What is wrong with the West Midlands Combined Authority and what we can do about it

Devolution is intended to be an ongoing process not a one-time event.  The WMCA will inevitably evolve and develop, and will do so under increasing public pressure as its undemocratic character becomes apparent. Here we outline the changes we will be campaigning for and why.

Birmingham Against the Cuts has long argued for more local democracy. That is why we support devolution from the highly centralised UK government to city regions, provided it does not increase regional inequalities. Devolution can mean that policy decisions are made closer to those most affected and with more input by them. Combined Authorities provide a scale of local government which matches the scale of local economic areas and other services such as local transport systems which span several local authorities.

The position of the TUC on devolution, agreed by the TUC Congress in September 2015, states that when proposals “have real democratic accountability at their heart, devolution can have benefits” with “properly funded public services” and a “mandate from the public through the ballot box combined authorities could usher in a new era of public service delivery in England that is more responsive to local need”. (1)

But Osborne’s model of devolution, and the WMCA which is based on it, meets none of these criteria:

• It is a one-sided business agenda driven by private profit not local need
• It is a threat to public services, jobs and conditions
• It is deeply undemocratic

But devolution is intended to be an ongoing process not a one-time event.  In the Scheme for the establishment of a Combined Authority for the West Midlands, published 26 October 2015, the WMCA acknowledges that ‘This deal represents a first step in a progressive process of devolution of funding, powers and responsibilities to the West Midlands Combined Authority… ‘ (para 52) (2). The WMCA will inevitably evolve and develop, and will do so, we would anticipate, under increasing public pressure as its undemocratic character becomes apparent. We will be campaigning for the reform of the WMCA based on the following three principles:

• A critical challenge to the claims for the economic strategy of the WMCA, and for an alternative primed by government investment and based on meeting social priorities and the promotion of the green economy.

• Defence and improvement of public services, the protection and improvement of jobs and conditions and the involvement of workers and service users in policy decisions.

• A radical democratisation of the WMCA with the full participation of citizens, communities and employees at every level of policy making and implementation so that it is genuinely democratically accountable.

The constitution of the WMCA already allows for reforms, such as the co-option of lay members, which can increase democratic participation. We will be arguing for it to be acted on. And the House of Commons Communities and Local Government Committee report Devolution: the next five years and beyond, published on 3 February 2016, also makes a sustained critique of the lack of democracy in the Combined Authorities policy and contains proposals which are in line with the reforms we will be campaigning for. (3) (Surprisingly, of the 56 submissions to the Committee not a single one comes from a trade union body.)

Why does the government want a WMCA?

 Neoliberalisation entails both the roll-back and the roll-out of the local state: the roll-back of traditional welfare state structures and functions and the roll-out of new neoliberal structures and functions. Osborne’s Combined Authorities are a perfect example. The roll-out of Combined Authorities is a new neoliberal political-economic project – the two aspects can’t be separated – on a sub-regional scale with several interlocking and interdependent functions which we outline as follows.

The government claims that the primary purpose of Combined Authorities is to be engines of economic growth. It is true that cities and their regions are the principal drivers of economic growth, competing in the national, European and global economy. It is also true that size matters and English cities apart from London are relatively small. (Manchester has a population of only half a million.) The West Midlands functions as an economic region, with Birmingham as its centre.

The neoliberal project of the WMCA is made absolutely explicit in the Launch Statement published by the seven councils – five of them Labour – in July 2015 (4): ‘Our objectives must be to amplify the competitiveness, productivity and profitability of private sector enterprise’ (p5.  It is spelled out again in the Scheme for the establishment of a Combined Authority for the West Midlands. (The LEPs are the three employer-led Local Enterprise Partnerships in the West Midlands.)

“The relationship between the LEPs and the Combined Authority will be seamless and will engage the wider business community, ensuring that all partners play to their strengths in contributing to a wider ambition for more and better jobs.

Investment decisions taken by the Combined Authority will reflect business views. These views, both in terms of shaping prioritisation and scheme design, will ensure that public investment is targeted to maximise business benefit, which is key to economic growth.” (Scheme, p1)

Combined Authorities constructing “the local socio-economic nexus”

Three mechanisms lock the Combined Authorities into the needs of local employers. One is control by central government. Claims that the new Combined Authorities represent decentralisation disguise the reality that they are a new form of highly centralised power.  Devolution is licensed, conditional and revocable: it is the government that decides where, what policies, what structures and what funding, with the Treasury under Osborne holding the whip-hand.  It is symptomatic that the Agreement establishing the Combined Authority is between the WMCA and the Treasury, not the DCLG.

A second mechanism is the key role of the one or more Local Enterprise Partnerships, the LEPs, in the governance of the Combined Authorities. Their representatives are seated alongside the Cabinet of elected councillors and the directly elected mayor (if there is one), and although they do not formally have a vote in effect they exercise a veto, since the whole Combined Authorities project is driven by the economic strategy that they define. So for example the economic strategy of the WMCA is comprised by the combined Strategic Economic Plans of the three LEPs (WMCA Devolution Agreement: Key Points (5)). A case in point concerns local business rates. The WMCA has the power to set and retain them, but can only raise the rates with the agreement of the LEPs.  Is it democratic to give business this much power over elected members of the Combined Authority?

The third mechanism is the consequence of the government’s decision to end the block grant funding of local councils and make them largely dependent for income on the business rate, which forces them to align with and promote local business interests and seek to attract external investment, in competition of course with other Combined Authorities.

This has an additional political advantage for the Tories: it locks the Labour councils and their leaders that govern most urban Combined Authorities’ local authorities (five of the seven in the WMCA) even more firmly into the neoliberal agenda.

