Devolution: the West Midlands in focus

  • There has been growing discussion since the Scottish Referendum about the opportunities for regional devolution in England
  • In the West Midlands, several local authorities will be part of a new West Midlands Combined Authority, which will give the region a range of new powers
  • The Midlands and East Public Services team recently held a roundtable discussion and were joined by risk/insurance representatives to discuss the opportunities and challenges that devolution presents

Greater Manchester, which in April became the first English region to take control of its health and social care spending, is perhaps the highest-profile example of the Conservative Government’s commitment to devolution.

In addition to taking long-term strategic decisions, combined authorities will have to look for quick wins”
Russell Mould, Risk and Insurance Consultant, Zurich Municipal

Devolution is also high on the agenda in the West Midlands, where 12 local authorities have joined the new West Midlands Combined Authority (WMCA).

The WMCA came into force on 17 June, and we recently held a roundtable with representatives of several of its member authorities, namely Narinder Phagura (Sandwell MBC), Sara McNally (Dudley MBC) and Neil Pearson (Walsall MBC), to discuss some of the opportunities and challenges of devolution, and alternative methods of service delivery.

Devolution: an opportunity and a challenge

The WMCA’s stated priorities include: driving economic growth, addressing a skills shortage, providing more housing and improving transport links.

In relation to transport, the Bus Services Bill, passed in May, could give the WMCA a range of new powers, including allowing it to co-ordinate the frequency of services run by different bus companies.

Russell Mould, Risk and Insurance Consultant, Zurich Municipal says: “Road, rail and bus networks cover the whole region, not just a single local authority area. Bringing all these networks into a single combined authority will allow for better control of fares and routes, benefiting people across the West Midlands.

“The councils involved in the WMCA hope to generate new income from outside by taking strategic decisions that will make the region more attractive.

“When individual local authorities take steps to attract new businesses and investment, often money moves about from one council area to another, while the overall pot of money in the region stays the same.”

Governance, conflicts of interest and other risks

The roundtable also discussed some of the potential risks and challenges in the devolution model, including:

  • Ensuring combined authorities are not dominated by any individual member authority and that conflicts of interest are avoided
  • Ensuring governance mechanisms are appropriate from day one
  • Striking the right balance between strategic and operational thinking
  • Managing contracts carefully, and ensuring that suppliers have the capacity to deliver services to an entire region

Regular assessments

Combined authorities will be subject to five-yearly assessments from central government, where they will have to demonstrate they are achieving economic growth in order to receive continued funding.

“In addition to taking long-term strategic decisions, combined authorities will have to look for quick wins,” says Mould.

Local authorities considering a devolution model should understand both the opportunities and the challenges involved.

“While it’s exciting to have these rights and powers, you must have an overarching vision and strategy to ensure it works for you,” says Justine O’Neill, Risk and Insurance Consultant, Zurich Municipal.

“Learn as much as you can from the examples of other councils to ensure you go into it with your eyes wide open.”

Alternative delivery vehicles

Experts at the roundtable also highlighted how councils are turning to alternative service delivery models in response to government funding cuts.

While there is an increasing focus on income generation, outsourcing of services is less common than might have been expected.

“With the budget cuts that councils are facing, the more services that go out of the door, the less room for manoeuvre they have to make savings. All they can do is to renegotiate existing contracts,” says Dave Harris, Regional Manager, Zurich Municipal.

“One member told us that there hasn’t been the ‘tsunami of outsourcing’ that might have been expected, and that councils are actually bringing services back in-house.”

Learning lessons from the roundtable

Mould says: “While we like to think we know what our customers are going through, it was really useful to meet some of them face-to-face, and a real eye-opener to hear about some of the challenges they are facing.

“We are looking to replicate these roundtables across the region (Midlands and East) and hopefully beyond.”

David Penter, Strategic Risk Consultant, Zurich Municipal, says roundtables such as this one can also help to influence the products and services we provide.

He adds: “They help us to understand the emerging risks and challenges our customers are facing and to develop appropriate solutions.”