MPs reveal doubts about City Deal accountability

The government has rejected accusations from a group of MPs that inadequate monitoring arrangements make it difficult to judge impact of City Deals.

Between 2012 and last year, the government signed 26 deals with cities outside of London to devolve spending and policy powers.

But this week, the Public Accounts Committee said that a failure to put in place monitoring and evaluation arrangements makes it hard to assess progress and compare approaches in different areas.

Committee chairman Meg Hillier, said: “Devolving power and responsibilities carries the risk of weakened accountability. The fact that the government cannot adequately explain where responsibility lies for the success or failure of City Deal programmes should therefore sound an alarm.”

She said a new round of devolution deals announced recently made it even more important to ensure that it was clear who should be held to account.

“Taxpayers must understand who is spending their money, how that money is allocated, and where responsibility lies if the system fails to deliver good value,” she said.

In a response, the Department for Communities and Local Government said: “Ministers have been repeatedly clear that devolution of greater powers requires clear accountability, including through directly-elected mayors responsible to local taxpayers.

“The committee is right to recognise that City Deals were the start of a revolutionary new way of working – putting an end to decades of centralisation – and we will ensure lessons learned can inform future devolution deals.”

A spokesman said that councils have to report back on their performance as agreed in individual deals and that individual government departments are responsible for monitoring and evaluating relevant projects.

Paul Woods, former chief finance officer at Newcastle City Council’s, which signed one of the first City Deals, told Room151: “In City Deals that I am familiar with, the leaders of the participating councils demonstrate strong ownership of their deals are very clearly accountable.

“Most of the round one City Deals don’t involve the up front payment of government money – in Newcastle we got the power to grow business rates and keep that local future growth to invest in infrastructure.

“It is important that there is accountability, of course, but locally, rather than nationally in the context of devolution. The local ownership of City Deals that exists ensures that this accountability is in place.”

Rob Whiteman, chief executive of the Chartered Institute for Public Finance and Accounting, said: “As decision making across a range of local public services starts to align more closely, the committee’s report rightly focuses on the need for there to be clear lines of local accountability, so that taxpayers know how and where their money is being spent – and who is responsible when things go wrong.”

Photo (cropped): Gordon Wrigley, Flickr.