One year on from our first roundtable and follow up report ‘The Path to Greater Regional Devolution’, the ‘devolution revolution’ has moved on considerably. Since February 2015 we have seen the Government’s Cities and Local Government Devolution Bill receive Royal Assent, a national programme of area-based reviews of post 16 education and training as part of the Government’s ‘skills devolution’ agenda and the announcement that Cornwall is to become the first rural authority in England to agree a devolution deal. This period of unprecedented change raises a series of complex challenges, risks and concerns that demand further consideration, discussion and debate. Since the May 2015 General Election devolution deals with more than seven areas have been agreed so will local government structures become more confusing after devolution? What effect will this have on accountability? What conflicts will there be between the new combined authorities and existing local authority arrangements? What lessons can we learn from Welsh devolution? The Government has expressed a desire for greater fiscal devolution but is this realistic? Chaired by Sir Paul Jenkins, the former Treasury Solicitor, our second roundtable on devolution discussed these issues and many more with local and central government leaders, policy influencers and stakeholders including Centre for Cities, Department for Transport, Grant Thornton, Lawyers in Local Government, LGiU, Local Government Ombudsman, Nottinghamshire Fire & Rescue, Staffordshire County Council, The Department for Communities and Local Government, The Financial Times, The National Forest Company and The Welsh Government. Our second report, Our Changing State: the Realities of Austerity and Devolution, summarises the key themes and thoughts that emerged from the roundtable and proposes a series of recommendations for further discussion and consideration by both local authorities and other key stakeholders as the country continues along the path towards even greater regional devolution. https://www.brownejacobson.com/training-and-resources/resources/legal-updates/2016/04/the-realities-of-austerity-and-devolution

1. our changing state: the realities
of austerity and devolution

2. From left to right
Sir Paul Jenkins, Former treasury solicitor (Chair)
Sarah Neville, Public Policy Editor, Financial Times
Alexandra Jones, Chief Executive, Centre for Cities
Paul Dossett, Partner, Grant Thornton
Jonathan Carr-West, Chief Executive, LGiU
Jane Martin, Local Government Ombudsman
Phil Horsfield, Director of Legal and Planning, Broxtowe Council
Rob Hann, Consultant
John Everitt, Chief Executive, The National Forest Company
Jeff Godfrey, Head of Legal, The Welsh Government
Tom Huggon, Deputy Lord Lieutenant of Nottinghamshire
Neil Timms, Treasurer, Nottinghamshire Fire and Rescue
John Tradewell, Director of Legal and Democratic Services,
Staffordshire County Council
Nick Olley, Legal Director, Department for Transport
Steven Bramley, Director, Department for Communities and
Local Government
Richard Medd, Partner, Browne Jacobson
Laura Hughes, Partner, Browne Jacobson
Richard Barlow, Partner, Browne Jacobson
Peter Ware, Partner, Browne Jacobson
Anita Bradley, Partner, Browne Jacobson

3. Our changing state: the realities of austerity and devolution page | 3
contents
About the roundtable 4
Introduction 5
Executive summary / key recommendations 6
Where are we now? 7
Relationship with central government 8
Follow the money 10
Bridging the gap 14
Accountability 16
The future - where is this going? 18
Conclusion 20
About Browne Jacobson 22

4. Our changing state: the realities of austerity and devolution | About the roundtable page | 4
The meeting was chaired, once again, by Sir Paul
Jenkins and we are particularly grateful for his
continued involvement and his support of our work in
this area.
This report reflects the nature of the discussions held at
the roundtable, however it does not necessarily reflect
the views of any of the individuals who attended, or the
organisations they represent.
The information and opinions expressed in this report
are no substitute for full legal advice, it is for guidance
only and, where applicable, illustrates the law as at the
published date.
Browne Jacobson would like to thank the local and central government leaders, policy influencers
and other stakeholders who joined us for our second annual roundtable discussion on the topical
issues surrounding austerity and devolution at our London office.
about the roundtable

5. introduction
Our changing state: the realities of austerity and devolution | Introduction page | 5
The landscape in local government is going through a period of unprecedented change. We want to
help the public sector develop awareness of the challenges ahead, and to explore possible solutions.
the realities of devolution and
austerity
sharing services and
delivering efficiencies
Our roundtable discussion brought together a diverse
and knowledgeable group of stakeholders, to identify
the realities of devolution and austerity and to look at
practical ways in which the potential challenges could
be overcome, including:
• accountability of local authorities and combined
authorities
• sharing services and delivering efficiencies between
public sector bodies
• finance and funding issues.
This paper addresses these questions and themes in
more detail and makes recommendations for local and
central decision makers who are involved at various
stages of the devolution agenda.
Richard Barlow
Partner and Head of Public Sector
Browne Jacobson

