Labour devolution to London: an interview with Sadiq Khan and Jules Pipe
The capital’s shadow minster and one of its most experienced council leaders talk about effective city government amid austerity and growth
Email
Sadiq Khan and Jules Pipe, being Labour men, hope Scotland will say “no” on September 18. Even so, the recent tilt of opinion polls towards “yes” has further concentrated minds on the case for government in the UK moving closer to those it serves. As party leaders promise Scots greater tax and welfare powers should they reject independence, in London Khan and Pipe are constructing Labour’s case for further enhancing the capital’s capacity for self-determination. In Khan’s Westminster office they scan the metropolitan skies and see political stars aligned.
“We’ve got a unique opportunity,” says Khan who, as well as being Tooting’s MP and shadow justice secretary, is shadow London minster. “After the Scottish people have, hopefully, said ‘no’, the Scottish parliament will ask, not unreasonably, about what further powers Scotland gets. There is a desire in Wales to get more power for the Welsh Assembly. There is a legitimate question about England’s regions getting powers. And there’s a generation of London politicians that has never been so joined-up in aspiring to devolve more powers to London.”
Pipe has led Hackney council as its executive mayor since 2002, chairsLondon Councils, the body representing the capital’s 33 local authorities, and headed Ed Miliband’s local government innovation task force, whose work has been welcomed by the Labour leader who made acommitment during the summer to devolving control of public services to councils in England. “The present government has said an awful lot about devolution but done very little,” he contends. “All political parties are devolutionist in opposition, but what’s different with us is the amount of commitment and engagement there’s been from senior Labour Party figures.”
Along with Miliband and Khan, Pipe mentions shadow communities secretary Hilary Benn. And it can’t hurt the cause that London’s political landscape is predominantly red, notwithstanding its mayor Boris Johnson being Conservative. Twenty of London’s 32 borough councils are Labour led and 44 of its 74 parliamentary seats are Labour held, with Khan, who coordinates his party’s political campaigns in the capital, intent on increasing that number next year. Labour also forms the biggest group on the London Assembly, with twelve members out of 25.
Yet the mayor, significant senior fellow London Tories, Lib Dems and Greens too want greater autonomy for the capital. It was Johnson who set up the broad-based London Finance Commission (LFC), chaired by Tony Travers of the London School of Economics, to draw up recommendations for fiscal devolution. These included the radical idea of London setting and retaining all the property taxes raised on its own turf – business rates, council tax, stamp duty and the rest, and receiving an equal amount less from central government - and its elected leaders spending the money they think best. Pipe, in his London Councils role, was a commission member.
With such a spread of impetus in the same general direction, change seems certain. The outline of such change under Miliband, should he pack his bags for Number 10, is taking shape. His party has not embraced the full LFC proposals on property taxes. Pipe, whilst supporting the commission’s position, acknowledges that this was the “shoot-for-the-moon” component and that making it a reality could take the same sort of long-term push that Crossrail required. However, in the particular case of business rates it intends to reach a similar destination by a different route.
Since last year, local authorities have been allowed to retain half of the business rates income they collect rather than sending it all to Whitehall to redistribute, though in London 40% of this retained portion goes the Greater London Authority (GLA) for use by the mayor. London is already to receive a percentage of any annual business rate increase until 2020, but Labour says it would allow London government to retain the full yearly hike, thereby pushing up further the percentage of the overall take the capital holds on to (the party has yet to decide if it would alter the split between councils and the GLA). Last year, that overall take is estimated to have been £3.2b.
London government would also be in a position to benefit from a Labour national government moving more money - a trebling to £30bn, it says - into the pot for which local enterprise partnerships bid. Reflecting its two tiers of government, London has its own, special version, the London Enterprise Panel (LEP). This is chaired by the mayor and is composed of representatives of the boroughs, business and Transport for London (TfL). A product of the coalition’s Localism Act, the LEP helps develop the capital’s economic growth strategy and allocates cash - £111m so far on various infrastructure, skills, small business support and technology projects. The LEP was recently awarded £236m towards a further set of schemes. If Labour implements its plans, those figures could get bigger.
The LEP would also be involved if Labour, as it plans to, devolves control of spending on further education (FE) from the centre. London Councils says almost a quarter of job vacancies in London are due to skills shortages and that the whole FE system needs to be more rooted in local authority ground. Boroughs recognise that FE provision needs the London-wide focus the LEP can provide, though Labour says that input from the lower level is essential if the right types of courses are to be provided.
This is where the head-hurting technicalities of governance bodies and funding streams make a connection with human beings. “In East London we need to see tech and hospitality funded in local colleges rather than hair and beauty, for which there are on job opportunities,” says Pipe. “Local employer intelligence needs to be fed in. Just having a couple of key hoteliers at the LEP level does not give you the fine grain understanding of what, say, the boutique hotels of Shoreditch actually need.”
