In a report, English devolution deals, the spending watchdog said these implications included “the details of how and when powers will be transferred to mayors and how they will be balanced against national parliamentary accountability”.

The NAO noted that the ten deals agreed so far involved increasingly complex administrative and governance configurations.

It stressed that, as devolution deals were new and experimental, “good management and accountability both depend on appropriate and proportionate measures to understand their impact”.

The watchdog said that to improve the chances of success, and provide local areas and the public with greater clarity over the progression of devolution deals, central government should clarify the core purposes of the arrangements as well as who will be responsible and accountable for devolved services and functions.

Central government should also ensure it identifies and takes account of risks to devolution deals that arise from ongoing challenges to the financial sustainability of local public services, the NAO added.
HM Treasury and the Cities and Local Growth Unit are responsible for managing the negotiation, agreement and implementation of devolution deals on behalf of central government as a whole.

Amyas Morse, head of the National Audit Office, said: “Despite several iterations of deals, the Government’s approach to English devolution still has an air of charting undiscovered territory. It is in explorer mode, drawing the map as it goes along.

“Some of the opportunities and obstacles are becoming clearer, but we still do not have a clear view of the landscape or, crucially, an idea of the destination.”

Morse added: “Devolution deals provide important opportunities to reform public services. As with any experiment, some elements will work better than others. As we have said before, it is in the interests of both local areas and the government to know which programmes have the biggest impact for the money invested. Localism is not a reason for failure to learn from experiences or to spread best practice.”

Responding to the NAO report, a Local Government Association spokesman said: “Councils are working hard on implementing agreed deals and are working with government to finalise those deals which are still to be signed.

“It is imperative that the momentum is maintained to secure deals, especially in non-metropolitan areas whose economic potential is just as significant as that of big cities.”

“In terms of accountability, devolution has the potential to improve the democratic process by allowing decisions to be made closer to local people to best meet their needs. But councils should be free to put in place the appropriate model of governance for their communities and not have a ‘one-size-fits-all’ model imposed on them where significant new responsibilities are devolved.”

The LGA spokesman added: “The report rightly recognises the possible complications arising from differing geographies for service delivery and councils, particularly for the recently announced sustainability and transformation plans. Councils and their partners will continue to take a pragmatic approach to designing and delivering services that best meet the needs of their communities.

“We support the study’s findings that devolution needs to be accompanied by fair and sustainable funding by Whitehall to manage risk and ensure devolved areas can run services successfully.

“This will help to ensure that the opportunities provided by devolution – delivering economic growth, building more homes, creating jobs and a skilled workforce, and joining up health and care services – will be actively embraced by both local and central government.”