APPG on Decentralisation

RTPI Evidence to APPG for Reform, Decentralisation and Devolution in the UK

1 October 2015

Introduction

The Royal Town Planning Institute (RTPI) has over 23,000 members who work in the public, private, voluntary and education sectors. It is a charity whose purpose is to develop the art and science of town planning for the benefit of the public. The RTPI develops and shapes policy affecting the built environment, works to raise professional standards and supports members through continuous education, practice advice, training and development.

APPG Answers

1. Devolved nations:

Devolution of legislative and fiscal competence to and within England, Scotland, Wales and Northern Ireland, including in the Scotland Bill and the Wales Bill.

The RTPI has been advocating an approach of subsidiarity in its policy work across the UK[1] and, for example, is supporting the allocation of powers to county and city regions in England; the transfer of powers on renewables from theUK Parliamentto Wales and the move of powers fromDOENIto local authorities in Northern Ireland.

While planning powers are devolved to Scotland, there are a number of issues - for example renewables, welfare, taxation and infrastructure – that have an impact on planning that are not fully devolved. Given this, inour submission to the Smith Commission,[2] the Institute set out 10 principles that we asked it to adopt in taking forward its work. We felt that these would help planners working to help deliver better places and we emphasised that they should be taken forward within the context of the outcomes based approach that is in place in Scotland.

The principles are:

  • Subsidiarity – that any new powers are vested in, and exercised, at a level that will be most effective in supporting all parties to deliver better places in Scotland. These levels include UK, Scotland, the city regions, local authorities and communities. Examples of this include welfare (especially the bedroom tax) and capital gains tax which have an impact on planning and the housing market
  • Coordination – that any new powers support and complement the ability to coordinate approaches to planning across the borders within the UK, and consider and support joined up consenting regimes that affect, for example, planning for renewables, marine areas and infrastructure
  • Appropriateness – that any new powers allow Scottish Government and its partners to develop specific approaches to tackle Scotland’s specific needs where this appropriate
  • Resourced – that any new powers are properly resourced to ensure their effective implementation
  • Aligned – that any new powers complement and don’t contradict or ‘get in the way’ of other powers that are devolved
  • Engagement – that any new powers are consulted upon and that Scottish Government works with its delivery partners in assessing how best to make them work
  • Spatial – that any new powers are examined in terms of how they will impact on the different geographies of Scotland so as to promote better integrated approaches. Too often subsequent policy approaches are programme or silo-based
  • Monitored – that the implementation of any new powers are monitored to check on their effectiveness
  • Sustainable – any new powers should be used to support the overarching principles of sustainable development
  • Long term – any new powers should be drafted to ensure that they support Scotland’s longer term plans, ambitions and aspirations. They cannot be focussed on merely providing short term fixes

We are of the view that these principles are not only applicable to the devolution of powers to Scotland but also to contribute to the debate on powers for other devolved nations of the UK; from national governments to strategic planning authorities and local government; and from local government to communities. They comprise a comprehensive and progressive checklist that can bring a rigour that helps shape how the distribution of power can be used to best effect.

2. Local government:

Devolution of legislative and fiscal competence to local authorities within the United Kingdom, including in the Cities and Local Government Devolution Bill

From a planning point of view devolution has the potential to deal with a number of pressing concerns:

  • Devolution is important to better delivering homes and jobs through urban planning.
  • Solutions need tailoring to local circumstances, especially the contrast between met and non-met areas.
  • Devolution may assist in integrating areas that are related but separated in central government departments such as new housing and health provision.
  • Relations between devolved areas (city regions, counties) are vitally important to housing delivery. They may be assisted by having single leaders who can negotiate with other areas and with government.

The RTPI has previously argued that institutions at local, regional, city, national, and international level need to be equipped with the skills and resources to make and implement decisions if devolution is to be effective.[3] The evidence points to the need to bind together devolution of legislative and fiscal competence if it is to be effective in creating economically successful places.[4]

The UK is one of the most fiscally centralised of all OECD countries, with just 4.8 per cent of all taxation attributed to all levels of government below the centre.[5] The highly centralised approach to tax and public expenditure within the UK means that the level of expenditure within any region, city our county is virtually entirely a matter for the Treasury and other central departments. The regionally imbalanced nature of domestic economic growth suggests that centralised tax setting and public expenditure may exacerbate regional economic disparities rather than improve them. Therefore If the Chancellor’s stated goal of economic rebalancing is to be achieved, the centralised approach to tax and expenditure needs to be reconsidered. In this context it is encouraging that England’s city regions are being promised that they may be given some additional, autonomy over elements of public expenditure and, marginally over growth in the local tax base[6]. However this needs to be about giving city-based regions more power to raise money and spend it as well as more power over planning, transport, homes, schools and health.

In the spatial planning arena, it is important for key officials in a city region to think effectively of the conurbation as a whole as well as about their own local area. Given the strategic nature of issues like housing, any new arrangements should encourage officials to think about the wider spatial consequences of decisions rather than just focusing on the consequences of decisions on their locality. Devolution of legislative and fiscal competence should reflect the importance of this larger than local thinking.

Governance arrangements for decentralisation

The ESPON project, Secondary Growth Poles and Territorial Development (SGPTD), which examined core cities in Europe found that one of the main leveragers of competitiveness and performance is strategic governance capacity. So it is clearly important to have appropriate governance arrangements in place. However each area is unique and faces different challenges with different strengths and weaknesses. It is therefore difficult to talk about the appropriate governance arrangements for decentralisation.

