NAO calls on government to clarify its devolution vision

20 Apr 16

The National Audit Office has called on ministers to set out more details on how devolution in England can be implemented amid increasing risks to the financial sustainability of local public services.

Examining the 10 pacts reached across the country, in areas including Greater Manchester, Sheffield, Birmingham and Liverpool, and the North East and Tees Valley, the NAO said that they offer opportunities to reform public services for local users.

Around 16.1m people live in areas subject to devolution deals, with nine new mayors of combined authorities to be elected in 2017, according to the report. All of the deals include an agreement on devolved responsibility for substantial aspects of transport, business support and further education. Other policy areas included in some of the deals are housing and planning, employment support, and health and social care, which has been implemented in Greater Manchester. Investment funding of £246.5m a year has been announced alongside the agreements.

The transfer of powers, funding and accountability for policies and functions previously undertaken by central government creates “significant accountability implications”, auditors stated.

The analysis acknowledged that the Treasury and the Cities and Local Growth Unit, which leads on negotiating devolution deals, want local areas to take the initiative, with Whitehall responding to their plans and proposals. As a result, the government has decided not to set out a clear statement of what it is trying to achieve through devolution deals.

However, the NAO’s English devolution deals report highlighted that there are still accountability implications that needed to be clarified. These include ensuring government identifies and accounts for risks to devolution that arise from financial sustainability challenges faced by local public services.

Further details of how and when powers will be transferred to mayors and how they will be balanced against national parliamentary accountability are also needed, according to the report. The deals agreed so far rely on “increasingly complex” governance structures, according to the NAO, and good management and accountability depend on appropriate and proportionate measures to understand their impact.

In addition, ministers should clarify the core purposes of devolution deals as well as who will be responsible and accountable for devolved services and functions.

Auditor general Amyas Morse said that despite several deals, the government’s approach to English devolution still has an air of “charting undiscovered territory”.

“It is in explorer mode, drawing the map as it goes along,” he added. “Some of the opportunities and obstacles are becoming clearer, but we still do not have a clear view of the landscape or, crucially, an idea of the destination.

“Devolution deals provide important opportunities to reform public services. As with any experiment, some elements will work better than others. As we have said before, it is in the interests of both local areas and the government to know which programmes have the biggest impact for the money invested. Localism is not a reason for failure to learn from experiences or to spread best practice.”

Responding to the report, a government spokesman said: “This report recognises the huge progress made in our revolutionary devolution agenda which began less than two years ago.

“With ten ground-breaking  deals already agreed across the country, covering 30% of the population, next year millions of voters will be able to elect powerful new mayors directly accountable to them, particularly across the Northern Powerhouse.

“We agree there is much more to do and we will continue to talk to areas so everywhere that wants to take part in the process can do so.”
 

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