A report by the Public Accounts Committee published on 1 July, warned that, following the abolition of the Audit Commission, the existing arrangements for local scrutiny of devolved functions must be made more robust.
Examining devolution agreements in 10 areas – Greater Manchester, Cornwall, Sheffield City Region, the North East, Tees Valley, Liverpool City Region, the West Midlands, East Anglia, Greater Lincolnshire, and the West of England – the PAC said local authority scrutiny was constrained.
The devolution deals for these areas, while all bespoke, share a number of elements, including devolved responsibilities in areas of local transport, business support and further education.
Committee chair Meg Hillier said English devolution represented a big change to the way large sums of taxpayers’ money is spent.
“It is therefore alarming to report that, as we hurtle towards mayoral elections planned for next year [in these combined authority areas], so many questions still hang over the process,” she added.
“Parliament and the public must be assured that devolved spending is subject to effective scrutiny and there are clear lines of accountability for delivering value for money.
“These vital arrangements are still very much work-in-progress and must be confirmed as a matter of urgency.”
The committee recommended that government should set out by November how it intends to ensure local scrutiny of devolved functions and funding will be well supported.
The Cities and Local Growth report highlighted that, currently, local auditors focus on individual bodies’ financial statements and arrangements for securing value for money.
“It is not yet clear whether there will be any sort of independent institutional scrutiny of devolution deals as a whole, or what form this might take,” it stated.
“As more powers, funding and responsibilities are devolved to the local level, we are therefore concerned that a gap in the scrutiny of value for money might be appearing.”
The report, which the committee acknowledged was being carried out in an evolving policy context, highlighted this was an untested policy area. There were already clear tensions emerging in the deals, with evidence that some deals may disintegrate.
There should be greater clarity from ministers about what they are hoping to achieve, Hillier added.
“The government has set an ambitious timetable to implement devolution deals but it must not skip over crucial details in a blinkered race to the tape.
“The interests of taxpayers are paramount and we urge the government to act on our recommendations now to ensure devolution fully serves those interests.”
A DCLG spokesman said the report “misses the point of devolution, which is to end the one-size-fits-all approaches of the past and hand power from Whitehall to local people who know their areas best”.
He added: “We’ve agreed 10 landmark devolution deals covering nearly 30% of the country, with local leaders accountable to their residents including through the election of mayors to oversee the new powers.
“This is a voluntary, bottom-up process based on local proposals demonstrating strong local agreement and clear accountability.”
