COUNCIL	Agenda Item:

6 January 2016

Heart of the South West Formal Devolution Bid

Cabinet Member	Cllr Clive Eginton

Responsible Officer	Chief Executive

Reason for Report: To inform Members of the work in drafting a business case for a devolution bid for the Heart of the South West (HotSW).This is being led by the Leaders of Somerset and Devon County Councils, all Somerset and Devon Districts, Torbay Council, Plymouth City Council, Dartmoor and Exmoor National Parks and the Local Enterprise Partnership

RECOMMENDATION(S): That:

Council endorse the joint Leaders and Mayor’s current approach to devolution and the drafting of proposals, their submission and negotiation of a deal for the Heart of the South West; and

The Leader of the Council be delegated to approve the final proposal should Government timescales change.

REASON FOR THE RECOMMENDATION: The Council has an opportunity to benefit from devolution across a wide range of topics and services. Benefits may include increased powers over decision-making and funding, leading to decision-making that more closely reflects local needs, improves services and reduces costs.

Relationship to Corporate Plan: Devolution potentially covers a wide range of services and plans. The detail of these will develop as formal proposals are developed, negotiation with Government takes place, and the final devolution deal is put into place. Once these are more certain there may be a need to review the council’s corporate plan in the light of the changed circumstances.

Financial Implications: Until detailed devolution proposals are developed, financial implications can only be generalised. They fall into three categories:

The Government requires devolution to be a fiscally neutral process – power over funding may be transferred but no new government money will be made available except potentially for ‘pump priming’ activity

There is potential for savings across the public sector in the Heart of the South West and proposals are being developed with this in mind

The Government may however attempt to negotiate additional spending by the council or other partners as a requirement of one or more parts of the final deal

Legal Implications: None at this stage. Implications will be addressed as any devolution deal is developed and agreed.

Risk Assessment: None at this stage although there is strong competition for devolution deals and some bids are further advanced. Failure to secure a deal may affect delivery the council’s ambitions. Implications will be addressed as any devolution deal is developed and agreed.

Introduction

1.1	Devolution for the Heart of the South West (HotSW) is being led by the Leaders of Somerset and Devon County Councils, all Somerset and Devon Districts, Torbay Council, Plymouth City Council, Dartmoor and Exmoor National Parks and the Local Enterprise Partnership.

1.2	Our shared Devolution Statement of Intent was submitted to Government on 4 September in response announcements in the July Budget and a deadline set by the Chancellor of the Exchequer. The Government received 38 bids from cities, towns and counties across England. There is strong competition for devolution powers and some bids are further advanced that HotSW. Nevertheless, the Government has subsequently asked us to produce detailed devolution proposals by the end of 2015 with a view to negotiating a formal deal thereafter.

1.3	The process to produce formal proposals is now under way and is being coproduced across the HotSW. This report updates Cabinet and the Council on the necessary activity to date and seeks endorsement of the council’s role in producing formal proposals to the Government’s timescales.

1.4	Any final devolution deal with government will be subject to further approval / ratification by all partners individually.

Our Devolution ambitions

Working with local authorities, National Parks and the Heart of the South West Local Enterprise Partnership to deliver full proposals for devolution which will seek a formal agreement with Government on a formal devolution deal based around:

Productivity and economic growth

Devolving powers over skills, apprenticeships, and business support, including more flexible, joined up funding and investment

Greater control over the public sector property portfolio

Health, social care and wellbeing

Reducing ill-health and reliance on health and social care services

Support to deliver integration of health and social care

Improved connectivity and resilience

Better coordination of infrastructure and local growth

More housing and economic infrastructure

Improved coordination and delivery of flood and coastal defence, protection and prevention infrastructure

Governance

The expansion of existing arrangements to create a pan-local authority Leaders Group, Committee or Assembly that co-opts other key partners

Supported by a Chief Executives Group developed from existing groups to support the Joint Leaders Group / Committee / Assembly

‘Passporting’ of powers down to areas or themes using existing formal decision-making structures where possible.

2.2	These recommendations seek to gain authority to pursue solutions that help the Council maximise the opportunities of devolution. They do not commit the Council to a formal devolution deal, only to make and negotiate on proposals.

2.3	At this stage of the process the Council is not required to take decisions on the detail of future service provision but rather to be actively aware and involved in discussions.

3.0	National background

3.1	The Government has declared its desire to devolve powers and budgets from Westminster to local authorities, along Local Enterprise Partnership geographies. The Chancellor of the Exchequer is particularly interested in devolution as a driver of economic growth and reducing reliance on the public purse.

