Latest Public Sector News

02.07.15

Over a fifth of councils expect to be in a combined authority with a metro mayor

More than one in five English local authorities expect to become part of a new combined authority governed by an elected mayor by 2020, according to a poll of council chief executives.

The figure has risen since before the general election when a mere 12% told PwC they expected to integrate into a new combined authority with a metro mayor.

Six out of ten of respondents agreed that their council would be part of a combined authority, without any stipulation as to governance arrangements, suggesting that the issue of a mayor is still a sticking point for more than a third of authorities.

The survey was conducted as part of a new PwC report, Delivering the Decentralisation Dividend: a whole system approach.

It suggests that there is much more to delivering devolution than elected mayors and that too much focus on governance reforms could come at the expense of delivering improved outcomes by taking a whole system approach to a place.

The report follows PwC research published earlier this year, which found that only one in 10 council chief executives and leaders believed their council could protect frontline services in the face of continued austerity, while 80% told researchers that some councils would fail to deliver essential services inside the next five years.

According to Jonathan House, government and public sector partner at PwC, the past five years had seen the establishment of a momentum that was driving devolution and decentralisation.

He said: “We are witnessing a process intended to decentralise power and responsibility to local communities, matched by a growing recognition amongst local authorities that their focus should be on delivering outcomes and not merely acting as service providers.

“The emergence of new combined authorities – with delegated central government functions and responsibility for delivering economic regeneration, integrating health and care and reforming services from housing to transport – is beginning to resonate with elected representatives and citizens.

“However, decentralisation cannot be an end in itself; it must have a clear focus on delivering improved outcomes; it needs to be multi-speed and driven fastest by those areas with the appetite to take on additional powers and responsibilities; and it will take time to develop local capacity and embed a culture of ‘decentralisation by design.’”

The report says that the UK remains one of the most centralised countries in the EU. Nine of the 10 core English cities have consistently performed below the national average in terms of GDP per capita, in contrast to the performance of second tier cities in many other European countries.

However, PwC says that the case for devolution extends beyond England’s cities; according to the County Councils Network, since 2006, county areas have contributed 41% of GVA and represent 36% of GVA growth.

Nick C Jones, director of PwC’s Public Sector Research Centre, said the challenge is to get the right balance between investment and reform.

“In the context of austerity and increasingly scarce resources, the trick will be for local and combined authorities to work with business and Local Enterprise Partnerships to stimulate growth in parallel with delivering high value public services and tackling the underlying drivers of high demand.

“The big savings that can be made already have largely been made, so shifting to a world of ‘fiscal neutrality’ will become the mantra for many authorities, particularly those looking to agree ‘devo deals’.

“That means reducing over time the traditional reliance on revenue support grants and boosting business growth and investment which, in turn, can drive up retained local income, such as through business rates.”

However, the report warns that whatever the decision on elected mayors, decentralisation depends on collaboration and effective partnership at the local level across multiple stakeholders.

In addition, the key local institutions necessary for success – local authorities, combined authorities and Local Enterprise Partnerships (LEPs) – need to ensure that local capacity, capability and accountability issues are addressed.

House added that the focus should be on making public services more effective within tight and shrinking, budgets by driving local innovation and improvement and redesigning services to improve outcomes.

“The next five years will be key for the ‘evolution of devolution’ across the country,” he said.

“Achieving this aim will require maturity of local leadership in order to take a whole system view of public services, identifying what can be better achieved collaboratively and the gaps local public sector bodies are currently missing through not taking a joined-up approach.

"Localities need to ensure they have the capability, capacity and accountability in place to make their case to central government and, more importantly, to then deliver on their plans.  

“While councils are undoubtedly under financial pressures, there has never been a better opportunity for local leaders to really deliver for their local communities and economies and they need to step up to the plate."

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