Effective Government Needs Real Political and Economic Devolution

Written by Graham Tope on Fri 20th Sep 2002

With over seven million people living in London, only slightly less than New York City, it surprises many that a city of such stature exist for over a decade without a strategic authority. So where were the fanfares when, eventually, the Greater London Authority was established?

London: the engine of the UK economy. Its development as a financial centre is an issue of concern not just to Londoners but to the rest of the nation. In contrast, thanks to key public services being starved of investment by successive governments, London now experiences some of the highest levels of social deprivation in the country.

Whitehall struggled to find an alternative to the "quango state" to address such issues and to give power back to regions. But the regions cannot tackle years of neglect without real political and economic devolution - and the capital has neither.

The 1999 GLA Act created a directly elected authority with responsibility for areas such as transport, the police, the fire service and economic development. However, the authority was given no direct revenue raising powers and in other spheres such as planning, the environment, culture and health only a strategic or promotional role was envisaged. Significantly, the powers of local authorities were left intact.

Providing strategic vision is meaningless without the resources and powers to affect real change. If regional assemblies are now the driving force behind regional change then why not give them the funding to tackle their problems? Devolved authorities such as the GLA need the power to both allocate and raise funds.

At present, London regional government is reliant on Her Majesty's Treasury. Eighty one per cent of the GLA budget is raised from government grants with only 11 per cent coming from council tax and eight per cent from various fares and charges. This compares to New York City's sources of income, which range from real estate tax to utility tax, commercial rent tax and even hotel room tax - 60 per cent of New York City's funding is raised from local taxation. If the current Labour administration is serious about bringing government closer to the people it needs to illustrate its support for devolution in London by redressing the balance.

The Government's unwillingness to hand-over power is symbolised by its bloody battle with the Mayor over the future of London Underground. Ken Livingstone assembled the best transport team in the world, headed by Bob Kiley, only to find that they have no control over the transport system they have been brought in to run.

It's not all bad news. With its successes, London can provide a model for other regions. In areas such as scrutiny, the London Assembly has attracted critical acclaim. The congestion charging scrutiny, chaired by Liberal Democrat Assembly Member Lynne Featherstone, has become a model for efficient and detailed scrutiny. The influence of the Assembly is maximised when cross-party consensus is reached and the body can speak with one voice.

The importance of functional bodies should not be overlooked in an analysis of devolved government in London. As members of the London Assembly, we have perhaps more power and influence through our individual positions on functional bodies, such as the Metropolitan Police Authority, than on the Assembly, the body we were elected to serve on.

Another aspect where the Assembly can try to set an example and provide a model of best practice is civic engagement and consultation. One important measure of the success of devolution will be the extent to which devolved bodies have been able to establish stronger connections with the people living in their regions. Polls across Britain are increasingly showing that people are becoming more apathetic and cynical about politics. This was reflected by the low-turn out witnessed during the general election. Market research carried out last year showed that 60 to 70 per cent of those surveyed in Wales felt that devolution had not made any difference to their lives. Strength of opinion in Scotland was even more marked with almost 80 per cent of Scots saying that the new parliament had not changed their lives in any way. Despite this, 43 per cent of people in Wales and 62 per cent of Scots wanted see more powers devolved.

Of course, for an organisation whose key function is to provide strategic direction to a capital city of over 7 million people, results won't be visible immediately. But a single voice for Londoners has been established, which represents them alone and collectively lobbies for London to receive its fare share of funding.

The challenges faced by the new Mayor and Assembly in London are not new. If devolution is to succeed, it will have to empower the region itself to bring about considerable improvements to public services and to restore Londoners faith in the political system. A tall order you might think. But why shouldn't London aspire? Is genuine devolution too much to ask for? The GLA is not merely a mechanism for the delivery of economic reform at the local level; it needs to be fully equipped with the powers to start tackling deep-seated problems: the serious lack of affordable housing, chronic transport difficulties and the fear of crime on our streets. The GLA can only be judged by results. If it is given the opportunity to deliver a real difference to the people of London and it meets that challenge, then it will have succeeded.