To start the year, we want to examine four big issues that preoccupied public policy in 2016, giving you the most insightful perspectives from the think tanks. We’ll go on to suggest where the action might be in the new year.
1. Can we seal the deal on Brexit?
The wide mandate claimed by the government in enacting the “will of the people” through Brexit comes with risks. Missteps will have drastic political consequences, and delays are proving to be just as damaging. Downing Street is already being criticised for cautious micromanagement, and in the absence of a clear plan set out from the centre “trying to divine the Government’s position from the personal musings of individual ministers is creating unhelpful uncertainty” (Institute for Government).
Announcing his departure as UK’s ambassador to the EU, Sir Ivan Rogers cautioned that “multilateral negotiating experience is in short supply in Whitehall”. The UK has two years to finalise the terms of withdrawal from the EU, for which the civil service will need considerable resources: an extra 500 staff, costing around £65 million per year (Institute for Government). Subsequently, we need to conclude six levels of trade negotiations, and the economic costs of uncertainty provide a strong incentive to make concessions (Centre for European Reform). The average length of time it takes to sign a trade deal is 28 months (Constitution Unit).
We know that Nicola Sturgeon has five tests for the Brexit deal (Centre for Constitutional Change) In R (Miller) v Secretary of State for Exiting the European Union, the government tried to persuade the Supreme Court that it retains the Crown prerogative on international affairs despite the European Communities Act 1972. That means the Scottish Parliament doesn’t need to sign off on the deal. If the government succeeds, however, it will want to authorise leaving the EU via a one clause bill authorising it to give notice under Article 50. In that case the votes of 54 SNP MPs will be essential. The deal to secure them may have to contain provisions for another referendum on Scottish independence (Centre on Constitutional Change). If not, removing references to EU law from devolution legislation would likely require consent from the devolved administrations – not asking would risk another referendum (Constitution Unit).
The prime minister has committed to involving the devolved administrations in negotiations – but the UK government retains the final say (Centre on Constitutional Change). Can the four governments get it together (Institute for Government)? How far does this commitment go?
2. Faltering liberalism
As EU expansion goes into reverse, and the US steps back from global leadership, the next stage of international affairs may be one of awkward co-existence between democracies and their more authoritarian counterparts (Chatham House). The 100-page 2015 National Security Strategy and Strategic Defence & Security Review committed the UK to the strengthening of a “rules-based international order” as a key national interest, and stated our willingness to use armed force to protect those interests. But that was a long time ago in policy terms, and this year’s progress report was “a holding document” (Policy Exchange).
With our historic reliance on soft power, some believe Britain may have to lower its ambitions on the international stage after Brexit (RUSI). Without a liberal consensus behind it, our negotiating position going into a flurry of bilateral trade deals is weakened. Take the United States for example. Donald Trump may consider Britain to be “very special”, and his commerce secretary may want to put a deal with the UK at the front of the queue. Yet that deal is unlikely to be acceptable to both Congress and British voters (Centre for European Reform).
The referendum lays bare the conflict between our hyper-liberal international ambitions, and the pick-and-choose liberalism practised at home. Theresa May has stayed true to the interpretation of the result as a call for controlled immigration – to the extent of jeopardising a trade deal with willing Indian partners. The “protective state” that Will Davies spies emerging from her policy platform has a very problematic logic: “protectionism (of indigenous industries and workers) is never simply an economic policy, but involves clear statements of who is in and who is out.” (IPPR)
May has therefore edged closer to the ‘robust’ views of the Conservative base on immigration since she left the Home Office, but what’s most important to this group is her ability to unite the nation (Democratic Audit). This is precisely what is under threat in the Brexit negotiations, as the Scottish response shows. Moreover, any economic interventionism in pursuit of “a country that works for all” would put May at odds with her party membership. You can’t always get what you want, even when you get it.
3. Charities in the spotlight
Charities are playing a larger and larger role in public service provision: government contracting now accounts for a quarter of the sector’s income. But as Sonia Sodha’s definitive report argued, the size of many of these contracts mean that all but the largest charities end up working under private companies in complex subcontracting arrangements, and “can find themselves taking on inappropriate amounts of risks from the state”. Devolution, by broadening the number of contracts available, should present opportunities for smaller charities: but this requires forming genuinely collaborative relationships with everyone engaged in tackling a specific social issue (NPC).
Public trust in charities reached an all time low this year, attributed in a Charity Commission study to “critical media stories about charities, a distrust about how charities spend donations, and a lack of knowledge amongst the public about where their donations go”. Many within the sector lamented a seeming lack of willingness amongst charities to defend themselves against attacks from the press. Charities regained the initiative when the controversial ‘anti-advocacy clause’ in Cabinet Office grantmaking guidelines was reversed (See TTR 4 December 2016). As Geoff Mulgan pointed out, the charity sector is a soft target for action against lobbying – an industry worth some £2bn (Nesta). It might be argued that given their role in delivering public services, it is natural that they should seek to shape the policy agenda.
There have been positive outcomes from a year of scrutiny. Kathy Evans of Children England argues that “It’s an opportunity for charities to refresh rather than rebrand”, particularly with respect to how much they seek to emulate the private sector. “A donation is not a sales stream”, she continues. “Charities are a different space.” How much charities can flex to deliver for government is another question.
4. More ambitious devolution?
The Leader of Essex Council argues that the devolution agenda has ground to a halt. “Whitehall and Westminster seem consumed by debates about governance”, he argues, while many parts of the country view elected mayors with “‘apathy or horror”. There’s an urgent need to open up the process to more local initiative and public engagement.
This year’s Cities and Local Government Devolution Act makes devolution to combined authorities legally possible, but does not specify the terms of negotiation. This makes the process dependent on political personalities and deals behind closed doors (See TTR 24 July 2016). Resisting a plea to advance a deal for Greater Lincolnshire in Parliament, the new Secretary of State insisted that “it is not right for central Government to impose deals on any area”. Yet George Osborne shaped the process by insisting on metro mayors as a precondition to devolution deals, which local areas are now resisting. For that reason agreeing a deal and “getting it over the line” have become quite different processes (Centre for Cities). As a Public Accounts Committee report concluded last year:
The rhetoric surrounding devolution is that local areas are the driving force behind the deals. However in practice central government is stipulating certain requirements, such as around local governance, without making them sufficiently clear up front.
The act itself also grants the Secretary of State powers over the governance arrangements of local authorities, the constitution and membership of local authorities, and structural and boundary arrangements. LGiU has previously voiced the concerns of smaller local authorities that devolution may actually amount to “restructuring by another name”. We should, argues UCL’s John Tomaney, learn from the US experience, where empowered mayors have not necessarily sparked a democratic renaissance or revived the economic fortunes of cities.
There are now twelve devolution deals agreed, but there is reason to be concerned about how fast implementation can progress, and whether the Mayors can actually deliver what people want from devolution (Centre for Cities). George Osborne was personally invested in this agenda. However, as a National Audit Office report noted in April, only seven officials in the Treasury were assigned to “directly negotiating and supporting devolution deals”. The business of Brexit is likely to slow down the process further, as Whitehall is not engineered for coordinated action. The 500 separate Brexit-related projects it has been pursuing attest to this. The democratic pressure for constitutional change (NLGN) that might grant more ambitious devolution (SPERI) is building.