A National Audit Office report published today finds that the Ministry of Housing, Communities & Local Government (MHCLG) is making good progress on delivering on the aims set out in the 2024 English Devolution White Paper, having established 18 Mayoral Strategic Authorities so far.
These receive funding via an ‘Integrated Settlement’, which offers greater simplicity and flexibility, and could deliver better value for money over time.
However, the report stated that some more newly established MSAs may struggle to maximise the benefits of their Integrated Settlements in the future if they do not build experience and capacity in government programme delivery.
Each MSA has its own Outcomes Framework, reflecting local priorities and circumstances. The Outcomes Framework contains a set of measures, negotiated between the MSA and the government departments contributing funding to the Integrated Settlement, with MHCLG coordinating the process.
The NAO suggests that there is tension between MSAs’ expectations of autonomy and funding departments’ ongoing responsibility for how the money they have granted is used locally. Getting the right balance will be important when scaling up the English devolution system in the future.
The NAO report also suggests that there is a risk that, as more MSAs are established, capacity constraints within MHCLG and other departments might cause them to seek Outcomes Frameworks that are more template-like, with similar measures applied across many MSAs. While this would clearly reduce administrative burdens, it could also weaken the focus on local needs and circumstances.
MHCLG is taking steps to provide relevant support through holding annual conversations with MSAs, making capacity funding multi-year and more reflective of an MSA’s current capacity and level of maturity, and providing extra funding for staffing and administrative costs.
The NAO recommends that, ahead of the next Spending Review, MHCLG should work to actively manage the risks involved in scaling up the MSA system. It also recommends that MSAs should ensure they have robust arrangements in place to support local scrutiny and accountability.
Gareth Davies, head of the NAO, said:
“MHCLG has done well so far in implementing its plans to set up Mayoral Strategic Authorities. The Integrated Settlement arrangements give welcome flexibility to dedicate spending where it is needed most.
“MHCLG should now ensure that the system through which Mayoral Strategic Authorities are accountable to central government is proportionate and supported by strengthened local accountability arrangements.”
Responding to the findings, Cllr Richard Clewer, chair of the Local Government Association's Public Service Reform and Innovation Committee, welcomed the progress but urged Government to accelerate the pace of change.
He said: "Devolution is proving its value by giving local areas the powers they need to drive growth and improve outcomes for communities, however we need to make sure that no parts of the country are left behind in the process.
"While this report highlights positive progress, the Government must now go further and faster to deliver meaningful devolution across England. Empowering local leaders to invest in infrastructure, address skills shortages, build affordable homes and boost productivity is key to tackling the challenges facing communities and the economy."
