For the past two years I have had the great privilege of overseeing the National Audit Office’s work on local government. As I prepare to move onto a new challenge overseas and reflect on my experience, it is clear that, thanks to devolution, local government is now at the heart of the government’s domestic policy agenda.
There is substantial support in many communities for more power devolved to them and clear emphasis on local economic growth and jobs. But it is also clear that much of the government’s approach to English devolution is experimental and has the air of drawing the map as it goes along. As I set out here, I believe that there are a number of issues that any government wanting to take forward this agenda will need to keep on top of as the devolution landscape matures.
To date, devolution deals have been struck between central government and 10 local 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. Each deal is bespoke, but each designed to set out how powers, funding and accountability for functions previously undertaken by central government will be transferred to local communities.
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These deals are the latest entrant to the complex devolution landscape, where they sit alongside a range of initiatives including city deals, combined authorities, and local enterprise partnerships – private sector-led strategic partnerships designed to drive local growth priorities.
With the advent of the Local Growth Fund in 2015, and growth deals struck between central government and individual LEPs, LEPs are now responsible for directing £12 billion of government spending by 2020.
"Much of the government’s approach to English devolution is experimental and has the air of drawing the map as it goes along"
In the spring of 2016 the NAO published reports on both the progress of devolution deals and on Local enterprise partnerships, leading to a Public Accounts Committee evidence session. Common to the reports and the evidence taken by MPs at this hearing are a number of issues that I believe the government needs to keep in view as devolution progresses:
1) Clarity about the purpose of devolution and the bodies within it
As devolution deals and LEPs demonstrate, the government sees devolving responsibilities to local communities as a vital means of boosting local economic growth. What is less clear, and is yet to be articulated by government, is a statement of what precisely the purpose is of devolution deals. Similarly, for LEPs, the department has not yet set out its objectives for what it hopes to achieve through growth deals.
Without knowing what the end point is for devolution deals and for LEPs, it will be difficult to assess the contribution that these have made to economic growth. A similar point can be made about all the organisations now operating within the devolution landscape: one of the findings of our LEP report was that LEPs themselves don’t always know how they fit with other bodies.
2) Accountability and assurance
There are significant accountability implications arising from devolution deals; a notable example being the details of how and when powers will be transferred to elected mayors. To provide local areas and the public with greater clarity over how well they are progressing, the taxpayer needs to know just who in their communities will be responsible and accountable for devolved services and functions.
Likewise, with LEPs the NAO found that there is considerable variation in their transparency, with the availability of financial information differing significantly between LEPs. Overall, LEPs are not as transparent to the public as the NAO would expect, especially given that they will be responsible for £12 billion of taxpayers’ money between now and 2020.
As we have set out in a number of reports in recent years, austerity means that local authorities are operating under substantially increased and increasing financial pressure. Against this backdrop, there are concerns about whether new bodies in the devolution landscape are sufficiently resourced for their roles. This is particularly apparent with LEPs who themselves reported to us that they have serious reservations about their capacity to deliver.
To oversee and deliver Growth Deal projects effectively, LEPs need access to staff with expertise in complex areas such as forecasting, economic modelling and monitoring and evaluation. But only 1 in 20 LEPs considered that the resources available to them were sufficient to meet the expectations placed on them by government.
By being clear about what it wants to achieve with its devolution agenda, and that the bodies which emerge in the devolution landscape are transparent, accountable and equipped to take on their roles, the government will maximise the chances of success of transferring powers to local communities.