On 25/02 the Eastern Powerhouse held an online session to discuss devolution in the East and the potential impact for business. From my perspective it’s very clear that the East of England stands at the precipice of a seismic shift. Devolution is no longer a distant political theory or abstract concept, but a tangible force that can shape the region's economic future. With the recent announcement of the Cambridgeshire and Peterborough mayoral election and now as Norfolk, Suffolk, and Essex gear up for their own devolved deals, the question is no longer "if" but "how" this transformation will impact businesses, infrastructure, and local governance.
Lessons from Other Devolved Areas
The East has the opportunity to learn from the success, and missteps, of other regions that have been at the vanguard of devolution in England. Greater Manchester’s pioneering deal over a decade ago laid the foundation for Mayoral Combined Authorities (MCAs), with other urban areas such as Liverpool City Region, Leeds City Region, South Yorkshire, and the West Midlands following suit. These city-regions have demonstrated the potential benefits of devolution, particularly in key policy areas for economic development and regeneration including employment and skills, transport, planning and housing.
The key takeaway? Leadership really matters! Greater Manchester has advanced its deal under Andy Burnham’s tenure, securing additional powers and influence over public funding. Devolved areas in the East must ensure that its leadership has the vision for growth and reform as well as the tenacity to secure its fair share of national investment, by overcoming past problems of weak governance and regional infighting.
The Business Perspective: What Companies Need to Know
For businesses, the stakes are high. The East has historically struggled to attract the level of investment seen in other regions, often side-lined in favour of the North and the Midlands. Devolution offers a golden opportunity to change that, if executed correctly.
Businesses need clarity on how these new structures will impact them in practice. Strategic planning and decision-making on infrastructure, education, and economic development will shift away from Westminster and into the hands of local leaders. This means businesses should be engaging with their local authorities now, ensuring that their voices are heard in shaping policy.
However, there are also risks. It will be several years before devolution, and the accompanying reorganisation of local government, is established. This is a long time to wait, and the transition period could bring uncertainty. The White Paper provides no indication that fiscal devolution will be considered, even for 'established strategic authorities'. Greater control over local tax raising powers - including business rates and other property taxes - will give mayors and combined authorities the ability to shape local economies by deciding how revenues should be invested in public services and infrastructure. Something that is commonplace in most other developed countries.
Transport, Infrastructure, and Economic Growth
The East of England has long suffered from poor infrastructure and is now facing the consequences of decades of underinvestment. The East is united behind Ely Junction upgrades. Yet once again the government of the day has overlooked this scheme! Chronic congestion, unreliable public transport, and outdated road networks have hindered business growth and investment opportunities. Devolution, in theory, should provide a mechanism to address these challenges at a local level, cutting through the inertia of central government decision-making.
Devolved city-regions with strong mayoral leadership, have secured significant investment in public transport, including tram networks, and greater control over bus franchises, and ticketing. The East must follow suit, prioritising projects that will deliver tangible benefits to businesses and residents alike. This includes addressing key bottlenecks like the Orwell Bridge, investing in sustainable transport options, and ensuring that housing developments are integrated with transport planning.
Strategic economic growth should also be a priority. The region is home to world-leading industries, including renewable energy, life sciences, and advanced manufacturing. A well-executed devolution strategy, combined with the UK new industrial strategy must capitalise on these strengths, ensuring that infrastructure and investment plans align with the needs of high-growth industries.
The Impact of Mayoral Governance and Local Government Reform
One of the most contentious aspects of devolution is the introduction of directly elected mayors. While supporters argue that a strong, accountable leader can drive change and attract investment, critics in larger predominantly rural areas fear that Mayors and Combined Authorities are too remote and disconnected from local identities and concerns.
Mayors in the East of England will be charged with overseeing key strategic priorities in areas such as transport, economic development, and skills. Their success will hinge on their ability to connect localities and unify diverse stakeholders, secure funding, and implement policies that deliver real-world benefits. Businesses and residents alike must scrutinise candidates carefully, ensuring that those elected have the experience, vision, and influence to be effective.
Local government reform is another critical factor. The move towards unitary authorities should, in theory, streamline decision-making, reduce duplication and introduce efficiencies at scale. Businesses operating across the region and looking to expand or develop will have fewer planning authorities to deal with! Clearly, the process must be managed carefully to minimise disruption. There will be implications for local areas in combining local finances, particularly where some areas will be bringing significant debt.
There is also a concern that dividing counties into different authorities will segregate more prosperous areas with the potential for growth (e.g. South Cambridgeshire) from more disadvantaged areas (e.g. North Cambridgeshire) where economic prospects are more challenging. The equalising benefits of a combined authority with greater powers over tax and spend becoming more pressing in this scenario.
A Moment of Opportunity… If Seized
The Powerhouse has consistently argued for further devolution and local government reform. Devolution has the potential to accelerate positive change in the East of England, but it is not a silver bullet. The success of this initiative will depend on the calibre of leadership, the level of cooperation between public and private partners, and the ability to secure meaningful powers, including greater levels of fiscal control.
Businesses must be involved in this journey, to ensure that their interests are represented in this evolving landscape. Residents must demand accountability from prospective mayors and local leaders. And policymakers must ensure that this transition is not simply about shifting power, but about making that power work for all people and communities in the East.
Whether devolution will deliver the economic transformation the East has been waiting for, is largely dependent upon how local actors rise to the challenge and shape this agenda.
The clock is ticking, and the future of the region hangs in the balance.