Abstract

Since coming to power in July 2024, the Starmer government’s approach to reform has rhetorically focussed on the centralised, short-term, and fragmented nature of British policymaking and the need ‘re-wire’ the state. This approach – encapsulated in its ‘mission-led’ approach to governance[1] – has emphasised an economic policy predicated on a long-term industrial strategy and a devolution agenda framed as decentralising power. In this article, we undertake a closer analysis of both, to argue they fall short in addressing a series of longstanding governance pathologies. On economic policy, there has been little challenge to Treasury control, and a failure to fully address short-termism. The devolution agenda, meanwhile, places regional authorities in service of central government, reproducing top-down delegated authority. We suggest that, despite Labour’s awareness of some of the problems of the British state, its attempts to tackle them are at best selective and do not go far enough in terms of a radical reform of Britain’s governing institutions and constitutional arrangements.

Introduction

The centrepiece of the Labour Party 2024 electoral campaign was the promise of ‘change’, offering an alternative to what it claimed had been 14 years of Conservative instability, chaos and disunity. In policy terms, it argued the previous period of government had been marked by short-termism and a lack of co-ordination – shortcomings long associated with the UK’s system of governance. For some critics, the UK state has hit a crisis point wherein its capacity to formulate and implement successful policies has become severely limited.[2] Labour’s response has been to promise to govern in a different way by adopting a long-term, mission-led approach to reinvigorate British productivity and economic growth.

In this article, we examine Labour’s strategy for achieving its growth mission by focusing on two key components – its industrial strategy, Invest 2035 and its commitment to a ‘devolution revolution’ in England. We argue that whilst some of Labour’s approach offers a positive way forward, it is though marked by significant contradictions. The emergent issue we identify is that its missions-based approach is one that is simply being layered onto the existing governance framework. Evidence is emerging that attempts to meaningfully devolve policy are already facing resistance by Whitehall.  Such a fate will be familiar to Whitehall watchers of previous Labour governments from the Fulton reforms of the 1960s to Blair’s ‘task forces’ in the 1990s, where radical intent gave way to incremental reform. Likewise, attempts at an ambitious industrial strategy appear to have encountered push-back from traditional Treasury orthodoxy of fiscal conservativism, particularly in light of the Spring 2025 statement. We conclude by questioning whether the current approach will prove insufficient in correcting the long-term pathologies of the Westminster Model. There is the very real potential that, despite the size of Labour’s majority, a window of opportunity is being missed on delivering a more radical, but much needed, wholesale reform programme.

A State of Crisis: Unpacking the pathologies of British governance

There is an emerging consensus within academic, journalistic and political debate that the British state is in crisis.[3] Whether one agrees with such provocations, it is evident that the pathologies afflicting policymaking in the UK are becoming more acute. British governance is increasingly undermined by the contradictory dynamic between a hoarding of power within a siloed central government machine dominated by a Treasury which lacks understanding of frontline delivery; and a highly fragmented but unaligned set of institutions involved in policymaking and service delivery nationally, regionally and locally.[4] This governance architecture has produced a myriad of policy failures in recent years.[5]

The British state is amongst the most centralised of all liberal democracies, with an electoral system designed to produce strong majoritarian governments, largely unchecked by vetoes on executive power. The principle of parliamentary sovereignty in its modern form manifests in a high centralised accrual of power in Whitehall wielding an inordinate influence both over day-to-day and strategic decision-making.[6] Centralisation has increased over recent decades, paradoxically accompanied by the pervasive fragmentation of the delivery arm of the state through New Public Management (NPM) inspired reforms, alongside privatisation and waves of devolution. The challenge of effective cross-departmental and centre-local coordination has been amplified in this context, while the evidence that NPM has led to meaningful efficient savings is limited.[7] This ‘incoherent’ mix of centralisation and fragmentation results in asymmetric relations between the centre of government and regional/local government impeding effective policy formulation and implementation.[8] In the context of an adversarial and majoritarian parliamentary system, the UK’s tendency toward short-termism and policy churn is entrenched. 

These characteristics result in a system that appears regularly incapable of formulating coherent, long-term, joined-up and effective policy. Policy is increasingly irrational and prone to failure, as demonstrated by recent ill-fated initiatives such as HS2, universal credit reform and the flawed initial response to Covid-19. Bold transformative agendas are stifled by Treasury reticence and short-term exigencies. What emerges is an image of British policymaking stylised on “muddling through” in the context of severe asymmetries in decision-making and resource allocation. Policymaking tends towards being highly centralised, top-down, short-term and incremental in character. This results in policy churn and ministerial ‘hyper-activism’, alongside poor coordination in implementation across a fragmented governance landscape.[9]

These stylised facts bely a more complex reality, and not all policy initiatives have fallen foul of these pathologies. However, one area in which these pathologies have been particularly pronounced has been in the effective formulation of economic policy. For several decades, the UK economy has encountered a series of fundamental challenges. Deindustrialisation followed by financialisation has left the country regionally divided, with many areas outside of London and the Southeast struggling to recover lost productivity. Millions of Britons continue to work in low-paid, non-tradeable industries whilst economic growth has become increasingly reliant on financial services.

