What makes a country great?

Great cities.

That is a lesson the United Kingdom once knew well. Britain reached its imperial heights in the late 19th century in part because its municipalities were growing into some of the world’s most productive cities.

None better symbolized British greatness than Birmingham, a manufacturing powerhouse in the West Midlands. In 1890, Harper’s Magazine called it the “best-governed city in the world,” and with good reason. Birmingham provided novel services for its people, including free libraries and museums, free education for all children, modern sanitation and affordable housing, street lighting, a municipal bank, and support for the poor.

The spirit of Birmingham was often expressed by the popular nonconformist preacher George Dawson, and two of his parishioners who became mayor—Joseph Chamberlain and his son Neville, who is better remembered for his later failures as a prime minister. The preacher and the Chamberlains evangelized for urban reform, advancing a philosophy called “The Civic Gospel,” the idea that great municipalities offer the best chance for human flourishing.

“A town,” Dawson once said, “is a solemn organism through which shall flow, and in which shall be shaped, all the highest, loftiest and truest ends of man’s moral nature.”

Today, the Civic Gospel is preached by city leaders worldwide, especially in the globally ambitious metros of Vienna, Mexico City, Seoul, and Tokyo, where governments pride themselves on pursuing cutting-edge, humanity-advancing improvements in democratic participation, environmentalism, the arts, and social policy.

But these days you won’t hear the Civic Gospel in its home city—or home country. When you ask municipal experts what the world’s best governed cities are today, you’ll get an earful about Barcelona and Bogota, but you’ll hear nothing about Britain. U.K. cities are too busy struggling just to survive.

Birmingham, still the second most populous U.K. city, with more than 1.1 million people, now draws notice as a cautionary tale. In September 2023, it became yet another British city to declare fiscal insolvency—one of eight in the past six years. Birmingham’s bankruptcy is blamed on cuts in national budgets, economic struggles, and two massive governance mistakes: an IT project that went £80 million over budget, and a failure to respond to equal pay claims by female city workers now totaling more than £700m. Unable to pay its bills, Birmingham has suspended spending on arts, youth services, and assistance to families in crisis.

The sorry state of local self-governance is not often mentioned in reports about the upcoming July 4 elections in the U.K., which are widely expected to see the current Tory government replaced by Labour. But local stagnation is at the heart of the sense of frustration and crisis that prevails in Britain.

In the face of national failures—declining life expectancy, dropping real wages, and fiscal austerity—Britons are unable to turn to their local governments for solutions, because those local governments are too weak.

After the Second World War, Whitehall (the nickname for U.K.’s national government) stripped local governments of responsibilities, in areas from utilities to hospitals, and nationalized services in new ministries and institutions. Whitehall also repeatedly reorganized local governments and their jurisdiction, thus fragmenting local power and reducing local control in fiscal matters. The resulting centralization made London a global goliath, but diminished the wealth, influence, and public services of the country’s small and mid-size cities.

The imbalance has not gone unnoticed. Over the past 15 years, British governments have sought to boost regions and localities via various strategies—like “rebalancing the economy” and “Northern Powerhouse.” In 2019, the Tories running Britain announced a plan for “Levelling Up” weaker cities and regions and their people with greater aid, and even established a ministry to pursue it.

But these efforts have failed, because the approaches are top-down, directed by the national government. Indeed, the national “Levelling Up” department has dispensed cash for projects through a slow bidding process, orchestrated by consultants who charge local governments large fees for their assistance. The Economist, in calling the process “scattershot,” noted that 60 of the first 71 projects funded through Levelling Up were behind schedule.

Since “Levelling Up” became policy five years ago, economic disparities between rich and poor regions have actually widened. British cities and counties, have become beggars, asking for bailouts for in-demand services like homeless programs, child care, and adult care that they no longer can afford.

The challenge will get worse for the new government post-election. Of the 300-plus local governments in England alone, more than half say they will be in severe financial distress by next year. It’s not clear that any help is on the way. Labour has made vague promises to “Level Up” better than the Tories.

For now, Birmingham and other insolvent cities feel stuck.

The most promising path forward is for the national government to restore the local autonomy that once made Birmingham and other U.K. cities great. There have been small moves in this direction, with so-called “trailblazer” deals that allow some metro regions to establish their own elected chief executives.

But such devolution deals are full of limits on local control that are nutty as anything in the classic British government comedy, “Yes, Minister.” Among the ludicrous documents of so-called devolution are a “scrutiny protocol” listing all the ways the national government will watch over cities, and a 2022 Levelling Up White Paper laying out a complex four-tier regime for devolving power to cities.

What’s really needed, but so far not on offer, is a restoration of the fiscal autonomy and local freedom that allowed Birmingham to build a city so great it had its own gospel.