Rewiring or short circuit?

There was a strange disconnect at the end of July between the relative lack of fanfare with which the Government slipped out its ‘rewiring the state' Cabinet statement and the reaction that paper generated within the sector. For many of us, it felt genuinely seismic.At its heart is a major transfer of powers and resources from Westminster to mayors and councils. It is a universal timetable for strategic authority coverage, control over local tax revenue, with mayors gaining a share of local income tax and greater business rates retention for councils and strategic authorities, alongside new powers over skills, transport, housing, innovation and culture, an overnight visitor levy, strengthened accountability, and a leaner, ‘devolve by default' centre.Full details will follow in a White Paper and fiscal devolution roadmap published alongside the Autumn Budget on 28 October.At the Local Government Information Unit (LGIU), we have made the case for devolution for decades. We have argued that national success has local foundations, that localism matters, both as a democratic ideal and because complex challenges are often best met by local innovation. You cannot grow economies, reform public services, or restore trust in democracy from Whitehall. Power should be local by default.Decentralising from Whitehall only to recentralise at regional level would be a missed opportunity. We need a clear account of all levels of the state and the split of functional responsibilities between them with an appropriate and understood degree of autonomy for each layer.That argument is clearly played back by the Cabinet statement in black and white, from the heart of government, with an emerging timetable. That is, genuinely and unequivocally, exciting.For me, there are three areas of concern. The first is about fairness. Growth-based funding through tax retention rewards places that are already growing. Without an effective redistribution formula, fiscal devolution risks becoming a machine for widening the very disparities it seeks to close. But we know from experience that equalisation formulae are complex to develop and involve winners and losers.We have argued that a new forum should be established for consultation between central and local government, something equivalent to the Italian Local Autonomies Conference. The White Paper should consider this.The second issue is a lack of clarity about the role of local authorities. There is a risk that this is a settlement for mayors and not a settlement for local government.The statement acknowledges that strategic authorities are only as strong as the councils beneath them, but its centre of gravity is strategic authorities. The crisis in council finance and the unrelenting demand pressures in statutory services get relatively little attention.Decentralising from Whitehall only to recentralise at regional level would be a missed opportunity. We need a clear account of all levels of the state and the split of functional responsibilities between them with an appropriate and understood degree of autonomy for each layer.The third concern is ‘stickiness'. We can recognise this moment as a unique opportunity, while also acknowledging that we have had a series of White Papers on devolution (one less than two years ago) and that governments of all colours have hummed localist tunes without ever really changing how the country is governed.Do we understand the barriers that have prevented this well enough to ensure that it is different this time? What is proposed still looks like an administrative settlement: national standards, central equalisation, powers that can be given and, in principle, withdrawn.What we have argued for is something closer to a covenant – a settled recognition that local government draws its mandate from its own electorate, not from Whitehall's (or Manchester's) good will. That is not easy in a country without a codified constitution but the White Paper will need to engage seriously with this problem.No doubt other issues will emerge and we look forward to that conversation with our LGiU councils and partners. But, if we can close these gaps during the development of the White Paper, this might just prove the transformational moment we need. In any case, it is surely better to travel in hope than in scepticism.Jonathan Carr-West is chief executive of the Local Government Information Unit (LGiU)

Title

DEVOLUTION

Rewiring or short circuit?

By Jonathan Carr-West | 12 August 2026

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