Under the microscope: York and North Yorkshire’s devolution deal

Earlier this month, on Yorkshire Day 2022, a devolution deal for York and North Yorkshire was signed by the leaders of the City of York and North Yorkshire councils and the secretary of state for levelling up, housing and communities.

This was an important step towards devolution for the area. It follows the reorganisation of local government in North Yorkshire - the largest county in England - which is abolishing its existing two-tier system of ‘lower tier’ district and borough councils plus an ‘upper tier’ county council, to introduce a new unitary authority which will become operational in 2023. Inaugural elections for the North Yorkshire unitary were held earlier this year.

A new combined authority will be formed of two unitaries – York and North Yorkshire – and, subject to parliamentary approval, this combined authority will receive specific devolved powers over matters including transport, housing, and education.

Once the devolution deal has been enacted and a mayor has been elected to lead the combined authority in 2024, around two-thirds of northerners will be represented by a metro mayor.

The investment fund in context

The deal comes with a total investment fund of £540 million over 30 years, or £18 million per year. Investment funds are by no means the only funding available to combined authorities, but given that the news focussed on this sum when the deal was signed (DLUHC 2022a), we will consider how it compares to local ambition, as well as other initial northern devolution deals.

First, the amount is less than the £750 million investment fund included in a bid worth £2.4 billion, that local leaders prepared two years ago (City of York Council 2020) meaning the investment agreed does not match the scale of local ambition.

Second, the agreed fund represents an investment of £590 per person in York and North Yorkshire, or roughly £20 per person per year for 30 years not accounting for projected population changes. To put this in context, the north of England saw a £413 per person fall on average in annual council service spending in each year between 2009/10 and 2019/20 (Webb et al 2020). Clearly this, or any investment fund alone, does not come close to the losses communities across the North have experienced because of austerity. And when shown alongside the North’s other initial devolution deals, as we have compared below, the fund comes fifth of the seven initial deals for size of investment fund per person.

Nevertheless, the investment fund is a step in the right direction. It is better that decisions about how to spend this money are taken locally, in line with local priorities.

Table 1: Investment funds as agreed in initial northern devolution deals

Source: IPPR North analysis of northern devolution deals (available at www.gov.uk), Bank of England (2022), ONS (2020a), ONS (2021b) and Sandford (2022)

Notes: Total 30 year investment funds are in the prices of the year the deals were made. Population figures used are for the year the deal was made. Per person calculations are adjusted for 2021 prices. We've assumed this won't be uplifted since no uplift is mentioned in the policy announcement.Although South and West Yorkshire’s deals were made in 2015, they were not taken to parliament until 2020.

Our per person analysis of initial investment funds helps us to put the York and North Yorkshire investment fund into context, but beyond this it does not tell the full story of funding for devolution.

Since initial devolution deals were agreed, the mayors overseeing these combined authorities have used their positions to leverage further funding. For example, the earliest of the deals – Greater Manchester – is now five years into operating as a mayoral combined authority (MCA) and planned to spend almost double the amount calculated above (£368 per person) last year alone (Johns 2021). Indeed, Greater Manchester is now negotiating a ‘trailblazer’ deal with central government – arguably paving the way for the next phase of devolution in England.

Leaders in York and North Yorkshire can learn from those deals that have come before their own: it’s not necessarily about where you begin, but where you’re going that counts. A devolution deal is just the beginning of a process that requires work, but has the potential to be transformative.

Comparing powers

York and North Yorkshire has a ‘level 3’ deal, which means that they have been able to access some of the most significant powers currently on offer through the government’s devolution framework in its levelling up white paper (DLUHC 2022b), including some new ones not yet enjoyed by other places.

The new mayor will take on the powers of the police, fire, and crime commissioner. The only other mayors that enjoy this power are in Greater Manchester and West Yorkshire (Sandford 2022). This provides the mayor with an important role in local resilience and civil contingency, as well as the ability to look at joining up services, work on prevention, and build safe places that communities can be proud of.

On economic development and transport, as well as having the ability to create a funding programme using the aforementioned investment fund, the new combined authority will have some ability to borrow to fund its work, and the mayor will have the option to introduce a mayoral precept on council tax bills and a supplement on business rates. The combined authority will also be the lead authority for the planning and delivery of the shared prosperity fund – the only fund related to the levelling up agenda that isn’t fully centralised.

In addition, York and North Yorkshire will gain some transport planning abilities as well as all-important access to bus franchising powers. York and North Yorkshire have specific transport challenges, particularly in rural places where access to public transport can be very limited. Working together with partners like Transport for the North, neighbours like the West Yorkshire Combined Authority, Active Travel England colleagues and others alongside long-term funding, the new mayor can and should choose to co-design a future for the area that enables affordable, sustainable, accessible travel and genuinely improves the economy and peoples’ quality of life.