Several London boroughs already have their own job brokerage schemes, building links with local employers. Hackney has just become the first local authority in the country to set up a levy scheme with hotels on its patch to fund the training of local young people for the hospitality industry. It should bring in half a million pounds a year. “The idea that hospitality is all low level service jobs that young people will be trapped in for the rest of their lives is nonsense,” says Pipe. “The kids themselves certainly don’t think that, they’re already working out how to climb the ladder. It’s odd that we as a council are having to create the money for this when the skills funding itself should be doing it.”
He says the same principle should apply with the work programme, currently run by the Department for Work Pensions and widely condemned as a flop. “You have this flood of people coming out at the end of the process who haven’t got anywhere with it,” says Pipe. Labour says the best performing London councils would, in collaboration with the mayor, take over this and other outsourced services.
Pipe says that many boroughs already have their own, better, self-funded schemes for tackling unemployment among those most difficult to get into jobs. “This is a people business,” he stresses. “There can be complex problems, which can’t be solved by private sector approaches or online.” He mentions Wandsworth as doing particularly good work with the ill and disabled.
Another part of Labour’s education and skills equation would be the creation of directors of school standards, appointed by councils or, in London’s case, perhaps clusters of councils, to have oversight of all state schools, including academies and free schools, which are formally outside local authority control. Recent research for London Councils found wide parental support for councils having such an influence.
Labour’s overarching pitch is that localising funds and powers would produce better decisions and better outcomes both in shaping London’s economic and physical development and helping Londoners reap the benefits. This gains urgency from the paradoxical situation London finds itself in: its economy is projected to grow healthily in the midst of an ongoing, wider climate of austerity. And all the while its population booms on towards ten million.
Khan sees considerable potential for the LEP as a place where knowledge is pooled, thinking joined up, and better outcomes secured, including when dealing with the private sector: “The mayor and local authorities working together know best where new houses and jobs should go.” By way of example he relates how, when he was transport minister in the last government, he was involved in sorting out how Crossrail would be delivered in Greenwich, negotiating the detail with the council, local MP Nick Rainsford and housing developer Berkeley.
A value-for-money case is being made too. “A Labour government isn’t going to be able to magic money out of the air,” Pipe is careful to stresses. “So we’ve got to get the best out of every last penny. It’s not about localities doing something different from national government, which has a legitimate right to implement a programme. It’s about admitting that maybe Whitehall civil servants may not know as well as Hackney what Hackney’s needs are and also the ways that Hackney is different from, say, Croydon, which is different from parts of west London and so on.”
He adds that shadow chancellor Ed Balls is “absolutely right to say we can’t go into an election saying we’re going to let rip on borrowing,” but, echoing the LFC, points out that local authorities being allowed to borrow more to build council homes is the sort of borrowing that, unlike some other sorts, gets paid back (the same would apply to Thames-crossing bridges and tunnels, if tolled, he points out). Khan believes there is “momentum” for Labour to make that move, though we must await the outcome of Sir Michael Lyons’s report for Miliband on housing, due to be published at conference time, to see where the party might stand on a reform that just about every significant London politician, Mayor Johnson included, seems to be in favour of.
Notwithstanding Pipe’s aside about the coalition doing more localist talking than walking, the mayor has been allowed to acquire and consolidate strategic powers over regeneration and there the consenus seeking further autonomy for the capital - DevoLondon? - is substantial. Labour’s support for national rail franchises being controlled locally echoes the call of both Johnson and Ken Livingstone, voiced at the last mayoral election, for TfL to take full command of the capital’s suburban routes.
Concentrating London’s government expertise in the most effective ways at the most appropriate levels seems an unarguably good idea, whichever party is advocating it. The special insights of local authorities in public services have long been recognised by Tories too. Two of Johnson’s key team members, policing deputy Stephen Greenhalgh and chief or staff and planning deputy Sir Edward Lister, were among the co-authors of a pamphlet called A Magna Carta for Localism in 2010, asking for local government to be handed control over unemployment support, non-NHS care and policing and crime prevention.
That said, Labour’s evolving plans for London have particular significance given that Khan could well be a frontrunner in the coming race to be his party’s mayoral candidate for 2016 and that Pipe has the credentials to be a Labour successor to Lister. Would a future Mayor Khan appoint Pipe as his Sir Eddie? When I asked the pair that question, the word “hypothetical” emerged from a brief bout of polite spluttering. Don’t be surprised if these authors of Labour’s emerging blueprint for London are putting it into effect in two years’ time.
