The Blind Spot and the Bluff - Why Growth in Every Postcode Needs More Than Devolution

What does Andy Burnham’s pledge to deliver "deeper devolution" to trigger economic growth ‘in every postcode’ mean?

 

The Welsh Government are rightly defensive about guarding the boundaries of the hard-won devolved settlement. But Welsh Councils are chomping at the bit to get some of the devolution action in England where the new Prime Minister has promised to fundamentally rewire the state by ‘shifting power, funding and accountability from Whitehall to local leaders’. 

But the former Mayor of Manchester is now Prime Minister of the whole of the United Kingdom and needs to tread deftly (not least because of the political backdrop of nationalist leaders in each of the devolved governments). 

The shape of Welsh local government and the way councils collaborate regionally are the responsibility of the Welsh and not the UK Parliament. Any hint that Westminster intends to bypass the Senedd in pursuit of its own regional agenda opens up a much broader constitutional conflict, not least because it comes while London remains unwilling to concede many of the additional powers repeatedly sought by the Welsh Government.

Feeling that the debate might be pulling away from Burnham’s "good growth in every postcode” narrative Welsh Local Government Association leader Anthony Hunt (the Labour Leader of Torfaen Council) has offered a triangulation - he said "I would not want the prime minister to circumvent the Welsh government, but devolution to Wales should not just be about Welsh Government".

 

So can Wales's regions be empowered to become stronger engines of growth without triggering a constitutional stand-off?

First-off we are not comparing like-with-like. The term ‘region’ in an English context typically refers to an area covering between 1.5 and 3 million people. In Wales, regions cover much less dense areas. The Swansea Bay City Region captures some 700,000 people, and similarly North Wales around 690,000 people. In Mid-Wales sheep outnumber people by 7:1.

Only the Cardiff City region is comparable to English tiers, and even then at the lower end: around 1.5 million people

Transposing an English mayoral worldview onto a very different political geography just doesn’t work. Wales may be a similar population size to the PMs old manor but that’s where the parallel ends. 

Andy Burnham talks about the regions of England and Wales interchangeably but the role the new Prime Minister champions for Metro Mayors is, in many respects, already performed by the Welsh Government. Powers over skills, employment support, economic development, housing investment and major spending programmes sit at an all-Wales strategic level. 

His argument for England is that powers should flow from Westminster to City Regions because they operate at an economically meaningful scale. Yet when the PM turns to Wales, he seems to suggest that powers already devolved to Cardiff Bay should be dispersed further down the system. But notably he is not calling on his successor as the Mayor of Greater Manchester, Bev Craig, to fragment the powers of the Greater Manchester Combined Authority and redistribute them amongst its ten constituent councils. On the contrary, the whole logic of the Greater Manchester model rests on concentrating strategic authority at a regional level. Yet the implication of his comments is that Wales should move in the opposite direction. Powers exercised nationally by the Welsh Government would be pushed down to regional bodies, or potentially filtered through the 22 local authorities that sit beneath Wales's devolved institutions. That raises an obvious question: if scale is essential for economic transformation in England, why should it matter less in Wales?

Despite the hopeful rhetoric we seem to have another Prime Minister who does not appear to appreciate the devolved context. But the political dynamic he has unleashed is a real force and it requires an answer from within Wales which meets the appetite for a stronger engine of local economic growth without weakening the strategic capacity that devolution was intended to create in the first place.

There are a couple of issues for me that arise from this:

1. The Prime Minister should make it explicit that he understands it’s for the Senedd and Welsh Government to decide the regional pattern in Wales not the UK Government.

2. The call for growth in every postcode is a slogan without a strategy. The Financial Times has described it as "good politics, dubious economics". UK regional inequality is not just about access to finance for Councils but how the UK Treasury uses its fiscal powers, its main levers of tax and spending, to ‘level-up’ the poorest parts of Britain. 

3. The issue of devolution within Wales is a really important one, but in practice there has been no appetite to confront the size and shape of local government - so it is now easier for one side to hide behind the devolution argument, and for the other to parrot the PMs new slogan without confronting it.

The challenge of boosting economic productivity in some of the poorest parts of the UK is the correct one, but as the experience in Wales over the last 27 years shows, devolving responsibilities alone will not address it. 

Nor does the distraction of addressing the long overdue decentralisation of government in England let local and national leaders in Wales off-the-hook from confronting a messy set of institutional arrangements at a local and regional level.

There is broad agreement that 22 County Council is too many for a population the size of Greater Manchester (which has less than half the number). But nobody can agree which ones to merge, and attempts to get authorities to pool resources at a regional level for strategic functions have been resisted at every turn. 

