In depth: Burnham's devolution revolution

The Gazette has been canvassing lawyers who have scrutinised – or searched for – the small print of Andy Burnham’s devolution pronouncements. This is what they said. 

Michael Frape, partner at Ashtons Legal, Cambridge, sees Wales as a central focus. A Burnham premiership, Frape told the Gazette, ‘is likely to encourage the Welsh Senedd to push for greater law-making powers and put pressure on the unitary legal and jurisdiction system of England and Wales’. 

Frape stressed that ‘although there is plenty of Welsh law’, justice and policing remain reserved powers under the Wales Act 2017. The landmark 2019 Thomas Commission report recommended full devolution of justice and policing, Frape points out, ‘but progress on implementation has been very slow, with only parts of the youth justice system being devolved in 2027’. 

Certainly, the Welsh government is emboldened to push the point after Plaid Cymru won the Senedd elections in May. The fact that Labour lost control means that progress here will also be a test of a Burnham administration’s ability to transcend party political interest in pursuit of a devolutionary agenda. 

‘We are pressing for a new Wales Bill to ensure that Wales has the same powers as Scotland,’ said Dafydd Trystan Davies MS, Welsh government cabinet member for government effectiveness and the constitution. ‘We were elected with a clear mandate to reset the relationship with Westminster.’ 

Funding

In a move that has complicated Burnham’s vision, Trystan Davies announced in June that the Welsh government will ‘work on establishing a standing national commission on the constitution to support informed, inclusive and deliberative engagement on Wales’s future’. The commission forms part of the Plaid-led Welsh government’s ‘first-100 days’ agenda.  

Trystan Davies is also clear that a new devolutionary contract must come with funding attached. He is ‘pressing for a fair, needs-based funding formula, to address historic underfunding and ensure that Wales receives the resources it requires’.

Money is of course key, especially now that Burnham has committed to existing fiscal rules. ‘Devolution is not without risks,’ noted Emma Pearmaine, managing director at Ridley & Hall, Leeds. ‘Additional regional powers must be accompanied by sufficient funding and clear accountability. Without that, there is a danger of creating new layers of bureaucracy without addressing the underlying pressures on public services.’ 

Funding is also central to transforming – and transferring – decision-making. Kate Turnham, partner in the land and development team at Thomson Snell & Passmore, Kent, explained. ‘The devolution of the decision-making process will make regulation applicable to the region in which development is taking place. This will apply to the planning process generally but also to open market and affordable housing numbers and regulation relating to environmental, ecological and renewable energy provision.’ 

She added: ‘A devolution of the process would enable developers to tackle problems which relate to the area in which the development is taking place, rather than trying to deal with regulation which is usually nationally governed.’ 

But, Turnham added: ‘The concern here is how this will be funded, and how high up the political agenda development and SME developers will be, when there will be so many other constraints on finances following any devolution. For such devolution to be successful, the input of funds required would be huge. Where will this funding come from?’ 

The same applies to energy, water and transport. Zoe Stollard, partner specialising in energy at national firm Browne Jacobson, noted: ‘Reform of essential utilities can mean many things, and the market will be watching closely to understand whether Burnham’s vision translates into concrete regulatory and legislative action. 

‘Combined with his devolution agenda, there is also a real opportunity to accelerate regional energy projects by giving local authorities and mayors greater decision-making power, but that will only work if it is backed by the right funding mechanisms and planning frameworks.’  

Deciding factor

There is, though, broad support among lawyers contacted by the Gazette for the principle of and the attendant potential for greater devolution to the regions for planning, development and infrastructure issues.

‘As a regional law firm, we see devolution as a significant opportunity for both our business and our clients,’ Alison Lobb, managing partner at Liverpool law firm Morecrofts, told the Gazette. ‘Decisions on transport, skills, housing, regeneration and economic development are increasingly being made closer to the communities they affect, which should lead to more targeted investment and stronger local economies. Local leaders are often best placed to understand the needs of their communities and businesses, and devolved powers can help drive investment, skills, regeneration and economic growth.’ 

For Lobb, regional decision-making ‘can mean better access to funding, skills initiatives and growth opportunities. For law firms, it is likely to generate increased demand across commercial property, development, employment, corporate and public sector work’. 

