The Spending Review is no longer at the forefront of the news, but it’s still worth thinking about. The spending plans it sets out and their implications will determine much of political, economic and social life for the remainder of this Parliament. That’s as true for territorial matters as it is for any others.
The most important lesson from the Spending Review is that the UK Government emphatically sees devolved governments as subordinate administrations with limited functions, and no wider role beyond the discharge of those functions. They don’t have a wider role as ‘partners’ in the governance of the UK or to speak for their nations; their role is seen as limited essentially to the public services for which they’re responsible. What they are to be ‘respected’ for is therefore similarly restricted. This is deeply regrettable. I’ve been arguing for some time that there is a serious mismatch between how devolution actually works, how the publics in Scotland, Wales and (somewhat surprisingly) Northern Ireland want it to work, and how the UK Government thinks it works. Any of those mismatches would be problematic; the three sets of them are all the more so. (I’ve written about that at greater length in a paper that appeared in the summer 2009 issue of Scottish Affairs, and a chapter in a book to mark the 20th anniversary of Charter 88.)
This limited interest in devolution and its implications means that only scant efforts were made to think through the implications of how the review was carried out. While they made efforts to engage with devolved ministers as part of the process, clearly those had limited effect – it was UK ministers talking to devolved ones, hearing what they had to say, but not negotiating or changing plans as a result. This rather token intergovernmental engagement was the sort of consultation exercise that naturally breeds cynicism around the wider public sector. A further consequence of that was that there was no effort made to avoid the absurdity of Wales coming worse out of the review than Scotland or Northern Ireland, despite the relative harshness of the present arrangements for Wales (previously discussed HERE). There are plenty of discussions of whether these spending plans are regressive or not in a general sense; the IFS’s analyses are available here, Reform’s are here, and there’s an IPPR paper here. However, there’s been much less of an effort to think through the territorial implications of the spending plans overall – the impact in different parts of the UK of cuts in public spending, of changes to the welfare system, and so forth. While we’ve heard a lot about the implications of housing benefit changes in London, there’s not been much (other than this paper from IPPR North) about its impact elsewhere. Certainly, you wouldn’t know much from the Treasury’s official ‘regional press notices’ (available here), which are even less specific than they were in the past. It looks rather as though the UK Government doesn’t really know what those implications might be. If it does know, it’s certainly not telling the wider public.
Two points need to be made about this. One is the unsuitability of this sort of Spending Review process for allocating funding to devolved governments generally – having them as recipients of funds that depend on inter-departmental negotiations driven by spending and political priorities that relate first and foremost to England. The speed of that process, and the tendency of immediate concerns to take precedence over remoter ones, is structurally inappropriate. It also leads to serious specific mistakes. In 2007, the biggest mistake was about consequentials arising (or not) from the 2012 Olympics (discussed HERE). That has been a running sore in relations which still festers. The 2010 parallel appears to have been the decisions about S4C’s funding and organisation, discussed HERE.
Making that sort of system work would require two changes. One would be to slow it down, so that there are meaningful opportunities for devolved governments to engage in the process. The second is to create the framework for that engagement, to address areas of policy spill-over. The clearest example of this at present is higher education (discussed earlier HERE). It’s one thing for UK to make decisions about higher education funding for England; it’s another to do so when those decisions profoundly affect devolved choices as well. In most federal systems, a policy of that magnitude would be formulated with extensive consultation, to work out what parts of it the devolved (regional-level) governments agreed with, what parts they didn’t, and how to manage the areas where there wasn’t agreement. It wasn’t done by one government seeking a report and then coming up with a confusing and contradictory set of announcements about they intend to implement it, while writing into its financial plans a set of commitments with very tangible implications for the other governments. In a system with so many and serious policy spill-overs as the UK has, a serious approach to such intergovernmental relations isn’t an optional extra. It needs to be central to the whole undertaking.
The second is that the Coalition appear uninterested in the wider purpose of devolution of keeping the UK together, by enabling devolved parts of the UK not just to have the gewgaw of their own governments and legislatures, but also to reshape public policy to reflect their preferences. ‘Respect’ has been treated as being something about process (though it has often miscarried even on that level), not substance. That’s not new, at least as far as the Conservatives are concerned, as I’ve been pointing out for some time, even if it does indicate the limited impact the Lib Dems have had in this area. As matters stand, Scotland and Wales clearly want something that is much more social-democratic than the Coalition’s approach at UK level. Those choices might well change over time, but that’s where they are now. The question is how to accommodate that diversity. Denying the power of devolved governments to make different choices, while sucking them along the path determined by London, simply threatens to undermine the political benefits devolution offers.
What’s most depressing, though, is that I could have written almost every word of the above at any spending review since 2001. In this respect, the Coalition’s thinking is as narrow as Labour’s was – but in a very different context, where the underlying consensus that made devolution easy before 2007 no longer exists and where what they’re doing is profoundly disputed. The UK Government has utterly failed to learn from the past. This is not just a gambler playing the same hand time after time, thinking their numbers will come up sooner or later. They’re doing so in circumstances where the game they’re playing is double or quits. And worse, they don’t seem to think that it’s a gamble at all.