The economic growth agenda is linked to an agenda for the continuing neoliberal reform of public services.  The West Midlands Combined Authority Devolution Agreement, published by HM Treasury and the WMCA on 17 November (6), states that “Our pursuit of growth will be accompanied by an agenda of innovation and public service reform that will reduce the overall level of public spending.” (p13). Thus Combined Authorities will be, like local councils, instruments relaying the ongoing savage cuts in public sector budgets, and that contributes directly to their economic agenda through providing opportunities for private profit through outsourcing and privatisation.

But Combined Authorities are projects to integrate economic and extra-economic life in a more fundamental way. The WMCA, for example, is responsible for housing, transport, the formation of the workforce from school age onwards through ‘employability’ and ‘skills’ development, and mental health. The Greater Manchester Combined Authority is responsible for the NHS and social care. The government’s intention is for metro mayors to take over responsibility for the police from the police commissioners, and for the fire service. (7)  In short, Combined Authorities are socio-economic projects which seek to integrate together the local economy and the social life of the community – combining economic production and social reproduction. It is the construction of what Jamie Gough in his theory of capitalist locality as a totality calls “the local socioeconomic nexus”. (8)

Why government and employers want a directly-elected mayor

The government’s preferred decision-making structure for CAs, and which offers the most benefits to them in terms of powers and access to funding, comprises a directly elected Mayor and a Cabinet of the leaders of the constituent councils. This model has the advantage of presenting the appearance of public accountability without the mechanisms which could make it a troublesome reality. The mayor represents a presidential form of local government, accountable only in direct elections every four years with no right of removal.  A directly-elected mayor means the government can deal with a single leader and one not tied to local political parties as a council leader is. Directly-elected mayors are ideally suited to the media’s fondness for reducing politics to personalities. And they offer the possibility of a Tory mayor, or at least an independent, being elected in Labour-dominated urban areas.

The private sector regards directly elected mayors as “the optimum internal management arrangement for privatised local government services.” For example, in 1999 Capita Group plc (which has for several years had a huge contract with Birmingham City Council), in its evidence to the Joint Committee on the Draft Local Government (Organisation and Standards) Bill, supported “the introduction of elected mayors or their equivalent for all tiers and size of councils” because they considered it was “easier to develop and negotiate effective leading edge…partnerships…where the council has a strong leader and effective Chief Executive and that it helped if the leader is able to commit the council and to have control over his/her group.” (9).

The Mayor and Cabinet are not held accountable to an elected West Midlands assembly. This severs the link between the Cabinet and the electorate which exists at local authority level between councillors and voters, and makes them less vulnerable to opposition from the public and indeed from backbench councillors.  It is a complete illusion to think that the WMCA ‘Cabinet’ members will go through a process of referring key policy proposals back to their councils and scrutiny committees for debate and amendment (let alone for public consultation), and then devise an amended joint policy proposals for it in turn to go back to local councils for ratification.

Combined Authorities take power from Councils

The Launch Statement claims that ‘Combined Authorities do not take power away from local councillors or the individual communities they serve.’ (p13). The truth is the opposite: they will take over some powers from councils, and perhaps increasingly so with the aim of effectively replacing local authorities, as Professor Colin Copus suggests in the House of Commons Communities and Local Government Committee report Devolution: the next five years and beyond:

“Public sector reform, certainly, looking at issues like transport, health and housing, and how those particular service areas integrate across any given geographical area, is central to this particular agenda. That brings up another objective about what is the role of local government with all of this and whether there is a barely-hidden agenda, maybe, to start to think about restructuring.” (p9)

Take the example of housing.  In December 2015 the government added an amendment to the Housing and Planning Bill which enables the Secretary of State to ‘invite’ a Combined Authority to call-in any local authority development plan within their local area if it is considered to be inadequate. (10)

Another example is children’s services. The headline in the Local Government Chronicle 14 January 2016 said “DfE backs scaling up of children’s services. Government indicates support for proposals to deliver children’s social services at a combined authority level”.

And there have even been suggestions that Combined Authorities should take over responsibility for school education from local authorities, ironically mainly from Labour. John Bolt, secretary of the Socialist Educational Association, asked in his blog Education for Everyone “Is Devo-Manc radical enough? And why are schools left out?” (12 March 2015). And, standing as a candidate for the Labour leadership, Yvette Cooper said she was in favour of education being handed over to the new Combined Authorities (interview with Fiona Millar, Guardian 7 July 2015).

Why do council leaders want the WMCA?

The principal attraction of a WMCA for the council leaders is some additional powers and the income from the business rates, which will compensate in a small measure for the huge cuts in the government block grant over the years and its abolition in 2020.

Some of those powers will be in the hands of a directly elected mayor, and some in the hands of the Cabinet comprising the seven council leaders, with the Mayor as Chair. Also seated at Cabinet meetings will be the representatives of the Black Country LEP, the Coventry and Warwickshire LEP, and the Greater Birmingham and Solihull LEP. (In addition there will be non-constituent representatives of up to 13 district councils adjacent to the WMCA area seated on a non-voting basis.)

It should be noted that none of the councillors have been have been elected to the Cabinet by the citizens of the West Midlands. Nor are they, or the chairs of the three LEPs, in any way representative of the West Midlands in terms of gender or ethnicity. Six of the seven council leaders are male, as are the three LEP chairs and all the candidates for mayor currently being discussed, and all are white.

The division of powers outlined in the West Midlands Combined Authority Devolution Agreement (p5) can be summarised as follows.

The Mayor’s powers:

• Responsibility for the transport budget, with a multi-year settlement to be agreed at the Spending Review.
• Responsibility for franchised bus services, and integrated ticketing
• Responsibility for a new Key Route Network of roads
• Planning powers over housing.
• Power to raise the council tax. According to an example in the bid document (2), a £10 annual council tax levy on Band D properties would raise £6m a year and support £78m of investment.

