Boondoggle, Whitehall or devolution? How investment appraisal might make a Yorkshire Assembly the right choice.

In one of its first significant acts, the new Conservative government has signalled its intention to reform the rules governing infrastructure investment:

...under the new plans, reported on Friday, investment decisions would be made with a focus on reducing inequality between northern and southern England, rather than promoting overall economic growth across the country.

Writing here in the North this is welcome news but represents just a start - the rules are still Whitehall's rules and the investment decisions are still Whitehall's investment decisions. There will still be enormous pressures from London and the South East for new investment - in more London rail infrastructure, in a new bridge or two and in relieving the pressure on the M25 - and let's remember that nearly all the people writing and lobbying for these investments live in those places.

I recall sitting in a meeting somewhere in Leeds with Lord Adonis who was then the Chairman of the National Infrastructure Commission. Two things came away from that meeting: firstly that the method for appraising transport investment favoured London for simple economic reasons; and secondly that London had spent the time and money preparing proposals that, if not 'shovel-ready' were advanced and actionable. The reality back then (and it hasn't changed much since) is that the North has plenty of (often slightly pie-in-sky - or do I mean tunnel-under-the-pennines) ideas but precious little detailed work. And, to make matters worse there are a host of competing schemes - go East of York and they'll tell you to dual the A64, head to Cumbria and they'll mither about how near impossible it is to get in and out of West Cumbria.

This is just the transport investment, we've not got to ideas about freeports, suggestions for improving town centres or a myriad of thoughts about business parks and "creative quarters". Hacking through this forest to get to things that might take us a step towards rebalancing the UK's economy will be a Herculean task, one made worse by a constant chatter and chunter from those 'leaders' about the investment.

It seems from here at least that there are three possible routes to take through the forest of ideas:

1. Boondoggle
2. Whitehall
3. Devolution

Given the political imperative of the programme, the boondoggle seems the likeliest route. With the new system for appraising proposals being something of a fudge but still under ministerial control, preference for investment will go to places with the right political vibe - Teeside with a majority of Conservative MPs and a Conservative mayor, Stoke-on-Trent with much the same, and the Black Country newly prominent in Tory thinking. The thing with boondoggles is that they can't be too blatant, there has to be a veneer of authenticity - typically a project appraisal or business case - prepared under the aegis of the relevant government department. And this is where the clash with Whitehall comes in.

A Whitehall-led system will try not to diverge far from the current utilitarian appraisal system (albeit one that has been painted green in a nod to climate change and to please the rail lobby) meaning that the process will favour cities over suburbia and small town. You'll spot how this clashes with boondoggles because those newly minted Conservative MPs represent suburbs and small towns not the larger cities. If you're the new MP for Leigh, having a high speed rail link from Manchester to Liverpool doesn't count as a win and if you've just got elected for the Don Valley, a decision to move some government department to Leeds simply doesn't deliver the promise. If the government is shouting about investing in the North but all the money goes to Liverpool, Manchester, Sheffield, Leeds and Newcastle, the promise to people living in that "Red Wall" won't be met.

This is where the government needs to be cautious about the third way to deliver - devolution. Right now there's an existing model based on the (outdated and widely discredited) idea of 'functional economic geography' as the basis for local governance. We've got local mayors for the West Midlands, Teeside, Manchester, Liverpool and South Yorkshire each with a bully pulpit and the favoured attention of Whitehall but, with one or two exceptions, these geographies act as much to divide as to unite. David Cameron may have joked about how Yorkshire couldn't agree on anything but the reality is that the manner in which that 'functional economic geography' works in practice makes for all the wrong sorts of governance structures - without history, local buy-in or real cohesion.

The core issue with 'fuctional economic geography' lies in its reliance on central place theories, on the idea that hub-and-spoke explanations adequate describe how people move around. This is where the idea of high speed rail fits - we link together the big city centres because they are the key drivers of economic growth. The problem is that those 'left behind' places are still left behind under this model and we have, in a city mayor model of governance a system that acts to compound the preference for the big city centre over more disbursed development models. Worse the mayoral model (as currently designed) fails to provide anything other than an elite voice for those towns and suburbs - councils leaders and chief executives do not, in my experience at least, provide the accountability needed to make the model work.

In other devolved systems this is avoided, either by not having an elected mayor (Scotland, Wales) or by there being a strong, elected assembly holding an elected mayor to account (London, Spanish regional government). The system introduced in England outside London fails in respect of accountability but the legislation has therefore limited the scope of devolution to the point where the mayor is little more than someone with a platform to lobby Whitehall plus the money to run some buses. It's better than nothing but, if the North is serious about taking more control of its own destiny, its constituent parts need to start arguing for either a better form of devolution (more akin to London or Wales) or else the return of powers to local government - plus maybe creating unitary councils were the system is still two-tier.

My own view is that my region should be arguing for a Yorkshire Assembly (with or without a directly elected mayor) with similar levels of devolved authority to Wales. I understand that some folk hesitate at this from fear of it leading to the 'Balkanisation' of England - an English Parliament would be better, they say - but I don't think that would deliver on the promise to left behind places in the North and Midlands in the way that a substantive regional devolution would. Nor do I think reasonably cohesive places like Yorkshire should wait for other regions before calling for substantial devolution.

To return to how this might work for infrastructure investment consider that a Yorkshire Assembly would judge investment on the basis of what is best for Yorkshire's economy and that this would be done in the context of having accountable representatives with a say in that division from every part of the county. This seems to me a better approach than one where Whitehall plus opaque lobbying dominates investment choice.

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