Devolution of powers hastily organised through “rushed backroom deals” could damage economic growth, the director general of the CBI will warn today.
John Cridland is to warn of “devo cracks” appearing if the Government plays politics with the devolution agenda at a conference in Manchester today.
The senior business figure said the starting point should be how devolution can boost jobs and growth and minimise bureaucracy, and not “about being different for its own sake.”
It comes as the North East Combined Authority has created a blueprint for the devolution deal it hopes to broker with Government for a regional power.
Its proposal includes investment funds for housing, businesses, skills, roads and rail, as well as control over £500m of European funding.
But the CBI chief will urge caution and say that regional powers must commit to structural reform and accountability in taking tough choices on budgets and priorities.
He said businesses must be involved in the process, adding: “Going forward, the precedent set for ‘devolution by deadline’ is a cause for concern.
“Any devolution of powers must be done in a careful, considered and transparent manner. And not through rushed backroom deals between politicians and civil servants.
“Let’s take time to breathe and - above all – let’s make sure we get this right. The alternative would be uncertainty, complexity and increased costs at the moment we can least afford them.
“Second, our members stressed that further devolution must be built on strong economic foundations.
“Devolution shouldn’t be about being ‘different for its own sake’ - it should be means to an end – economic growth across the UK.
“Fundamentally, we want the next Government to ask ‘how does devolution fit into our plans for growth?’ rather than ‘how does growth fit into our plans for devolution?’
“Business wants to see evidence that further powers will complement – not constrict – growth, jobs and investment.”
But Ed Cox, Director of IPPR North, moved to stress the urgency and importance of devolution and called on Government to show “more ambition” in this regard.
He said: “The business case for devolution is unequivocal. Using the full potential of our cities and regions will bring down the deficit, rebalance the economy and raise living standards.
“Devolving a coherent package of powers away from Whitehall will allow areas our cities and regions to invest in the infrastructure, housing, skills and transport connections they need to flourish.
“It will create a business-friendly environment which means the private sector can create more and better jobs in sectors which offer security and prosperity to all areas, not just core cities.
“The main stumbling block will be a lack of ambition and commitment from the main political parties, who must spell out in their manifestos the details of a new devolution settlement and timetable for the whole of England.”
John Cridland will add: “Business needs a strong voice in today’s debate on further devolution.
“A voice of caution asking politicians to ‘think-twice’ before pressing ahead with decisions with real economic consequences.
“A voice asking them to listen to their head – not just their heart - when it comes to devolving powers.
“A voice reminding us to think global – making sure that businesses from all UK regions and nations can make their mark in foreign markets.
“Business needs greater clarity – both around existing devolution settlements and the potential new powers on offer.”
Councillor Simon Henig, chairman of the North East Combined Authority, said: “The UK and particularly England is among the most centralised democracies in the world with most major decisions currently taken in London, often to the detriment of areas like the North East.
“It is clear that change is needed and that greater devolution is supported by the majority of the public. Of course it is right that business is involved in the debate, which is why the North East Combined Authority is currently organising a series of public meetings on our devolution proposals throughout March, which will enable the views of business groups such as the CBI and others to be taken into account before they are submitted to government.