The WMCA’s powers:

• Control of a new additional £36.5 million a year funding allocation over 30 years, to be invested to drive growth.
• Devolved 19+ adult skills funding
• Joint responsibility with the government to co-design employment support for the hardest-to-help claimants.
• Responsibility with government for business support programmes.
• Power to retain 100% of any additional business rates income raised through economic growth. (Until now, councils could only keep half of this additional income.) This provides an incentive for councils to attract businesses. According to the WMCA bid document (3), ‘we estimate that every £1m of additional growth above the agreed baseline could finance £13m of capital investment. Exceeding the baseline by 1% could support £65m…’ (p4).
• Power to increase business rates by up to 2% to fund investment in infrastructure schemes, subject to a majority vote of business members of the relevant LEP. A 2% SBR (Supplementary Business Rate) would generate around £30m a year, which would support capital expenditure of up to £400m.

It is intended that decisions will be made by consensus. When this is not possible, matters will be put to a vote and will require a 2/3 majority vote of Constituent Members of the Combined Authority present and voting (Scheme, para 15). There are however a number of matters which require unanimity of Constituent Members present and voting.

What needs to be noted here is the very limited amount of funding that the WMCA gains. £36.5 million a year for 30 years, plus the possibility to increase business rates, subject to business agreement; but both these can only be used to fund investment, not to provide services. The additional business rates income and a rise in council tax can both be used to fund services but the former is an unpredictable amount and the latter is a relatively small amount.

Economic Growth and Employment

 The main argument for the WMCA is that it will create economic growth.  But how justified are the claims; and what kind of economic growth?

First, it should be remembered that the WMCA may actually cause some job losses as a result of merging services at the Combined Authority scale.

The WMCA Devolution Agreement: Key Points says the following (the Super SEP is the combined Strategic Economic Plans of the three LEPs):

 “Half a million new jobs

The deal will enable the delivery of the Super SEP across all three LEPs, which has the potential to help support the creation of up to 500,000 new jobs.” (p3)

Note that the claim in the headline is heavily qualified in the first sentence: “potential”, “support” “up to”. Nor does it say over what timescale, so this particular claim is largely meaningless.  But the more fundamental question is what economic analysis are the repeated claims that the WMCA will generate economic growth based on? Why it is essential to question these claims is because, according to Adrian Bua of the New Economics Foundation:

“the evidence of devolution as a driver of economic growth and convergence in social and regional inequalities is pretty thin.  For example, one analysis of devolution concluded that the evidence in favour of such links is very weak and another found a moderately negative relationship.” (11. Emphasis in original)

Similarly, Matt Wood of the Crick Centre at Sheffield University says:

“it is far from clear whether devolution will stimulate higher levels of growth in the UK, and it is even more difficult to forecast the geographical and social beneficiaries of this prosperity within the reconfigured UK political economy.  For, even if we do get growth, what kind of growth will this be?  Which places will grow, and will that growth be sustainable?” (12)

Wood asks what kind of growth? In that context it is remarkable that the green economy as an area of potential economic growth, and the whole issue of environmental sustainability, are entirely ignored in the case for the WMCA. In fact there is not a single mention of the words “green” and “environment” in the Agreement document at all.

We are not saying that the WMCA will not generate economic growth, but we are saying that the language of “boosterism” needs to be challenged and the claims it makes need to be thoroughly critically analysed. And one set of claims that should not be taken at face value are those that the WMCA makes for the economic benefits of HS2. According to Key Points the WMCA will have “The power to make HS2 benefit the people of the West Midlands. The HS2 Growth Strategy alone will create an additional 100,000 new jobs.” (p3). What is the evidence for this claim?

The hyping of HS2

In September 2015 Transport secretary Robert Goodwill announced “We estimate that HS2 will create 25,000 jobs during construction and 3,000 jobs when in operation.” According to Construction Enquirer, the industry newsletter (16 September 2015), this claim refers not just to the London to Birmingham phase but to the whole scheme from London to Birmingham, Manchester and Leeds. (13) This is due to be operational in 2033. Clearly only a small percentage of these jobs will be in the West Midlands, and they will be dispersed over a period of 16 years. The Birmingham City Council report Birmingham Skills: supply and demand, published 15 January 2016, estimates that HS2 will create jobs on a contract basis, up to a maximum of 10,000 in any one year. But these are for specialist staff in railway construction, and it seems likely that many if not most will come from outside the West Midlands. (14)

According to The Midlands HS2 Growth Strategy: Accelerating the UK’s engine of growth, published by the Greater Birmingham and Solihull LEP in July 2015, jobs will be provided in Birmingham by ‘the rolling stock depot at Washwood Heath which will provide maintenance and servicing for the whole network, with 500 jobs created at the depot and a further 140 jobs at the National Control Centre’ (p10). (15).  (Bizarrely, this report makes no mention of the WMCA at all, even though it was published in the same month as the WMCA Launch Statement, which contains a whole page statement of support signed by the chair of the GBSLEP and the other two LEP chairs.) And on 4 February 2016 HS2 Ltd opened its Birmingham headquarters, which will employ up to 1000 staff, and presumably a significant percentage will come from the West Midlands. (16).

But the vast majority of additional jobs that it is claimed HS2 will create come from the growth in the local economy that it is anticipated it will generate. The argument in The Midlands HS2 Growth Strategy: Accelerating the UK’s engine of growth report is summarised in one page by The Midlands HS2 Growth Strategy, published by the GBSLEP inAugust 2015. (17):

 “The Strategy will ensure that the wider region will benefit from radically improved national and international connectivity. The two HS2 stations and Birmingham Airport, with its huge potential and ability to open up access to key international markets, will drive new areas for regeneration, housing and business growth across the Midlands. The major investment in region-wide connectivity will provide access to significant employment and training opportunities for local residents, and is ultimately capable of delivering:

• 104,000 created and safeguarded jobs – with 10% of all jobs created for local residents who are currently unemployed

• Increase the number of people qualified to NVQ Level 4 or equivalent to the national average of 36%

• 2,000 apprenticeships

• 700 business supported to take advantage of the opportunities

• £14bn additional economic output

• 2,000,000 of the region’s population connected to HS2 by public transport”

Note that both documents are ambiguous as to whether the claims they make apply to the GBSLEP area or the WMCA area or the whole of the Midlands, East as well as West.

