It is understood that on 16th July 2024, Rayner wrote to all of the Local Authorities who are not currently subject to a devolution deal, encouraging them to submit proposals by the end of September 2024 to participate in a first set of devolution settlements. Devolution was also at the forefront of today’s King’s Speech, where the introduction of the ‘English Devolution Bill’ was announced, intended to provide new powers to metro mayors and combined authorities through a new framework.

There is sound economic evidence that strong strategic leadership and cooperation can lead to economic growth. Savills published a UKREiiF research paper on realising the growth potential of 14 major UK cities, where it was found that the country needs clear, long-term policy frameworks which are consistent. This will give investors more confidence to make the decisions that are critical to drive economic growth over the next decade. The research also found that the UK needs to align planning for housing with employment areas which comes with its own challenges including land availability, power capacity, transport infrastructure and Green Belt constraints.

There are presently 11 areas in England with mayoral devolution and their powers, particularly in relation to planning, differ significantly depending on the deal negotiated. In Angela Rayner’s letter to the Local Authorities, she has made reference to moving away from a “deals-based approach” but there is very little information currently available which sets out what new framework will look like. The following levels of devolution deals currently exist:

• Level 1 deals offer only a limited strategic role in delivering services.
• Level 2 deals offer control over the adult education budget, Local Enterprise Partnership functions and the UK shared prosperity fund.
• Level 3 deals offer more expansive powers. In addition to level 2 powers, they offer powers to facilitate regeneration schemes, investment funds and transport systems. Metro mayors can also have strategic planning powers to produce spatial development strategies.
• Level 4 deals offer extra powers to Level 3 around skills, careers and transport. Currently only Manchester and West Midlands Combined Authorities have agreed 'trailblazer’ deals at this level.

Angela Rayner has made it clear in her letter that Local Authorities will not be forced to adopt the metro Mayor model. In terms of incentives, it is clear from the new Government that devolution settlements are a useful way of moving funds from a national level and allowing local leaders to decide where the funds should be directed to create maximum levels of impact. However, as with a lot of Government funding, it has not been adequately evaluated yet and this is something Savills are currently reviewing. 

The Deputy PM has also pledged to introduce Local Growth Plans across the Country which will align with Labour’s national industrial strategy. These plans were initially included in Labour’s manifesto and have now been confirmed in the Kings Speech. The intention is that local leaders will work with major employers, universities, colleges, and industry bodies to produce long-term plans that identify growth sectors and put in place the programmes and infrastructure they need. Although this joined up approach to planning and development is welcomed and long-term strategies are likely to play an important role in years to come, there are significant unmet housing and employment needs now which require short-term solutions in order to see results over this parliamentary term.

The devil is in the detail and we await further announcements on how Labour’s strategy to devolve power will play out in practice. However, negotiating devolution settlements with Local Authorities and producing Local Growth Plans takes time. It is clear that securing economic growth is of paramount importance to the Government and there is recognition of the role the development industry can play in achieving this, but in order to revolutionise the current system, the Government should also be focusing on short term wins through national policy amendments and trying to encourage positive decision-making when it comes to key economic, residential and infrastructure projects.

These short term changes to policy will hopefully become apparent by the end of July when revisions to the National Planning Policy Framework are expected to be published, initially for a period of consultation before being formally adopted later in the year.