The new Starmer government is acutely aware of the problems facing the British state, the policymaking pathologies related to it and their role in undercutting the formulation of economic policy which arrests Britain’s economic decline. It is in this context that Labour promised ‘to change how Britain is governed’.[10] An approach oriented round the concept of “mission-led government”. In framing this new approach, Labour note that past governments have been beset by short-termism, lacked ‘a relentless focus on long-term ends’ and that ‘too often different parts of the government have pursued their own narrow goals rather than working together’. This speaks directly to siloisation and fragmentation across government.

Labour’s 2024 manifesto committed to addressing five key missions, yet the first six months in government were hallmarked by slow progress and a lack of strategic direction. Facing mounting scepticism, in December 2024, Starmer launched the government’s ‘Plan for Change’[11] to supplement the mission-led approach with several measurable milestones to be delivered over the course of this Parliament. The purpose of these milestones, according to Starmer, is to allow the British public to track the progress of government in delivering its missions.[12] A more critical take would be to suggest it is more akin to New Labour ‘deliverology’ rather than a step towards consolidating a mission-led approach. In this context, mission number one – Kickstart economic growth to secure the highest sustained growth in the G7 – has been amended to include a milestone stipulating rising living standards over the course of the next parliament. Among Labour’s missions, this is acknowledged to be of upmost importance. Labour have launched an industrial strategy which it argues is key to a novel approach to economic policy aimed at producing ‘long-term sustainable growth’. Furthermore, as outlined in the December 2024 English Devolution White Paper, the government will develop ‘Local Growth Plans’ with cities and regions as part of its ‘devolution revolution’. It argues these are ‘central to the government’s mission to boost economic growth’, as it will allow the overcoming of centralising tendencies of the British state which has ‘tightly gripped control and held back opportunities and potential for towns, cities, and villages across the country’.[13]

All of this suggests that Labour has a commitment to tackling shortcomings in the UK’s governance arrangements as part of its number one mission to boost economic growth. The launch of an ostensibly long-term industrial strategy and a commitment to further devolution are key planks of this. In what follows, we examine what progress these initiatives have made towards combatting the dysfunctionalities in the British state.

Invest 2035: an industrial strategy for the long-term?

Achieving Labour’s mission of the highest sustained economic growth within the G7, with rising living standards across the whole of the UK, is a monumental task. The UK’s growth – recently further eroded – has been anaemic in recent years. Central to this is the vexatious issue of low productivity. Productivity growth remains substantially behind trend growth prior to the 2008 financial crisis. The UK’s productivity challenge has a striking spatial dimension, with growth concentrated in London and the Southeast, whilst all other regions lag behind. The mission to achieve economic growth is also the mission to solve the productivity problem and its regional dimensions.

Labour has already taken steps to deliver this objective, though the new government appears less sure footed than it should be given its electoral majority. Having initially committed to the fiscal rules of her predecessor, the Chancellor, Rachel Reeves, played a cautious political game in the run-up to the November 2024 Budget. The purpose of fiscal rules – to bind a government’s hands in terms of spending to secure the confidence of the markets – requires that the rules have credibility. Reeves, whilst pining for this image of credibility, opted to change the definition of public debt to allow for greater borrowing headroom for capital spending in future years. Despite nervousness in the gilts market and short-run increases in borrowing costs for the UK government, her changes to the fiscal rules must be seen as a necessary measure to deliver on the long-term ambition of her Industrial Strategy.

The recently published Industrial Strategy Green Paper Invest 2035 provides insight into how Labour seeks to deliver economic growth in the long-term. Despite immediate fiscal challenges, the document outlines an industrial strategy that is broadly focused on investment to boost high-growth sectors across the UK. Eight sectors where the UK has a clear competitive advantage have been earmarked: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. These so-called ‘growth-driving’ sectors have been responsible for 60% of all productivity growth from 1997-2022. Where growth in these sectors slows, so too does growth in the economy as a whole.[14] The proposed industrial strategy seeks to target growth in these sectors that is ‘long-term … sustainable, resilient and distributed across the country’.[15] Four principles are advanced: 1) building long-term stability; 2) renewing commitment to free and fair trade; 3) easing the investor journey; and 4) being a strategic, growth-focused state. Though concern remains that the approach remains too Westminster-centric and more could be done to allow city-region mayors to drive the process.[16]

There has of course been previous ambitious growth or industrial strategies in recent years (notably Theresa May’s abandoned 2017 Industrial Strategy, for example). Nevertheless, it would be hasty to dismiss Invest 2035 as another doomed-from-the-off industrial strategy. There are several compelling innovations at the heart of this new strategy which represent reasons to be optimistic. Of particular interest is that it is built upon a recognition of the prevailing governance pathologies which have hobbled attempts at long-term economic policy making in the UK. In particular, Invest 2035 seeks to overcome the chronic short-termism and churn characteristic of economic policy making over the last few decades.