We can summarise the argument of the Growth Strategy: Accelerating the UK’s engine of growth as follows. The connectivity that HS2 will provide will attract investment, and that the LEP will provide the improved infrastructure that business requires: land use and an upskilled labour force. But the whole case depends upon attracting huge private investment over and above what the West Midlands already attracts. No evidence is offered as to the likelihood of this or where it would come from. And how much of this investment will be to meet the needs of workers and communities in the West Midlands, not those of property investors and stock-market gamblers?

The “Skills Deficit”

 The development of the skills of the workforce is a central concern of the WMCA. This is what the Agreement says:

“22. The government commits to working with the Combined Authority on Area Reviews of post-16 education and training across the West Midlands. The reviews will be chaired by the Combined Authority and will include all post-16 education and training provision in the initial analysis phase. Recommendations will be focused on general Further Education and Sixth Form Colleges, however the Regional Schools Commissioner and the relevant local authorities will consider any specific issues arising from the reviews for school sixth form provision.

25. […] From 2018/19, there will be full devolution of funding. The Combined Authority will be responsible for allocations to providers and the outcomes to be achieved, consistently with statutory entitlements.

27. To ensure continued local collaboration following the Area Reviews, the Combined Authority Shadow Board will work in partnership with local colleges and providers to develop the local Skills and Employment Strategy. This will aim to ensure that post-16 providers are delivering the skills that local employers require. It is expected that the Combined Authority Shadow Board will then collaborate with colleges and providers, with appropriate support from the Education Funding Agency, to work towards that plan.”

The Area Review of post-16 education and training in Birmingham and Solihull started in September 2015. The Steering Group carrying it out contains no representatives of teaching staff or their unions. (18)

Skills and productivity

The low level of productivity in the West Midlands is a major priority for the WMCA.  In fact, according to a report published by the West Midlands Economic Forum in January 2016, “The most recent official statistics indicate that productivity in the Midlands has grown at a similar, albeit slightly quicker, pace than the rest of the UK since 2010” (though in the East rather than the West Midlands), with higher than national growth in the manufacturing and logistics sectors. (19). The Birmingham City Council report Birmingham Skills: supply and demand (15 January 2016) states that “In terms of gross value added per worker, Birmingham performs better than other English core cities apart from Bristol, Leeds and Manchester.” (20)

But this is only relative within the English context. Nationally productivity is low compared to countries such as Germany, France and the US: “Only Japan in the G7 performed worse than the UK last year in terms of output per hour worked” (Guardian 18 September 2015).

The explanation that the WMCA Agreement gives is a skills deficit. It has set up a Productivity Commission to tackle this.

“The Productivity Commission is based on a model for radical reform of the whole skills system that will reduce unemployment, raise skills levels and make a significant contribution to raising productivity.” (21)

Birmingham City Council, the largest of the WMCA local authorities, published on 15 January 2016 its own programme for skills development which it sees as contributing to the WMCA.

“With the new West Midlands Combined Authority the City Council and its partners will need to work together across the region to boost skills. To deliver the Combined Authority’s new responsibilities an Employment and Skills Strategy has to be developed. The Birmingham Skills [and Employment] Vision is a contribution to the development of the Employment and Skills Strategy. It sets out the challenges and priorities for Birmingham. “ (22)

What the report doesn’t mention is the extent to which existing skills are being utilised. But we do have figures for Greater Manchester from New Economy, the organisation responsible for policy, strategy and research for Greater Manchester’s Combined Authority and Local Enterprise Partnership, and there is no reason to think that the West Midlands is significantly different.

“there are problems with skill utilisation. There are more level 4 qualified people than ‘level 4 jobs’ available. […] a worrying 39% of unemployed people have level 3 and above skills (19% have a level 4 qualification). […] This shows that qualifications are not necessarily a guarantee of work. Many unemployed people have valuable skills.” (23)

But while it is true that there is a need for skills development this is not the fundamental reason for Britain’s – and the West Midland’s – low productivity compared to other major economies: it’s lack of investment, as Michael Burke explains:

“Despite much discussion there is no ‘puzzle’ behind the very weak level of UK productivity. It is because the UK has a very weak relative rate of investment. As the UK economy has a persistently lower level of fixed investment, so the relative decline in productivity is unavoidable. All other G7 economies gained on the UK in terms of productivity because they all had higher levels of investment over the same period.” (24)

This was the subject of a report entitled Exploring the debate between the low wage labour market and productivity improvement published in 2015 by, again, New Economy, the GMCA/GMLEP organisation that is funding ‘Skilled and Ready’ in Manchester. (25)

“The British business model generates a lot of low paying work by international standards. Over a fifth of jobs pay less than the low pay threshold (two thirds of median earnings).”

“Low pay is concentrated in private sector services. Three quarters of jobs which pay the National Minimum Wage (NMW) are to be found in industries such as hospitality, accommodation, retail, care, cleaning, employment agencies, leisure, security and hairdressing. Some 9.7 million of the UK’s total of 28 million jobs are found in these low-paying sectors (although not all are minimum wage jobs). With rare exceptions, these are also the sectors where productivity per employee is low and has been throughout economic history – implying at least some kind of a connection between productivity and pay.”

“Low wage, low productivity employment has grown significantly in the years since the recession to give the labour market its increasingly bottom heavy appearance. Excluding the self-employed, since March 1999, the number of jobs in the low paying sectors has grown by 1.4 million (17.2%) while the number of jobs in the rest of the economy grew 1.9 million (11.2%).”

