Devolving accountability – a riposte to the Public Accounts Committee

Posted on 04/05/2016 by Ed Hammond. Tags:

Jacqui comments and Ed blogs on the new Public Accounts Committee report.

Jacqui McKinlay, Chief Executive of CfGS, commenting on the release of the Public Accounts Committee’s report: Accountability to Parliament for taxpayers’ money, said:

“The Public Account Committee must accept devolution of scrutiny is part of the package. Parliament will need to share accountability with local structures, rather than being the primary focus.

If the PACs report tells people working in local government anything it is that we must get serious about good governance if we want to wield greater powers. If we can’t get our own house in order and demonstrate a robust and locally determined system of devolved accountability, we cannot be surprised when Westminster seeks to maintain oversight of local expenditure.”

The Public Accounts Committee’s concerns about accountability in devolution illustrate the challenge of changing minds and mindsets about what “devolution” really is

by Ed Hammond

The Public Accounts Committee has just released a report commenting on accountability for spending across Government. The report highlights some of the most highly publicised examples of spending that might be regarded as being poor value for money – grants to Kids Company and money spent on the eBorders programme. It also mentions, in passing, English devolution. The PAC’s view is that accountability systems – the accountability between departmental Accounting Officers and Parliament, and the ability of AO’s to account for the spending of public money – is weakened by the complexity of such major schemes.

The PAC commented more specifically on what they were still calling “City Deals” last November, where they made broadly similar comments. Their view – reflected through similar comments made by the National Audit Office – focuses on accountability upwards, to Parliament, for all public spend. It’s a point of view – an oddly Diceyan opinion about where responsibility and accountability should lie – but in my opinion not one that holds water given that the purpose of devolution itself is to drive accountability and decision-making on spending down to local level. With the full localisation of business rates and negotiations over further local funding freedom and flexibility, Parliament will need to recognise that it needs to share accountability with local structures, rather than being the primary focus. Put another way, as Lord Porter put it in his own evidence to the PAC late in April, “If it is a devolved service there is no way a minister or secretary of state should be held to account if it fails”

The battle to impose perfect systems of accountability at central level – where Accounting Officers in Whitehall are expected to have an unimpeded and real-time view of all public spend – would be a quixotic and ultimately doomed attempt to impose on devolution intellectual purity on a real-life system which is messy, confusing, occasionally frustrating but, ultimately, good enough. It’s important to bear in mind that accountability systems statements, as originally envisaged, were an attempt to set out the broad framework of accountability, responsibility and governance relationships rather than to allow Ministers or Parliament to exert direct influence over all of that spend. They recognise that it is the whole accountability system that is important, and that needs to be robust as a whole, rather than insisting that every element of that system be perfect.

Ben Harrison at the Centre for Cities has recently blogged on the tendency to look for perfection in the making of devolution deals. He says that we should be more concerned with identifying solutions that are good enough – the risk being that rejecting the offer of devolution because it is does not conform with some Athenian archetype of democracy or some other lofty aim risks missing the very real opportunities that it can bring.

I agree with this. Up to a point. Mainly because it depends on having an agreed sense of what “good enough” means. For one, I have more sympathy than I think Ben does with the sentiment that the way that devolution deals are being planned, negotiated and implemented needs to be more structured. I don’t think that structure brings with it the dead weight of bureaucracy. It can do, if it isn’t planned properly. What structure does mean is consistency, understandability and proper oversight – which is impossible with a highly informal set of deals developed in an ad hoc way to suit the convenience of decision-makers rather than those holding them to account.

So what does this structure look like? Next week, we are publishing a detailed report on devolution governance, reflecting on exactly these issues. We will be suggesting that local areas think about establishing what we term a “governance framework” to discuss and secure local agreement on basic issues like who will be involved in the development of policy,

Firstly, it must be local. The view expressed by the PAC above is only the view of one set of parliamentarians – others take a more localist approach. Take comments made by the Communities and Local Government Select Committee, reporting on the Devolution Bill, as it then was, last year. They said:

As the DCLG says, the overview and scrutiny requirements in the Bill are an initial framework to be used as a basis for more robust provisions, which we believe have a role in fostering public confidence in the new arrangements, as well as balancing vested interests. These should be developed to suit the characteristics of the local areas as a result of deliberate efforts to hold active discussions at local level, with residents involved in designing new and more open methods of scrutiny. Local areas need to give active consideration to how the mayor will work with the council leaders and how s/he will be held to account.

In this sense, following Ben’s typology, I think we *can*, in fact, strive for a solution that is both less top down and more structured – if that structure is proportionate and based on local accountability and local need. This means, however, that we must consciously recognise the need to move away from assumptions that accountability will always need to be asserted through Parliament – and that, once this happens, local scrutiny systems must be robust and effective. It is likely, for example, that we will see local Public Accounts Committees established to perform this role – as we have suggested ourselves.

The onus now lies not on Parliament, on Ministers of civil servants, but on those of us working in local areas to ensure that those robust systems can be created and sustained. The power to create flexible, proportionate and robust governance systems for devolution lies wholly in our hands.


About the Author: Ed Hammond

Ed leads CfGS's work on devolution, transformation and on support to councils and other public bodies on governance and accountability.