3.2	In general, devolution is expected to support the following areas of government policy:

Increased productivity

Skills and employment

Housing

Reducing the cost of the public sector

3.3	Many devolution deals are being developed by consortia of local authorities and their Local Enterprise Partnerships. The largest agreed deal so far is the Greater Manchester Devolution Agreement. Known as the ‘Northern Powerhouse’ this deal will:

Join up economic growth agendas and public service reform

Health and social care integration

Devolve business support and skills/training/apprenticeship budgets

Create a directly elected Mayor with transport, strategic planning, housing development and Police and Crime Commissioner powers

3.4	Cornwall Council have also recently agreed a devolution deal to give them greater power and influence over business support, skills and employment support, EU funding, and health and social care integration. During tough negotiations with Government they demonstrated that an elected Mayor for Cornwall was not required for their area.

During August, Heart of the South West Leaders agreed to produce a high-	level set of ambitions stating our desire to negotiate a devolution deal with	government where we would make improvements to our area in return for	increased powers and responsibilities.

The Heart of the South West Devolution Statement of Intent was submitted to	Government and made public on 4 September 2015.

3.7	The Government praised our statement of intent for its clarity and ambition	and asked us to move forward swiftly to produce detailed, formal proposals	and begin negotiation with them on a formal deal.

3.8	Government’s expectation is that we will submit proposals before the end of	2015 and carry out formal negotiation in early 2016.

3.9	Therefore, partners are now working on formal proposals and preparing for	high-level discussions with Government.

4.0	Next steps: producing formal devolution proposals

4.1	At a meeting on 5 October it was agreed to write our Statement of Intent by	‘themes’ so partners could share the load of producing detailed proposals for	the final bid document.

One Chief Executive and one Leader are leading on each theme, driving development of proposals and liaising with other Heart of the South West partners.

Each theme group will produce a ‘chapter’ which will be written into a single bid document for submission to Government. These themes are:

Health, social care and wellbeing

Skills and employment

Business support

Resilience and connectivity

Housing and planning

A governance theme will ensure that governance for the devolution deal is acceptable and equitable to all partners.

4.2	A Programme Management Office is overseeing delivery of each chapter and	maintaining communications between partners. Currently this Office is funded	through existing resources. It is important to note that each partner remains	responsible for their own governance processes and public/in-house	communications.

4.3	Each theme ‘chapter’ will demonstrate a thorough understanding of the issues and the difference that devolved powers and funding would make, including:

A robust evidence base

A series of ‘offers’ to government and ‘asks’ from government showing:

Stretching targets

Demonstrable outcomes for the Heart of the South West area

Resource requirements including an analysis of costs and benefits

Impact assessments

Proven capacity and capability to deliver

5.0	Engagement with Members and partners

5.1	Producing the formal bid is a fast moving process involving many organisations and individuals. In order to keep Members informed and provide background information for partners, the Devolution Programme Management Office will produce a weekly newsletter for all partners as well as more detailed updates as they become available. Leads for each theme (see above) will engage with their key stakeholders.

5.2	One or more partners may choose not to proceed with a formal bid. This would be unfortunate as there is strength in all partners coming on board however it is possible for a devolution deal to go ahead even if one or more local authorities choose to opt out. There is significant discussion under way between partners to produce proposals acceptable to all and more will be known as the bid develops. Furthermore the Statement of Intent’s working principles include an agreement that proposals will do no harm, even if a particular proposal offers no advantage to a given area.

6.0	Consultations undertaken

6.1	Despite the Government’s challenging timescales to date, efforts have been made to keep Members informed on the development of the proposals and this will continue going forward.

6.2	Any final devolution deal with government will be subject to:

Further approval / ratification by all partners

Consultation, as appropriate, before delivery of parts of the deal

6.3	Council Members will be kept informed as work continues, including through:

Circulation of regular updates

Cabinet report and Member briefings

7.0	Options considered and reasons for rejecting them

Alternative approach	Reason for rejection
Not to participate	There is significant potential benefit to Mid Devon through devolution which can be explored with minimal risk.
To submit proposals based on a different geography	Government has also confirmed that the preferred geography for proposals is based on Local Enterprise Partnership boundaries.

7.1	Both of these alternatives have also been ruled out on the advice of senior civil servants.

Contact for more Information: Kevin Finan, Chief Executive, 01884 234201 (kfinan@middevon.gov.uk)

Circulation of the Report: Management Team, Cllr Clive Eginton