Paul Rowsell is Head of Governance Reform and Democracy at the Department for Levelling Up, Housing and Communities.
This interview was conducted across two sessions, on 7 June and 3 August 2023.
Q: Could you tell us who you are, and what your work has been over the decades on regional growth and policy?
I am the Head of the Governance Reform and Democracy Unit here in the department. For a considerable number of years now, I’ve been responsible for the structures of local government – the creation of new governmental institutions and such like – all of which have played a central role in creating the frameworks which governments have considered necessary to promote growth.
I’ve been in the current role since 2011, but in fact I was doing the same things right back to 1994: reforms to local government; the introduction of the concept of mayors for local authorities (which, of course, has since expanded into other areas); creating the whole executive structure of local authorities. Through all of that.
Q: What have been the key successes of policy over that period? And what has been your abiding frustration?
The success has been the move in local government away from the old committee system towards having an executive-style leadership; and subsequently the introduction of Combined Authorities and mayors for Combined Authorities. That, on the whole, has been successful.
But those reforms themselves are a result of what is, I think, a significant failure; or an opportunity missed. Governments of various complexions have had a taste for trying to replace the two-tier structure of local government. What, in my view, needs to be done – and one day probably will be done – is that we need to move to England-wide unitary local government, with councils of an appropriate size (Durham, Wiltshire, Buckinghamshire and so on).
The first set of reforms I mentioned there are all about the internal operation of a governmental institution. I think the key there was that the reform of the executive actually reflected and made transparent the reality of what was previously happening (but in a-non transparent way, behind closed doors). Whilst in reality for many years there had been ‘executive-style’ leaders, the apparent approach was that the decision was taken in committee. In truth, the decisions were taken outside in a wholly un-transparent way.
The move to the executive structure made the reality and, as it were, the legal framework come together. That, I would argue, significantly improved accountability. It was clearer who was taking decisions. Improved accountability was actually essential. One of the issues today is that even with the existing systems we have now, accountability is still an issue which needs to be sort of worked out and addressed.
And on the second set of reforms, I think there are two broad areas where unitarisation is so beneficial.
First, the two-tier system means that there is duplication. It means that there’s a lack of clarity about who does what. It adds a very significant operational weight and drag to decision taking. Much effort has to be devoted to reaching an agreement between different tiers of councils and different councils. ‘Going unitary’ means that it is clear in an area who is responsible for what. It enhances accountability. It enhances efficiency.
It enhances transparency and leads to more innovative and imaginative delivery of public services. Things could be joined together, different types of services. You could have links between, say, housing and social care in a far more straightforward way. It is striking how people – officers and elected members in unitary authorities, particularly those who have moved to unitary authorities – say they can never imagine why this wasn’t done before.
Second, there’s the question of the geography of the Council. Size is important, both in terms of geography and what (most satisfactorily) should be a functional economic area. That’s particularly true in relation to the exercise of functions directed at economic growth, regeneration and such like. The area and the size of the governmental institution needs to be such that that institution can have the capacity and staff with the capability to deliver the full rate of services.
Unitarisation is great. That’s what we should aim for, so that England becomes wholly unitary – as indeed are Wales and Scotland already. But it’s not any kind of unitary: it’s unitary of an appropriate size; with appropriate borders; with the capacity and capability for the services which they are providing.
Theoretically, different services could perhaps best be provided for different ranges of size and over different areas. But if you think about the critical services, then capacity and capability are really critical – for the big personal social services, like children’s services (where you need to have the capacity to employ various experts in the field). The functional economic area concept is critical for those who are engaging with growth, regeneration, economic performance, boosting productivity and such like.
Q: Your argument seems very aligned with the conclusions of the Redcliffe-Maud Report?
I agree absolutely with that. I would certainly commend that you read the summary report and it’s still around; there are copies in places. It was the most excellent and the best report. Even up to this day, there’s nothing to touch it.
The history was that the Report was produced; it was accepted by the then-Labour Government to be implemented. When the Heath Government came in, they said, ‘we can’t implement it’ – because of the lobby from the County Councils. They cobbled together the two-tier structure, which, as Michael Heseltine constantly has said since, we’ve spent (I’ve spent most of my career) trying to unpick, in a piecemeal way.
