Ministers explore how to stop regional leaders misusing planned new spending powers
Labour wants to make sure mayors and council chiefs in England can be held to account for extra revenues devolved to them Ministers are mulling over how to ensure that England’s regional leaders do not misuse their newfound spending muscle, as Whitehall prepares to devolve more revenue to local levels. Ideas under consideration include a new select committee in Westminster, enhanced reporting…
As the government prepares to hand over more revenue to local mayors and councils in England, officials are grappling with the challenge of ensuring these regional leaders do not abuse the newfound spending powers. Ideas being considered include setting up a new select committee in Westminster, bolstering reporting requirements, and creating a dedicated audit body focused on local and regional government finance.
The Labour MP Rachel Reeves and Treasury select committee chair Meg Hillier have both advocated for robust accountability mechanisms to keep mayors answerable for their fiscal decisions. Hillier emphasized that select committees, particularly the Treasury committee chaired by herself, play a crucial role in scrutinizing local spending.
The Audit Commission, which previously oversaw local government finances, was dissolved in 2015 and its responsibilities have been redistributed across various agencies. The Institute for Fiscal Studies has warned that the government must devise a funding system that prevents wealthier regions from outpacing poorer areas in terms of per capita income.
Devolution expert David Phillips stressed the importance of a well-designed funding mechanism to encourage economic growth without creating unfair disparities between regions. Labour's growth-focused policies, led by Andy Burnham, aim to empower local leaders through increased fiscal discretion.
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