6. Our changing state: the realities of austerity and devolution | Executive summary / Key recommendations page | 6
• there remains some scepticism about devolution.
Whilst most are excited about what it could
mean, doubts remain about the manner in which
agreements are being reached and the differing
agendas of parts of central government. Greater
transparency and clarity of what is ‘on and off the
table’ would help deliver deals, persuade sceptics
of the benefits that devolution can deliver and allow
frameworks for governance, scrutiny and operations
to develop
• there is no current standard model for devolution,
and accordingly, future devolution is likely to also
occur in a non-uniform manner. Thinking now about
the future, and the aspirations of the combined
authority model, will help decisions about the
shape of governance and overview and scrutiny
arrangements in combined authorities
• the ability of combined authorities to trade,
collaborate and take over services from constituent
members could truly transform local government
and the delivery of public services and deliver
significant efficiencies
• legacy contracts ‘inherited’ by a combined authority
may be unsuitable for use in the new arrangements.
Due diligence reviews of such contracts should be
undertaken sooner rather than later so issues can
be addressed within the restrictions imposed by
law. From now, new contracts being entered into by
public sector bodies need to be sophisticated and
flexible to meet future structural and organisational
changes, to the extent legally permissible
• inherent conflicts of interest are likely to occur
when members wearing ‘two hats’, representing
both their local authority and the combined
authority, are asked to make decisions which may be
incompatible with both parties’ interests. This can
be further complicated by existing collaborations.
This needs to be recognised and addressed, not
swept under the carpet
• the extent of proposed devolution seems, in
some instances, to be inhibited by a reluctance
to really transfer functions and the associated
assets and funding and this is resulting in a new
division of responsibility between central and local
government, where it is very difficult to know if it
will be effective or fairly funded
• the devolved administrations in Wales and Scotland
have been through many of these challenges.
Although there are key differences with English
devolution, some comfort may be taken from the
fact that similar complexities were worked through
and resolved. However some key issues, such as
accountability when things go wrong, have not been
addressed satisfactorily to date
• so far, the government has resisted all calls for
substantial fiscal devolution. The Communities and
Local Government Committee Inquiry (CLGC) into
the subject is likely to add further pressure for a
change of position. It seems inevitable that the
government will need to respond to the pressure
to some extent. The question is, what do local
authorities need to do, to ensure they can sustain
themselves beyond 2020 and should they be
lobbying more for this change?
executive summary / key recommendations
Our roundtable meeting, research and experience in this area, leads Browne Jacobson to make the
following observations and recommendations:

7. Our changing state: the realities of austerity and devolution | Where are we now? page | 7
where are we now?
At around the time of our previous report, there was
a mood of scepticism about whether all the talk of
devolution would lead to anything of substance. In the
last year or so, extraordinary work has been done to
knock this cynicism on the head and nurture the seeds
of real change. However there remains much more
to do in order to convince everyone that devolution
will create a genuine transformation in both local and
central government.
Our perspective on this change and the future of
the public sector is significantly informed by our
relationships with clients who are living, breathing
and enduring its reality. This period of unprecedented
austerity has driven public bodies to explore every
opportunity and, in some cases, to step outside of
their comfort zone in seeking solutions to falling
income. From use of the ‘Teckal’ exemption to provide
services back to the public sector and profit-making
trading companies to generate revenue, to exploring
the boundaries of vires to charge for services and
collaborating across area borders to share services
and functions; localities have left no stone unturned
in seeking to do more (or at least the same) with less.
It is widely accepted that the ‘low hanging fruit’ has
been picked and that yet more innovative solutions
are needed if local government is to survive, let alone
thrive, to 2020 and beyond.
The advent of combined authorities and devolution
takes things in a new direction. A kind of regionalism
combined with localism; a bottom-up process that is
driven from the top down. The process of devolution
is fraught with local and national politics and a lot of
uncertainty, combined with a fear that areas that sit
back and wait to see how it all turns out will miss the
boat. This has driven the forging of new partnerships
and the development of complex, ambitious proposals
at a pace that might not have previously been thought
possible. Indeed, this new model of cooperation, driven
by devolution, was widely agreed to be a welcome
collateral benefit from the early deals.
The Cities and Local Government Devolution Act 2016
(the Act) received Royal Assent on 28 January 2016, and
provides a legislative (if not necessarily comprehensive)
structure for the various devolution requirements,
options and a statutory foundation for the existing and
proposed devolution deals.
The lack of detail in the Act leaves a number of
important issues unresolved, some of which formed the
basis for debate at the roundtable.
Since the publication of our report ‘The path to greater regional devolution’ in March 2015, the
devolution landscape has changed dramatically. Before exploring the current issues, we reflect on
how we reached this point.
“There are too many authorities who
have taken austerity as victims – there
are few who have said they’ll redesign
services, contracts and outsourcing
arrangements.”
Neil Timms, Treasurer,
Nottinghamshire Fire and
Rescue Service

