Real tests for relationship between Cameron government and devolved administrations lie ahead

The report, called Devolution in Practice 2010, brings together a range of experts to analyse how devolution has changed the UK since 1997. It hails devolution to Scotland, Wales and Northern Ireland as a landmark reform, but argues that it took place in relatively benign economic and political circumstances. The strength of the settlement will now be tested, as the new coalition government of the UK lacks a strong mandate in Scotland and Wales and yet stringent spending cuts are in the pipeline from which the devolved administrations cannot be protected if England is to be treated fairly.

Guy Lodge, Associate Director of ippr said:

'The new prime minister has gone out of his way in his early days in office to give a reassuring message to the people of Scotland, Wales and Northern Ireland through his 'respect' agenda. But there's no getting away from the fact that the Conservative mandate in Scotland in particular is extremely weak. At the same time, grant funding to the devolved nations will have to be cut as part of the deficit reduction programme. Holding off cuts to the block grant until 2011/12 might help David Cameron to win friends in Scotland, Wales and Northern Ireland, but it risks a backlash from England - particularly those poorer areas which already look jealously at the funding those parts of the UK receive.'

The report argues that the devolution settlement can be strengthened despite the difficult economic and political circumstances. It surveys an array of public opinion evidence to show that, while the public in Scotland and Wales want self-government and to be able to do things differently, they also want to remain part of the United Kingdom. Key to delivering this is an agenda of 'respect' by the Westminster coalition government towards the devolved administrations. This means recognising the right of the governments in Scotland, Wales and Northern Ireland to pursue different policies, but also working together for common cause when it makes sense to do so.

Alan Trench, a contributor to the book and research fellow at the University of Edinburgh, said:

'Devolution has had an easy ride so far, with Labour dominating all three governments in Britain and generous public spending allocations. Now times are tough: not only is spending going to get very tight, but with different parties in office in Edinburgh, Cardiff and Belfast, party ties cannot help smooth intergovernmental relations in the way they did. That means that the UK Government needs to approach intergovernmental relations with great care to make the new system work. Complacency is not an option.'

To ensure smooth relations, the report recommends:

• There should be an early overhaul of the administrative and decision-making arrangements surrounding the block grant that goes to the devolved administrations to ensure decisions are fair and transparent. This would not have to involve any extra spending, and has been called for by all the devolved governments and several reviews.
• The UK government should respond to the aspirations of the devolved administrations where that is appropriate. For example, it should support an early referendum on primary legislative powers for Wales. The current model for legislating for Wales is already creaking and cannot survive the sorts of political differences that now exist.
• More systematic and regular use of intergovernmental ministerial meetings through the Joint Ministerial Committee, including a meeting of the JMC for finance before the emergency budget in July, to discuss spending cuts.
• In the longer term, the so-called 'Barnett formula' - by which devolved administrations' level of grants are set - needs to be reformed so that it is fair to all parts of the UK, and the devolved administrations need to be given greater fiscal autonomy to raise their own revenue where they wish to do so.

Notes to editors

1. The devolved administrations are funded by an annual grant from the UK government. Its value is determined by the Barnett formula which relates changes in the grant to changes in spending on 'comparable' programmes in England.

2. The Barnett formula results in spending disparities per head across the nations of the UK. Precise and comparable figures are not produced by HM Treaury or the devolved administrations, but a proxy for 2008/09 is shown below.

Identifiable public spend per head, minus social security, across the UK nations, 2008/09

(ippr analysis of HM Treasury Public Expenditure Statistical Analysis data)

3. An embargoed copy of the report is available to the media from Tim Finch (contact details below). The preface and introductory chapter can be downloaded free from www.ippr.org/publicationsandreports/publication.asp?id=752. The full report (286 pages) can be ordered from the same page or by calling Central Books on 0845 458 9910.

Contact

Tim Finch, Director of Strategic Communications, ippr, 0207 470 6106 / 07595 920899 / t.finch@ippr.org