In the joint foreword to the Green Paper, the Chancellor and the Secretary of State of Business and Trade state that this government and its industrial strategy will ‘not repeat the mistakes of the past, with policy changing as fast as decision-makers’.[17] To put an end to the so-called policy “merry-go-round”, the new industrial strategy is formulated on a 10-year plan with a statutory Industrial Strategy Council (ISC) established to ensure long-term delivery and policy stability. Mirroring the Office for Budget Responsibility (OBR), the ISC will report directly both to the Chancellor of the Exchequer and the Business and Trade Secretary. It will provide independent, evidence-based analysis on issues pertinent to industrial strategy and monitor implementation of the strategy across the economy. The ISC will be composed of business leaders, trade unionists, academics, among others, to ensure that a range of perspectives informs economic policy moving forwards. Its statutory footing is intended to protect the ISC and the industrial strategy from the short-term whims of electoral politics and often-destructive wholesale changes in direction for policy.

But there are also inherent limitations in the Industrial Strategy. They stem not so much from the strategy itself, but rather from the way Labour has framed its project for government in the context of the pathologies of the British state. Institutional tinkering which places new bodies on a statutory footing may have some role in countering short-termism, but in the UK system, statutory footing alone is no guarantee of long-term policy stability. The ISC could, in principle, just as easily be banished by an incoming government, given the near unchecked power governments with a majority have in the context of the UK’s majoritarian electoral and political systems. Without deeper institutional change to build and support long-term partnerships in the development and implementation of economic policy, drawing together the state, business and trade unions, the ISC may prove insufficient and, as such, eminently expendable. Whilst the ISC may well prove to be a compelling initiative that has some short-run implications for economic policy, it remains to be seen whether it will be an institutional innovation that stands the test of time, leads to further reform and achieves cross-party support. This highlights that short-termism is not always a deficiency in policy or an ideological aberration on the part of policymakers, but rather a characteristic of the British political system that is not easily overcome.

Additionally, there is a general tendency of governments within liberal democracies to sacrifice long-term ambition on the altar of short-term political exigency. Given the pressures faced by governments in terms of their perceived competence and legitimacy, it is common for short-term thinking to override commitments further down the line. The trade-offs governments make are often some of the most sensitive and consequential,[18] oftentimes resulting in long-term promises functioning more as politically calculated deferrals of an issue rather than credible policy commitments. In this respect, Reeves’s first Budget – and its immediate economic consequences – has raised questions as to the reality of her long-term ambitions for the economy. By restricting current expenditure to what can be raised in revenue, Reeves has only been able to provide modest funding increases in this financial year, whilst deferring further down the line the tough choices regarding spending priorities.

These tensions have only sharpened as macro-economic conditions have worsened. The modest headroom bought by changes to the fiscal rules was quickly eroded as the cost of government borrowing increased.  It leaves Reeves under pressure given speculation that this would make it difficult for the government to keep within its fiscal rules. What followed was a Spring Statement reflecting the most orthodox of Treasury thinking, which sought to reestablish a degree of fiscal headroom through stringent welfare cuts and commitments to efficiencies across government departments. Whilst the government have maintained a commitment to capital spending and investment, that their fiscal headroom disappeared so quickly betrays the modest nature of these changes to the fiscal rules in the first place. The response to the loss of headroom, meanwhile, shows that novel thinking around investment and active government at best runs alongside traditional economic policymaking orthodoxies, and has failed to displace well-worn Treasury pathologies.[19] This context of cuts raises questions regarding whether the long-term ambitions of this government can be delivered when the departments tasked with doing so will be facing serious financial constraints in the years to come. The trade-off between long-term ambition and short-term exigency may prove fatal to the primary mission of the Labour government, strengthening the case for mitigating constitutional reforms to be put in place.

An industrial strategy for industrious places: Continuing to “pick winners” in the shadow of the Treasury

A notable aspect of Invest 2035 is the professed commitment to place-based policy and to ensuring that the fruits of economic growth are shared widely across the country. Labour’s approach can be seen as an attempt to challenge the longstanding skewing of prosperity and wealth that has characterised Britain, especially in the wake of deindustrialisation. This is central to its strategy to address the problems of productivity and growth. There is an obvious tension within the Green Paper. Whilst committing to regional prosperity, it also suggests that the government will need to be ‘clear-eyed about the sectors which offer the highest growth opportunity for the economy and businesses’.[20] The sectoral approach to industrial strategy refocuses economic policy making on “picking winners”, albeit sectoral winners.