The Liverpool City Region has already demonstrated how devolved powers can be used to support growth, infrastructure and investment, Lobb added. ‘We have already seen the benefits of devolution through investment in transport infrastructure, skills programmes, business support and regeneration projects. For example, the City Region Combined Authority has been able to align skills and training programmes more closely with the needs of local employers.’

In Leeds, Pearmaine’s firm, whose clients include SMEs, families, charities and legal aid-funded clients, also sees some clear advantages. ‘For community-based law firms, devolution presents an opportunity to bring decision-making closer to the people and businesses affected by it,’ she said. ‘We see every day how issues such as housing, family support, social care, skills and access to justice have a distinct local dimension.’ Regional leaders, she argued, ‘are often better placed than Whitehall to understand those challenges’. 

Caution is advised, nevertheless. ‘Devolution does not automatically create a more democratic system,’ warned Kate Jardine, planning partner at Thomson Snell & Passmore. ‘In order for it to truly assist democracy, the powers given must outweigh the powers retained and the recipients of those powers must be elected individuals with local needs at the heart of what they preach.’ 

A Burnham plan, she noted, would build on the reorganisation that has followed the Local Government Review, including the reintroduction of strategic authorities. ‘Burnham looks to take it a step further, though,’ Jardine said. ‘The rhetoric of his plans for further devolution will no doubt help local government bodies’… decision-taking and policy-making, particularly for essential infrastructure such as housing, energy, education and transport, in a more autonomous and efficient manner.’ 

Letting go

Whether devolution will operate in ‘the way many hope that it will’, Jardine noted, ‘very much depends on how much control central government (wherever that may be located) retains and what funding streams will be available to local decision-makers to enable them to put the mechanisms in place’. 

She predicted a ‘swathe of planning and property law’ reform, not least based on Burnham’s declared intention to use vacant public land to reduce the cost of new social housing projects. While that may include the development of large sites, in order for such projects to benefit local economies, she hopes that a development ‘level playing field’ will be created that boosts ‘smaller, local development’. 

More clarity is needed, Jardine said, on what Burnham’s ‘place-based collaboration’ (which would entail a combination of private investment and public funding) would involve. ‘What hasn’t been made fully clear is where that private investment will come from,’ she said, predicting an increased importance being accorded to ‘social value weight’. ‘The most important element of embedding social value properly will be enabling all providers to be able to deliver, not just the ones with the deepest pockets. This will come down to a complete change in the way we think about development.’ 

A stress on regional planning may also mean that decisions are devolved ‘up’ from a local level, in an attempt to hinder opportunities for ‘nimby-ism’. A rise in compulsory purchase orders is a possible outcome. 

‘The key question is how far devolution goes,’ said James Clark, partner at Foot Anstey, Exeter. ‘Whether regional leaders are entrusted with powers comparable to those exercised by the mayor of London, or whether they remain focused primarily on strategic planning and coordination.’

If reforms are ‘accompanied by meaningful planning powers’, Clark added, ‘the proposals would effectively restore a strategic regional tier that has been largely absent from the planning system since the localism reforms of the early 2010s’.

Browne Jacobson partner Craig Elder said that the stress Burnham has placed on infrastructure renewal, ‘given the challenging economic environment’, is to turn to public private partnerships (PPPs). 

These were a controversial feature of the Blair government, criticised for high costs and higher than anticipated risks for public bodies. But, Elder noted: ‘Reformed PPP models have been delivering worldwide since the UK scrapped PFI without a replacement, with Scotland and Wales pressing ahead with their own non-profit-distributing and mutual investment models respectively to fund schools, hospitals and roads. These include features that learn lessons from some of PFI’s perceived drawbacks.’ 

Concerns around governance and accountability are among the points which increase the reluctance of central government and its agencies to enable far-reaching devolutionary reform. 

That is a point picked by Suzanne Gill, commercial property partner at Wedlake Bell, London. ‘The experience in Teesside demonstrates the need for strong local scrutiny and accountability in devolved decision-making,’ she said. ‘Is it time for the Audit Commission to resume its review of local government?’ 

Gill also noted that clarity will be needed on the position of infrastructure projects that straddle newly empowered regions to secure private investment. 

In a similar vein, Lobb added: ‘There does have to be an element of caution in that greater devolution can also create complexity. The challenge will be avoiding unnecessary complexity for businesses operating across different regions.’

Nevertheless, Gill strikes a positive note: ‘Commercial property investors have a lot to gain from devolution, because we can expect devolution to increase land values in the devolved regions as economic activity there increases.’