Spain's devolution process, originating from the 1978 Constitution, has led to the establishment of 17 autonomous communities and an ongoing devolution since 1979. In the UK, devolution has been gradual and asymmetrical since the late 1990s, with the establishment of the Scottish Parliament, Welsh Assembly, and Northern Ireland Assembly. However, their fiscal autonomy is more limited compared to Spanish autonomies like the Basque Country and Catalonia, who benefit from unique tax agreements known as"Concierto Económico", whereby the local government is responsible for collecting taxes independently and contribute to central government as per negotiated terms.
In England, regional devolution has been central to UK politics, particularly since the Greater Manchester devolution deal in 2014. The former government published the Levelling Up paper and Regeneration Bill in 2022, expanding on the devolution framework and enabling the creation of County Combined Authorities (CCAs). But as a result of the latest election, resource commitment and distribution are still to be defined, although the Labour government has made it clear that devolution is at the top of the government’s agenda, committing to deepen existing devolution settlements in England by giving new powers to local areas and creating a new statutory requirement for local growth plans (King’s Speech, 2024).
Challenges and Opportunities for economic development
The table below captures both opportunities and challenges regarding economic development in devolved regions, based on each country’s devolution model. In general, regions benefit from an extensive range of powers allowing for targeted development, while at the same time facing economic development constraints due to fiscal and political imbalances.
Conclusion
The future of regional economic development under devolution in Spain and England must address key trends like economic devolution, climate change, migration, post-pandemic recovery, post-Brexit shifts, and the rise of the digital economy. Balancing regional development with national cohesion is essential, as seen in both cases, where asymmetrical power distribution foster both benefits and tensions. In this, central governments play a crucial role in funding procurement, strategic alignment, and infrastructure support, which can enhance or hinder devolved efforts. To ensure success, strong partnerships, continuous collaboration, and effective top-down and bottom-up communication between governments and stakeholders are crucial for inclusive economic policies.