The dilemma here is that there will be places which simply do not have a competitive advantage in terms of the strategic sectors set out in the industrial strategy. Most of the UK’s workforce is in non-tradeable sectors, with the largest employers being supermarkets, charities and hospitals.[21] Reeves’ 2024 budget, whilst accommodating long-term commitments contained within the industrial strategy, also introduced increases to employer National Insurance contributions and reductions in payment thresholds, along with a gradual phasing out of business rate support. These short-run measures may potentially impact most on workers in lower paid low-growth sectors, many of whom are underemployed due to the consequences of historic deindustrialisation. Such risks have only been exacerbated given the squeeze on welfare spending in the Spring Statement. These economic measures risk creating an employment squeeze in the private sector that, unless absorbed by the public sector, will lead to more people out of full-time work.[22]

This reveals a paradox in the framing of regional ‘rebalancing’ or ‘levelling up’. Past and present government policy has promised resources directed towards growth sectors to improve productivity and competitiveness, with limited redistribution and socio-economic support for ‘left behind’ places. Given this is Labour’s approach, the extent to which prosperity and wealth will be meaningfully decentralised to those areas which have been hit hard by deindustrialisation is limited. These areas are often marked by an absence of the growth sectors which Labour’s strategy is oriented round and are also places where the political risks to Labour from the populist right are growing.

Relatedly, Labour has embarked on its mission to drive economic growth without sufficiently addressing another major pathology of British policymaking. Namely, the dominance of the Treasury and its narrow methodology for making investment decisions. As the Invest 2035 Green Paper argues, infrastructure is vital to economic growth. A great deal of public and private finance is required to ensure that transport, energy and digital infrastructure can support the growth mission. This investment in infrastructure will need to be dispersed throughout the country, so that city-regions receive the investment they require to successfully leverage their competitive advantage. This entails spending money where obvious agglomeration benefits do not currently exist. It raises concerns, as Coyle and Sensier make clear, that the Treasury’s centralised approach to investment decisions, epitomised in its Green Book methodology for appraising infrastructure investment, tends to concentrate spending in places where agglomeration is in evidence at the expense of those where it is not.[23] This so-called ‘Matthew Effect’ risks widening spatial disparities as growth is inhibited in the areas that need it most.

The Starmer government’s approach to its industrial strategy does suggest an understanding of the need for working across departments, across sectors and in partnership with non-government stakeholders. This may allow the tight rein of the Treasury to be loosened, and a shift away from siloed policymaking. Currently, the industrial strategy remains more rhetorical than it is detailed. The only real innovation of note is the ISC and, as argued above, there is no guarantee that its statutory footing will inoculate against short-termism, churn or – in this instance – Treasury dominance. The ISC’s relationship with the Treasury and the Department for Business and Trade is left – perhaps purposefully – vague, as is the nature of the working relationship between the two government departments. This suggests that incrementalism remains the order of the day, with novel institutional tinkering playing a load-bearing role regarding the promise of a fundamental shift of gear in the economic performance of the UK.

Devolution revolution? Labour’s decentralisation agenda

The heralding of a ‘devolution revolution’ has also been a key focus for the Starmer government since taking office. It is framed as integral to its number one mission of economic growth. As noted above, Labour’s economic strategy focuses on place and promoting the competitive advantages of regional economic clusters. Its institutional rejoinder to this has been to focus on ‘completing the map’ of English devolution. The goal is to develop a set of local and regional institutions to promote regional economic growth, the road map for which has been set out in the December 2024 Devolution White Paper. Labour’s commitment to devolution seeks to address two of the key pathologies of the British state. First, devolution is meant to decentralise both British policymaking and economic strategy. Second, it’s role within the missions speaks to a desire to foster greater collaboration across the governance network to combat fragmentation and ensure local, regional and national actors are all working towards shared goals.

The White Paper undeniably reforms and streamlines local government structures to overcome the churn and fragmentation which has beset regional and local governance and economic development. Local councils will be shifted to a unitary model. Combined authorities have been rebadged as ‘strategic authorities’ (SAs) and have been given statutory status. These SAs will exist at one of three levels – foundation, mayoral and established mayoral – with a clear set of criteria authorities will be expected to meet in order to move up the levels. The White Paper also notes that government will offer established SAs a single budget referred to as an Integrated Settlement, designed to give SAs greater autonomy from central government, as well as granting established SAs more powers, particularly over regional transport and planning. Finally, the White Paper seeks to enable greater coordination across the different levels of government and overcome fragmentation by linking local and regional authorities into national policymaking conversations through the creation of new forums through which they can liaise with central government and through the development of Local Growth Plans which central government will seek to align with national priorities.

Labour have argued that the Devolution White Paper represents the most ambitious and wide-ranging devolution agenda yet seen from a British government. However, Labour’s approach to devolution also contains significant contradictions. First, its approach to devolution has not offered any inkling of overcoming sub-national government’s financial dependence on central government, with the White Paper failing to outline any substantive fiscal devolution. Second, Labour remains committed to a devolutionary process that is more akin to a process of delegation and control at the discretion of the centre rather than a meaningful embrace of the principle of subsidiarity. Third, Labour’s approach appears short-term in not having adequate answers to pressing questions related to regional and local authority capacity.

