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Better oversight needed to ensure value for money for devolution – NAO

The spending and timescale of devolution deals is growing and needs better oversight to ensure it is managed efficiently, the National Audit Office (NAO) has said in a new report.

The report says that the scale and scope of English devolution deals has increased substantially in the past 18 months, from the initial deals with Greater Manchester and Cornwall to new deals with Sheffield, the North East, the Tees Valley, Liverpool and the West Midlands, before three further deals were announced in last month’s Budget.

The devolution deals will bring about substantial changes to government spending, including £246.5m additional funding every year, the controversial business rates devolution and funding to support housing growth.

Amyas Morse, head of the NAO, said: “Despite several iterations of 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.

“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.”

The NAO warned that central government has not provided a clear timetable for future devolution deals or details of how and when powers will be transferred to local government, including elected mayors, creating a potential lack of accountability.

The auditors also said that the broader geographical areas subject to some of the devolution deals, such as the West Midlands, have a lack of clearly defined geographical boundaries and a risk of conflicts of priorities.

The report says that careful management is needed of the increased spending devolution has already caused central government, including hiring 155 additional staff at the Cities and Local Growth Unit, and to ensure that local authorities are able to finance their new responsibilities under devolution.

The report adds that central government should clarify for Parliament and the public the core purposes of devolution deals and who will be responsible and accountable for devolved services and functions.

The devolution process has already proved controversial. Cambridgeshire County Council voted against the devolution proposal in the most recent Budget and Lord Kerslake, chair of the All-Party Parliamentary Group for Reform, Decentralisation and Devolution, called the devolution process ‘piecemeal and incoherent’.



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