The Guardian view on Labour’s new localism: necessary work in progress | Editorial

Diminished by outsourcing, impoverished by Westminster-imposed austerity, and constrained by one of the most centralised polities in the world, local government in England has endured a miserable first quarter of the 21st century.

Levelling up, the Conservative party’s response to the regional discontent exposed by the Brexit referendum, contrived to add insult to injuries already inflicted. Too often amounting to a top-down, pork barrel exercise, it required local councils to participate in Hunger Games-style competitions for Whitehall largesse. Many wasted millions of pounds on bids, only to be told that “London says no”. The various pots of money released in any case failed to compensate for the cuts to council funding from 2010 onwards.

The cancellation of HS2 at the Tory conference – and the farcical shoddiness of Rishi Sunak’s last-minute Network North plans – sounded the death knell for this failed rebalancing project run from the centre. For Sir Keir Starmer, there is now a huge opportunity to demonstrate that Labour can do much better.

At the party’s conference in Liverpool last week, there was much talk of “taking power to give it away”. Taking a lead from Gordon Brown’s Commission on the UK’s Future report, Sir Keir has committed to introducing a “take back control” bill during his first 100 days in office. Local leaders have been promised the tools to develop long-term growth plans, and Labour will roll out nationally the kind of trailblazer powers that are already exercised in the West Midlands and Greater Manchester.

The direction of travel is right. But the devil will be in the detail. The shadow chancellor, Rachel Reeves, has resisted calls to include elements of fiscal devolution in the bill, which would offer councils greater financial room for manoeuvre. More generally, if real power is to be exercised alongside new responsibilities, local authorities cannot be expected to operate on the shoestring budgetary assumptions of the last decade. Bold and popular initiatives, such as taking buses back under public control in Greater Manchester, will need to be backed with fiscal firepower.

In the current economic context, this will be a challenge for an incoming government. But the rewards of reviving lost municipal capabilities, for the country and for Labour, could be transformative. The Brexit period of political upheaval exposed deep resentment towards an economic orthodoxy in which power had been uprooted and devolved to global market forces. At a local level, this allowed exploitative rentier capital to colonise great swaths of what Ms Reeves has described as the “everyday economy”, including transport, care and the provision of utilities.

Battling formidable headwinds, pioneering Labour councils in places such as Preston and Wigan have nevertheless reasserted local influence in areas such as public procurement and the delivery of social care and services. And as the West Yorkshire and Liverpool city-regions look to emulate Greater Manchester’s bus franchising model, Labour’s metro mayors increasingly embody the desire for a greater democratic say in the running of cities and towns.

Properly empowered, England’s north could become a proud showcase for a renewed local politics – one that is closer to voters, more accountable, and more able to tackle a trust deficit in public life, which has reached alarming levels. If it seizes the moment, Labour has the chance to design a new, better and lasting settlement in our regions.