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How devolution is changing the UK, and what it means for your business

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The push towards devolution inevitably gets less attention now than it did in the pre-Brexit age. But on the ground, significant change is taking place in how parts of England are governed.

Devolution has been a prominent item on the agenda for UK governments in the past two decades. Building on the successful transfer of powers to governments in Scotland, Wales and Northern Ireland, many areas in the UK now operate as ‘combined authorities’, in which local authorities pool resources and gain control over transport, policing, planning and housing. 

In May, six areas held elections for so-called Metro Mayors, who determine the overall strategy for that particular region.

These were Cambridgeshire and Peterborough, Greater Manchester, Liverpool City Region, Tees Valley, West Midlands and the West of England. Sheffield City Region will hold elections in 2018, while a further two combined authorities – North East and West Yorkshire – have no directly elected Mayor. The formation of combined authorities is also proposed for Cheshire and Warrington, the Heart of the South West, and Dorset. 

Alongside this, a number of ‘unitary authorities’ have chosen to scrap the old county, district and city council models and create a single-tier system. Cornwall, Wiltshire and Shropshire have done this, and Oxfordshire and Buckinghamshire are taking steps to do the same.

Despite this progress in handing over more responsibility to regions, there is a sense that devolution as a concept could be losing momentum. According to research by PwC in 2016, just 20 per cent of chief executives and council leaders felt confident that local government would have more powers and responsibilities by 2020, down from 33 per cent in 2015.

Furthermore, while 69 per cent believe they will be part of a combined authority by 2020, only 36 per cent believe their anticipated combined authority will be overseen by an elected Mayor.


Scotland

Devolution started in earnest in 1997, when a referendum led to the creation of the Scottish Parliament. The new Government took control of a range of powers including economic development, education, health and housing, with more following in 2012.

The aftermath of the 2014 independence referendum saw the establishment of the Smith Commission, which led to the new Scotland Act in 2016. This devolved significant new powers to Scotland, including additional controls over income tax, welfare and employment programmes.

Wales

Created in 1998 after the referendum, the National Assembly for Wales now has primary law-making powers and, in 2014, won tax-raising powers in areas such as stamp duty.

The Wales Act of 2017 will move the arrangement to a similar one to Scotland’s, outlining a number of reserved powers with the Assembly controlling everything else, including the ability to set income tax and determine policy around roads, energy and equality. Opponents argue the assembly could end up with fewer, rather than more, powers

Northern Ireland

The 1998 referendum, held over the Good Friday Agreement, saw the creation of the Northern Ireland Assembly, with Government powers divided into transferred, reserved and excepted powers.

Aside from taxation and defence, the Assembly has power over most areas, including employment law and policing/justice. The devolution process itself has worked well; however, local political pressures have seen the Assembly suspended on several occasions since 1998, including earlier this year, pending the outcome of ongoing talks