How Labour will transform politics – and public services – by devolving more powers to London

ANYONE who campaigned in the Scottish referendum felt the strength of anger directed towards Westminster. And it’s not confined to Scotland. The same anger is felt in London, Manchester and across England, Wales and Northern Ireland. People feel Westminster and Whitehall are completely out of touch with their lives.

This is no surprise. Britain is the most centralised state in the world. Too few decisions are taken by local people in touch with their local area. We need change. But we need that change to be led by the British people, rather than just another Westminster stitch-up. Labour will hold a Constitutional Convention – a real people’s assembly – to decide how we can devolve power away from Westminster and give it back to Britain’s cities and regions – including London.

Only 7 per cent of the money we need to pay for services in the capital is in the control of London government – compared to nearly 50 per cent in New York. The rest is in the gift of Whitehall and Westminster. London’s economy is about the same size as that of Sweden, and the capital accounts for more than a fifth of total UK economic output. Our population is bigger than that of Switzerland or Israel. A city of this scale desperately needs more say over its own future.

Devolution is the key to government achieving better results on smaller budgets over the coming years. For Labour, it’s essential to our plan of making Britain fairer while we pay down the deficit. Local people with knowledge of their local area and economy make better decisions about the allocation of resources than distant Whitehall officials. It allows us to break down the silos of government and eliminate duplication. Devolution will lead to higher growth, more jobs and a more efficient government – and will also allow us to get better outcomes across the public sector.

In London, in particular, it will allow us to tackle the very serious challenges we face in the decade ahead, including building the new homes we need to ease our city’s desperate housing crisis – by far the biggest concern of Londoners. It will allow us to build the transport systems and infrastructure we need to cope with our booming population. In just over a decade, our population is set to increase by the equivalent of the combined populations of Edinburgh, Cardiff and Belfast, and we have no plans for where these new people will live or how they will travel to work. And it will allow us to end the scourge of poverty and inequality in London. A third of our population now lives in poverty and more than two thirds of them are in work.

Fourteen years ago, Labour created the mayor of London and London Assembly. It’s something we’re incredibly proud of – giving Londoners a say over their city for the first time in a generation. But we must go further. Labour will devolve more power to London – and the other cities of Great Britain – than ever before. Crucially, it will not be an either/or choice between empowering our 32 boroughs or the mayor. Both levels of London government will benefit from significant devolution of power and resources. London only works when the different tiers of government work hand in hand, something that hasn’t always happened.

There are two major strands to devolution. The first is public service reform – giving greater oversight of public services to groups of local authorities, so that they can be properly integrated with local services, and take account of existing resources and local circumstances. The second is fiscal devolution – giving cities and regions more control over their budgets.

On public service reform, Labour will give groups of local authorities, working in partnership with the mayor, control over a wide range of Whitehall programmes designed to help people get back into work, further education funding, re-offender services, troubled family schemes and more powers over education and health. London’s Local Enterprise Partnerships, chaired by the mayor and groups of local authorities, will also be given powers over skills, housing, infrastructure and transport. On fiscal devolution, we will allow London government to keep any additional business rates revenue above forecast.

And this is just the start. We are determined that Labour will win power at the general election, only to give it away immediately. Our Constitutional Convention will decide how to give it away to our communities, cities, regions and nations. Devolution is essential to making politics relevant to people’s lives again, and to building a better city while living within our means.

Sadiq Khan is shadow London minister. Jules Pipe is chair of London Councils and the elected mayor of Hackney.