Meanwhile, on land and housing, the deal will devolve a range of powers, many of which (like establishing a mayoral development corporation) are enjoyed by other northern MCAs. Some however are rarer or indeed new, including compulsory purchase orders (not yet held by South Yorkshire or Tees Valley), the power to call in planning decisions (not yet enjoyed by Greater Manchester, North of Tyne or West Yorkshire), and a new £2.65 million fund to pilot new energy efficiency or shared ownership schemes (Sandford 2022). Using these powers and leveraging more to plan and deliver homes for local people that are affordable and sustainable will be especially important in York and North Yorkshire where many local people often feel, as revealed to IPPR researchers in recent focus groups (Mort et al, forthcoming 2022), that they are being priced out of their communities by increasing numbers of second-home owners and holiday let conversions. The new combined authority will need to use their planning powers creatively and wisely to create places that work for local people and make the most of a sustainable tourism industry.

Another prominent element of the deal – and one which doesn’t feature in all devolution deals – is the inclusion of a section on culture and tourism. However, the specificity of this section is vague. Beyond stating that the new combined authority will work with DCMS’s arms length bodies to develop strategies (which one might expect ought to happen anyway), there is little in the way of specific powers or resourcing to enable the combined authority to capitalise on the considerable cultural assets and potential of York and North Yorkshire, and to harness the economic, public health, and pride of place that would follow. The northern culture APPG recommended earlier this year that future funding for culture and the creative industries be devolved (Northern Culture APPG 2022). It will be up to the new combined authority and mayor to work with partners to leverage further funding.

On education, as with all of the northern MCAs, the adult education budget (excluding apprenticeships and traineeships) will be devolved. This will happen from the 2025/26 academic year – the same time that the government’s lifelong loan entitlement is expected to launch to support adult reskilling. The budget will be important for focussing local education provision on local need, providing the skills that York and North Yorkshire need and want to develop. The deal anticipates that the combined authority will support a new local skills improvement plan (LSIP); the national rollout of LSIPs began in May and will continue over the next year. Given that Yorkshire has huge potential to be the home of future green industries, using the skills system to ensure a just transition to the clean jobs of the future for local people will be an important task for the new combined authority. In addition, thoughtful use of budgets for English language provision will ensure that York and North Yorkshire's diverse migrant communities can also develop their language skills – ensuring that they can benefit from the local job market and integrate into their new home (Morris 2021).

There are things that could have been included in the devolution deal that have not. For example, there is no reference to local ambitions to end child poverty. Nevertheless, places like York and North Yorkshire should not wait for government to insert targets into deals to make them a top priority. For example, IPPR North and partners in the north east of England called for reducing child poverty to be put at the heart of devolution deals (Round and Longlands 2020) and although this does not appear to have been adopted by government yet, the North of Tyne Combined Authority are now carrying out child poverty work in 60 schools.

It is striking, when comparing the patchwork of powers across the North, that the government continue to use a widely criticised deals-based approach to devolution. For example, places like South Yorkshire and Tees Valley will need to enter resource-consuming trailblazer negotiations to secure some of the powers than York and North Yorkshire’s deal already offers. What is sorely needed to improve the process of devolution is a better, flexible framework, designed with local places, and a transparent process that enables people to move at their own speed towards the powers that work for their places (Giovannini and Johns 2021).

The road ahead for York and North Yorkshire

York and North Yorkshire have a strong shared identity and together have a formidable range of assets and opportunities for the new combined authority to harness – including rich heritage and culture, a beautiful coastline, and countryside that helped to dub Yorkshire 'God’s own country'.

The deal also covers a diverse footprint with specific challenges for the new mayor to address to build a bright future with and for the area. From the city of York itself, to rural areas, coastal towns, and former mining communities - county, and even district or borough level quantitative data does not tell the full story of the places covered by this deal. People in many parts of York and North Yorkshire are experiencing widening inequalities, a lack of social mobility, pockets of health inequalities, and poor transport and digital connectivity.

Recent IPPR focus groups in York and Scarborough show that too many people are locked out of the opportunity to live a good life. People are struggling to get by – to survive even (Mort et al, forthcoming 2022). As energy bills and inflation skyrocket, we can expect this problem to worsen, feeding into social isolation, public health problems, and weakening social cohesion and democratic engagement. The new combined authority will need to consider how it can involve people in designing local policy at a time when they are struggling to feed themselves and their children.

Another challenge for York and North Yorkshire will relate to representation. The deal provides for four elected members and one local enterprise partnership (LEP) representative, meaning that the diversity of voices across the places involved will have few representatives through which to be heard. To make the very best of the opportunity of devolution, these voices should be far more diverse than the candidates parties fielded in this year’s elections (BBC News 2022), and to be successful leaders will need to secure the trust and involvement of citizens from all parts of the combined authority area. Devolution should be an opportunity to empower all communities across York and North Yorkshire.

Overall, Yorkshire Day 2022 was a significant one. It represents a step towards devolution for a large, diverse area with huge potential. It is the beginning of a story for the area, one which will be written by the combined authority and Mayor. The onus will be on elected leaders to write that story with people and places across York and North Yorkshire, to collaborate with others across the North, and to innovate – using every lever available to them – to leverage enough power and additional funding to tackle the area’s challenges head on, undo the damage done by austerity and make the most of opportunities to build a fair, sustainable future in which everyone in York and North Yorkshire can live a good life.

Rosie Lockwood is head of media and advocacy at IPPR North and tweets at @Rosie_Lockwood

Marcus Johns is a research fellow at IPPR North and tweets @MarcusIPPR

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