Scotland needs to start rewiring its own state

Westminster is discovering the virtues of decentralisation. For Scotland, that should prompt a more uncomfortable question: if power is better when it is closer to the people, why should devolution stop at Holyrood?

There is something slightly strange about watching Westminster discover the virtues of decentralisation.

For decades, the United Kingdom has been one of the most politically and fiscally centralised states in the developed world. More than 95 per cent of tax revenue in England is controlled by central government, leaving local government with comparatively little financial autonomy. In addition to this, it has no separate national government at all: its local and regional government operates within a system ultimately controlled from Westminster.

Now, the UK Government wants to change that.

Its new Rewiring the State paper promises to move power away from Whitehall and Westminster and towards the places where people actually live. Mayors are to receive greater control over transport, housing, skills, employment support, innovation and cultural investment. Regional government is to receive a greater share of locally generated tax revenue. Every part of England is expected to have a strategic authority by the end of 2028.

The language is striking. Central government is not merely being asked to delegate some responsibilities. The paper explicitly says the agenda is about “devolution, not delegation”, with a principle of “devolving by default”.

This is potentially a significant change in the way the British state operates.

But it raises an awkward question for Scotland: if Westminster is now seriously considering how to take power out of the centre, what is Holyrood going to do with the power it already has?

Scotland has, of course, been having this conversation for some time. But until recently, the debate has largely been about the relationship between Scotland and Westminster. Devolution meant bringing powers from London to Edinburgh. The assumption was that once power had arrived in Holyrood, the important work was largely done. It wasn't.

The Scottish Parliament has now existed for more than 25 years, and there is an increasingly difficult question about what has happened to power within Scotland itself.

The evidence of that change can be seen in the manifestos published for this year's Holyrood election. Almost every major party now accepts, in one form or another, that Scotland needs to decentralise. The SNP proposes strengthening regional economic partnerships. Labour has proposed allowing regions to establish regional mayors. The Greens support new local governance models, including city-region structures, while Reform proposes pushing decision-making down to local authorities.

Even where the proposals differ, the direction of travel is remarkably consistent.

The consensus is that devolution cannot stop at Holyrood, which is important because Scotland's cities and regions are increasingly being placed at a disadvantage by the way power is organised. English city-regions are acquiring powers over transport, housing, skills and economic development, alongside increasingly powerful directly elected mayors. Scotland's equivalent institutions remain comparatively fragmented.

Glasgow is an obvious example. It is Scotland's largest city and sits at the centre of an economy whose performance matters to the country as a whole, yet responsibility for the wider city-region is divided between multiple institutions and administrative boundaries. Edinburgh and the wider south-east face similar questions.

The issue is therefore not simply whether decentralisation is ideologically desirable. It is whether Scotland's current structures are capable of allowing different parts of the country to make the decisions required to grow and improve. And here Rewiring the State offers Scotland something more useful than a template to copy: a challenge.

The UK Government's argument is that local leaders are often better placed than central government to understand their economies, coordinate public services and respond to the particular circumstances of their communities. There is a practical logic to this. A decision about transport in Glasgow does not necessarily become better because it has travelled through another layer of government in Edinburgh. Nor does a national government automatically have a better understanding of the barriers facing a particular local labour market.

“The next stage of devolution should not be about moving the centre. It should be about making sure there is no single centre at all.”

But decentralisation is not inherently good. Giving power away does not guarantee that it will be used well. Local institutions can be weak. Local leadership can fail. Resources can become unevenly distributed. Power can simply move from one political elite to another without ordinary people gaining any greater influence over their lives.

That is why Scotland should be wary of treating decentralisation as an exercise in administrative rearrangement. The real question is what decentralisation is for.

The most compelling case is not that Scotland should have more mayors because England has them, or that councils should receive more powers because Westminster is doing it. It is that decisions should be made at the level at which they can be made most effectively and democratically accountable.

That requires thinking seriously about money as well as powers. It requires institutions capable of exercising those powers. And it requires giving people a meaningful relationship with the institutions making decisions on their behalf.

That last point is particularly important because Rewiring the State contains another, quieter admission. Alongside decentralisation, the Government wants to move away from a model of “consultation by default” towards new forms of public participation.

This connects to an important criticism made by Carnegie UK's Adam Milne: governments can become very good at asking people for their views without necessarily giving those views any meaningful influence over what happens next. Consultation can easily become something done to people rather than with them.

If Scotland is serious about decentralising power, then it should not simply reproduce the same political structures at a smaller geographical scale. A genuinely different model would have to ask how citizens participate in decisions, not simply which institution gets to make them.

That is where the debate becomes more interesting than the familiar argument about Holyrood versus Westminster. The challenge for Scotland's new Parliament is not merely to demand more power from London. It is to decide what it wants power to look like once it is here.

That is a particularly important question at the beginning of this parliamentary term. There is already broad agreement that Scotland is too centralised. There is growing agreement that regions and cities should have greater control over their own futures. And now Westminster itself is embarking on an ambitious attempt to restructure the English state around that principle.

Scotland therefore has a choice.

It can watch England experiment with new forms of regional government while continuing to operate broadly the same structures created three decades ago. Or it can use this moment to rethink the architecture of government from the bottom up: where decisions are made, who controls resources, how regions are represented, and how citizens exercise meaningful influence over the institutions governing them.

The point of devolution was never simply to move the centre of government from one city to another.

If the argument for bringing power from Westminster to Edinburgh was that decisions are better when they are closer to the people affected by them, then Scotland should be prepared to follow that argument to its logical conclusion.

The next stage of devolution should not be about moving the centre. It should be about making sure there is no single centre at all.