A failure to empower: Financial dependence, top-down delegation and capacity issues

It is unclear how Labour will meaningfully empower local and regional authorities if financial dependence on central government persists. Mayoral Combined Authorities have historically received funding through individual government departments and specialised funding pots subject to tight central auditing and control.[24] Labour has acknowledged that this has led to inefficient use of time and resources, and to central ‘micromanagement’ of regional policymaking, undercutting attempts to make best use of local knowledge and expertise. Recent ‘trailblazer devolution deals’ forged by the previous government grant regional authorities a single consolidated budget and have been seen as an effort to counteract this. Crucially, each trailblazer deal has been accompanied by a Memorandum of Understanding which ensures central government reserves responsibility for auditing regional spending.[25] To date, English devolution has occurred in a largely top-down and ad hoc manner, directed by the centre through the negotiation of a set of bespoke deals. Only three regions — Greater Manchester, the West Midlands and the Northeast — have agreed trailblazer deals with government at present, leaving other CAs within the confines of the existing system.

Labour’s new approach provides a set of criteria SAs must meet to become ‘established’ and gain greater powers, including access to a single funding pot. Labour have argued that the Integrated Settlement will mean ‘that for the first time mayors are not bound by strict Westminster rules over how to spend money locally’.[26] However, Integrated Settlements will operate under a revised version of the same Memorandum of Understanding which trailblazer funding was subject to, whereby the centre retains auditing powers over regional spending.[27] The White Paper suggests auditing and financial oversight of SA spending will be streamlined, but ensures a continuing role for the Ministry of Housing, Communities and Local government in ensuring financial oversight and accountability.[28] Thus, Labour’s approach is one of delegated-authority which does not unshackle regional authorities from central auditing and financial control, indicative of a top-down model of accountability.

Furthermore, the White Paper’s attempt to end ad hoc deal making between central government and regional actors is undercut by its introduction of a mechanism by which established SAs can propose to additional functions to be added to the devolution framework. This mechanism risks the process of deepening devolution descending into ad hoc ism, with the process being driven by the sporadic propositions and demands of established SAs and negotiations with central government, rather than by a clear overarching logic. In the wake of the publication of the White Paper, Greater Manchester Mayor Andy Burnham has already begun lobbying the Treasury to approve further powers for GM over post-16 skills provision and local revenue raising powers, to which central government has responded.[29] This exchange signals the direction of travel set for deepening devolution by the White Paper, and it is one still marked by ad hoc deal making and will still likely result in highly asymmetrical arrangements across SAs.

The folding of regional and local government into Labour’s mission-led approach represents a continuation of this centralising ethos at the heart of the devolution agenda. The Devolution White Paper calls for a partnership between local, regional and national government, hence the development of institutions such as the Council of Nations and Regions, and the development of bilateral partnerships with individual SAs to align national and local policymaking. As noted above, Labour have also proposed that SAs be given the right to propose new areas and competencies they wish to be devolved, indicating some degree of bottom-up influence over the direction of travel of devolution going forward.

The further powers and competencies Labour will seek to hand down to SAs reflect centrally concocted missions. Additional powers regarding planning and spatial policy for example, are being passed to SA mayors on the basis that they are ‘integral to delivering the 1.5m homes committed to in this Parliament’.[30] Similarly, increased SA control over retrofit funding and the development of Great British Local Energy Plans reflect government’s green energy mission. Labour’s devolution agenda casts local and regional actors as conduits for the implementation and delivery of its missions. National priorities and goals are still fundamentally being set and adopted in a top-down manner by central government, then translated into regional and local initiatives through a process of negotiation.[31]

Labour’s devolution agenda also lacks adequate thinking round issues of capacity at the local level. Local government is in financial crisis. Since 2021, six local councils in England have declared themselves effectively bankrupt by issuing Section 114 notices. By 2026-27, almost all of England’s 317 councils estimate a funding shortfall, with only 14 able to balance their budgets.[32] Labour has demonstrated some awareness of this, increasing grant funding for local government by £1.3bn in 2025/26 and including £600m for adult and children’s social care in their first budget. Much of this money will be swallowed up by the increased cost of social care in the light of Labour’s increases in the national living wage (NLW) and employers’ National Insurance contributions (NIC). In real terms, local government spending power remains nine percent lower than in 2010/11.[33] The money Labour have committed to local authorities is frontloaded and is something of a temporary sticking plaster, not a solution to the root issues. The Devolution White Paper suggests that the reorganisation of councils around a unitary model will enable significant efficiencies to be made. It is worth noting that this has been disputed by local actors, who see this as another round of top-down ‘inefficient and top-down’ reform.[34] The government acknowledges that, alongside institutional rejigging, a new funding model is needed. The absence of a worked-out plan regarding local government funding, at a time when Labour is asking local and regional governments to take on further responsibilities and drive economic growth puts the cart before the horse in terms of actually empowering local authorities to have capacity to use their new powers effectively.