8. Our changing state: the realities of austerity and devolution | Relationship with central government page | 8
relationship with central government
In order for devolution to be successful, it’s clear that
there will have to be ‘buy-in’ from central government
departments. The CLGC Inquiry into the Cities and
Local Government Devolution Bill questioned whether
some Whitehall departments, such as health and
education, were really committed to the principles of
devolution. There are some central government policies
which appear to go against the principle, such as the
Department’s for Communities and Local Government’s
(DCLG’s) insistence on calling-in local fracking decisions
or the Department for Education’s (DfE’s) regional
approach to the oversight of academies. Comments
made at our discussion indicated that some departments
have only recently themselves accepted that devolution
is here to stay, so perhaps over time commitment will
start to grow in these departments.
In terms of the nature of the relationship between
local and central government, the devolution process is
already driving changes in the relationship; the dialogue
taking place is unprecedented. Councils are negotiating
genuinely exciting packages directly with the Treasury
and DCLG, often as part of barely-established
collaborations with other local authorities. Yet some
deals threaten to fall down as fast as they were
made. Proposed combined authorities in Oxfordshire,
Hampshire and North Midlands all came under threat
as the government ratcheted up the pressure to agree
deals in time for the budget. In the North Midlands,
a number of authorities dropped out of the deal at
the last moment, although the remaining authorities
committed to continue with their bid. It is not difficult
to argue that such situations could have been avoided
if local authorities had had sufficient time to work out
what was really important for an area, who were the
preferred partners and what the deal would look like.
Amid all of this, there is the question of what happens
if things go wrong. As lawyers, of course, we tend
to focus on the risks on the basis that forewarned is
forearmed. As far as we are aware there has been little
contingency planning undertaken in parallel with the
devolution deals, in the sense of identifying what could
fail and how this should be dealt with. Will combined
authorities be too big to fail? Will government be
prepared or able to step in and deliver failing services?
Or will other authorities be expected to step in and
help, as happens with failing children’s services and
academies? Perhaps more fundamentally, will Whitehall
be prepared to accept that mistakes might be made and
that those mistakes need to be learned from rather than
intervening too readily?
We think there is a risk that the lack of long-term
planning and rapidly evolving relationships could lead
to confusion about who is responsible for what. In
the event of failure of a combined authority or some
aspect of a devolution deal, there may be no robust
plan for addressing the failure and public services are
potentially on the line. The mayor, where there is one,
may become the focal point for complaints but will he
or she have the resources, the time and the power to
take any meaningful action, particularly if there is a
fundamental failure of the concept of devolution to do
what the government intends or what an area wants?
The role of central government will inevitably change but is it ready for this change and is there
going to be a consistent approach across the various departments?

9. Devolution is likely to impact on the size of
many central government departments but it
will also have a huge impact on the nature of
the roles being carried out.
It will require central government employees
to utilise different skills in assessing and
considering bids and providing a necessary
degree of oversight, and/or a minimum level of
standards, to ensure that appropriate service
levels are met.
There will also, no doubt, be tensions that arise
between local and national priorities, with
central government needing the requisite skills
to be able to influence local decision making
and balance diverse approaches being taken
within different geographical areas.
With this in mind, central government will need
to ensure that it has the appropriate people
in place who can meet these challenges and
adapt to a significant cultural change. Central
government could therefore take steps to:
• understand the impact of devolution within
individual departments and analyse the
changing roles and tasks that this will
require
• undertake a skills audit of the current
workforce to identify how these roles and
tasks can be completed, and any gaps in
current skill levels
• assess whether redeployment or
restructuring is required to ensure that the
correct workforce is in place
• consider retraining, or if appropriate,
recruitment, to ensure that any gaps in
skills are filled
• communicate effectively with the
workforce so that cultural changes are
understood and embedded.
page | 9Our changing state: the realities of austerity and devolution | Relationship with central government

