The government will publish a white paper on 'rewiring the state' later this month, setting out detailed plans to hand over more income tax revenue to regional mayors. Chancellor Rachel Reeves suggested the idea in her Mais lecture earlier this year, and it has been adopted by Andy Burnham’s government, which sees devolution as a key part of its growth policy. However, officials are concerned about how to ensure local leaders are fully accountable for what they do with the additional cash – including between elections.
Meg Hillier, the Labour MP who chairs the Treasury select committee, said she believed her committee would be the right body to scrutinise the use of the new powers. 'It is absolutely critical that strong, clear scrutiny structures are established which match this move to localism. It would be reckless to hand out new powers without ensuring there are transparent mechanisms to hold mayors to account for their decisions,' she told The Guardian. She added that a core role of select committees is to ensure politicians are publicly held to account for how they spend taxpayers' money, and that this is just as important at a local level.
The Audit Commission, which had the specific task of overseeing local government spending, was abolished in 2015, with its role split across several other bodies. As well as shoring up accountability, there have been lengthy discussions in government about how to balance incentivising local leaders to encourage economic growth with ensuring funding is stable over time. The Institute for Fiscal Studies said last week that the government should use 'equalisation payments' to prevent areas with the highest share of income tax, such as London, from pulling ahead of other regions.