Left and local? What’s next for Labour’s devolution agenda under Corbyn?

While Labour were in government, they tended to address socio-economic challenges through a national frame. But during the party’s first term of opposition it began to create space for local responses. The 2015 manifesto included proposals to devolve economic power, some public service reform around places and a “new English Deal” for local communities.

Yet these plans for devolution ran up against the still dominant instinct in the party to retain power and direct it from the centre. Now that Jeremy Corbyn has been elected on a platform of national economic reform, a strong role for the state and a ‘new politics’, what does this mean for Labour’s fledgling devolution agenda? Looking at the messages from Corbyn during the leadership election and the initial priorities set out by the new shadow cabinet, there are hints of a new approach, and some emerging questions which will need addressing by Labour’s new leadership in the weeks and months ahead.

What are the policy implications for local government of the politics of anti-austerity?

Corbyn has been clear that he views austerity as a political choice rather than an economic necessity, although the policy specifics of this position have yet to be fully realised, especially with regard to local government. With the spending review just around the corner in November, pressure to articulate the practical implications of Labour’s anti-austerity stance will grow.

Will the Labour party view councils primarily as sites of potential political resistance against the government’s spending reductions? Or will its commitment to challenge “fiscal orthodoxy” lead it beyond simply defending the status quo to develop new policies that address the future financial sustainability of local government?

During the leadership election, Corbyn stated he is in favour of giving local government the power to increase the proportion of its funding raised locally (in accordance with principles of equalisation); indicated that he is open to a “whole place approach” to budgets and funding; and advocated removing borrowing restrictions on councils to build housing.

Under a Labour party more open to fiscal and financial reform for local government, could policies that it not recently had the political appetite for now be on the table? Previous “no-go” areas such as council tax revaluation, removal of council tax referenda thresholds and the ability to retain a larger share of locally-raised revenue could all be possibilities. The politics of this would be interesting – although these areas seem unlikely to be substantively opened under this government, there would likely be cross-party political support in local government, including from the Conservative-led LGA which has advocated similar.

Can Labour be anti-austerity and pro-reform?

The Conservative government is pursuing spending reductions and reforms to devolve power in tandem. Since the Labour party challenges the premise of the former, where does that leave its appetite for the latter?

Corbyn has referred to the government’s northern powerhouse agenda as a “cruel deception” which devolves cuts without power, and the new shadow communities secretary Jon Trickett has said that “devolution tied to spending cuts will not work”. So if the Labour leadership is sceptical of the government’s motives behind devolving power, would it recognise the efficacy of a more decentralised state at all? Corbyn is certainly alert to the need for a different approach to the north of England. His Northern Future report does not claim to be a definitive blueprint, but does contain some interesting insights.

The report identifies the geographic element of inequality and includes an analysis of regional imbalances in the national economy. Although it establishes a range of areas that need to be addressed for the north to prosper – industrial growth, transport, housing, education and skills, arts and culture – the solutions are almost all national. A new national investment bank, a national education service, new national flagship arts organisations and even a national targeted graduate scheme to promote careers in industry, would all be charged with reinvigorating these poorly performing sectors. There is a clear commitment to relocate government departments outside of London, but this is not the same as committing to relocate Whitehall functions outside of the capital and closer to communities.

The risk is that these identified components of successful local economies would each be subject to separate strategies driven independently from the centre, rather than Labour pursuing more sustainable strategy of empowerment for the north (and other regions) by devolving and aligning the full range of levers locally to both promote growth and ensure local people benefit from it.

There are signs that Corbyn’s Labour sees a clear role for local authorities in a number of emerging policy positions: building council housing; the reinstatement of local accountability over all schools and TfL-style transport powers in all cities. A key question will be whether this is just because the local state is the closest substitute to the local private markets – of housebuilding, academies and free schools or public transport – or whether the dots join up to a comprehensive reform agenda for a more decentralised statecraft that is an inherent good in itself.

What does ‘new politics’ mean for local democracy?

Finally, with Corbyn’s emphasis on a new politics and a different style of leadership, Labour will likely adopt policies that seek to reinvigorate local democracy and enhance democratic accountability. He has stated his opposition to the government’s imposition of directly elected mayors as a condition of devolution, and expressed a preference for all members of a local authority to have a strong democratic role – but not yet spelt out what this means in practice.

Jon Trickett is also shadow minister for a constitutional convention, a process Corbyn has set out would engage with civil society, local authorities, businesses and the public to address questions of governance. It is likely that the full range of constitutional questions for England will be part of this – including electoral reform and reform of Westminster institutions – all of which have opportunities and potential consequences for local democracy, representation and participation.

It is early days in Corbyn’s leadership of Labour. As the dust settles after the shock of his winning the leadership from the backbenches, Labour’s approach to devolution and local government will soon come into focus as the government pushes ahead with the northern powerhouse agenda and a series of devo-deals expected this autumn, many with Labour-led authorities. The central versus local debates within Labour look set to continue.