make decisions around lots of different things,’” explains one senior source close to the negotiations. “That's why it's a game-changer.”
The problem with the current system, one official explains, is that it isn’t really about devolving funding to places like Greater Manchester — it’s really just delegating the administration of something that has been decided elsewhere. The pre-determined funding streams — which all have their own timescales and their own conditions attached from various Whitehall departments — inhibit the ability of the city region’s leaders to do what the combined authority was in fact created to do: use its local knowledge and influence to “coordinate across different policy levers”.
What does that mean in practice? Officials say that under the current arrangements, it is difficult to get key projects off the ground because funding them would involve prising off a bit of money from the housing budget and a bit from the health budget and a bit from the brownfield funds, which is often impossible because of how restricted those funding streams are. The single settlement would give them much more freedom and flexibility to coordinate different budgets in order to get things done.
The single settlement has another important implication: it means that the government would be delegating funding for certain policy areas rather than specific policy initiatives. That matters because at the moment a minister in Westminster could decide to reduce one funding stream that flows via Greater Manchester and increase one that is administered more centrally, and in one fell swoop, that money would be gone from Burnham’s coffers.
As the deal document puts it: “The government and GMCA recognise that the current system of funding for mayoral combined authorities is fragmented, overly reliant on centrally administered funds, and lacks clear, lean and proportionate accountability structures.” It goes on to say: “GMCA will receive the same level of long-term certainty over funding as government departments receive.”
All in all, the single settlement agreement is considered highly significant and seems to mark a step towards greater maturity in how the government sees devolution to the English regions, trusting leaders like Burnham to make difficult decisions. But whether it actually happens is another question. Greater Manchester is promised its settlement “at the next spending review,” which could be next year but many expect won’t happen until after the next general election. In which case, Burnham’s team of negotiators might have to suit up for another round of talks, possibly with a Labour administration this time.
“It’s not perfect, but it’s much more than another marginal step forward,” says former Downing Street advisor Mike Emmerich when I ask for his take on the trailblazer deal. “I think it’s the point at which devolution has gone from being purposeful experimentation to proper implementation, albeit on an incremental basis.”
Emmerich, an economist by training and a longtime advocate for devolution, was a crucial player in the original 2014 deal that created Andy Burnham’s role, as well as handing certain powers over transport, employment and skills, policing, housing investment and business support to Greater Manchester. There have been five subsequent devolution deals with the government since then (covering things like health and public sector reform), but everyone I speak to agrees this latest one is the most significant step forward since the 2014 agreement.
“The way we do things is by evolution — we tend not to do the French-style plan-led process of Grand Projets,” says Emmerich. “It is par for the course for how things happen in this country, and this looks like it is heading in the right direction, albeit more slowly and cautiously than people like me would want.” When Emmerich saw Michael Gove speak at a major conference about northern politics recently, he left the speech with the feeling that “the genie is out of the bottle and she’s not going back in.”
Outside of the single settlement, there is much less to get excited about. Greater Manchester is getting some money for brownfield land remediation, which one source describes as “very helpful”. In the crucial area of skills, in which Burnham strongly believes, Greater Manchester has been given more leeway to direct local courses so that they train people up for the skills the job market actually needs (“it definitely feels like a step change in what up to now has been a very centralised one-size-fits-all system,” says Professor Andy Westwood from the University of Manchester, who knows this area well).
In transport, the deal backs Greater Manchester to deliver ticketing integration across bus, Metrolink, rail and cycle hire by 2030, although Burnham didn’t achieve his bigger ambition to bring rail services fully within the emerging Bee Network, putting them under local control. There’s also a small amount of money — just under £4 million — “to eliminate the use of bed and breakfast accommodation for homeless families in Greater Manchester”, which Mill readers will know is a huge local problem.
In return for new powers and funding, the government has insisted on beefing up the scrutiny of Burnham and his officers, with regular sessions at which local MPs will be able to question the mayor and other portfolio figures in “public, broadcasted sessions” described by one Labour figure as “a chance for some Tories to bash Andy”.
‘Of course, we will shout it from the hilltops’
Early on, it became clear that one key party to the talks wasn’t playing ball: the all-powerful Department of Work and Pensions. “From the beginning, they were very reluctant to get involved in the negotiation,” says one source who was briefed about it at the time. That was a problem because one of Greater Manchester’s ambitions was to secure a greater role in “back to work” programmes — an area where the city region has shown success in a recent pilot scheme.
“We had a really modest ambition here — we weren't asking for Universal Credit or benefits,” says the source, but Whitehall negotiating rooms are where many modest ambitions go to die. As a result, the final text of the deal is weak when it comes to jobs, deploying phrases like “consideration of potential employment support pilots and commitments to explore data sharing”.
Prising powers out of the dead hands of the British state is hard, as generations of devolutionists know only too well. It’s why when you read the trailblazer deal and its hundreds of small-fry clauses (“The government recognises GMCA’s ambitions to introduce simplified side road zebra crossings,” was my favourite) and wafer-thin promises (“The government commits to urgent work with GMCA to identify the specific legal powers needed for TfGM to effectively tackle antisocial behaviour,”), you start to mentally calculate how many centuries or perhaps millennia it would take, at this pace, to achieve anything resembling the kind of devolution practised with great success by other industrialised nations.
“In the context of other countries, you just can't explain it — what are you celebrating?” says Dr Nicola Headlam, a former head of the Northern Powerhouse, who has studied devolution during her time as an academic. “In normal economies that aren't subject to this insane centralisation, how would you explain this? To a German? It's not even explaining it to an alien that would be hard, it’s explaining it to any citizen of Western Europe.”
Despite all that, Headlam — who serves as chief economist at the Red Flag Alert consultancy — thinks that the trailblazer deal is “very overdue and sensible” and is a “vindication of the sensibleness” of Burnham and his team, “in terms of playing the ball in front of them and not being too hostile to central government”.
One of the sources we spoke to who was close to the negotiation agrees with Headlam that much of the document is sensible and counts as progress, but warns against headlines about “historic steps”. “You've seen the bland press releases but when you dig under the surface, you're not really sure what the wins are,” the source says. “Of course, we will shout it from the hilltops that this is the most important deal done and that it shows English devolution is alive and well, but there's not a lot in it if we're brutally honest,” the source says. “It's baby steps on the way to stronger devolution.”
For Burnham’s team, thoughts now turn to implementing the limited new powers they have been granted immediately — including over things like employment skills “bootcamps” and brownfield funds. But the most significant moment will be negotiating that all-important single settlement and the timing for that is out of their hands. “I don't expect a spending review under the Tories — you don't do one going into the election,” says one source. In which case, don’t expect any major changes in how Greater Manchester is governed for a while.
If it’s Labour who will be in charge of the next major talks, people like Headlam would like to see a much less gradual approach. “Radical devolution now needs to be on the table, not incremental,” she told me. “Two cheers for Greater Manchester for extracting the maximum available and playing that game again. But the fact they have to play it again is absurd. The endless conditionality that is placed on these things — I don't mean to be sniffy about their achievement in taking the max in what was available, but I am more ambitious for this country. The government is not supporting industries in any serious way. You need to reach for something else from your toolbox.”
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Fancy some related reading? Try our story London knows best: How the dead hand of Whitehall strangled Britain.