In 2014, First Minister Carwyn Jones, following the Williams Commission, proposed reducing 22 councils to 12. In 2015, Local Government Minister Leighton Andrews proposed 8 or 9 authorities, with the possibility of just 6 large councils. Despite arguing that councils needed to “grow up” and agree on reform, he failed to secure consensus and the plans collapsed. In 2018, his successor Alun Davies attempted another reorganisation, seeking to halve the number of councils and warning: “Change or we will change you.” Again, councils resisted and reform stalled.

As a compromise, Welsh councils were encouraged to collaborate regionally rather than merge outright. However, these collaborative arrangements produced mixed results: Strategic regional planning initiatives often struggled because councils prioritised local interests over regional objectives; five regional education consortia, created to improve school support, were accepted reluctantly and were eventually dismantled.

In 2021 Mark Drakeford introduced the bloodless Corporate Joint Committees (CJCs) which required regional cooperation on planning, transport and economic development. Although presented as collaborative bodies, many viewed them as a form of local government reorganisation “by stealth” and were resisted. In my documentary podcast series Y Pumed Llawr / The Fifth Floor on the workings of government in Wales former Education Minister Kirsty Williams pointed out that regional collaboration was undermined by local political incentives. She said:

“Understandably, if you put yourself into the shoes of a council leader, or an education portfolio holder, you're not going to win any votes because your local authority has supported another local authority's educational improvement journey. Your sole focus, quite rightly, and what you'll be held to account for by your voters, it’s on what you've done in your own county.  That idea that people would share those resources and work together to lift everybody up, it was a lovely idea, but the reality is very, very different. 

And I think, if we're honest, the regional consortia was just a mitigation to a bigger policy that wasn't deemed able to be delivered, which is local government reorganisation. So ‘I can't do local government reorganisation. Local education authorities are too small. What do I do about that? ‘Well, I'll try and create this entity’. But ultimately, in significant parts of Wales that was really strained”.

 

Despite repeatedly defeating attempts at reorganisation, Welsh local government has been profoundly weakened by austerity. Since 2010, Welsh councils have lost around 40% of their workforce, leaving them increasingly unable to deliver the growing range of responsibilities placed upon them.

Government policies still assume local authorities have the capacity they possessed decades ago. In reality, years of budget cuts have hollowed out councils to the point where many struggle to fulfil statutory duties as originally intended. Technical functions that once sat comfortably within every authority, such as assessing local housing need, increasingly require expertise and resources that many councils no longer possess. In some of Wales's smallest authorities maintaining the specialist leadership and professional capacity required in areas such as education and social services is close to breaking point. 

For many Councils delivering the full range of Welsh Government priorities is an ever growing challenge, and has created a disconnect. Politically, local government remains fiercely protective of its autonomy and traditions. Operationally, however, many councils lack the capacity, expertise and staffing needed to meet expectations.

The problem is not that local government is unnecessary, but that the current relationship between central and local government is increasingly unclear and unsustainable. The result is a system caught between two realities: councils determined to preserve their independence, and public service delivery structures that are running on diminishing resources. And a residual ‘City Deal’ set of activities that lives in the gaps.

At a time of continued financial pressure and growing public frustration over governments' ability to deliver change, the fundamental question is whether Wales can continue to defend local government arrangements that may no longer be capable of delivering services as effectively as required.

Andy Burnham has said he wants "every leader in this country signed up" to having good jobs in every community and has invited the First Ministers of Wales, Scotland and Northern Ireland to a summit at the National Economic Council in October.

The Plaid Cymru led Welsh Government will get support for robustly defending the devolution boundaries, but they don’t have a coherent answer to the mess of regional and local government in Wales. First Minister Rhun ap Iorweth’s manifesto in May’s elections had nothing to say on rationalising the jumble of local and regional arrangements. Continuing Welsh Labour’s reluctance to confront its local government base it simply stated that structures “will be kept under continuous review to ensure they remain fit for purpose”. 

 

If Andy Burnham is smart at next month’s summit he will drop the rhetoric of demanding “every leader” sign up to his incomplete plan and instead offer a bargain - a staged release of the extra powers to Senedd that the Welsh Government is asking for, and in return challenge them to confront the mess of regional and local government in Wales (that the previous Labour Government failed to grapple) and produce their own routemap for local economic growth. If he doesn’t do the former he’ll allow them to duck the latter.

But triggering economic growth ‘in every postcode’ will need more than that. There’s a danger that Whitehall’s tendency to ‘devolve and forget’ that Wales has witnessed will simply be extended to the English regions.  Even with a re-wiring of the English State that shifts ‘power, funding and accountability from Whitehall to local leaders’, the centre of government retains a responsibility to lead a macro economic policy to helps ‘every postcode’. Because even after some decentralisation, responsibility for the main economic levers will not be devolved, and no amount of displacement activity can abdicate the responsibility of the UK Treasury for the deeply unequal economy it has presided over.