Holyrood usurped – economic development in Scotland post-BREXIT

Image: Holoyrood.com

‘… it should be local authorities that are in the lead’ and ‘the decision making is with UK Government Ministers’!

By stewartb – a long read

We’ve had another assessment of actions by the Tory government in Westminster impacting adversely on Scotland. It reveals what is being done to Scotland with no democratic mandate from Scotland. The assessment is by the cross-party House of Commons Committee of Public Accounts in a report entitled ‘Local economic growth’ (published 8 June 2022).

See: https://committees.parliament.uk/publications/22483/documents/165800/default/

It’s worth noting that the Committee has 16 members, including just one from Scotland (the redoubtable SNP MP Peter Grant – more of whom later) and one from Wales.

Background

The Committee notes that during the ten years to 2020, government committed £18 billion in domestic funding to local economic growth policies in England. As this area of policy was fully devolved during that period, one presumes Scotland, Wales and NI all benefited financially through the Barnett allocation process: devolved administrations were able to decide how these funds were best spent. Since 2014, a further c. £10.3 billion has been directed to the UK through EU structural funding: Scotland received its share to be managed and distributed in line with specific Scottish Government priorities.

In short, funding came to Scotland from different sources and Scotland’s elected government was able to decide on how to spend it. The Committee sets out how the Tory government is changing this arrangement in radical ways.

The track record

The Committee offers this description of the UK after c.12 years of Tory government in Westminster – this is a government of course that has had access to ALL powers relevant to the UK’s economic development: ‘Despite efforts by successive governments to tackle longstanding spatial disparities, the UK remains less productive than its main competitors, shows regional disparities that are among the largest in the OECD and inequality within the UKs regions is even greater than it is between them.’ (my emphasis)

Given this is the state of the UK after a prolonged period of Tory policy prescriptions and management, is Scotland likely to benefit from devolved economic powers being taken away from Holyrood and exercised in Westminster? Hardly!  But this is what is happening.

‘Levelling-up’ – the latest big wheeze

The Public Accounts Committee explains that: ‘The Department for Levelling Up, Housing & Communities (DLUHC), has a coordinating role for Levelling Up and leads on the design and delivery of central governments place-based local growth interventions.

At the November 2020 Spending Review, the Tory government announced or furthered a range of economic development interventions:

  • £3.2 billion Towns Fund in England
    • the £4.8 billion Levelling Up Fund for the UK
    • the one-year £220 million Community Renewal Fund for the UK to replace European Funding in advance of the UK Shared Prosperity Fund
    • the creation of Freeports.

On overall scale: ‘As at November 2021, and including the £2.6 billion for the UK Shared Prosperity Fund announced at the 2021 Spending review, central government had committed £11 billion through these schemes over the period 2020–21 to 2025–26.’

Tory actions so far

The Committee is scathing over implementation to date, even in England: ‘It is unsatisfactory that Ministers finalised principles for awarding the first round of the Levelling Up Fund only once they knew the identities and scores of shortlisted bidders.

‘The Department has past form with this. In November 2020, we reported that the selection process for awarding the Towns Fund had not been impartial and we raised concerns about the lack of transparency over the selection process. … we remain concerned over the timing of Ministerial input for final awards. …. The process allowed them (i.e. ministers) some discretion in how bids met a pre-defined list of other considerationsbut Ministers decided on the principles for awarding funding only after they knew who, from the 170 shortlisted bidders, would win and who would not as a result of those principles. …. There is no transparency over the location and type of unsuccessful versus successful bids.’

On the process for awarding the Towns Fund the Committee noted that it ‘had fuelled accusations of political bias.’ So this Committee is expressing concerns over the impartiality of the process even within England: when one considers the Westminster government’s additional ‘motivations/incentives’ regarding Scotland and its pro-independence government, concerns such as these can only be heightened!

The Committee is also scathing about the Westminster governments’ level of basic understanding: ‘Despite billions spent on local growth policies over many years, the Government still does not have a strong understanding of what works.’ 

And: ‘The Department does not yet know how it will measure performance on a consistent basis across different geographical areas and timescales.’

On devolution

This cross-party Committee states: ‘It is unclear how the Department is reconciling tensions between devolved responsibilities and administering local growth funding on a UK-wide basis. Economic development is a devolved power but the Department is administering the Levelling Up and UK Shared Prosperity funds (UKSPF) on a UK-wide basis.’

It adds, on claims of close collaboration: ‘… it has not yet convinced us that that this collaboration will be effective in ensuring that priorities of the devolved administrations are adequately taken on board.’

