More than one in five English local authorities expects to become part of a new combined authority, governed by an elected mayor, by 2020, according to a new report from PwC.  That figure has soared since before the general election when a mere 12% of local authority chief executives and leaders told PwC they expected to integrate into a new combined authority.

The PwC report, Delivering the Decentralisation Dividend: a whole system approach, says local authorities are responding to the Government’s commitment to the ‘Northern Powerhouse’ and the Cities and Local Government Devolution Bill, announced in the Queen’s Speech.

But it also points out that there is much more to delivering the decentralisation dividend than elected mayors and that too much focus on governance reforms could come at the expense of delivering improved outcomes by taking a whole system approach to a place.
Key findings from the report:

  • A PwC poll shows growing confidence amongst local leaders & chief executives that there will be further decentralisation by 2020 - a third now agree their council will have significantly more powers and responsibilities by 2020
  • Challenges remain around elected mayors, financial pressures and difficulties in building collaborative relationships
  • The decentralisation opportunity depends on collaboration and effective partnership at the local level across multiple stakeholders. Local authorities, combined authorities and Local Enterprise Partnerships (LEPs) need to ensure that local capacity, capability and accountability issues are addressed
  • Localities must focus on the outcomes they can achieve together and create a robust case to central government for further decentralisation of powers and funding.

Stephanie Hyde, Executive Board Member and Head of Regions at PwC, said the past five years had seen the establishment of a momentum that was driving devolution and decentralisation:

“We are witnessing a process intended to decentralise power and responsibility to local communities, matched by a growing recognition amongst local authorities that their focus should be on delivering outcomes and not merely acting as service providers.

“The emergence of new combined authorities - with delegated central government functions and responsibility for delivering economic regeneration, integrating health and care and reforming services from housing to transport - is beginning to resonate with elected representatives and citizens.

“However, decentralisation cannot be an end in itself; it must have a clear focus on delivering improved outcomes; it needs to be multi-speed and driven fastest by those areas with the appetite to take on additional powers and responsibilities; and it will take time to develop local capacity and embed a culture of ‘decentralisation by design.’”

Mark Smith, regional chairman of PwC in the Midlands says the challenge is to get the right balance between investment and reform:

 “The trick will be for local and combined authorities to work with business and Local Enterprise Partnerships to stimulate growth in parallel with delivering high value public services and tackling the underlying drivers of high demand.

“The focus should be on making public services more effective within tight and shrinking budgets by boosting business growth and investment, driving local innovation, and redesigning services to improve outcomes.  While councils are undoubtedly under financial pressures, there has never been a better opportunity for local leaders to really deliver for their local communities and economies."