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City deals review raises questions over devolution capacity

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The National Audit Office has raised concerns about the capacity of councils and government to negotiate further city deals and devolution agreements.

The NAO has conducted a review of the first wave of city deals covering Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham, and Sheffield.

The report said it was “not clear” if current arrangements where staff wokring on deals are funded through councils and their partners was “sustainable”, the report said.

It said local authorities needed people with expertise in forecasting and economic modelling as well as local knowledge to manage the deals.

“Some cities told us that wider reductions in the government’s funding mean it has been challenging to devote sufficient resources to managing devolved funding effectively.”

It added: “The risk of there being insufficient capacity to manage and oversee programmes locally is likely to increase if more funding, or more complex programmes are devolved.”

Concerns were also raised about the capacity of government departments to negotiate wide-ranging deals with more places due to “resource constraints”.

As the first wave of city deals were agreed in 2012 it was “too early” to come to any conclusions about the overall impact of any projects delivered or initiated, the report said, including whether they had had any impact on economic growth.

However, the government and cities could have worked together “in a more structured way” to develop a “consistent and proportionate approach” to evaluating impact of the deals and specific projects, the report said.

Amyas Morse, head of the NAO, said: “It is in the interests of both cities and the government to know which programmes have the biggest impact for the money invested. However, their understanding of this will remain limited without a shared approach to evaluating the impacts of the programmes.”

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