Resetting Regional Policy: How We Make Devolution Work

Following the General Election, the new Government has stated that a reset and expansion of devolution is a policy priority. It's an exciting opportunity for the North, but one that requires further consideration of what devolution is for and who ought to have a role in regional decision-making. 

Here, our CEO Robert White shares his perspectives and speaks with his True North Advisory Council co-chair, Professor Maggie O’Carroll, about why business and civil society must be an equal partner in devolution with local government.

A reset of the relationship between England’s regions and Westminster has been positioned as a day one priority for the Government, as it seeks to undertake what Angela Rayner has described as a “devolution revolution”. The Deputy Prime Minister and Housing, Communities and Local Government Secretary wrote to council leaders ahead of the announcement of a new ‘Take Back Control Act’ in the King’s Speech, calling on areas that have not yet secured a devolution deal to request new powers from Westminster.

It's encouraging to see devolution high on the policy agenda, with the King’s speech and Angela Rayner’s letter following her and the Prime Minister’s meeting with the 12 elected mayors of England, during their first week in power. But a prioritisation of regional policy does not in and of itself make for a successful strategy. 

Devolution was one of the success stories of the last Government, with 11 Combined Authorities and directly elected mayors established between 2017 and 2024. It was a part of that administration’s wider ‘levelling up’ agenda, which saw £3.8 billion of investment channelled into the North across two funding rounds. 

The consensus, however, is that much more needs to be done to make regional policy a success. I wrote last year about why this is the case, in reference to a paper from Harvard Kennedy School and King’s College London that found short-termism, a lack of ambition and policy instability had contributed to the gap between the richest and poorest areas of the UK becoming larger.

Mind the gap

The ‘Two Nations’ report from the Centre for Social Justice, published in December, offers a fascinating and sobering perspective on this. Among the many things that stood out related specifically to productivity and prosperity, were the fact that just two regions of the UK — London and the South East — have productivity levels above the national average. Without London, the UK would have lower living standards per head than Mississippi — the poorest US state.

The report explains that the ongoing productivity and prosperity puzzle the UK faces is intrinsically linked to poor supply-side infrastructure, specifically skills training and education. It says: “London receives nearly 50 per cent of all FDI [Foreign Direct Investment]. Investors will choose a region based on the potential it has for a successful return on their investment. This includes colleges and schools that equip students with the skills needed to make that investment a success.” 

So, while everything has changed in Westminster, nothing will change for devolution across the country until planning and decision-making moves towards the long-term, transcending short-term political cycles and prioritising the skills that align with the jobs of the future. It’s for that reason that there must be a more significant role for business and civil society to play in regional policy, investment, and decision-making.

Fostering a long-term strategic vision for the North is one of the driving missions of True North — our network that unites the region’s most influential and purpose-driven voices to co-create a path forward, with a view to unlocking the true potential of the Northern economy. 

What is devolution for?

The task assigned by Sir Keir Starmer and Angela Rayner to the 12 elected mayors of England, is to each draw up a ‘growth plan’ for their region, “identifying growth sectors and the infrastructure they need to thrive”. 

While this speaks to a more long-term, joined up approach to devolution, this reset for regional policy has to also be a moment to ask: what is devolution for? What are effective devolution structures and models of implementation? What are the decisions that can be made locally instead?

Professor Maggie O’Carroll, CEO of The Women’s Organisation and my co-chair on the True North Advisory Council, believes that devolution should address key supply-side infrastructure challenges — namely transport, housing, planning in concert with their other statutory duties such as Care and Environment Health. 

Whilst addressing skills, business creation, growth and innovation will remain important issues for all regional leaders, she says: “We must consider whether industrial and economic development policy ought to be made on a local level. Ultimately, hyper-localised skills and business development are not particularly cost effective or impactful.”

Citing economic development research: “The experience of a business owner in West Yorkshire is not dissimilar to a business owner in Lancashire, for example, so our aim must be to work on finding the solutions that help both to thrive, through a national skills and business growth agenda, in consultation with relevant stakeholders. That will ensure that the needs of business are accounted for in the context of a UK-wide industrial strategy, encouraging collaboration and working towards shared goals, rather than in local government silos.”

Who ought to have a stake in devolution?

Historically in the UK, devolution has been focused on dispersing power from central to regional and local government. But for investment to flow into the regions that need it, the people that are releasing the capital need to feel comfortable that the bodies who receive it will reinvest it responsibly and effectively.

The solution is a more formal and equitable role for business and civil society, where local government is not the only prism through which devolution is implemented. Maggie shared: “We have to give greater parity to the private sector and civil society, who offer much of the agility that the public sector naturally finds challenging. By doing this, we can foster an effective public-private partnership that sees local government as an enabler and facilitator of regional policy, but business and civil society at the forefront of its design and implementation.”

Maggie shares an example of councils established in the United States, such as the Women’s Business Council. “It has representatives at the White House who are embedded in the Small Business Administration. They have a responsibility to ensure that procurement in the US is diverse and inclusive of women and ethnic minority-led businesses. It’s not only been transformational in terms of the equalities agenda, but the number of new women-owned businesses grew at nearly double the rate of businesses owned by men between 2019 and 2023.”

Following this model and embedding of business and civil society at the heart of devolution decision-making and structures could have a transformative impact on the Government growth ambitions.

True North: a network for regional change

Much of the ingenuity that fuels Northern economic activity comes from the business community and the entrepreneurial endeavour of individuals. But many of them feel like they do not have a voice in the decisions that happen in the places they live and work.

True North offers that voice and a network for national and local government to engage with. Many of our members could well be the people sat in those same rooms alongside elected officials; not as observers but actively designing and delivering regional policy.

It’s encouraging to see devolution at the top of the agenda for the new Government. But a reset of the relationship between the regions and Westminster has to also consider a reset of what we mean by devolution itself.

If you're a purpose-driven leader and want to join the True North network to engage with more than 250 members from the private sector and civil society you can sign up here.