10. follow the money
Local authorities engaging in devolution have been advised to ‘follow the money’. This may be
sensible advice, but it is difficult to observe given the complexities of the deals which are being
considered and the lack of true fiscal devolution. With ever-increasing devolved powers there must
be the funding to support service delivery, otherwise it will be simply unsustainable. At present, it is
still unclear whether authorities will have the support that is required.
In our 2015 report ‘The path to greater regional
devolution’, we advocated the use of each local
authority’s powers to borrow, charge and trade as a
means to increase income. Combined authorities have
the potential to access powers at least equally as wide
as local authorities, particularly if granted the general
power of competence. It remains to be seen whether
such powers will be equally curtailed, for example,
will combined authorities be subject to the same
restrictions in function-related activities.
There is much pessimism about the state of local
government finance, with a recent survey by the Society
of Local Authority Chief Executives (SOLACE) reporting
83% of members thought it would decline over the next
10 years.
Authorities will face continuing cuts to budgets in
the coming years. Business rates retention is the
government’s only offering for fiscal devolution to
date and the details are as yet unclear. The Act
does not provide for fiscal devolution, giving only
limited financial powers to local areas. By 2020, local
authorities will no longer receive core grants from
central government, however they will retain all
revenue from business rates. We question whether
authorities will be able to become self-sufficient
within this timescale and suspect that this will cause
inconsistency between regions, with the most severe
impact on the most deprived areas.
At this stage, there is little information as to how
business rates retention will work in practice. The
policy is likely to have other consequences; for
example, impact on the successful leisure trust business
model which has been set up in a number of areas to
avoid the trusts having to pay business rates. It is also
unclear whether charities will continue to benefit from
discretionary business rates exemptions.
In its report into the Devolution Bill, the CLG Committee
recommended greater freedom over business rates and
other taxes to allow councils to apply increases where
necessary. We anticipate this will be a key finding
of its current inquiry. The committee made similar
recommendations in 2014, to which the government
responded: “there is a difference between policies
which increase the burden of municipal taxation, and
those which allow councils to share from the proceeds
of enterprise and economic growth. The first ultimately
hinders economic growth, the second encourages it”.
It remains to be seen whether the government will
move from this position given the pressure from the
committee and across local government and think tanks
alike to do so.
Once established and bedded-in, it seems likely that
combined authorities will look at alternative delivery
models as vehicles to increase efficiency and savings, or
to generate income, whether through trading companies
or partnerships with other public sector bodies. A
collaboration between combined authorities would be
1
2
3
4
6
“Without more powers to generate income
or to innovate, local government as it
is would become unsustainable and the
current devolution exercises would prove
a ‘meaningless sham’.”
SOLACE survey findings, 2015
2
Our changing state: the realities of austerity and devolution | Follow the money page | 10
5

11. a powerful force indeed, perhaps coming close to recreating the metropolitan county council structure abolished by
Margaret Thatcher, perhaps not necessarily the current government’s intention.
While alternative delivery vehicles have become more common for local authorities, they still require careful
thought and planning. Providing services back to the parent council is one thing, but it is quite another to trade
and become truly profitable in the mid to longer term. Councils want to sell their services so their own service
delivery can be run on a cost-neutral basis, but who will trade with them? Such considerations and challenges need
to be carefully thought out at both the planning and operative stages.
1.
Section 10 of the Cities and Local Government Devolution Act 2016 adds s113D to the Local Democracy, Economic Development and
Construction Act 2009 (1) “the Secretary of State may by order provide for Chapter 1 of Part 1 of the Localism Act 2011 (which confers a
general power of competence on local authorities) to have effect in relation to a combined authority specified in the order as it has effect in
relation to a local authority”.
2.
http://www.solace.org.uk/knowledge/reports_guides/Transforming%20Services%20Transforming%20Leadership_Final.pdf
3.
But note that the Chancellor announced in the budget on 16 March that the threshold for small business rate relief is to increase from £6,000
to £15,000 meaning that from April 2017 600,000 small businesses will pay no business rates.
4.
http://www.publications.parliament.uk/pa/cm201516/cmselect/cmcomloc/369/369.pdf CLG committee
5.
http://blogs.ncvo.org.uk/2015/10/06/what-osbornes-business-rates-devolution-means-for-charities/
6.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/407480/CM8998_Web_1.pdf (see responses to
recommendation 4).
In our experience public bodies that are looking at alternative delivery models need to consider amongst
other things:
• establishing a clear vision for what they want and why they want to achieve it
• working through how the various models will sit together, acknowledging that one solution will not fit all
problems but as a whole it must work
• ensuring that the proposals are grounded in sound decision making and are within the powers of the body
in question
• whether the models can be used as a genuine catalyst for change, not just an opportunity to shift a
problem
• employment issues including pensions must be thought about at an early stage, this includes engaging
with staffing groups to try and ensure that they understand proposals and are as on board as possible.
Our changing state: the realities of austerity and devolution | Follow the money page | 11

