Local Public Accounts Committees: what are they?

Posted on 27/01/2023 by Ed Hammond.

This week (on 26 January) Lisa Nandy MP announced that the establishment of local Public Accounts Committees would form part of a new approach that the Labour Party would take towards English devolution, if they form the next Government.

Speaking to the LGC, Ms Nandy said she wanted to “bake in proper transparency and accountability measures so that local communities can hold their leaders to account”

This begs the question – what *are* local Public Accounts Committees? You could be forgiven if the idea has passed you by. Although Local PACs formed part of Labour’s election manifesto in 2015 (and bubbled around the devolution policy space in subsequent years) the idea seemed a little too technocratic, a little too governance-focused, to gain wider traction.

We can say this because, well, local PACs were our idea. Our former Executive Director Jess Crowe originated the concept back in 2014 – we subsequently worked it up into more detail and fed it into all the main political parties. It was picked up by one of Labour’s frequent policy reviews, and the rest is history.

Since then we have continued to tinker with the idea. In 2018 we produced a detailed policy paper on the subject. You can read it here, although do be aware that we’ll be updating it shortly and will revise this blog to reflect that – so do bear that in mind when reading it.

The first question to answer is – why?

In our view there is a pressing need for a “whole system” overview of public spend at the combined authority, or sub-regional, level. This need has only become apparent in the past five years – the maturing of combined authority arrangements has led to an understanding that delivery is not about a single institution doing something, but in a wide range of partners across a broader area working in concert. The ICS agenda in the health and care system is another example of this recognition. But while decision-makers recognise this need, broader governance lags behind – those structures continue to focus on narrow institutional accountability.

Almost a full third of the levelling-up white paper was devoted to thinking about this challenge – the need for systems and processes at local level to align with outcomes. For the first time it felt as though policymakers were beginning to engage with the fact that making growth “happen” is contingent on getting governance and responsibility at local level right (as we ourselves said in a publication called “Growth through good governance”, way back in 2014 – http://cfgs.org.uk/wp-content/uploads/Growth-through-Good-Governance.pdf)

The second questions to answer is – what will they deliver?

A local PAC would engage head on with the challenge of the “governance of complexity” – this complicated landscape of organisations in the public, private and third sector with often overlapping activities connected to supporting, and providing services to, local people, and planning for their future. Using VfM as a prism to look at who is doing what, why, and for what result, provides a focus where otherwise that complexity might seem overwhelming. It helps that VfM is an established concept central to delivery at both national and local level.

Local PACs will deliver certainty, transparency, and accountability. They will help to map relationships, follow the “public pound”, and bolster the accountability and governance arrangements of individual institutions. They will – critically – be spaces for locally-led accountability, shifting the balance of oversight away from the assumption that this kind of oversight is best carried out by national bodies.

Ultimately Local PACs would deliver a clearer sense of where public investment leads to a return – whether that return is economic, social or cultural. It will introduce better rigour to the way that decisions are planned and made and improve partnership working. It will provide a way to surface in public the necessary trade-offs when we prioritise what is, and isn’t, important to focus on across the local area, and will provide a way to confront those tensions head-on.

The third question to answer is – how will they work?

Our 2018 discussion paper went into a lot of detail on this point. We wanted to be able to demonstrate that Local PACs are something that are practically deliverable rather than a vague aspiration of interest only to policy wonks.

The first point here relates to duties and powers.

Methods of operation would hinge around a central duty held by each Local PAC, “to hold to account the delivery of public services by organisations working together across a locality, and to investigate the value for money of those services”. As you would expect, in our paper we defined each of the key terms in that duty. In particular, we would not expect that the local PAC would look at the day to day activities of individual organisations, but at VfM across an area in the round.

In terms of powers, we originally had in mind the following possibilities:

• “Enter and view” powers – a local PAC would need the right to directly inspect and investigate public services, and to speak to those in receipt of those services;
• Rights of access to papers and documents and rights to require people to attend and answer questions. These would obviously be carefully described;
• A specific audit function. We had in mind that a local PAC would could review the outcome of individual organisations’ audit exercises, review associated risks and understand how and where those risks are shared between organisations. Our original paper predates the outcomes of the Redmond Review into local audit, and in updating our thinking we will be thinking about the need for this aspect of a local PAC’s responsibilities would change in consequence;
• The presence of sanctions for non-compliance with a local PAC’s powers feels necessary in some form – but we have struggled to understand how these might be proportionate and how they would be enforced.

The second point is about resourcing, and practical operations (including things like the composition of a local PAC).

A local PAC could be a totally independent organisation, or it could be hosted by another organisation (although it is important to note that it would need to be seen as operationally independent of that organisation). It would need to be supported by a small staff including people with financial expertise. (We would not envisage the establish of a “local National Audit Office” for every area alongside a local PAC!)

In terms of membership, we thought that a local PAC might be chaired by an independent person and comprise a mix non-executives from local authorities and other local organisations. Non-councillors would though need to be represented (we think that the local PAC would not be a local government committee / joint committee in the legal sense; its composition would need to reflect this). We are equivocal about the role played by local MPs on a local PAC (quite apart from anything else, we are not sure that a sitting MP would be able to make an ongoing commitment to engaging with such a body given the requirement to attend sittings of the Commons in Westminster).

Finally – funding. Doing this properly would not be free. National policymakers will have to make the judgement about whether investing a not insubstantial amount of money to make local PACs will yield results in improvements in the effectiveness of public services. Demonstrating the cash impact of accountability and governance systems in this way is difficult. Funding could be agreed nationally (as with the Public Accounts Committee at national level, we think that a funding solution independent of Government is needed), or could be managed locally either by precept (which makes the funding situation meaningfully transparent) or through some form of subscription from local bodies.

We’re delighted to see a public profile for this idea – more work needs to be done to refine and test exactly how local PACs might operate but, for us, this debate is an opportunity to dig into an issue which has been elided and ignored for too long.   

 

First published 27 January 2023