This funding crisis raises pressing questions regarding the ability of local actors to work effectively in concert with SAs to drive forward economic growth. SAs have highly uneven capacity. Local funding squeezes have a knock-on effect on SA spending power, and some SAs, such as the Northeast Authority remain in their infancy. Whilst the successes of Manchester’s Authority are held up as an ideal which could be attained by other regions, its success was the result of longer-term efforts to build up regional expertise, capacity and tight, collaborative relationships across local governance in Greater Manchester.[35] Again, the White Paper acknowledging this issue, however its practical offerings in this area are limited. The lack of an ambitious plan to build capacity in newly formed SAs and adequately address local government funding calls into question the extent to which Labour’s devolution agenda is meaningfully long-term in approach.

Labour’s long-term vision for devolution clarifies the position of regional and local authorities within the governance mix, but their mission-oriented approach casts regional authorities as bit-part players. Regional authorities will continue to be subject to continued central oversight and control under Labour, as illustrated by the Treasury’s refusal to allow SAs to levy local tourist taxes. In general, the White Paper’s initiatives around enabling regional accountability is unambitious, continuing a longstanding inability to develop meaningful bottom-up accountability across English regional governance.[36] Labour also does not have adequate solutions to problems of uneven capacity and long-term underfunding at the local and regional level. These problems will surely impinge on the ability of local and regional authorities to produce meaningful change in their localities. Failing to address them will be seen as an inadequate approach to setting out a long-term, sustainable model of local and regional governance. This is a matter of considerable importance because the Starmer government needs to build trust and a collaborative ethos across tiers of government to ensure the reorganisation of local government is a success.

Mission impossible? Addressing the pathologies of the British state

The government has oriented its approach to addressing the pathologies of the British state round the notion of ‘mission-led’ government. Our analysis suggests that this is unlikely to have the wholesale effect Labour hopes for. The impression to emerge from Labour’s  ‘mission’ reform agenda is one that, rather than leading to a substantive shift in direction, represents a rhetorical flourish on top of what is a rather conventional set of policy-goals supported by incremental institutional reform. It fits the longstanding pattern of grafting on another layer of reform to a governance framework that is increasingly not fit for purpose. Invest 2035 reads in this fashion. Whilst its objectives are clear, the measures by which these ambitions will be met are in short supply. The primary institutional innovation – the ISC – remains somewhat of a question-mark. In the absence of a meaningful reforming zeal regarding the pathologies of British policymaking, it is perhaps easier to envisage mission failure than success at this stage. Labour’s devolution agenda does go a step further, giving regional authorities a statutory role for the first time and clarifying the layers of British government in a systematic fashion. But it is driven more by a Westminster-centric vision of delegated authority, rather than any real commitment to devolution based on the principle of subsidiarity. Revealingly, the needle on the power dial between central government and SAs and councils will not significantly shift. Integrated Settlements will provide a degree of autonomy but will likely remain subject to central audit. Institutions framed as giving regional leaders a voice in national policymaking, may end up as a means through which SAs can be rallied behind the priorities of central government.

To more substantively address the pathologies of the British state, it is this balance of forces that needs to be addressed. In terms of economic policy and the growth mission, more needs to be done to challenge Treasury control over economic policy and public spending. This could involve rethinking the role and influence of the Treasury, or the creation of a new growth and investment-oriented department to act as a counterweight in Whitehall, as was attempted under both the Wilson and May governments.[37] The capacity and role of other departments besides the Treasury should be expanded. Departments should be able to command more sway over strategic spending decisions, rather than being neutered by the Treasury as has occurred in instances where they have attempted to play a more active role.[38]

In terms of devolution, substantive fiscal devolution and increasing the amount of tax revenue which is collected and retained by sub-national government is typically and understandably deemed crucial.   Discussion of such measures is conspicuously absent in the Devolution White Paper. In this sense, rather than simply clarifying the roles and structure of local government in law, more could be done to constitutionally enshrine SAs as financially autonomous governmental entities by Labour, alongside a wider constitutional reform agenda as was mooted by Labour when in opposition. A long-term radical reform of local government funding more generally is also, as we note above, something the government should move to produce, but which currently appears unlikely. Forms of bottom-up accountability must also be encouraged as part of a shift away from a top-down Westminster Model of accountability. This should involve technical measures which give SAs the ability to locally audit their own spending, which Labour has intimated they may trial. It can and should also involve encouraging greater local democracy and citizen input into policymaking through SAs, beyond periodically electing a mayor.[39]

Conclusion

In this article, we have analysed the extent to which the government’s adoption of a mission-led approach may challenge a range of well-established pathologies associated with the British state. In exploring Labour’s industrial strategy and its commitment to a devolution revolution, we found some evidence of long-term thinking in the latter, but limited ambition in its institutional reform to encourage this. Labour’s approach is, at best, a selective attempt to overcome the pathologies of British governance and, at worst, falls back into the orthodoxies it promised to overcome. To substantively tackle the British state’s centralisation, fragmentation, short-termism, policy churn, siloisation and poor coordination would require a programme of radical reform which the Starmer government does not seem predisposed to pursue. Elected governments are unlikely to undermine the executive dominance typically enjoyed in Britain. Labour’s own touted programme of constitutional reform already seems to have been put firmly on the back burner in favour of more immediately pressing issues. It remains to be seen whether the devolution White Paper can deliver transformative change if Labour reverts to the same familiar  patterns of British governance to achieve its missions. Indeed, history suggests that the recent pattern of policy failure raises significant concerns for the likely prospect of mission success.