12. Our changing state: the realities of austerity and devolution | Follow the money page | 12
Some councils are taking a more entrepreneurial route. East Hampshire for example has aspirations of zero council
tax by 2024 by relying on “money making business ventures, selling its services to other local authorities and
through investment”. The council has already begun to buy commercial property to generate income and has
reduced council tax by two per cent in 2016, one of the only councils in the country to do so.
Combined authorities may present further opportunities for innovation and it would be pertinent for combined
authorities to consider what innovation is possible. Local authorities (and combined authorities which are also
expected to be given the same power) can utilise the general power of competence to think outside of the box. It
could enable any manner of initiatives from development companies to community empowerment models, through
to supporting business, not just to develop new technologies but to actually be involved in helping to solve some
societal challenges. This could unshackle local authorities so they can achieve place shaping transformation,
although this will inevitably be different from area to area.
power of competence to
think outside the box
further opportunities for innovation
7.
http://www.lgcplus.com/politics-and-policy/finance/district-bucks-trend-with-plans-for-2-council-tax-cut/7002079.article
“It is a really important cultural piece,
trying to get authorities to think about
how to develop and deliver services
better.”
Paul Dossett,
Grant Thornton
7

13. Our changing state: the realities of austerity and devolution | Follow the money page | 13

14. page | 14
8.
See sections 18 and 19 of and Schedule 4 to the Cities and Local Government Devolution Act 2016
The majority of current devolution deals do not include health functions. How combined authorities engage
the Clinical Commissioning Groups (CCGs) and other health commissioning bodies will surely have an impact on
how services are delivered. Our discussion considered the issue of savings achieved by integration of services,
specifically that the savings are not always realised by those making the investment. This creates perverse
incentives in the system, particularly where savings go back to central government. There is also a lack of evidence
as to whether integration leads to savings at all, at least in the short term and particularly where there is no initial
set-up investment. It may be that health is not yet ready for devolution, given the significant and complex issues
with the NHS. This certainly seems to be reflected by the government’s late amendments to the Devolution Bill
which introduced a ‘devo-lite’ option for health functions to be shared with local authorities, rather than devolved.
Health integration could be considered critical to proper and effective devolution, but there are other options for
integration of health services such as section 75 agreements which, although not perfect, are at least a tried and
tested path.
bridging the gap
Since the onset of austerity, public bodies have sought increasingly creative ways of improving
efficiency and finding savings for the public purse. How will this work with bodies that are not part
of a combined authority structure? How will the devolution deals fit with existing arrangements?
Section 75 agreements...
Section 75 agreements are made under powers set out in the National Health Services Act 2006 between a
local authority and an NHS body in England. Section 75 agreements can include arrangements for pooling
resources and delegating certain NHS and local authority health-related functions to the other partner(s).
Such arrangements can only be agreed if it would lead to an improvement in the way those functions are
exercised. However, they have proved an invaluable tool for NHS and local authority collaboration and
integration.
To make necessary savings, combined authorities will have to drive efficiency. There is an opportunity to create
centres of excellence for the provision of certain services. Provided that the authorities have robust codes of
conduct and protections in place to prevent conflict between the parties, this could go a long way towards making
the combined authority self-sufficient.
Our changing state: the realities of austerity and devolution | Bridging the gap
8

