The Chamberlain News

MPs’ slam Government’s ‘incoherent and unaccountable’ devolution policy

MPs have slammed the Government’s devolution programme, claiming that Ministers have no way of measuring success and that some business-led local enterprise partnerships are not up to the task of handling growth funds amounting to billions of pounds.

The latest in a series of critical reports about devolution by the Public Accounts Committee accuses the Government of approving “incoherent” deals with councils and LEPs which lack clear objectives and are not subject to public scrutiny.

The opening paragraphs of the committee’s pull no punches:

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. 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.

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.

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.

The West Midlands Combined Authority, a partnership of councils and LEPs, has negotiated a devolution deal which it says is worth £8 billion. The deal involves the Government paying WMCA £40 million a year for 30 years to support an overall investment package that is said will create 500,000 jobs.

The Public Accounts Committee report states that the Government “has not made the objectives of devolution sufficiently clear” and it is “therefore not clear how they will judge success and measure progress”.

The report adds that the experience of devolution in England and elsewhere “provides inconclusive evidence for whether it results in economic growth and improved outcomes from public services”.

In the first recommendation of the report, the Government is urged to be clear about what it is trying to achieve by devolving services to local areas by setting out how it will monitor progress.

The MPs challenge Government claims that devolution is a bottom-up process led by councils:

The rhetoric surrounding devolution is that local areas are the driving force behind the deals. However in practice central government is stipulating certain requirements, such as around local governance, without making them sufficiently clear up front.

Some local areas have expressed dissatisfaction that they have to adopt a mayoral model as a pre-condition of a devolution deal, even in cases where they do not think the model appropriate to local needs.

Central government has not set out clearly what is required from local areas in putting forward devolution proposals, and equally what is and is not on offer from central government in return. There are unresolved tensions between a stated wish to let local areas put together innovative arrangements and a central desire to impose particular governance models.

The committee also notes that the Government has no way of comparing the financial performance of city regions and LEPs, to see how poorer and wealthier parts of the country fare.

Many of the concerns expressed by the committee are reserved for local enterprise partnerships:

It is not clear that combined authorities, LEPs and local partners have sufficient capacity and capability. LEPs were established as non-resource intensive strategic partnerships, but are now responsible for overseeing delivery of the £12 billion Local Growth Fund, representing a significant increase in their responsibilities and influence over spending locally.

There is varying capacity and capability across the LEPs, and a large number of them do not feel that they have sufficient resources to meet government’s expectations or governance requirements. They are also relying on local authorities for staff and expertise at a time when local authorities are themselves trying to cope with severe financial constraints.

We are not confident that existing arrangements for the scrutiny at local level of devolved functions are either robust enough or well supported. Robust and independent scrutiny of the value for money of devolved activities is essential to safeguarding taxpayers’ money, particularly given the abolition of the Audit Commission.

It is alarming that LEPs are not meeting basic standards of governance and transparency, such as disclosing conflicts of interest to the public. LEPs are led by the private sector, and stakeholders have raised concerns that they are dominated by vested interests that do not properly represent their business communities.