Dr Darcy Luke is a Research Associate at University of Manchester. He completed his doctoral research on the politics of the management of public expenditure in Britain at the University of Birmingham. His research interests include British politics, public expenditure, labour movements, and methodological issues in political science.

Dr Nathan Critch is also a Research Associate at the University of Manchester. He completed his doctoral research on the politics of post-crisis public inquiries at the University of Birmingham. His research interests include British politics, the British state, depoliticisation, crisis management and statecraft.

Patrick Diamond is Professor of Public Policy at Queen Mary University of London. He previously held a number of senior posts in British central government between 2000 and 2010. He has published widely on British policymaking, the core executive and civil service, the Labour party and social democracy

David Richards is Professor of Public Policy at the University of Manchester. He is currently primary investigator on the UK Productivity-Governance Puzzle project and the Nuffield Foundation funded project ‘Public Expenditure Planning and Control in Complex Times:  A Study of Whitehall Departments’ Relationship to the Treasury (1993-Present)’. He has published extensively on British politics, democracy, public policy, governance and political biography.

Dr Sam Warner is a Lecturer at the University of Bristol. He is the author of Who governs Britain? Trade Unions, the Conservative Party and the failure of the Industrial Relations Act 1971 (published by Manchester University Press). His research focusses on the study of power in British politics, drawing on models of (multi-level) governance and theories of state management to explore the big distributional questions of public policy and political economy.

Andy Westwood is Professor of Government Practice at the University of Manchester and is The Productivity Institute’s Policy Director and leads the Institutions and Governance theme. He is an expert in further and higher education, science policy and local/regional economic development and has worked regularly as an adviser for the OECD, IMF and the EU and the House of Lords select committee on Economic Affairs and Digital Skills.

Endnotes

[1] UK Government, Plan for Change: Milestones for mission-led government, CP 1210, December 2024.

[2] David Richards, Martin Smith, Sam Warner and David Marsh, ‘“Crisis, what crisis?” Understanding the recurring problems of the British state, British Journal of Politics and International Relations, EarlyView, https://doi.org/10.1177/13691481241269329

[3] David Marsh, David Richards and Martin Smith, ‘The asymmetric power model 20 years on’, Parliamentary Affairs, vol 77 no 4, 2024, pp658-85; Sam Freedman, Failed State: Why Nothing Works and How We Fix It, London, Macmillan, 2024.

[4] Sam Warner, David Richards, Diane Coyle and Martin Smith, ‘The inefficiency of centralised control and political short-termism: the case of the Prison Service in England and Wales’, Policy & Politics, EarlyView, https://bristoluniversitypressdigital.com/view/journals/pp/aop/article-10.1332-03055736Y2024D000000053/article-10.1332-03055736Y2024D000000053.pdf

[5] Patrick Diamond and Jeremy Richardson, ‘The Brexit omnishambles and the law of large solutions’, Journal of European Public Policy, vol 30, 2023, pp2235-50.

[6] Joseph Ward, Bradley Ward and Peter Kerr, ‘Whither the centre? Tracing centralisation and fragmentation in UK politics’, Political Studies Review, EarlyView, https://doi.org/10.1177/14789299241258629

[7] Christopher Hood and Ruth Dixon, A Government that Worked Better and Cost Less? Evaluating Three Decades of Reform and Change in UK Central Government. Oxford: Oxford University Press, 2015.

[8] David Richards, Sam Warner, Martin Smith and Diane Coyle, ‘Crisis and state transformation: Covid-19, levelling up and the UK’s incoherent state’, Cambridge Journal of Regions, Economy and Society, vol 16 no 1, 2023, pp31-48.

[9] Patrick Diamond, Jack Newman, David Richards, Anna Sanders and Andy Westwood, ‘“Hyper-active incrementalism” and the Westminster system of governance: Why spatial policy has failed over time’, British Journal of Politics and International Relations, vol 26, no 4, 2024, pp1185-210.

[10] Labour Party, Change: Labour Party Manifesto 2024, London, p12.

[11] Op. Cit. UK Government, 2024.

[12] House of Commons Debates, 6^th ser. vol. 758, col. 22WS.

[13] Ministry of Housing, Communities and Local Government, Press Release: Deputy Prime Minister Kickstarts New Devolution Revolution to Boost Local Power, 16 July 2024: https://www.gov.uk/government/news/deputy-prime-minister-kickstarts-new-devolution-revolution-to-boost-local-power

[14] UK Government, Invest 2035: The UK’s Modern Industrial Strategy, Green Paper, October 2024, p16.