The report quotes Damian Grimshaw, professor of employment studies at Manchester Business School, who argues that low productivity acts as an inducement for employers to organise production around low quality products and services. “Labour has become a disposable commodity, while the imperatives of compliance, managerial control and cost are prioritised above innovation, skill, worker discretion and efficient organisation.”  Martin Allen, in an article published in January 2016, provides further evidence (26):

“As TUC research shows (Press Release 15/07/13), 80% of the ‘new’ jobs created since 2010 have been low-skilled and low-paid. It may well be that skills shortages exist in certain areas, in particular the building and construction industry, but at the same time a 2014 UKCES employer survey has estimated 4.3 million workers currently have qualifications and skills more advanced than their job requires while in the same year the CIPD estimated 1 in 5 jobs need only primary education. Certainly arguments about a new ‘Post-Fordist’ workplace where workers are multi-skilled, more autonomous and need to be more enterprising have been counteracted by evidence about new forms of ‘Fordist’ employment in fast food (Schlosser, 2002), call centres (Jones, 2011) and, more recently still, by The Guardian’s (December 2015) exposure of the Draconian employment practices of Sports Direct – which, despite its notoriety, is surely not unique.

As a consequence, the increase in the UK’s GNP since the economic downturn has been as much the result of an increase in the size of a low skilled, low paid labour force as it has been any increase in skills, productivity or technological investment. In particular, employers have depended on a new ‘reserve army’ of labour from overseas, that despite generally menial employment is often highly qualified.” (p19)

Allen’s argument is borne out by the annual Cities Outlook report published by the Centre for Cities thinktank in January 2016. It looked at the Birmingham “city region”, which includes Birmingham, Dudley, Sandwell, Solihull, Walsall and Wolverhampton (27). It says that Birmingham is a “low wage, high welfare” city which lags behind the UK’s most successful cities when it comes to creating new jobs and offering workers good wages. In 2015 the average weekly workplace wage in cities was £545, but in Birmingham it was £452, significantly below.

The argument on which the WMCA’s economic strategy rests boils down to this: the connectivity that HS2 will provide, coupled with an upskilled and more productive workforce, and facilitated by tying housing, transport, land use and other infrastructural improvements to employers’ requirements, will attract a huge increase in private investment. But no evidence is provided to sustain this case. In our view the only fundamental solution is a radical change in government strategy, as argued for by Jeremy Corbyn:

“…a new economy that puts public investment front and centre stage: in science, technology and the green industries of the future. Instead of Osborne’s economic house built on sand, our focus will be on the reindustrialisation of Britain for the digital age, driven by a national investment bank as a motor of modernisation – and sustainable growth that will slash the welfare bill in the process.” (28)

Public service reform

 The Agreement makes a general statement of government policy:

“39. The government commits to support the programme of public service reform across the West Midlands. HMT and DCLG will continue to engage with the Ministry of Justice, Department of Health and Home Office to ensure that appropriate support is provided to facilitate the implementation of these reforms.”

 There is no mention in the Agreement of the WMCA taking over the control of the budget for Health and Social Care, as is happening in Manchester. However, this statement clearly opens the door to further powers for the Combined Authority, along with future cuts and privatisations. There is though one public service issue the Agreement specifically deals with: what it calls “troubled individuals”:

“38. The government will support the Combined Authority Shadow Board to co-design and implement approaches to improving the life chances of troubled individuals (those with multiple problems of homelessness, substance misuse, offending and mental health) and in doing so reduce their cost to public services.”

In line with this the WMCA has established a Mental Health Commission. It is significant that the rationale is presented in economic terms: poor mental health and wellbeing is a significant driver of demand for public services and has a negative impact on the economy.

“The West Midlands Combined Authority has commissioned research in to mental health and its impact on the public sector. It is believed this commission is the first of its type in the country.

The commission will consider evidence from around the West Midlands region and beyond and it will consider the experiences of real people with real mental health experiences, as well as the knowledge of professional mental health practitioners and mental health organisations.

The commission will be chaired by Norman Lamb MP, former minister of state for care and support.

The elected member sponsor is Cllr Darren Cooper, vice chair of the shadow WMCA.

The commission has identified the following key areas of enquiry:

• Employment and housing
• Early intervention principles
• Criminal justice/troubled individuals
• Role of employers
• Primary care

The commission’s desired outcome is to create a blueprint that can deliver economic, social and public sector reform for the West Midlands…” (29)

The framing of the Commission’s terms of reference should be challenged. What it ignores is the impact of public sector reform upon mental health service users and the mental health of the wider population. These include changes in the social security system, so-called welfare reform, major cuts to programmes to meet the housing needs of mental health service users, and direct cuts in mental health services within the NHS budget.(30)  On 13 February 2016 the Observer published this:

“A leaked report by a government taskforce has painted a devastating picture of England’s mental health services, revealing that the number of people killing themselves is soaring, that three-quarters of those with psychiatric conditions are not being helped, and that sick children are being sent “almost anywhere in the country” for treatment.” (31)

We should also challenge the composition of the Commission. It is chaired by Norman Lamb MP, formerly Liberal Democrat care minister in the Coalition government. The panel includes Dr Geraldine Strathdee, National Clinical Director for Mental Health, NHS England, Professor Kevin Fenton, Director of Health and Wellbeing, Public Health England and Dame Carol Black, former government health advisor and international expert on health, work and wellbeing. (32) However, there is no mention of representatives on the Commission of either mental health service users or mental health service professionals working in the West Midlands. One of the principles of the WMCA should be the democratisation of services and the centrality of service user involvement in the running and development of services.

How government controls the WMCA

We have said that the claims that the new Combined Authorities represent decentralisation disguise the reality that they are a new form of highly centralised power. We will give two examples from the WMCA.