To reinforce what is changing, candidly what is being imposed on Scotland, it’s worthwhile reflecting on some exchanges during the Committee’s evidence session involving Peter Grant MP:

See https://committees.parliament.uk/oralevidence/9894/default/

Peter Grant: ‘…. How does the part played by the three devolved national Governments in the decision making process in these funds compare with the part that they played in the allocation of the European funds they will be replacing?’

Emran Mian (Director General, Decentralisation and Growth, DLUHC): ‘On the European structural funds, you are right: the devolved Governments were managing authorities for their portion of the UKs share of the EU structural funds. My team was the managing authority only for the English portion of the EU structural funds. The approach we are taking on the UK shared prosperity fund is different; it will have a single framework for the whole of the UK. But we expect there to be really significant collaboration with the devolved Governments and, critically, with the individual local authorities, which will ultimately be responsible for delivery.’

…..

Peter Grant: ‘That means that the Scottish Government was previously able to use its priorities as part of the decision-making process for the allocated funds to local authorities, but the equivalent decision now is entirely taken by the UK Government and is based entirely on the UK Governments assessment of priorities. Is that correct?’

Emran Mian: ‘Ministers have been clear that decision making on the UK shared prosperity fund will be for the UK Government, but we will work really closely with each of the devolved Governments.’

…..

Peter Grant: ‘…  the decisions about how much would be allocated, which phases it would be allocated to, what the criteria were, when the bidding opened and closed, how each bid scored against the criteria, and how those scores were converted into successful bids—every single one of those decisions was taken, either at official level or at ministerial level, by the United Kingdom Government on replacing funds, whereas previously the devolved Governments would have had significant input. That is the case, isnt it?’

Emran Mian: ‘The bidding authorities are local authorities in each of the devolved Governments. It is slightly different in Northern Ireland. There is really—‘

Chair: ‘But, Mr Mian, Mr Grant is talking about where the decision was made, not who was bidding.’

Emran Mian: ‘I just felt that it was important to emphasise that there is a really important level of decentralisation here, and we are trying to work with the level of government that is very local. Given that these projects are often very local in the nature of what they are trying to do, we thought it was appropriate that it should be those local authorities that are in the lead, rather than the devolved Governments. The decision making, as you say, is with UK Government Ministers but involves working closely with the devolved Governments.’

…..

Peter Grant: ‘But it is correct, isnt it, to say that all 32 Scottish councils—I do not know what the numbers would be for Wales and Northern Ireland— had to tailor the way they presented their priorities in order to fit a set of priorities and criteria that had been determined by the United Kingdom Government? They did not have to tailor it to the priorities that had been determined by the Scottish Government.’

Emran Mian: ‘It is the same point, in that the decisions were made by UK Government Ministers. But I have got to say that the feedback that we have had, as a set of officials working directly with local authorities in each of the four nations, has been really positive, in that we have sought to have really active conversations with places about what they are bidding for and how that fits in with the prospectus that we have laid out. We have tried to have a really constructive conversation with those local authorities—‘

Chair: ‘I think you have just re-emphasised the point, Mr Mian.’

End note

To set alongside these Tory government actions – taken with no democratic mandate from Scotland – to over-ride the devolution settlement, it’s hardly reassuring to have this additional conclusion drawn by a cross-party House of Commons Committee: Accountability for levelling up outcomes remains unsatisfactory. This Committee has reported before that governments accountability arrangements had failed to keep pace with increasingly complex ways of delivering policies and services, and that this had weakened accountability to Parliament for the use of public funds.’

4 thoughts on “Holyrood usurped – economic development in Scotland post-BREXIT

  1. Thank you for this illuminating research and this report. It puts into context the eagerness with which some Labour Councillors in some Councils in Scotland were so keen to accept support from, or give support to, Tories to form the administrations. If, before the funds are allocated, Westminster knows the ‘scores’ of the applicants and then devises a formula by which funds are distributed, which – surprise! surprise! (Naw!! Nae surprise!) – benefits cronies to the detriment of others.

    So, when Glasgow City Council or Dundee, for example, receive disproportionately low funding for projects compared to Councils where there are unionist administrations, it is presented by the Scottish media as ‘incompetence’ on the part of SNP and Greens and, ultimately, of the electorate for voting for such people.

    And, since the places which have non-Unionist Councils are mainly the places where poverty is highest, then we have Labour Councillors (including an Orangeman) in effect diverting funds from where they are really needed. And this is ‘The Peeople’s Party”??????? When was it last such?

    Liked by 4 people

  2. I have had to post as ‘Anonymous’ for some time now, because if what I post has more than 2/3 lines, under my own name, it vanishes into the aether.

    Liked by 1 person

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