Q: Most of those we speak to stress a gradual disempowerment of local government from the 1980s onwards, whereas you emphasise progress through reforms towards more effective executives. How do you reconcile those two positions?
In the 1980s, sadly, the local government sector got enbroiled with very controversial party politics. This took several forms, but in essence certain leaders with the politics of – if I could speak slightly politically – the far-left sought to challenge Mrs Thatcher’s government.
We had the goings-on in Liverpool, with which I was involved on the Government side as a young civil servant. We had the attempt of councils to refuse to set rates, which led to people being surcharged, bankrupted, et cetera.
It led to the then-government’s policy of seeking to reduce local government expenditure. We went through the whole saga with local government finances: pressures on spend; rate-capping; the abolition of domestic rates and its replacement by what was then called the Community Charge – but popularly known as the Poll Tax; and that had to be abolished very shortly after it was introduced by Michael Heseltine, and replaced with the council tax, which has been in place ever since.
The question of how much local government can spend, and – indeed – what happened subsequently during the period of austerity from 2010 onwards (where tremendous pressure was put on local government spending, and councils are certainly far slimmer than they once were)… It is part of a story, but it’s not the full story.
There are really two stories: a story about expenditure and a story about structures. The pressure on spending undoubtedly led to a degree of centralisation of decision making and controls, which subsequently, various governments have sought to move away from; to increase local flexibility.
So, I would say, if you take the the period of the 1980s until now, local government has been through some tempestuous times – some of which are the result of the environment in which the sector found itself; some of which is the result of what people in the sector did; and some of which, is compounded, by the capacity and ability of local government to perform.
Combined Authorities are a success story. There’s no doubt about that, given where things are. Countrywide, things would have been much better if we could have had appropriate unitarisation; but that doesn’t rule out the benefit of a Combined Authority. A Combined Authority covers an area – say, Greater Manchester or Merseyside – which I think is greater than one would want to see any unitary local authority. (The largest unitary of course, is Birmingham, which is 1.1 million, and that’s probably too broad.)
It’s striking to think that, until recently, the setting-up of Combined Authorities took place in areas which were already unitary. (The only non-unitary Combined Authority is the Cambridgeshire and Peterborough Combined Authority, which, for a variety of reasons which we needn’t go into because some I think are unique to the area, is not a great success.)
I think if one moved to an ideal, we would move to significant unitary councils and we would move to having Combined Authorities consisting of several significant unitary councils. The Combined Authority would cover, as it were, the full city region area; an area where there is a functional economic area, and where having transport under the control of one entity would really make sense – where one entity can be responsible for boosting the growth of productivity over the whole region.
Q: What have proven to be the largest barriers in the way of that progressive reform?
The way to look at making these reforms, I think, is to see if you’re a scientist. If you have a chemical reaction, there’s something called an energy barrier: you go through a difficult period, and once you’re through that, you’ve arrived at where you want to be.
Going unitary brings an enormous energy barrier, because going unitary involves shaking up massive personal interests of many. The number of councillors is significantly reduced. People like their little fiefdoms in district councils. It’s not because they’re district councils; it’s because they are the little fiefdoms which, sadly, have to come together for the greater good. And that’s difficult.
To put it controversially, one of the issues which both political parties have faced is the high number of councillors in the district councils. They are the foot soldiers to win general elections. Politically, governments are wary about reducing the number of ‘foot soldiers’ – the number of councillors – by going unitary. Hence we have seen few steps to unitary over time.
We had some unitarisation in 2008-2009; but I think the original ideas were bolder than that. In the end, that’s what we settled on. At the end of that period, the then-government slightly confused what the parameters were and set about creating small unitaries: perhaps having regard more to the politics than to the economics. That fell apart in 2010. Then, because it had caused so much pain, we went through a period where nobody wanted to touch unitary. It had caused local pain to the local parties, and it led to within-party fighting, which obviously the Government’s not keen on.
We had the next attempt at unitary where we created places like Dorset and Buckinghamshire – again quite painfully, but we did that. Then we had another attempt recently, which we just finished, where we created unitaries in Cumbria, North Yorkshire and Somerset.