15. “It feels like devolution is being used
as a driver for change… a ‘total place’
scenario is being forced through to compel
organisations to sit together in a room and
work together.”
Richard Barlow, Partner,
Browne Jacobson LLP
Many local authorities use shared services of some form or other, as well as outsourcing services to the private
sector. The formalities of such arrangements vary, from letters of intent to fully negotiated contracts. Outsourcing
contracts in particular are often incapable of flexing as the customer organisation goes through structural or
organisational change; EU procurement rules are a significant barrier. It is feasible that combined authorities may
come under pressure to take on the PFI or other strategic contracts from their constituent members, which may
allow greater leverage with suppliers, but there are difficulties in making the contracts fit the new organisation.
We think that compatibility between the combined authority model and existing collaborative arrangements
and service contracts is an issue that will raise its head in the future. Early due diligence is advisable to identify
potentially problematic contracts and assess what, if anything, can be done with them. New contracts should be
carefully drafted to maximise flexibility and match the evolving context of local authority structures as much as
possible within the limitations imposed by law.
It is as yet uncertain what the market’s response will be to combined authorities. Will it be willing to engage with
them without requiring additional guarantees from the constituent members? From the combined authority’s
perspective, as a larger client it should expect to be able to drive economies and benefit from improved bargaining
power as long as it does not suffer from undue bureaucracy and fragmented decision making.
Our changing state: the realities of austerity and devolution | Bridging the gap page | 15

16. accountability
There are growing concerns about the lack of transparency and scrutiny in devolution negotiations. The Act could
be considered to have missed a vital opportunity to establish a governance framework to increase public confidence
in the new structures.
When decision-making is devolved, whether to mayors, combined authorities or both, how will the
public know who is accountable? The legislation offers little clarity on where responsibility will sit.
This is confusing for all concerned, even more so for the public.
There is no reason why combined authorities cannot engage with the public in their areas about the key decisions
to be taken through consultation. Indeed, a consultation may be required in some cases where it is required by
legislation or there is a legitimate expectation that one will be undertaken. A consultation must: be undertaken
at a time when any proposal is still at its formative stage; provide sufficient information to enable an intelligent
response to be given; allow sufficient time for a response to be given and must consult all of those potentially
affected by the proposal. Consultation results must be conscientiously taken into account in reaching the relevant
decision, which does not mean that the preferred outcome of those consulted must be adhered to, simply that the
results must be considered.
The dual role of those representing their organisations as members of the combined authority will inevitably give
rise to conflicts. It is important that combined authorities have strong governance structures, constitutions and
codes of conduct to ensure that the risk of conflict is minimised and robust procedures are put in place. In reality
this is likely to be difficult, given the local authority and party politics that will also play a role. It will become
more of a challenge, the greater the range of services that are passed to the combined authority. In a recent
survey, SOLACE members said they supported combined authorities taking on significant levels of service delivery,
including health, social care, welfare, education and housing. If this is the direction that we are heading in, it is
essential to put in place proper accountability and governance structures now.
The following issues are key for governance of combined authorities:
• it is important to be clear about the limits of the powers of the mayor as opposed to those of the
authority
• the extent to which any decisions of the authority require anything beyond a majority
• there is a need for clarity as to how far a combined authority can go to ‘co-opt’ or otherwise involve
non-voting representatives of stakeholder organisations
• how minority parties have any opportunity to participate in combined authorities if their party does not
control any constituent council?
9.
http://www.themj.co.uk/CAs-top-choice--to-deliver-services/203283
Our changing state: the realities of austerity and devolution | Accountability page | 16
9

17. “We need to have the conversation about
where things are taking place. We aren’t
having that conversation at the moment.
There is already a postcode lottery and
unequal outcomes, it’s just unspoken.”
Alexandra Jones,
Centre for Cities
10.
https://www.ipsos-mori.com/researchpublications/
researcharchive/3645/Public-knows-little-about-the-devolution-
revolution-but-supports-local-decisionmaking.aspx
Combined authorities should also look to demonstrate
accountability through consultation on local issues and
make it clear where complaints should be directed. This
should go some way towards increasing public buy-in to
the devolution deals which has been lacking (an Ipsos
Mori poll in October 2015 found that over three quarters
of those questioned knew “little” or “nothing” about
devolution).
The impact of devolution on regulators and ombudsmen
is similarly unclear. The government have proposed
a ‘no wrong door’ policy to redirect complainants
who approach the wrong organisation, but there
are concerns about the burden this could place on
ombudsmen, particularly given the complexities of
combined authorities. A multi-layered strategy towards
accountability is one option, with complaints dealt
with at a strategic, commissioning and provisional level
in order to make the system as efficient as possible,
increasing the accountability of providers of local
services, which in turn should increase the quality of
that service. There appears to be no good reason why
accountability should stop at the feet of public bodies
– why shouldn’t providers and commissioners be equally
accountable?
Our discussion group considered to what extent the
general public would and should be able to understand
which part of local government dealt with what. There
is an argument that the individual taxpayer does not
need to know the innermost workings of his or her local
authority – and does not at the moment. Instead it was
suggested that authorities should “hide the wiring” and
simply make it clear who is accountable and to whom
complaints should be directed. This may simply be the
office of the mayor. At the same time, it was noted that
there is no regulator of local government – is this the
answer?
“We should be asking, is devolution on offer to
achieve costs savings or to make things more
effective?”
Dr Jane Martin,
Local Government Ombudsman
Finally, we should remember that things are not perfect
now. Even though devolution will create unfamiliar large
structures that are not entirely transparent in their
workings, it may still be a step in the right direction and
this point should not be lost.
Our changing state: the realities of austerity and devolution | Accountability page | 17
10

