Devolution: Government must do more to protect taxpayers' interests
1 July 2016
The Public Accounts Committee report raises new concerns about the oversight and implementation of devolution deals in England.
- Report: Cities and local growth
- Report with oral evidence: Cities and local growth (PDF 672KB)
- Inquiry: Cities and Local Growth
- Public Accounts Committee
Report conclusions and recommendations
The Committee's report examines devolution as an evolving policy area "so that government can take account of our recommendations at a relatively early stage".
It highlights concerns that plans for proper accountability to taxpayers at a central, local and Parliamentary level are not yet in place.
The Committee is "not confident" existing local arrangements for scrutinising devolved functions are adequate and also questions the capability of Local Enterprise Partnerships (LEPs) to fulfil their agreed role in the devolution process.
Concern over lack of transparency over funding for different areas
Separately, it describes as "alarming" the fact that "LEPs are not meeting basic standards of governance and transparency, such as disclosing conflicts of interest to the public".
The Committee is concerned by a lack of transparency over funding for different areas, highlighting the fact that per capita funding ranges from £11 a year in the Greater Manchester deal to £27 a year in the West of England deal.
It also warns the timetable to implement devolution deals in the coming months is "extremely challenging" and that "any delay in this process…could put the proposed May 2017 elections at risk".
Ensure timetable for deals remains feasible
The Committee's recommendations call on the Government to provide stronger leadership and greater clarity in multiple areas of the devolution process.
These include ensuring the timetable for implementing deals remains feasible and that Government "has clear contingency plans for potential delays".
The Committee challenges the Government to be "specific and clear about what it is trying to achieve by devolving services to local areas" and to explain how it will monitor progress against these goals.
The Government should also be clear "on where it believes that outcomes are a matter for local leaders to decide and where centrally imposed targets are more appropriate".
Meg Hillier MP, Chair of the PAC, said:
"Devolution involves big changes to the way large sums of taxpayers' money are spent on their behalf.
It is therefore alarming to report that, as we hurtle towards mayoral elections planned for next year, so many questions still hang over the process.
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 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.
It must be far clearer about what these deals are intended to achieve and set out in detail where accountability for areas of public spending will lie.
The interests of taxpayers are paramount and we urge the Government to act on our recommendations now to ensure devolution fully serves those interests."
Ten devolution deals agreed
In the 18 months to April 2016, 10 devolution deals were agreed over the transfer of powers, funding and accountability for policies and functions from central government.
The deals apply to 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.
Since 2010 the government has devolved powers, funding and responsibility to local areas through a variety of means.
The last six years have seen the creation of 39 Local Enterprise Partnerships and the agreement of 28 City Deals, 39 Growth Deals and ten devolution deals.
This has resulted in rapid change in the local government landscape and the roles and remits of many of the bodies involved.
Not all devolution deals are coherent
There is wide support for the principle of devolving powers from the centre to local areas, which are often best placed to identify and respond to the needs of local people.
However, we are concerned that not all devolution deals are coherent: they lack clear objectives; and are not aligned geographically with other policies or local bodies.
There has been insufficient consideration by central government of local scrutiny arrangements, of accountability to the taxpayer and of the capacity and capability needs of local and central government as a result of devolution.
"Some devolution deals already beginning to unravel"
We are clear that while devolution is driven by political decisions, this does not absolve central government departments of exercising sufficient and effective oversight of implementation.
This is an untested policy and there are clear tensions emerging, with evidence of some devolution deals already beginning to unravel.
As the devolution agenda progresses, in order to maximise the prospects for success, we will want to see greater clarity from government about what they are hoping to achieve and stronger consideration of the issues we highlight in this report.