The question now is: is there going to be another pipeline of unitaries, or will there not be? I suspect there possibly will be a pipeline of unitaries, but ultimately whoever the government is, government we need to grapple with this and move to appropriate unitary structures across the whole of England.
Q: To link two of your themes, we’ve recently seen the rejection of a Devolution Deal to Cornwall that would have had a directly elected mayor over a single unitary authority, which would create an exceptionally high (local) concentration of power.
It would have been. It may be a striking development. You’re right that to have a directly elected leader of a unitary with no tier below other than parish councils (which don’t do much really, although they’re important in the community), that would have been a new departure, towards very sharp accountability. There would need to be with that, I think, stronger overview and scrutiny: to ensure that the elected person was genuinely accountable between elections throughout the whole period they were in office.
Q: If we’re thinking about how local powers evolve, do we need to to think more systematically about where planning, housing or transport sits?
In terms of land use, planning, planning consents, etc: even if there had been a Mayor of Cornwall, planning was not part of the executive functions of the local authority. That would have remained the responsibility of a planning committee.
The logic of this was that when, back in the early 2000s, we set up the idea of an executive leader (directly elected or not), the idea was that this was appropriate for most decision making. But when it came to what was seen as quasi-judicial decisions (like granting a planning consent or granting licences), then this needed a committee.
In Greater Manchester, even now, the mayor hasn’t got his spatial strategy because they can’t get agreement. I’m not saying we would have done things differently, but some of that goes back to the approach that all these developments are locally-led. That’s been a guiding parameter of the current government; of previous governments. Developments need to be locally-led, and have support and consent in the area. The reality is that with the Combined Authority arrangement – be it in Manchester or anywhere else – we go as far as the constituent authorities will tolerate.
Q: Should there be a mechanism for majority voting, or some sort of mayoral override, to prevent this “moving at the pace of the most reluctant” dynamic?
It depends on whether we keep the approach that it has to be locally-led. It is very unlikely that the local authorities will, as it were, allow the mayor to have certain functions over the whole area and allow the mayor to do things which materially affect them – the environment, the living situation of their particular area. It’s a choice [to not have qualified majority voting or stronger mayors]. We could do that now. The powers are there. We could have different powers to say that spatial planning is a decision for the mayor, without the need for consent from the constituent councils involved. That would have been perfectly possible. But we knew we couldn’t do that because those orders require consent of each of the constituent authorities, and we would never have got consent.
There is a policy choice. It’s where you strike the balance between, on the one hand, the mayor needing to have freedom of action to secure economic development over the whole area; and where a particular smaller part of that area is able to have its say about the local built environment.
Q: And London stands as an example of an alternative approach, established by primary legislation with those local consents and hence with a stronger mayor?
That’s right. We could have used that approach elsewhere, but didn’t. Government didn’t, for pragmatic reasons. It was using existing legislation, which had this concept of consent. As explained to Parliament, everything the Authority does is subject to a threefold control: the agreement of Government; the approval of Parliament; and the consent of the area. The consent of the area is interpreted as the consent of the constituent councils.
Q: We have focused on the role of local authorities so far, but there have also been attempts to establish governmental institutions at a regional level (ended with the abolition of Regional Development Agencies and the Government Offices for the Regions after 2010). Why were they not replaced with something serving the equivalent function?
Whether one agrees or disagrees with it, the concept was that – across England – regions didn’t really make much sense. There were the old so-called economic regions, but they were constructs. There was no clear regional identity, which is important if there’s going to be effective regional governance.
We had been through the plans, during Tony Blair’s Government, of regions. We put a lot of effort into creating the idea of elected Regional Assemblies. Even in the North East, where there is probably the strongest regional identity compared with other places, that was turned down. People voted against that very conclusively in a referendum. Arguably, people took that view in part because what was promised for those region assemblies in terms of powers and functions was rather limited. They would say, ‘why do we need this extra tier of government, which really isn’t going to do anything?’
You can see the history that followed from that. We went through RDAs. The new government came in 2010; RDAs were abolished, Government Offices were abolished. We then had an idea of Local Enterprise Partnerships, which themselves are now on the way out. LEPs were an idea where various local authorities got together – this is where the concept of localism came in. Local authorities could come together to form a wider area. I don’t think that has been wholly successful. LEPs are now on the way out.