[15] Department for Business and Trade, Press Release: Industrial Strategy Launch to ‘Hardwire Stability for Investors’: https://www.gov.uk/government/news/industrial-strategy-launch-to-hardwire-stability-for-investors

[16] Patrick Diamond, Jack Shaw, and Andy Westwood, ‘English devolution: How city-region mayors and industrial policy deliver local and national growth’, Journal of Urban Regeneration & Renewal, vol 18 no 2, pp134-147.

[17] Op Cit. UK Government, October 2024, p2.

[18] Alan Jacobs, Governing for the Long Term: Democracy and the Politics of Investment, Cambridge, Cambridge University Press, 2011.

[19] Nathan Critch, Darcy Luke, David Richards, Sam Warner, ‘The Spring Statement signals a return to Treasury orthodoxy’: https://blogs.lse.ac.uk/politicsandpolicy/the-spring-statement-signals-a-return-to-treasury-orthodoxy/

[20] Op Cit. UK Government, October 2024, p29.

[21] IBISWorld, ‘Biggest Industries by Employment in the UK in 2024’: https://www.ibisworld.com/united-kingdom/industry-trends/biggest-industries-by-employment/

[22] Valentina Romei, ‘UK private sector employment shrinks at fastest pace since 2021’: https://www.ft.com/content/8dcadbd2-57a1-4fff-b2e2-9ff2704fe209

[23] Diana Coyle and Marianne Sensier, ‘The imperial treasury: appraisal methodology and regional economic performance in the UK’, Regional Studies, vol 54 no 3, 2020, pp283-95.

[24] John Denham and Janice Morphet, ‘Centralised by design: Anglocentric constitutionalism, accountability and the failure of English devolution’, The Political Quarterly, vol 96 no 1, 2025

[25] Janice Morphet and John Denham, ‘Trailblazer devolution deals: The next oxymoron in the policy litany of sub-national governance in England?’, Local Economy: The Journal of the Local Economy Policy Unit, vol 38, no8, 2024, pp755-72.

[26] Ministry for Housing, Communities & Local Government, English Devolution White Paper. Power and Partnership: Foundations for Growth, CP 1218, December 2024, p47.

[27] Ministry for Housing, Communities & Local Government, ‘Integrated settlements for Mayoral Combined Authorities’: https://www.gov.uk/government/collections/integrated-settlements-for-mayoral-combined-authorities#supporting-documents

[28] Op. Cit. HCLG, December 2024, pp106-7.

[29] Andy Burnham, ‘Letter to Government following publication of English Devolution White Paper’: https://www.greatermanchester-ca.gov.uk/news/mayor-sends-letter-to-government-following-publication-of-english-devolution-white-paper/

[30] Op. Cit. HCLG, December 2024, p15.

[31] Kitty Donaldson, ‘Labour mayors heading for clash with Treasury on housing, jobs and transport’: https://inews.co.uk/news/politics/labour-mayors-clash-treasury-housing-jobs-transport-3316551?srsltid=AfmBOooBjyv8pbkEYI9_mMOvsyKisLT-VryyAFbxz6RD3qmFRzCbxh_G

[32] Andy Pike and Jack Shaw, Townscapes, Mapping the Gaps: The Geography of Local Authority Financial Distress in England, Bennett Institute for Public Policy, University of Cambridge, 2024.

[33] Stuart Hoddinott, Nick Davies, Thomas Pope, Amber Dellar and Philip Nye, Austerity Postponed? The Impact of Labour’s First Budget on Public Services, Institute for Government, November 2024, pp17-21.

[34] Kwame Boakye, Caitlin Webb and Jonathan Knott, ‘Reorganisation would be “inefficient and undemocratic”’: https://www.lgcplus.com/politics/governance-and-structure/reorganisation-would-be-inefficient-and-undemocratic-26-11-2024/

[35] Graham Haughton, Iain Deas, Stephen Hincks and Kevin Ward, ‘Mythic Manchester: Devo Manc, the Northern Powerhouse and rebalancing the English economy’, Cambridge Journal of Regions, Economy and Society, vol 9, no 2, 2016, pp355-70.

[36] Jack Newman, Sam Warner, Michael Kenny, Andy Westwood, ‘Rebuilding local democracy: the accountability challenge in English devolution’: https://www.bennettinstitute.cam.ac.uk/wp-content/uploads/2024/04/Rebuilding-local-democracy-WP.pdf

[37] Patrick Dunleavy, ‘Restructuring UK government at the Centre—Why the IfG Commission's Naïve Plan will not Work’, Political Quarterly, vol 95 no 2, 2024, pp.356-62.

[38] Op. Cit. Denham and Morphet, 2024, p.6-7.

[39] Joe Sarling, ‘Community Calling: People want more influence’: https://www.newlocal.org.uk/wp-content/uploads/2022/08/Community-Calling.pdf