Being Northern is the greatest privilege of my life.
It is to know that where you are born is home to hills that undulate under the weight of their own beauty, beaches which stretch farther than the eye can see (even further than the donkey rides), and where the white heat of industry scolds our hands in knowing the industrial revolution was made possible because of our toil.
It is for my deep love of the North, not because of my scepticism of its talents, its people, or its industry, that I worry about some of the putative Prime Minister’s language around devolution.
Andy Burnham’s economic argument, as far as one currently exists, is that people lack control over their own lives and into that will step unscrupulous landlords, rapacious businesses, and otherwise ill meaning agents of capital that will charge too much, give too little, and leave places and people poorer. To ameliorate the onslaught of bad actors Burnham has promised to rewire the state. Moving significant parts of Whitehall to the North, devolving some fiscal powers to mayors, and ushering in state intervention in key public utilities.
It is a hope-and-change message that has been well received by MPs on all wings of the party. Burnham has had little time to prepare for government but he may have bought himself some time for practicalities to catch up with the size of his policy. It is in this thorny issue of implementation where things get much harder.
Let’s momentarily ignore Burnham’s scepticism about the school to university pipeline. Instead, let’s follow UUK’s lead and acknowledge that his ambition to place universities at the heart of economic growth is a good thing. In his speech at the People’s History Museum he said that growth
[…]comes from placing our universities at the heart of local economies – as all the Mayors do – and bringing the innovation-led approach through start-ups and scale-ups. It comes from committing to decent infrastructure in all parts of the UK and getting national investors to back the aspirations set by regions.
Agree. As written previously in Wonkhe the success of Greater Manchester is the success of its educational institutions in training a skilled workforce, bringing in new investment, and supporting the success of a broad and flourishing business scene. It may therefore follow that the Greater Manchester model could be applied everywhere but devolution isn’t one approach. It is an uneven patchwork of powers made more or less effective by leaders of different quality.
Not to be down on Burnham’s achievements but it might be more straightforward to devolve buses than it is the knowledge economy. With a bus it is possible to predict how many people need it, how many buses there are, the possible routes, the cost of servicing those routes, and how many drivers are needed for the buses, the routes, and the demand. Now, that is hard, fraught with legal challenge, and it has taken years of hard graft. The benefit of a bus though is it can be counted. The right amount of research in which places is a much more abstract sum.
What to devolve and where
For anyone who has read Head North Burnham’s latest speech will feel familiar. If there is one political north(ern) star in his life it is a sincere belief that the North has been badly done to. Despite all of this, he should resist the temptation to immediately devolve large amounts of research funding to Mayoral Combined Authorities, at least at first.
It is the case that the UK’s research system is pretty centralised. There is some money, not lots, that flows through combined authorities. From time to time there are funds like the Research Innovation Fund which directly allocate money on a regional basis. Greater Manchester already has a bespoke devolution deal where it was allocated additional innovation funding and it has a strategic partnership with the government to shape regional and national priorities. It is a better deal than most places but it is not entirely devolved.
However, to pivot suddenly away from the current system would set the wider cause of devolution back as it would damage the overall research ecosystem. The question isn’t only how to ensure a broader spread of research funding but how to ensure the benefits of research investment are more widely felt. This might be about devolving some research funding in some places but equally it might be about better trains that allow people to move between jobs, affordable housing that allows workers to be closer to their nearest supercomputer, digital infrastructure which can move data faster, or a thousand other interventions which would grow the impact of research but aren’t about devolving research budgets.
DL1
“Growth in every postcode” is a catchy political phrase but as Burnham knows more than anyone the North is not a monolith and needs different interventions in different places. Darlington has benefited from the state affording civil servants the privilege of moving there through office relocations, the train station expansion has given people more places to work, and attracting new businesses along with the existing university campus has formed the basis of an embryonic knowledge economy. The case for giving the mayor of the Tees Valley a top-slice of research funding to further this growth is unclear at best.
While Burnham says his policies will be put through a “Makerfield test” the argument for devolving research spending is one which makes most sense in places with the largest populations. This isn’t to say that there shouldn’t be more money for great universities outside of cities. It is to say that Burnham’s economic advisors believe in the agglomeration benefits of research spending and these are most readily deployed in places with large populations and large business bases. The UK’s second tier cities are poorer than their European counterparts and partially that is because of a legacy of government refusal to invest in their comparative strengths.
The big questions
Rather than focussing on the mechanism the bigger challenge is what is the significant spending on research supposed to achieve. The five devolved questions they should be asking are:
- What is the right configuration of blue-skies, applied, infrastructure, and business support spend, that supports health and prosperity across the UK?
- What is the right combination of central, regional, and local spending, and in which regions and localities, that can actually achieve growth in every post code?
- Where does the UK have a global competitive advantage in research and how can regions be encouraged to build on their own research strengths?
- What kinds of interventions are needed in connectivity and infrastructure to induce the most impactful spillover effects from research?
- What kinds of devolved fiscal powers would have the greatest impact in boosting productivity and economic growth across the country?
Ultimately, the purpose of research is to make lives better. Devolution is one tool that when used to crank the handle of research led economic growth could power the economy. Too much power given away will lead to a system which is too diffuse, with too many priorities, and too little serendipity to grow the economy. Too little and the UK will continue as it has for the last decade or so, and sadly, ten years from now will look even worse.