 The Agreement has a section on ‘future employment support, from April 2017, for the hardest-to-help claimants’ (paras 29-31). It states that the WMCA will ‘co-design’ this with the Department for Work and Pensions (DWP). But in reality all the power will be in the hands of the DWP, as the wording of the Agreement makes clear:

“DWP sets the funding envelope”

“DWP set the high-level performance framework”

“in the event employment support for this group is delivered through a contracted-out programme…DWP sets the contracting arrangements…”

“Providers will be solely accountable to DWP” (para 31)

The final paragraph of the Agreement, under the section headed “Delivery, Monitoring and Evaluation”, states that “The West Midlands Combined Authority…is accountable to local people for the successful implementation of the devolution deal” (para 53). What form will this accountability take?

“The provisions of this deal will be monitored by a Steering Group of senior officials from the Combined Authority Shadow Board and government, and private sector LEP representatives, meeting at least quarterly, with any issues of concern escalated to Ministers and Leaders to resolve, in keeping with the letter and spirit of this deal.” (para 61)

This is a closed group of WMCA and government officials and business representatives from the LEPs. There are no representatives of the citizens of the West Midlands, of trade unionists, of users of services, or of local communities.

The House of Commons Committee report warns that the practices in these two examples are unacceptable:

“There is an obvious difference between joint working and devolution, namely that devolution involves a transfer of responsibilities from, in this case, the DWP to a combined or local authority. With ‘joint working’, there is a risk that Departments will carry on without changing their practices. Devolution, on the other hand, leaves decision-making in the hands of local politicians, with accountability to local voters. We recommend that, where the terms ‘joint working’, ‘joint commissioning’ and ‘co-commissioning’ appear in a deal, they are challenged and defined in practical terms. In such cases, we would expect to see local areas actively involved in designing the project, performance management and its integration with existing local services. Joint working on or co-commissioning of services should be considered as a first step towards eventual fuller devolution.” (p20. In bold in the original.)

Combined Authorities and the absence of consultation

The House of Commons Communities and Local Government Committee Devolution: the next five years and beyond makes a damning judgement:

“We have found a significant lack of public consultation and engagement at all stages in the devolution process. People are keen to be involved; our public session in Greater Manchester highlighted residents’ strong appetite to be included and consulted. The public should be engaged in the preparation of devolution proposals, insofar as possible during the negotiations and once the results of a deal have begun to make an impact, and communicated to throughout the process. (Summary p3)

51. We have been struck by the lack of discussion and consultation with the public in areas which have proposed, negotiated and agreed devolution deals. At the question and answer session we held with residents during our visit to Greater Manchester, the vast majority of contributions, often made in angry tones, arose from the perceived lack of efforts by the combined authority to engage the public about the deal relating to their local area. (p24)

53. For devolution to take root and fulfil its aims, it needs to involve and engage the people it is designed to benefit. There has been a consistent very significant lack of public consultation, engagement and communication at all stages of the deal-making process. This is due to areas having limited time in the run up to the 4 September deadline. The Government drove the first wave of devolution deals through at a rapid pace (considered in more detail in the next section) which meant there was no opportunity for engagement with residents, or for residents to have their say on the principle of devolution or the framework of the specific deal proposed in their area. Despite this, we believe that local leaders could have communicated more effectively and extensively with their residents about the deal process, the contents of the deal and how it would affect them. […] However, from now on, efforts should be made to engage, consult and communicate with the public at all stages of the process—in the preparation of proposals, their negotiation and following agreement. Strategies to involve the public may include citizens’ juries, public meetings and, within the NHS and local government, staff engagement sessions. Once a deal is entrenched and its reforms have had the chance to take effect, the public should be consulted on their experience of its practical effects.” (p25. All in bold in original)

“Conclusions and recommendations

15. For devolution to take root and fulfil its aims, it needs to involve and engage the people it is designed to benefit. There has been a consistent very significant lack of public consultation, engagement and communication at all stages of the deal-making process.” (p53)

 

This report’s indictment applies forcefully to the WMCA, which has been set up almost entirely behind closed doors. Six months after its Launch Statement and two months after the Agreement was signed with government it announced an online “consultative survey” which ran for three weeks from 18 January till 8 February 2016.(33)  It comprised five opinion questions with a five point scale plus a comment box. Question 1 was typical in being likely to produce meaninglessly uninformative responses:

“Q1 By working together more closely through a West Midlands Combined Authority (WMCA), councils will be better placed to deliver improved outcomes in relation to economic development, regeneration and transport across the West Midlands region.”

This is just sham public consultation. Genuine democratic consultation would have entailed a series of proper public consultation meetings throughout the West Midlands where informed discussion could have taken place, and a referendum on a directly elected mayor and on the Combined Authority itself (which of course was ruled out, as in all the other Combined Authorities as well, because the vote would probably have been to reject).

Excluding participation by unions and communities

The Agreement has a section on Governance but it says not a single word about public participation, let alone empowerment. Nor is it mentioned on the WMCA website. There are two inter-related principles at stake here which concern power and knowledge. One is the democratic right of citizens and communities to have their voices and interests heard and influential in Combined Authority policy. It is summed up by Jeremy Corbyn when he advocates “a new politics that offers people a say in the decisions that affect them, in communities and workplaces, as well as more direct control over their own services. We want to see the democratisation of public life from the ground up.” (34) The other principle is about the politics of knowledge. Whose knowledge counts in the policy-making of the Combined Authority; is it just that of government and business? Is the practical knowledge of working people and communities, and the theoretical knowledge that it generates, to be dismissed and excluded or valued and acted upon?

We have demonstrated the dominance of business voices and interests in the WMCA. In contrast, there is a complete absence of any counter-balancing representation of the trade unions. A graphic demonstration of where the power lies is that the word “business” appears 34 times in the WMCA Agreement but there is not a single mention of the word “union”.

It has been suggested that there will be representation of trade unions on some of the lower-level committees that the WMCA will set up. So far no such committees have been announced, but three ‘Commissions’ have been: on Mental Health, on Productivity, and on Land. It is not known who will be on the latter two Commissions. There is little information on the WMCA website. Both are obviously key issues for the trade unions and for local communities, and they should be fully involved. But there is a danger that they will be marginalised or excluded, or else involved after the strategic decisions have been taken.

