Devolution and poverty: Can we tackle poverty at a local level?

This paper is intended to provide a summary of the key questions and considerations facing policymakers, informed by two roundtable events held in Birmingham and London, with politicians and policymakers from local and central Government, local charities, and experts on city growth and poverty.

Part 1 of this paper outlines the key themes from two expert roundtables, on the potential rationale for localisation and the barriers to tackling poverty from a local perspective.

• There are a number of strong rationales for localisation. Key factors raised by attendees at our roundtables included: the vital role of local knowledge in tackling poverty; the need for local services to be joined up and presented as a complete package; the potential benefits of greater creativity and experimentation; and the political benefits of being able to build a local narrative around the need to address poverty.
• Employment support and skills were highlighted as areas where devolution of services is especially valuable, with suggestions that such devolution should go further, for example, through devolving Jobcentre Plus.
• However, attendees also set out a number of barriers to tackling poverty at a local level through devolution. Some aspects of poverty are difficult to tackle locally, and require cross-local or national-level action.
• Other barriers included the differing capacities of local areas to grow (the effects of which are potentially exacerbated through localisation of tax and welfare); the fact that growth does not necessarily entail a reduction in poverty; the potential for local areas to differ in the priority they place on poverty (especially when this might be due to a lack of democratic accountability), and the differing levels of capacity across local government.

Part 2 of this paper draws out the implications for policymakers in considering when to devolve, and how to devolve, informed by the roundtable discussions and SMF’s wider thinking.

• We argue that Government, in deciding when and when not to devolve, should consider: whether the benefits of localisation can be achieved through other means; whether local knowledge is important to the success of the policy; whether local-level incentives are likely to result in better outcomes; whether redistribution and risk-pooling across areas would be significantly undermined; the level of local Government capacity; and the extent to which poverty can be tackled at the local level alone.
• We call on the Government to explicitly set out responsibilities for tackling poverty in devolution deals, and set up a framework for robustly measuring local-level poverty. It should strengthen local involvement in future devolution deals, and ensure that future measures to further localise powers and responsibility are demand-led.