The policy of devolution is a response to those early 2010 reforms: to try and adopt a way forward, which is acceptable to the local leaders; recognises the reality of identity; but nevertheless creates governmental institutions which are able to take decisions over an appropriate area, in the fields which are highly relevant for promoting growth, productivity, regeneration and boosting investment (including investment from overseas). The Combined Authority – and the devolution which goes with it – is a pragmatic solution, to try and square this circle and meet the differing views about how things should work.
There are obviously discussions about whether we have gone far enough. I think Government would say, ‘no, we haven’t’. At the moment, this Government says it’s the beginning of a journey: we’ve had devolution in the West Midlands, in Greater Manchester; now we have the ‘trailblazer deals’ which seek to go further.
I think we would say that the city region probably makes a lot of sense, with places like the West Midlands like Greater Manchester. And that’s fine. The question that leads to is: what do we do when there is no obvious city region?
One thought is that if we are looking at the economic growth and prosperity of the country as a whole, how important are these other areas? Should we just focus on the city regions and it will all work out? It will draw everything up? That clearly is challengeable and is challenged in other areas. So we’ve then moved to where we are. It comes full circle to having some analogous way of devolving powers to appropriate functional economic areas, outside a big city region.
Q: Can the “map of devolution” be left to local areas to negotiate bottom-up, in that case?
We can’t ultimately have areas left out. The Government recognises that. Some have argued that you don’t need to worry about some areas; but we can’t leave those areas out. That is a foundation of the current government’s Levelling Up policy. There shouldn’t be places which are left out.
The evolution approach has been followed by successive governments, and the challenge of going against that would be enormous I think. If a government were to decide, let us say, that it wants to do a Redcliffe-Maud type solution, then it would have to face up to the consequences of having a lot of contested issues in particular places. It’s something a government would want to do at the start of a parliament, get that through and get it operating so that the delivery benefits of those changes could be seen and come through by the end of the parliament.
Only yesterday I was talking to someone concerned within Hampshire; they have a real problem, and politics there has not sorted it out. But on the other hand, to give a counter example, if you look at the North East: in 2016, politics completely frustrated any sensible solution. We just had to accept that. We then put together a partial, poor interim solution based on the North of the Tyne authorities. That delivered for that area; you could see the benefits of that. That then led to the rest of the North East thinking, ‘there’s real benefit here, so okay, we’ll go for a proper Combined Authority covering the functional economic area’. Even then, we weren’t home and dry because there was a lot of toing and froing as to whether Durham will come on board. In the end, they did. And we now have got to where we ought to have been from the start. Evolution can work. That’s a prime example of it.
We ended the first interview with Paul at this point, having focused exclusively on local government structures; and scheduled a second interview two months later to discuss the other themes covered in interviews elsewhere.
Q: Other than governance reform, have we been ambitious enough – and have we used the right set of policy levers – to successfully drive growth across the country?
In terms of the levers, which are promoted by devolution, transport is certainly one of the most important levers; the other lever, which I think areas rightly see as very important, is skills and training. If they had to make a choice, I think they would go for both transport and skills. Skills is really important in driving local growth. I think that’s widely accepted in the local sector; they probably rate skills above transport. It depends where you are, because in some places the transport may not be perfect, but it’s okay; in other places the transport is pretty abysmal.
Q: So local leaders don’t prioritise some of the other levers that we’ve seen in recent devolution deals, such as universities and innovation?
I think it depends on the context. If they’re looking for a devolution deal, then they don’t – because they realise that’s not really within the ambit of the devolution agreements which we have.
But on the other hand, I think local leaders certainly recognise the importance of innovation hubs; the importance of universities. They attach a lot of weight to that. Last week, the Secretary of State announced this new proposal for us to build a new quarter in Cambridge: an innovation hub in Cambridge. Government attaches huge importance to that, and rightly so.
Q: How has thinking about the drivers of growth evolved over the time you have been involved?
In the history of local growth, there have been various attempts at growth and regeneration going back many years. They have to an extent succeeded and to an extent not succeeded. The emphasis that has been put on particular aspects has tended to vary over time. I think the experience of Michael Heseltine in the London Docklands was really significant. To this day, the experience of the London Docklands and that whole development – bringing together physical planning, infrastructure, building hubs or particular industries or services – is seen as paving the way and showing what can be done.