18. “Comparing this to the first phase of Welsh
devolution, it was extremely complicated,
difficult to trace where the powers had
transferred, but this didn’t prevent it
from working… it remains difficult to
trace where the powers are but it doesn’t
prevent them from being exercised
properly.”
Jeff Godfrey,
Welsh Government
11.
http://www.publications.parliament.uk/pa/cm201516/cmselect/cmcomloc/369/369.pdf
the future - where is it going?
Whilst on one hand the dream of devolution is championed by the government, the lack of fiscal devolution results
in ‘partial’ rather than ‘total place’. Chancellor George Osborne has been the driving force behind the changes to
date. When he moves on, will the devolution revolution continue to have the same level of impetus?
Our discussion considered the need for a new philosophy for delivery of public services. That philosophy can be
conceived at a national level, for example looking at how to design services so as not to overload the health sector,
but it needs to be implemented at a local level.
Whilst the future seems uncertain, there is certainly a way through it and it is clear that many local authorities are
approaching devolution with enthusiasm and commitment. Devolution in Wales was by no means straight-forward,
however it worked because it had to. The opportunities offered by it can ultimately outweigh the difficulties.
We are told that the Act “should be seen as a first step towards a more comprehensive devolution”
although it is not clear what the next steps will be and how far they will go. The government
declines to provide a template for current deals, although there are distinct similarities which
suggest there is an unofficial starting point.
Our changing state: the realities of austerity and devolution | The future - where is it going? page | 18
11

19. Our changing state: the realities of austerity and devolution | The future - where is it going? page | 19
“I think we’re moving to a place where
local authorities are having their own
ownership of the challenges.”
Paul Dossett,
Grant Thornton

20. conclusion
The devolution deals being brokered between combined
authorities and central government are incredibly
varied, resulting in a patchwork quilt of functions to be
discharged at local, sub-regional and national level. This
adds to the existing complexities of local government,
rather than doing anything to simplify it. Whether
these deals will stack up to be effective and financially
robust enough to allow local government to overcome
austerity, and provide the local areas they serve with
the same (or better) level of services, will be revealed
in time. It is exceptionally difficult to predict the
outcome, but prudent to expect further announcements
and change between now and 2020.
We believe that the combination of austerity and
devolution will drive more shared and reduced services
and that this will form a key part of the future
landscape for local authorities. Over the previous
years, austerity has forced local authorities to become
much more commercial, entrepreneurial entities. We
think that this will continue, indeed that it is essential
to achieve the necessary cost savings and still deliver
services.
We would recommend any local authorities involved in
devolution deals to take informed legal and financial
advice at every stage. However, as devolution in Wales
has demonstrated, whilst there is initial complexity and
difficulty, the public sector is able to adapt in order to
find a way through and that things will work out in the
end. It has to, given that central government has not
indicated what the alternative is.
Devolution as both a political and a policy goal is not going away, it being a core part of the current
government’s plan to reduce the size and extent of the state.
allow local government to overcome
austerity
prudent to expect further
announcements and change
between now and 2020
Our changing state: the realities of austerity and devolution | Conclusion page | 20

21. “My experience in government is that somehow it
all works through, eventually clarity emerges.”
Sir Paul Jenkins
Our changing state: the realities of austerity and devolution | Conclusion page | 21

22. • adult services
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infrastructure
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related litigation
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• tax
• vires.
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