Kevin Richardson: Building Strong New Institutions for Levelling Up

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Category: General news

Changes to local institutions tasked with levelling up the economy could well be on the way.

A Devolution and Local Economic Recovery White Paper is expected. More Directly Elected Mayors and more Combined Authorities can be reasonably expected, together with a rumoured rationalisation of existing district councils. The Government is simultaneously reviewing the ‘regional footprint’ of its national funders of research and innovation. HMT Treasury has committed to opening an ‘economic campus’ somewhere in the North. Local Enterprise Partnerships (LEPs) have already formed themselves into new regional groupings. New public sector hubs and new growth companies have been proposed. These could well look like to some as successors to the old Government Offices for the Regions and Regional Development Agencies.

Research shows consistently that strong institutions are critical for local and regional growth. These need capability and capacity to deliver positive impact on the ground but they also need to demonstrate the same characteristics to ensure that public monies are governed strongly with genuine probity and accountability. It would surely be far better to embed these features in the early design stages rather than retrofit new cultures and systems as an afterthought.

So, what practical lessons can we learn from the existing use of formal laws, regulations and of other assurance frameworks? The Local Government Act 1972 and the Local Government (Access to Information Act) 1985 are long established and well understood within local councils. The Local Government Act 2000, developed further in the Localism Act 2011, provide for Overview and Scrutiny Committees that act deliberately as a counterweight to decision making by the Executive (Elected Mayors, Leaders and Cabinets.)
Local authorities also manage processes of ‘external scrutiny’, where their committees look at issues which lie outside its own direct responsibilities. In England, local councils often scrutinise public health bodies, community safety partnerships, and Police and Crime Commissioners. This process could easily be widened to extend to the work of other new institutions or agencies.

Following a critical report from the NAO, a formal review by Government resulted in a strengthened 95-page National Local Growth Assurance Framework to guide the work of LEPs.
The EU Treaty currently limits the extent to which public support can be directed towards ‘undertakings’ if such state aid has the potential to distort the single market. The Government has indicated that it intends to legislate to bring forward a UK wide ‘state aid’ regime but the precise design will need to await the outcome of the current Brexit negotiations.

The OJEU Works and Services Directives currently provide very clear procurement processes. These will remain in place following the departure of the UK from the EU until such time as Parliament makes new arrangements.
The HMT Green Book often provides a strong framework against which to develop the proposal, and then manage the delivery of larger and more complex projects. But it is far from perfect and it is much easier to use in the South than in the North of the country. A HM Treasury review is much awaited.
Nevertheless, despite this existing legislation and the growth of project management processes, the Centre for Public Scrutiny in 2018 suggested that current accountability arrangements are not strong enough and Local Public Accounts Committees should be established.
We will need to wait until the Autumn to hear what the Government has in mind. But it would do well to embed good governance, probity and accountability into the early stages of design rather than retrofit them afterwards.

Kevin Richardson – Local Academy

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