Q: What has stopped us taking the examples of the London Docklands or the Liverpool docks and scaling that across the country?
I would say local leadership, local politicians. If you think back to London Docklands, the London boroughs in that area had fiddled around for decades trying to develop London Docklands, and they got nowhere. It took a bold measure: Michael Heseltine came in and said, ‘all this activity is really going nowhere. They argue, they debate, they’ve got so many interest groups they try to satisfy. We’ve got to cut through all this’. He invented the mechanism, which I think has proved its worth, of the Urban Development Corporation.
I think there’s another question: the whole difficulty of planning, and planning being in the hands of local district councils, who – with all due respect and understandably so – are not particularly strategic; not particularly visionary. I say understandably so, because the members of those councils accurately reflect the wishes of their constituents, which is not to have rapid growth or not to do anything big; but there’s a tendency to keep things as they are.
Q: Investment has moved disproportionately to London and the South East. Is that a problem? Is London more of a help or a hindrance to the other local and regional economies of the UK?
The idea of the present Levelling Up agenda is to, as it were, move forward in a way which doesn’t detract or level London down, but seeks to level up other areas. Take transport. A few weeks ago, I went from Newcastle to Preston, to Lancashire County Council. That took four hours; even the scheduled time was three hours. The track is absolutely hopeless. Some of it is single track. You wander through the Pennines. It was just so frustrating. It’s a well-known point of discussion, but East-West transport — nobody has grappled it so far. There are plans, but nobody has really grappled it.
It’s chicken and egg: if there’s no demand, you don’t invest much. But then, if you don’t invest much, there’s no demand. As an example, every month given my position as chairman of the Council of Europe Governance Committee, I go to Strasbourg. I remember when TGV [French high speed rail] was built: it was built in about seven years, not the decades High Speed 2 is going to take; but I think the interesting point is, I remember reading, ‘we’re going to run a train every two hours. We think there’ll be a good demand’. In fact, the actual demand completely outstripped the planning. Now it’s a train every hour, and in busy times it’s two every hour. Therefore, you have really good transport links. It generates the business of transport, but it also tends to support and generate the things people are travelling for.
Q: Within Whitehall, how much do you observe commonality across departments’ approach to devolution, and how much is there variation?
I think there’s a lot of variance. Attitudes range from departments which have a culture of devolution – which my department, I would say, does – to departments which are very nervous about devolution.
The big step to get to where we are today, which we couldn’t have done without, was HM Treasury coming in strongly under George Osborne to say, ‘we’re going to have some real devolution’. If Treasury had not done that, it would have wandered around and gone nowhere.
I think that people think the DWP and Education has tried to give a bit more ground recently, but historically they have been centralising. They’re cautious.
The culture goes back a long way, to thinking that the weakness in our education system – and particularly the weakness in schools – was largely due to local government. Right back from the days of, you know, the early Eighties, there’s been a huge shift. The controlling powers of education have been completely stripped out of local government. Now we have academies; we have governors. I think it was thought that local government control – and this was certainly true in some places, but it was not true universally – was one of the big problems as to why our schools weren’t performing as one would have hoped they would.
The Business department – in the past, and probably to an extent now, although they have moved a long way – was based upon sectors and looking how to support sectors, rather than being based upon place and how to promote place. In my department here, our judgement is that, really, to make good progress, you need to promote place rather than just concentrate on sectors.
Q: How does change happen in Whitehall? Even with the support of HM Treasury, progress has not been as rapid as you would have liked?
Without HM Treasury, nothing would have happened.
It always amazes me both how different departmental cultures are, and how deeply they’re embedded. I think Whitehall cultures can change, in two ways. First, if there’s a very strong centre which pushes through reforms and that could change. It could change it. The other circumstances where I think departmental embedded cultures can change is where a department hits a massive crisis. It explodes. We see that, in a sense, in HM Treasury; the 2008 banking crisis, in many ways, changed lots of things. So we need a strong centre or a massive external event.