According to the Chancellor one of the aims of the decentralisation agenda is to make people feel less remote from the decisions that affect their lives.[7] The measures explained in the forthcoming Devolution bill, whereby directly elected mayors sit at the top of a city region hierarchy, risk underplaying the potential of devolution. A town hall bureaucracy can feel just as remote as a Whitehall one.

The uniqueness of places is grounds for having locally tailored governance arrangements. Decentralisation is vital to delivering effective public services and a sense of effective democracy, but an appropriate style needs to be found for it. The best decentralisation is locally-devised as is evinced by the success of greater Manchester. Therefore the most suitable type of governance arrangements for decentralisation should not be decided centrally, but should be locally designed. In this context we have identified as necessary for success in city-region governance and urban planning:

  • Benefits for all parts of the conurbation/all areas thinking of the whole not just their part
  • Bottom-up, locally designed
  • Covering a wide-range of public policy areas e.g. including public transport management
  • Strong local political buy-in
  • Good links with business

If devolution is to be effective it is important to align governance arrangements with real functional economic areas. While traditional administrative boundaries still serve a purpose, the challenges around housing, transport, and other matter of strategic importance suggest that the boundaries that need to be applied at each level are often very different from many current boundaries. Such challenges often need coordination across a wider area than a single administrative boundary. In many parts of the country there is currently a democratic deficit whereby decisions taken in one area critically affect the well-being of communities elsewhere who have no effective voice in the decision-making process. Making these decisions at the appropriate geographic scale will not only increase the likelihood of effective implementation; it will also make it easier to ensure that a degree of fairness between localities is observed.

Sustainable funding system for local government

There is now a build up of evidence to buttress arguments for the potential benefits of devolving taxes to city regions. In 2014 the CLG select Committee[8] suggested property taxes should be devolved to all city regions. The RSA City Growth Commission[9] also suggested that city regions would be a good basis for further fiscal devolution.

Apart from doing little to address regional economic disparities, the centralised mechanism of funding for local government makes it difficult for the Department of Communities and Local Government to grasp the impact of funding reductions on the financial and service sustainability of local authorities. This leads to a raft of unintended consequences whenever cuts in funding are made, not least cuts to local planning authorities. Whether or not the funding system is devolved, oversight of the financial viability of local authorities needs to be strengthened. This may be easier to do though self monitoring in a more decentralised funding system

Aspects of the local government funding system, such as the use of ring fencing and protection of certain budgets and lack of flexibility in the generation of income - while in some cases understandable - get in the way of delivering efficiencies to deal with the lack of finance and resourcing. Many of the core and key cities have put convincing cases forward for local business rate retention. This would allow areas to fund services in a more efficient and effective way than is currently the case, where locally raised taxes go back to central government only to be redistributed back out to local authorities – a process which is itself quite costly.

City Deals offer a new funding stream to local government, and have been used successfully to incentivise coalitions of local state actors in several areas to develop strategies and identify and prioritise ‘asks’ of central government. This has led to the funding, financing and delivery of infrastructure and to the formulation and implementation of new initiatives in policy areas such as skills and business support. We think they could go much further, especially in the housing arena.

Planning issues such as housing and transport are fundamentally strategic, as local economies don’t stop at administrative boundaries. 50% of commuters live and work in different local authorities,[10] and the porous nature of these boundaries means that it is crucial to foster cooperation between local authorities in order to agree on issues of housing, employment and infrastructure. The ‘duty to cooperate’ provisions of the Localism Act have worked well in some areas but are not enough - something additional is needed. Our work on strategic planning[11] has shown that it is best practice for areas undertaking strategic planning to have effective discussions with adjacent areas. For example coordination between city regions on the Liverpool-Manchester-Leeds/Sheffield axis is important. And there is a very urgent need for better and more effective discussion on planning the London-and-South-East region.

A clear lesson that can be derived from the successful aspects of the City Deals programme is that when there is a positive reason offered to Local Authorities to cooperate, rather than just a requirement places on them to do so (as is the case with the “Duty” to cooperate), more constructive outcomes are achieved. In this context the RTPI has recommended[12] that the government back up its statements on increasing housing supply with powerful, effective incentives for local authorities to plan collectively and for the long-term. There is already a mechanism to achieve this with the money awarded through Growth Deals and City Deals, and future resources of this kind should be provided to areas which can demonstrate jointly agreed housing plans. This would provide a substantial incentive for collaboration on planning for housing, and would focus on issues related to housing growth.

This evidence is prepared by Joseph Kilroy, Policy Officer:

020 7929

Royal Town Planning Institute

The RTPI is a charity registered in England (262865) and Scotland (SC 037841)

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[1] See RTPI Planning Horizons Making Better Decisions for Places (2014) see

[2] See

[3] RTPI Planning Horizons Making Better Decisions for Places (2014) see

[4]Rodríguez-Pose, A. Ezcurra, R. Is Fiscal Decentralization Harmful for Economic Growth? Evidence from the OECD Countries, Spatial Economics Research Centre, London School of Economics (2012)

[5] Tony Travers Devolving Funding and Taxation in the UK: A Unique Challenge, 2015

[6] ibid

[7]

[8] See

[9] See

[10] Centre for Cities, Cities Outlook 2014

[11] See

[12] See