The long-awaited Devolution White Paper is expected to set out the new Conservative Government’s ambitions for extending new freedoms and responsibilities to the local state.

This report examines the implications of future devolution for districts and smaller unitary councils, and the potential role that they can play in responding to the challenges of Covid-19 and the crucial levelling up agenda. It makes the case for greater ‘subsidiarity’ in allowing places to better determine and shape their own fate, and it considers the current arguments deployed for devolved powers, contending – as we have done before – that the crucial role of smaller cities and places is being overlooked in the rush for a ‘bigger is better’ approach.

We therefore discuss the optimal footprint for devolved powers and examine the appropriate governance for where devolution should land.

We recommend that reform should focus on:

• Pragmatic consideration of the appropriate scale at which better social and economic outcomes can be achieved, and at a level where local areas can agree to cooperate.
• New connections between places, within and across regions, with a relative scaling-up of powers across larger areas, to encourage ‘local and regional cohesion’.
• Combined authorities, structured from the bottom up, using existing units of government, to form new territories that could, but need not, correspond to present or historical boundaries.
• Institutional reform (e.g. Mayors and unitarization) where it is desired, that can address the issue of electoral inequality, to ensure a consistent ratio of councillors to population, across all authorities; and ensure parity in local accountability for the fullest devolution of powers.
• The potential contribution that smaller units of government can make, in helping to grow economies and providing effective services, and the additional powers that may be appropriately devolved – whether as part of a wider mayoral combined authority, or not.