13.Government’s intention is that the elections for the directly elected mayors agreed as part of devolution deals will take place in May 2017. The Department set out the “challenging” timetable required to meet this deadline, with local areas needing to agree and consult on the governance details of its new arrangements over the summer. The governance proposals will include the specific powers that will be devolved to the combined authority and the mayor, and how the combined authority will be set up, including final geographical compositions and voting arrangements. The Department told us that to meet the May 2017 deadline these local proposals will have to be decided locally in sufficient time for corresponding secondary legislation to be enacted by early November 2016.
14.We put it to the Department that there has, so far, been little meaningful consultation by either the Department or local areas with stakeholders, such as local MPs, councillors and voters. We heard evidence from Professor Pike that the devolution deals have been perceived as “relatively closed and a bit opaque”, with wider stakeholders feeling “a little bit out in the cold”. Devolution deals were typically agreed by government and council leaders and senior officials and only after the agreement is announced are the arrangements being consulted on locally and ratified by councils.
15.The Department describes LEPs’ role as ‘strategic’, with a focus on formulating local economic plans and engaging the business community. It told us that LEPs are not, for the most part, delivery bodies, and that they rely on local partners and on capability in local government to oversee the delivery. However, in a relatively short period of time LEPs’ role, remit and level of financial influence has increased, and in 2014 it was announced that LEPs would be responsible for overseeing the £12 billion Local Growth Fund between 2015–16 and 2020–21. Given that some LEPs were newly created whereas others were based on pre-existing structures, each has a varied history of joint-working, political engagement and therefore expertise in overseeing growth projects on this scale.
16.Overseeing billions of pounds of capital projects requires expertise in economics, modelling, forecasting, and monitoring and evaluation. It also requires robust governance processes, particularly given that LEPs are led by the private sector. However, the NAO’s report shows that an alarming number of LEPs themselves do not feel that they have adequate staff or skills. Only 5% of LEPs considered themselves to have adequate resources to meet the expectations of government, 69% did not think that they had sufficient staff, and 28% did not think that they had sufficiently skilled staff. The Department acknowledged that many LEPs are heavily reliant on local authorities. Given the severe financial constraints facing local government this creates a risk that such support may not be sustainable. Like LEPs, combined authorities are expected to take on increased responsibilities and to pool resources as part of their devolution deals. We heard from Lord Porter that certain areas, such as Manchester, have a strong track record of people and partnerships working together. In other areas, the capacity to take on additional and joint responsibility varies, and can be limited by whether there is a track record of joint working.
17.The devolution of functions from central to local government also has potentially significant implications for the required skills and numbers of staff in central government, as well as in local areas. We asked whether government has taken a Civil Service-wide view of the possible impact of devolution on their workforce needs and the Treasury said it had not taken such a “whole system view” from the centre. The Department did accept that the types of skills needed to manage the new arrangements are likely to be different, with a shift from being “the planner and the designer to being the convenor, the facilitator and the system owner”. As each devolution deal is bespoke, there are differing functions being transferred to each area and to varying degrees. There will be both a capacity and capability requirement to manage the assortment of arrangements.
18.We felt that there would be an expectation from the taxpayer that in transferring funding and responsibilities to the local level, the headcount of central government would consequently fall. The Department told us that “it is not an explicit expectation that there will necessarily be a quantified reduction due to devolution deals”. But the Department added that “Over the Civil Service as a whole, in this Parliament, there will be further headcount cuts…That is part of all our spending review settlement. A number of different things contribute to that, and devolution is one of those.” The Department told us that local areas were telling them that, through pooling their individual council resources across the new combined authority areas, they could “resource their combined authority and their mayor with the resources they currently have.”
27 June 2016