Number 10 has never driven change in this area. Margaret Thatcher saw local government essentially as a hostile force and that covered an awful lot. Tony Blair, I think – in a different way – saw it as a hostile force to an extent: not as political opposition, but as a sector which was old fashioned from his experience with Labour local government; not really focusing on providing the public services but focusing on maintaining the old traditions and their power base.
It’s better if you’ve got Number 10 enthusiastic, but what you don’t want is a Number 10 which is basically opposed or nervous about the whole thing. When George Osborne did the deals, he had a Prime Minister and a government that was not necessarily hugely enthusiastic; but were broadly happy to let him get on with it.
Q: How important has parliamentary scrutiny, or parliamentary initiative, been in shaping the patterns of devolution and institutional reform in the UK or in England?
There’s quite a lot of enthusiasm for devolution in parliament, but it depends very much on individuals rather than a party. I would say in all parties, there are people who are very keen and there are people who are cautious. There’s quite a lot of argument in the House of Lords for devolution. They quite see this as a favourable way forward.
I might be unfair here, but whilst parliament has not proved challenging against the idea of devolution, I don’t think a great deal has been shaped by parliament either. Having said that, what is significant is that you can have particular areas, where members of those areas are opposed to devolution and that can significantly delay or hinder devolution in those areas.
Q: Our conversation has focused overwhelmingly on England. Should we think of English reform as being akin to governance change in Scotland and Wales (and perhaps London) or as distinct?
Arguably, as Scottish local government will say, the Scottish government does not like devolution. Devolution to the Scottish Government is great, but they don’t devolve much beyond that, and they are really quite a centralising force. They’ve created Police Scotland. We are told by colleagues that they tend to discourage devolution to their areas. It all goes through Edinburgh, and then it stops.
Wales is much smaller. They have a problem with the size of their local authorities. They are unitary local authorities, which is good, but they struggled too. I think they had two goes that tried to reform them. They have bigger and more sustainable local authorities. And of course, Northern Ireland has its own distinctive features and issues which don’t arise elsewhere in the UK.
Q: The UK remains very centralised, including with Scotland and Wales, on taxation. Why has fiscal devolution not been more of a priority for reformers?
HM Treasury has been a key champion on a lot of devolution; but HM Treasury is very cautious about any talk about fiscal devolution, because they see the fiscal lever as central to the overall economic management of the economy. I don’t think they see a way in which that could be reconciled with having significant fiscal devolution.
Part of that line that goes right back to the 1980s, when the rates, particularly the business rates, were wholly local. We forget that now. In the early Eighties, when Mrs Thatcher became Prime Minister, each area set its own business rates. There were wide variations in business rates and, of course, business didn’t like that. They successfully lobbied for business rates to be centralised, set by government and parliament. Well, I can’t ever see that changing really.
Q: But we do have some smaller scale alternatives – like Scottish income taxes or a tourism tax – that could be expanded?
Advocates of reform don’t ask for it, and I think that’s partly because they know it couldn’t be a runner because of the inbuilt Treasury and Whitehall; and also I suspect because although they might like extra money, but I’m not sure whether they would particularly welcome the responsibility for setting a very significant local tax, which could impact their citizens and their businesses in a very significant way.
It can also have the effect that, as it were, the wealthy areas get wealthier, and the poor areas lose out on any sort of redistribution or any equalisation, and that is a challenge in every state. How does the prosperous prosper and those who are failing tend not to fail?
Q: What innovation stands out as being particularly successful? What risks should future reformers bear in mind?
I’ve said that the two areas which stand out as successes are the London Docklands and Merseyside. They made a huge change. I could remember discussions in the early Eighties where people were seriously suggesting that we should just basically close down Liverpool.
On risks, I think my view – which isn’t necessarily shared by all – is that one of the big weaknesses is that if you look at the local government systems, we’ve got on the whole a pretty ineffective and dysfunctional local government system, particularly in two tier areas. People spend countless time arguing about petty things, try to maintain little power bases without being able to focus on the big picture and get on and do things. Part of that is the planning system we have, which is not a system that promotes development, but rather – and I know the Secretary of State is changing this in the [Levelling Up and Regeneration Bill before parliament] – it’s a system which tends to preserve the status quo.
ENDS