The Guardian view on English devolution: an idea whose time has come

Later this year, a fleet of distinctive yellow and black buses will begin to make their way through Wigan, Bolton and parts of Salford and Bury. Publicly owned, with fares initially capped at £2, the franchised Bee network will be operating throughout Greater Manchester by 2025. Fought for by the city region mayor, Andy Burnham, this will be the first bus service outside London to come under local control since Thatcherite deregulation in 1986.

It is a sign of the times that Mr Burnham’s flagship policy has been given the green light by a Conservative government. As the next election looms, both of England’s major parties are embracing greater devolution as a means to address the regional inequalities that helped drive the leave vote in the Brexit referendum. The secretary of state for levelling up, Michael Gove, and his shadow, Lisa Nandy, made a point of speaking at last week’s Convention of the North in Manchester, in front of a phalanx of metro mayors. During the 1980s, successive Tory administrations used a legislative wrecking ball to demolish local government powers, privatise public services and centralise political control in Westminster. But Tory backing for another mayoral combined authority in the north-east means that three-quarters of the north of England will soon be included in some kind of devolution deal.

Redistributing political power away from London and the south-east is a necessary part of any future growth strategy, and a much-needed response to a loss of faith in Westminster politics. But meaningful devolution requires fiscal as well as political firepower. In the absence of the former, the government’s anaemic levelling up programme has thus far offered only piecemeal and inadequate pots of Westminster funding, delivered on a shamelessly pork-barrel basis.

There are indications that in “trailblazer” deals being negotiated with Mr Burnham and Andy Street, the Conservative mayor of the West Midlands, the Sunak government may do more. A departmental-style single grant to local authorities would allow flexibility in determining priorities and strategic goals. But there is a strong case for going further and faster. Currently, around 95p in every £1 paid in tax goes to central government, compared with 69p in decentralised Germany. Granting greater revenue-raising and borrowing powers to local government would be good for democracy and ensure accountability. Comparative research by the OECD has found that decentralisation is positively linked to GDP growth and local investment.

For Labour, which has a rich tradition of municipal radicalism to draw on, there are other compelling reasons to take ownership of a radical devolution agenda. The decision to put Greater Manchester’s buses back under public control followed an extensive consultation that found the policy to be overwhelmingly popular. In a similar vein, Labour-run city regions can become the vehicle for a belated reversal of the privatisation and hollowing out of the public realm, which began in the Thatcher era.

In his new year speech, Keir Starmer astutely redeployed the Brexit slogan “take back control”, promising greater local powers over transport, employment support, energy, housing, culture and childcare. That message was reiterated last week in Manchester by Ms Nandy. An election commitment to end an era of destructive competition and outsourcing in the provision of public services would be both radical and popular. Combined with ambitious state investment in postindustrial regions to drive the green transition, it can become the cornerstone of a new political settlement for England. Labour should ensure that Greater Manchester’s impending bus revolution is only the start of its own devolution journey.