The Productivity Commission may well focus on employment, skills and training but, as we have said, what finally determines productivity is investment and business strategy. This is a crucial site where the trade union movement should be fully represented at all levels of the Commission, including by representatives of the key unions affected and also local Trades Union Councils. But apparently there will be just one trade union representative – presumably from the leadership of the West Midlands TUC – on the Productivity Commission, compared to no doubt numerous representatives of the LEPs and business.

 There is also the question of at what level there is trade union involvement: is it at the level where the key strategic decisions are taken, which is likely to be above that of the Commission? Greater Manchester, as a model which the WMCA may well follow, provides a warning:

“There are two high level groups who currently have oversight of the skills agenda in GM. They are the:

1. Skills and Employment Strategy Group, and the
2. Skills and Employment Programme Board.

The Strategy Group is accountable to the GMCA and the GM LEP. Its role is to agree GM’s priorities and strategic direction around skills and employment.

The Programme Board is accountable to the Strategy Group and is responsible for implementation of the Partnership’s delivery plan.”(35)

There is no trade union representative on the Strategy Group, but there is one – though only one – on the Programme Board. So there is union involvement, but it is only in the committee concerned with the implementation of policy decided elsewhere – there is no union involvement in the committee responsible for the making of policy itself.

The TUC’s response to Combined Authorities

The resolution on devolution passed at September’s TUC conference calls for devolution proposals to ‘have real democratic accountability at their heart’ (36). What is the TUC’s strategy to campaign for this and to deal with the actual situation of profoundly undemocratic Combined Authorities? It can be found in a TUC policy document published on 7 July 2015: Decentralisation and devolution in England (37). It contains a section headed “A framework for action at the sub-national level” which begins “The TUC should advocate three key elements that could be applied to devolved structures that emerge in any given region.” The two key ones concerning participation are as follows:

1. “Public service workforce partnership councils, co-terminus with the relevant devolved authority bringing together employers, councillors and unions from across the public sector…

2. Civil society partnerships, co-terminus with the relevant devolved authority, bringing NGOs, voluntary and community groups, trade unions, businesses, academia and others together to:

• Set out the key outcomes that devolution will deliver for the devolved region, including equality, anti-poverty, decent jobs, strong public services, tackling exclusion;

• Set out new ways of partnership working, replacing failed markets with collaborative forms of engagement between civil society and the public sector, using new forms of finance and grant making.” (p11)

There is a problem here:  voice and social partnership are not the same as ‘real democratic accountability’. There’s a rhetoric of democracy but the reality is ‘social partnership’. This implies that there is a basis for consensus which can be achieved through negotiation. But it is clear from what we have said so far that there are conflicting interests at the heart of the WMCA between private profit and social need, and between top-down power and participation and democracy. That is why organised union, community and citizen pressure is essential.

Democratic accountability and the WMCA

 The government’s view is that the public accountability of Combined Authority is ensured in two ways: by the fact that the mayor (if there is one) and the council leaders are elected, and by the Combined Authority’s scrutiny arrangements.  Neither are adequate to ensure public accountability.

The mayor is elected for four years by the Combined Authority area’s electorate and is not recallable by them or removable by the Combined Authority Cabinet. The Cabinet members are elected, but by their local authority electorates to serve on the local council; they are not elected specifically to govern the Combined Authority, and they are not accountable to voters in that capacity.

So the ongoing accountability of the mayor and Cabinet is the responsibility of whatever scrutiny arrangements they choose to put in place.  The House of Commons Communities and Local Government Committee report Devolution: the next five years and beyond states:

“72. The Devolution Bill requires each combined authority to establish at least one overview and scrutiny committee, consisting of backbench councillors from the constituent councils, to review and scrutinise its decisions and actions and those of the elected mayor.” (p34)

The Scheme for the establishment of a Combined Authority for the West Midlands does not specify what the WMCA’s scrutiny arrangements will be. It says:

 “22. The Constituent Authorities of the Combined Authority will establish joint overview and scrutiny arrangements which reflect the political balance of the Combined Authority, to exercise scrutiny functions over the Combined Authority and any sub-boards and structures.”

However, it seems likely to follow the Greater Manchester Combined Authority model of a single Scrutiny Committee comprising a group of councillors drawn from all the participating councils and meeting monthly. This is hopelessly inadequate to exercise effective critical scrutiny over the wide range of complex issues that the CA will be dealing with. After all, Birmingham alone, even after the recent culling of Scrutiny Committees, still has three.

However, the Devolution: the next five years and beyond report notes:

“77. As the DCLG says, the overview and scrutiny requirements in the Bill are an initial framework to be used as a basis for more robust provisions, which we believe have a role in fostering public confidence in the new arrangements, as well as balancing vested interests. These should be developed to suit the characteristics of the local areas as a result of deliberate efforts to hold active discussions at local level, with residents involved in designing new and more open methods of scrutiny.” (p34)

There is a precedent: the scrutiny arrangements in London. There ongoing public accountability of the directly elected mayor and the Greater London Authority is ensured by a directly elected London Assembly.  This was proposed as a possible model for CAs to follow in written evidence submitted by Professor Colin Copus to the House of Commons Committee inquiry.

“should councillors elected to constituent authorities in a Combined Authority have the powers to hold to account someone elected by the voters of the whole Combined Authority area? There is a case to examine whether large urban based Combined Authorities require a separately elected scrutiny body – along the lines of the London Assembly.” (38)

The London Assembly has 25 elected members. They are not just existing councillors drafted onto a Scrutiny Committee, they are elected by citizens who vote for them specifically because they are going to fight for their interests. And they aren’t just reactive to policy, they act as champions for Londoners proactively investigating concerns through not just one but 15 issue-based committees and raising their findings and their policy demands with the Mayor and with the government itself.  (39).

