Ministers are considering additional oversight for regional leaders as England moves towards deeper fiscal devolution, with stronger audit and reporting arrangements among the options being examined.
The government is preparing further proposals to give mayors and strategic authorities greater control over revenue and spending as part of its wider devolution programme. Greater local discretion could allow funding to be aligned more closely with regional priorities, but it also increases the financial consequences of weak governance.
Options reported to be under consideration include enhanced reporting requirements, stronger parliamentary scrutiny and further local audit arrangements. Ministers are also examining how political accountability should work when substantial financial powers move away from Whitehall.
The institutional framework has already started changing. The English Devolution and Community Empowerment Act 2026 provides for a Local Audit Office and creates new scrutiny and audit arrangements for established mayoral strategic authorities. It also gives the Secretary of State powers to request reviews of an authority’s audit and reporting arrangements.
Fiscal devolution raises a broader question because local leaders could eventually exercise more control over revenues rather than simply receiving grants allocated by central government. That can support longer term planning around transport, skills, housing and regional growth, while exposing local budgets more directly to the consequences of economic performance.
Funding differences between regions complicate the model. Areas with stronger tax bases can raise more revenue than places with lower incomes or weaker economic activity, so greater local retention has to be considered alongside some form of equalisation if ministers want to increase autonomy without widening regional disparities.
The Institute for Fiscal Studies has argued for arrangements that redistribute resources where necessary while retaining incentives for local growth. A system that removes most of the financial benefit from expanding the tax base would weaken the case for devolution, whereas one that leaves poorer regions permanently behind would create a different economic and political problem.
Business investment is closely tied to the outcome because mayors increasingly influence transport, skills, land use and development programmes. More predictable local funding can help regions build coherent investment plans, particularly where infrastructure crosses local authority boundaries, while companies also need confidence that decisions will be transparent and consistent.
The government has presented devolution as part of an attempt to move economic decision making closer to communities and strengthen growth outside London. Whether that produces better results will depend partly on the capacity of regional authorities to manage larger budgets and on the willingness of central government to leave them meaningful discretion.
Any new safeguards therefore need to identify weak governance without recreating Whitehall control through another layer of approval. As mayors gain more influence over investment and revenue, the balance between autonomy and accountability is becoming one of the defining questions in England’s next phase of devolution.
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