Modern state governance in Western Europe has undergone signifi cant changes in the past thirty years. The horizontal shake-up triggered by new public management was complemented by a vertical shake-up of governance systems, fuelled by the European integration process and the increasingly prominent role of the regions both in economic development and in democratic renewal. The devolution process in the UK represents one of the most significant constitutional reforms of the British governance system, with deep political, administrative and policy implications. Drawing on a nine year old longitudinal study of the unfolding of the devolution process in the UK, this article explores the challenges and opportunities offered by the new political spaces created by devolution. The argument put forth in this paper is that devolution, whilst acting as a catalyst for differentiation and innovation both at process and output level, has lacked strategic vision in the re-shaping of the policy framework of the UK, thus exposing serious limitations of the current governance system, especially in terms of public scrutiny and accountability of the new governance frameworks, but also in terms of long term sustainability.