The challenges caused by Brexit and the pandemic present an “opportunity to reset relationships” between the UK Government and devolved nations, a Lords committee has said.

The upper house’s Constitution Committee published a report on Thursday, calling for a shift in how the union operates, shoring it up for the 21st century.

Among the recommendations is to allow the administrations more of a say on the spending of the Shared Prosperity Fund in devolved areas, along with reforms to operations in UK governmental departments, ending what the committee says is a “top down approach”.

Committee chairwoman Baroness Ann Taylor said: “The United Kingdom, the union, marks its centenary in 2022.

“After the challenges of Brexit and Covid-19, there is a clear need and a clear opportunity to reset relationships between its constituent parts to achieve a better functioning union.

“This will help us to keep pace with the rapid changes and many challenges that confront all of us and which every layer of government will have to address in the 21st century.

“The UK Government needs to articulate a compelling vision and narrative for the United Kingdom in the 21st century.

“The committee’s vision is of a more co-operative union based on a renewed sense of respect and partnership between the different layers of government and a new emphasis on shared governance in the interests of all its citizens.

“But for this to be a success requires good faith and a constructive approach from central, devolved and local government.”

On the reforms needed in Whitehall, the report called for “greater respect and co-operation” between departments and constituent parts of the UK, adding it will help to “strengthen” the union.

“To deal effectively with and respond to the challenges of governing the United Kingdom in the 21st century, significant culture change is required in Whitehall, including the end of its top-down mindset,” the committee wrote.

“After the completion of the review of intergovernmental relations and if, or when, devolution is extended across England, Whitehall will need to transform how it manages, and mediates between, the different interests of the nations and regions.”

Michael Gove
The report raised concerns over the wide-ranging portfolio of Michael Gove (PA)

The report also raised concerns over the wide-ranging portfolio of Michael Gove – who has responsibility for intergovernmental relations as well as being the Secretary of State for Levelling Up, Housing and Communities.

Mr Gove’s wider responsibilities “risk undermining its focus on this important area”, the peers said.

The committee said it welcomed the Shared Prosperity Fund – which has proven controversial among the devolved countries who view it as breaking the devolution settlement.

But the report added the committee “heard significant concerns about the UK Government’s role in making allocations from the fund directly in devolved areas, without the involvement of the devolved administrations or devolved authorities”.

It said: “The Government’s lack of engagement with the devolved administrations on the overall design of the fund is unhelpful and has undermined trust.

“To rebuild trust and partnership, we recommend the devolved administrations and devolved authorities should have a more constructive role in the governance of the fund, including decisions about local priorities and the allocation of funding.”

SNP MP Tommy Sheppard described the report as “disappointingly one-sided”, saying the committee had “made up their minds that the union was unquestionably a good thing before they even heard their first witness”.

A spokeswoman for the UK Government said: “The UK Government is committed to working with the devolved governments to deliver for people all over the United Kingdom.

“Our successful world-leading vaccine rollout involved co-operation across the UK, and devolved governments have just been provided their largest real-terms annual funding settlement since devolution over 20 years ago.

“Last week we also published a landmark agreement with the devolved governments on ways of working, which includes a Prime Minister-chaired council where the Scottish Government, Welsh Government and Northern Ireland Executive can raise any issues to tackle co-operatively. This will be based on the principles of mutual respect and builds upon years of existing co-operation.”