Lessons from Canada’s devolution experience

These forums were part of a broader road trip that took members of staff and the presidential team to six city regions to try to figure out what ‘devolution’ and a potential new relationship with central government might look like. The details of the tour and each specific regional issue were covered very well in a piece in Property Week, which I encourage you to read.

As is usually the case for me, this represented the latest in the ongoing education of both my adopted new home and issues facing our industry, as well as providing me with another opportunity to contrast and compare with my experience in Canada. In particular, I found the devolution debate to be particularly interesting, as a similar situation occurred in the province of Ontario, where I am from, in the late 1990s.

At that time, Canadian provinces were facing the similar sort of fiscal challenges being experienced today in the UK and were battling with national government. The difference was that provinces already had the ability to tax and control their own revenue, but also responsibility for big-ticket major expenditure items such as healthcare and education. Furthermore, responsibility for municipalities (local authorities) is also at the provincial-versus-national-government level, with functions such as public transport administered at municipal level, as they are here.

Although this structure had started in an evolved state from where we are today in the UK, 20 years ago there were still many similarities including a lot of small local municipalities with a number of intermediate regional authorities that duplicated effort and struggled with both local and provincial government.

As we are seeing here, the governments of the day engaged in fierce political debate about the merits of further devolution. Municipalities fought with the province and with each other as they tried to figure out how to divide an increasingly small pie. In the end, Ontario found itself able to push a lot of cost down to a smaller number of consolidated regional authorities with their own elected mayors and councils. Despite the significant growing pains, everyone is much better off for the effort.

The BPF and our membership see regional growth as very important but also do not think it best for it to be dictated by national government, and caught up in constitutional wrangling. Local authorities should ‘stand on their own feet’, make their case, work in partnership with the development community and build on the existing framework and tools. There are many examples of where this is already happening. I have seen it work from my position at Oxford Properties in the Thames Valley, where our Green Park investment sits on the border of three different authorities and has a successful LEP.

There is abundant capital that will invest outside of central London and in the regions as long as there is sufficient and sustainable scale creating liquidity and a market with pricing transparency and appropriate risk-adjusted returns. I was encouraged to read a recent FT article where a number of northern cities appeared to be abandoning local rivalries and committing themselves in principle to join together with an elected mayor as part of their bids for new powers. There was also a piece in PW by Sir Eddie Lister on how creative thinking and local knowledge will help unlock the opportunity presented by devolution. This is one of the most important issues facing both the country and our industry.

Maybe in time devolution might be a base to assist with pension fund reform and the consolidation of local authority plans to provide the scale and opportunity to access global investments at superior returns and lower costs similar to the Canadian plans.

Paul Brundage is executive vice-president senior managing director - Europe at Oxford Properties and junior vice-president of the BPF