PAC issues accountability warning on devolution deals

11 Nov 15

The Public Accounts Committee has called for greater clarity in the government’s flagship devolution agreements after raising concerns about accountability and scrutiny arrangements in the first round of City Deals in England.

In an examination of the pacts, which were signed with the eight core cities outside London in 2012, the MPs said devolving power and responsibilities carried the risk of weakened accountability.

The PAC’s report highlighted that a lack of monitoring and evaluation in the deals made it difficult to assess their overall effectiveness.

Committee chair Meg Hillier said the government was not able to adequately explain where responsibility lies for the success or failure of City Deal programmes, which covered areas like skills and infrastructure.

This should “sound an alarm”, she stated. “It is also disappointing that there is no effective mechanism for comparing results in different cities, nor to scrutinise the knock-on effects projects in one area might have elsewhere. Taxpayers and indeed the government are unable to assess precisely the impact of what has been delivered through the deals so far.”

As the government extends devolution to more places – agreements have already been reached with Greater Manchester, the Sheffield city region and  North East and Tees Valley – Hillier warned that there was “considerable scope for tension” between local government and Whitehall if accountability arrangements were not right.

“Wider devolution deals, such as that agreed with Manchester, will see cities and regions take on increasing responsibility for providing public services. When things go wrong, it must be clear who will be held to account. “Taxpayers must understand who is spending their money, how that money is allocated, and where responsibility lies if the system fails to deliver good value.”

The committee concluded some of the initial City Deals had shown early signs of success.
However, it would be difficult to assess the overall impact as the Department for Communities and Local Government accepted there had been a failure to put in sufficient monitoring and evaluation arrangement.

As the government devolves additional responsibilities, ministers need to be clear on how to determine the funding to be devolved to deliver services locally. The committee also called on DCLG to develop a consistent approach to measuring impact alongside a more robust assessment of the capacity of local authorities to run devolved programmes, particularly for devolution of NHS spending planned in Manchester and Cornwall.

Responding to the report, a DCLG spokesman said: “This one nation government’ is determined to rebalance our economy and ensure power and resources are devolved from Whitehall to local people who know best what is needed for their area.

“Ministers have been repeatedly clear that devolution of greater powers requires clear accountability, including through directly-elected mayors responsible to local taxpayers.

“The committee is right to recognise that City Deals were the start of a revolutionary new way of working – putting an end to decades of centralisation – and we will ensure lessons learned can inform future devolution deals.”

CIPFA chief executive Rob Whiteman said the committee had rightly focused on the need for there to be clear lines of local accountability so that taxpayers know how and where their money is being spent.

“Devolution is an opportunity to concentrate more power locally and improve public scrutiny,” he added. "But for this to happen, transparency and the carefully planned transfer of both funding and accountability must be at the heart of the devolution process."

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