How mayors can help improve public services

A short bonus post this week (my main one is coming at the weekend) as I have a report out on mayors and public services which may be of interest to readers. It was written for Labour Together, not because I have become a Labour member, but they are well connected with the new government and I’m keen for these recommendations to land. So far the expansion of the mayor role has been a cross-party endeavour and I’m hoping it stays that way. It was also written up in the Guardian and FT.

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The first section of my book explains why centralisation is behind many of our problems. England has always been relatively centralised (obviously much is devolved to the other nations of the UK) but this has got a lot worse since Margaret Thatcher went to war against local government in the 1980s.

Since then councils have lost much of their control over housing, education and other services, as well as seeing their funding not just slashed but tightly constrained, preventing them from raising council tax beyond tightly prescribed limits.

At the same time demand has been rising rapidly for most of the things they are still responsible for like social care and special educational needs, which has forced them to cut remaining discretionary spending on early intervention and services that benefit the taxpaying majority like libraries and parks. What funding there is tends to come in small time-limited pots that they often have to bid for which makes it hard to coordinate or plan.

Whitehall has taken on responsibility for almost everything that happens in the country, and within central government there has been another wave of centralisation into No. 10 and, particularly, the Treasury. This has made No 10 unworkable and the Treasury the default dominant player in deciding government strategy. But however smart and brilliant the people in Downing Street or HMT they cannot help but be overwhelmed by the sheer number of decisions in which they are now involved.

The loss of state capacity outside the centre has also created an unhealthy dependence on large for-profit outsourcing firms that, despite responsibility for numerous failures, keep winning contracts because there are no other options.

In the book I argue that the one positive counter-development in recent years is the rise of city mayors, or technically speaking, mayors of combined authorities. These grew out of a little noticed bit of legislation passed at the tail-end of the last Labour government. This was jumped on by a Coalition government looking for ways to stimulate regional growth. George Osborne insisted that combined authorities had a mayor, partly in the hope some would be Conservatives, and partly to ensure greater accountability. There are now eleven in place, with another two waiting to be approved by Parliament, and more in development. London, of course, also has a mayor, though this was developed earlier and with a different framework. Most people in England now have a mayor.

To date their role has been largely economic with their major responsibilities covering transport, skills and development. But, as I set out in the report, some of the more established mayoralties, like Greater Manchester, West Midlands and South Yorkshire, have started to get more involved in public services.

Good examples include Greater Manchester’s involvement in probation, which has led to a halving of reoffending rates for women, and a number of successful employment pilots in South Yorkshire. Manchester have also got involved with the local health and education sectors, often using the convening power of Andy Burnham rather than any statutory powers.

Expanding the mayors’ role in this space is an obvious next step. First because it’s much easier to join-up service delivery locally than it is from the centre, with each Whitehall department much further away from service users and defending its own empire. It was really noticeable when I was interviewing people working in mayoral authorities how naturally they switched between talking about different services when discussing their programmes, regardless of their nominal title. This just doesn’t happen in central government departments.

Secondly, the public services / economy divide doesn’t make much sense in practice. A sick workforce is more likely to be inactive. A less well educated one will be less productive. The prevalence of crime, rough sleeping, and anti-social behaviour are critical to the economic wellbeing of urban centres and shopping areas. Giving mayors responsibility over these things will boost their ability to generate regional growth.

Then there’s the fact that the centre of government simply cannot be strategic about high level policy because it’s so involved in the day-to-day management and oversight of service delivery. Departments like the DfE and DHSC are forced into using crude forms of target-based accountability because there’s no other way of managing from the centre. While targets can be useful they need to be supplemented by local intelligence to work properly.

The challenge for those of us in favour of decentralisation is that mayoralties are fragile. Most are still very new and not properly established. Many parts of the country don’t yet have one. Some (like in the West of England and Cambridgeshire/Peterborough) are struggling. Shifting services over wholesale, in a hurry, could knock them over completely and undermine the broader argument.

So my proposals in the report focus on a set of principles that, if applied, would see the capacity of mayoralties built up over time, allowing for a gradual shift of responsibilities away from the centre.

1. Unify key roles overseeing regional services in the person of the mayor. We have already seen this happen with policing, as several mayors have become police and crime commissioners (in practice the work is done by a deputy). This could also happen for other services like health, with mayors chairing the regional bodies (called integrated care boards) that the NHS has set up to manage delivery.

2. Doing this would require making the various regional structures used by central government to deliver services match the mayoralties. One reason Greater Manchester has been able to go further than others in thinking about public services is the regional structures for health, probation and policing happen to match their boundary. Whether this is true elsewhere is arbitrary, and in other cases, like education, the boundaries never match. This makes no sense.

3. When central government decides it wants to set up a new programme – like tuition for school students or a pilot of a new scheme to help disabled people into work – they typically contract out to a for-profit company. I propose that in the first instance they should offer the job to mayors who could then commission locally. This would help build state capacity.

4. Mayoralties could, more broadly, be built up as centres for commissioning in their region to support local authorities who are currently being screwed by private equity owned for-profit companies. The most egregious example, which I’ve written about before, is children’s homes. Greater Manchester are running a programme to set up some of their own homes that their constituent local authorities can buy into. This is a much better approach. The same could be done for other services like adult social care and nurseries.

5. Finally the Treasury can help out by combining all the various little pots of money mayors get from departments for public services projects into a single budget that they can control properly, allowing for more autonomy over what to prioritise. This is in development for their current economic responsibilities already.

In the final section of the report I raise some questions around the broader development of the mayor role. How much should their roles be standardised? Is it possible to insist they perform certain functions or does that cut across their ability to determine their own priorities? How do we ensure all parts of the country have a mayor? Can it be done through inducement or will it have to be forced at some point?

Perhaps most importantly what fiscal powers do mayors need to really make their role meaningful? If they cannot raise their own money they will always be supplicants to central government, creating a problem for both sides, and preventing genuine decentralisation. England is the most fiscally centralised country in the developed world and the ability to vary local taxes, as happens in almost every other country, seems critical for the long-term viability of devolution.

The report has been well received across government, and in mayoral authorities, and I’ve had a lot of positive discussions with officials and advisers. There does seem to be a genuine desire to devolve and real hope that it will be a substantive legacy for this government.