Devolution and effective scrutiny

January 19, 2024

The Levelling up and Regeneration Act 2023 and the 2023 Autumn Statement set out various changes for devolution. Tiffany Cloynes looks at the Government’s proposals, including the creation of Combined County Authorities (CCAs), and highlights the importance of scrutiny in ensuring effective governance.

The following ten areas presently exist under Mayoral devolution in England:

Cambridgeshire and Peterborough
Greater London
Greater Manchester
Liverpool City Region
North of Tyne.
South Yorkshire
Tees Valley
West Midlands
West of England
West Yorkshire.

Four new deals were introduced in the Autumn Statement 2023 these are:

Level 3 devolution deals

By way of reminder Level 3 is a single institution or County Council with a directly elected Mayor, across a functional economic conurbation or whole county area.

The two Level 3 deals announced were:

Greater Lincolnshire – this deal anticipates the Mayor taking on roles around careers advice and resilience
Hull and East Yorkshire – includes £15m for “transport, flood and coastal erosion programmes”.

Both of these deals feature a new collaborative partnership with Department for Culture, Media and Sports’ National Delivery bodies.

Level 2 devolution deals

Level 2 deals can be taken up by any single institution or County Council without a directly elected Mayor across an economic conurbation or whole county area. These deals will have fewer devolved powers granted to the areas in question.

The two Level 2 deals announced were:

Cornwall – will exercise the devolved powers itself
Lancashire – will establish a non-mayoral combined authority with Blackpool and Blackburn with Darwin councils.

New Level 4 devolution deals

In addition to the above, there will be a new ‘Level 4’ deal within the devolution framework available to combined authorities, the newly created CCAs (see above) and local authorities (who already have a Level 3 deal). The new Level 4 devolved areas will be expected to provide new local transport powers, post 19 skills policy and “strategic housing powers” relating to affordable housing and net zero.

Level 4 deals will not, at present, include access to the single financial settlement which has been offered to Greater Manchester and the West Midlands.

General

In addition to the above, the pre-agreed Suffolk County Council deal is to be implemented.

According to the Institute for Government this means that 57% of the population representing 60% of the national economy and 42% of landmass will be covered by devolution. However, there is a considerable way to go.

The Greater Manchester and West Midlands “trailblazing” deals have a new funding system which grants funds flexibility over transport skills, housing, net zero and local growth budgets, but these are not presently to be offered “across the piste”.

The Autumn Statement set out the framework for Level 4 deals. They will be offered a consolidated funding pot which won’t be as flexible as the trailblazing deals.

Scrutiny

The Scrutiny Protocol (the protocol) was published on 22 November 2023 and applies to the arrangements for Overview and Scrutiny Committees in all English Institutions with devolved powers including Mayoral and Non-Mayoral Combined County Authorities (created under the Levelling Up and Regeneration Act 2023) County Councils and Unitary Authorities who have agreed devolution deals.

The protocol is non statutory guidance and sets out a detailed framework to assist. It suggests a single committee model should be used to provide a shared platform, and identifies 18 key principles. Any new activity arising from a devolution deal should incorporate the following into any existing scrutiny arrangements:

pool of members
politically balanced membership
geographically balanced membership appointment of chair
sustained appointments made on interest and skills
well-resourced training
inviting technical expertise
remuneration and status
holding the Mayor or Directly Elected Leader and the institution to account
participation in pre policy and pre-decision scrutiny
provision to call in
regular performance monitoring including agreed outcomes
robust work programming
focused task and finish exercises
strong relationships with stakeholders
regular self-evaluation and reflection
access to data, research and analysis
strong relationship with audit committees.

Under the 2023 Scrutiny Protocol a combined authority and the new CCAs will be legally required to establish an Overview and Scrutiny Committee (the O&S committee) together with an Audit Committee. The O&S committee has the power to “call-in” decisions made but not implemented and can ask that the decisions are reviewed. It may also call the Mayor, Members or Officers to come before it and answer questions. The O&S committee will also have statutory powers to scrutinise the decisions of the Executive.

County Councils, CCAs and authorities with devolution deals should look to incorporate the scrutiny of any new transaction arising from devolution into their existing scrutiny arrangements. Members are encouraged to maintain and develop a strategic overview of their service areas and to work collaboratively with other committees as appropriate.

In the case of Mayors and Directly Elected Leaders, question times should be organised so questions are taken directly from the public, such events should be chaired by an independent person, for example, a journalist or business person and they should be held every three months.

In light of the protocol (November 2023) and the Best Value Standards and Intervention Guidance (July 2023), scrutiny will be even more critical to underpin and ensure effective and efficient governance.

It will be interesting to see if the funding landscape will change to keep pace with the changes in devolution, to actually enable delivery rather than putting change without sufficient funding to deliver.

Tiffany Cloynes is a Partner and Head of Local Government at Capsticks.