It is interesting that a submission to the Devolution: the next five years and beyond report by Greater London Assembly Conservative members also strongly supported scrutiny by an elected assembly as a much more effective model for Combined Authorities. This is what the report says:

“The GLA Conservatives believed there were other problems with the scrutiny arrangements set out in the Devolution Bill. They said that the proposed model in the Devolution Bill had nothing like the London Assembly’s level of scrutiny or expertise and that:

The assembly or city-council model is much better at scrutinising at a city-wide level than a single scrutiny committee drawn from the respective component parts.

The London Assembly, amongst other things, produces between 30-40 policy reports every year; hosts 11 Plenary Meetings each year to hold senior public servants to account; and scrutinises the Mayor of London at 11 Mayor’s Question Time events that are televised and open to the public (often more than 100 are in attendance). A single scrutiny committee could not possible have this level of influence or power.“ (p46)

Opening up the WMCA to public participation in decision-making

We have argued that the best answer for the WMCA is an elected West Midlands Assembly. The Constitution of the WMCA doesn’t exclude the option of an elected Assembly.  If it’s right for London why isn’t it right for the West Midlands? This is the position adopted in resolutions passed by Birmingham Trades Union Council. It taps into the strong popular desire for local democracy and influence in the decisions that shape people’s lives. As a demand it is likely to become more urgent and popular as the democratic deficit of the WMCA becomes more evident in practice.

But it is not a question of an elected Assembly or nothing – there are other democratic reforms which we can argue for as a step in the right direction. They Include opportunities to counter the male-dominated and exclusively white composition of the current WMCA Cabinet and the likely contenders for mayor and ensure that the WMCA power structure represents the gender and ethnic make-up of the West Midlands.

In what follows we give some examples of the opportunities which should be taken advantage of to democratise the WMCA. One is proposed in the Devolution: the next five years and beyond report.

“74. Other witnesses saw scrutiny as an opportunity to use creative ways to reinvigorate local democracy; for example, Ed Cox suggested combined authorities could have second chambers made up of people from the business and voluntary and community sector and citizens’ panels.”

A forum along these lines, with at least advisory powers, would enable direct public participation and input.

Another way of opening up the WMCA Scrutiny Committee to public participation would be to co-opt onto it representatives from unions and community organisations, with voice and indicative vote. The Scheme for the establishment of a Combined Authority for the West Midlands actually allows this.

“23. The Combined Authority may co-opt additional non-voting representatives to the joint overview and scrutiny arrangements as necessary.“ (p5)

And come to that, why can’t there be union and community organisation delegates co-opted onto the Cabinet itself on the same basis, alongside the employer representatives? Again, this is actually already permitted by the WMCA constitution. But is there any intention to enact it, unless there is strong public pressure?

“9. The Combined Authority may co-opt additional non-voting representatives to the Combined Authority.” (Scheme, p3)

Another means of opening up the governance of the WMCA to public participation is through the membership of its committees. The final structure of WMCA committees and their membership is still in the process of being decided so there is still opportunity to open them up to popular participation.

“43. The Combined Authority may establish further joint committees or sub-committees and delegate powers and functions as considered by it to be appropriate.” (Scheme, p9)

There is an opportunity here to establish a series of inclusive and powerful committees, one for each of the main issues that are the remit of the WMCA – employment and ‘skills’, transport, housing, etc – made up of representatives of all the relevant stakeholders and with strong public and trade union participation, perhaps themselves as delegates from wider forums.

The WMCA is a neoliberal project – it’s time to challenge it

Up till now the organisations of the labour and community movements in the West Midlands have been largely silent on the question of the WMCA. Knowledge about what it means is not widespread. But the situation will begin to change after it is becomes fully operational in the early summer. Moves by political parties to select their candidates for mayor will also begin then for the election in 2017: Labour will hold a ballot of its members this July.

As we have argued in this paper, the WMCA is a further stage in the Tories’ neoliberal transformation of England. It needs to be understood and its key policies challenged and opposed. Part of the response will focus on the defence of public services and the jobs and conditions of its workers. Part will entail a rigorous questioning of the claims being made for economic growth: where is the evidence, who will it benefit? And a large part should be about the democratisation of a deeply undemocratic power structure. As we have said, the fundamental solution is to make it accountable to an elected West Midlands Assembly, and that should remain our bottom line. But in the meantime there are a number of other more realistically attainable demands, involving opening up the existing bodies of the WMCA to participation – taking advantage of existing opportunities for co-option – and creating new ones such as committees and forums.

All of these issues need to be put on the agendas of trade union bodies, community organisations, local Labour parties, etc, and resolutions passed to put pressure for change on the WMCA power elite. We also need wider public meetings to spread awareness of the WMCA and how it can be challenged and democratised.  And the candidates for mayor of the Combined Authority need to be challenged to give their support to policies for its radical reform.

 

Richard Hatcher

14 February 2016

Birmingham City University

Birmingham Against the Cuts website: https://birminghamagainstthecuts.wordpress.com/

Contact: Richard.Hatcher@bcu.ac.uk

References

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29. http://www.westmidlandscombinedauthority.org.uk/what-we-do/commissions/
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33. http://www.westmidlandscombinedauthority.org.uk/
34. Jeremy Corbyn.  ‘Reshuffle? Focus on Tory failings in health, housing and education instead’. Guardian 9 January 2016. http://www.theguardian.com/commentisfree/2016/jan/09/jeremy-corbyn-on-middle-britain-labour-beating-the-tories
35. Greater Manchester Local Enterprise Partnership’s Assurance Framework for Local Growth Funding, March 2015. http://archive.agma.gov.uk/cms_media/files/final_lep_assurance_31_march_20151.pdf?static=1
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37. TUC Decentralisation and devolution in England document, 7 July 2015. http://www.scribd.com/doc/290018102/TUC-Decentralisation-and-Devolution-in-England#scribd
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