If devolution is to succeed it requires substantial central coordination, writes the former leader of Nottingham City Council.

The buzz word of the moment is devolution. There is hardly anyone among the commentariat or political classes who does not think it is a good thing.

Indeed, it is a very good thing, and an act of courage to make it the mainstay of government policy. The UK is stifled by centralisation. Nowhere is this more evident than in the inability of central government to understand, let alone deal with, the skills agenda so necessary to both economic growth and social development.

The same can be said of transport decisions – which still depend heavily on Whitehall vetting. Even ‘minor’ issues which affect people’s daily lives and are managed locally – heights of hedges, obligation for neighbours to provide boundary fencing, fines for anti-social behaviour – all depend on clunky national legislation.

But the current conversation too often deals in generalities: ‘more powers to mayors,’ ‘fiscal devolution,’ ‘more local decision making,’ more motherhood, more apple pie. And even when it gets slightly more specific – more council housing, aligning the utility investment to regional growth, reindustrialising – the argument still lacks the logistics for delivery.

Take fiscal devolution, perhaps wisely omitted from Burnham’s June speech but very much in the mix: I have yet to hear mention from those touting it of its inherent paradox.

If I, mayor/leader of deprived-borough-up-North, am offered the opportunity to set my own council tax and business rates, to introduce new taxes and keep some of the benefits of growth, I might be interested.

I certainly would not be keen on cross subsiding anyone else

But I am also aware of the politics and economics of imposing additional burdens on an area where the tax base is low, the capacity to pay is similarly low, and therefore the benefits are very limited. I might actually be more worried about losing cross subsidy from the leader of well-to-do-borough-down-South.

Yet, If I were the latter I would seize the opportunity of a few high value tweaks to the council tax, business rates, and the chance to tax foreign visitors without a vote. I certainly would not be keen on cross subsiding anyone else.

But it is not only an issue of the differential ability to raise money. This very difference compounds the centre-periphery phenomenon, thereby further widening the very gap which it is designed to close.

As for retaining the benefits of growth, in a deprived area I could spend enormous energy on growth development as mayor or leader, only to see richer areas, mainly in the south benefit from self-generating growth which has had nothing to do with council intervention.

Such was the case of the New Homes Bonus – the grant awarded to councils with large increases in housebuilding – which had to be abolished because it was increasing the regional divide.

But this is not the only paradox. The subtext of devolution is levelling up. However, the dynamics of the system are that well-off areas attract investment, poor areas rarely do.

The development of the Cambridge-Oxford-Milton Keynes triangle illustrates this dilemma. For the benefit of the UK national economy, it needs to grow and needs good transport and infrastructure links. However, from the perspective of levelling up, it is likely to suck investment, jobs, R & D business and infrastructure subsidy from other less well-off areas.

No state can let a thousand flowers bloom

To handle this delicate balance between regional and national priorities requires some large measure of central intervention which will undoubtedly cut across the devolution agenda.

Moreover, every area will rightly be required to produce its sub-regional plan with sectoral priorities. And the betting is that the plans will be remarkably aspirational and, with some laudable variations, similar – high end manufacturing, lots of bio-tech, green energy – all competing not just with well-off areas but with other deprived areas for limited funding and investment.

They will inevitably end up outbidding each other with, for example, business rate concessions and grants, for the same inward investment opportunities. No state can let a thousand flowers bloom. There will have to be central coordination, sectoral and regional targeting, and noses put out of joint.

So, there we have it. The paradoxical reality is that devolution requires substantial central coordination. On the fiscal front it needs cross subsidy and central management. On the growth side it needs central planning and prioritising. Without both, the gap which devolution is trying to fill will, perversely, widen.

This leaves the most effective tools, to which Burnham has wisely given most emphasis – control over the money/powers handed out by central government and to some extent, utilities. But even here there needs to be some prescription.

The temptation of localised economic development plans tends overwhelmingly towards investment in things and not people. Yet the imperative in turning an area around is education and training and, crucially, this does not start at the age of 16.

There is a dire need to pour resources into early years and primary education, not only as factors in self-fulfilment, but also as an investment in a future self-confident and aspirational workforce which can compete. But this is a long-term investment with long-term payback. The electorate and the political class may well lack the patience to allow it the time to succeed.

Devolution is a Rubik’s cube. I sincerely wish Andy Burnham the very best of luck in solving it.

Graham Chapman (Lab), former leader, Nottingham City Council