The Secretary of State for Housing, Communities and Local Government (Angela Rayner)

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I beg to move, That the Bill be now read a Second time.

This Government were elected on a manifesto to deliver change—real change for working people; change that people can see and feel around them. That means more money in their pockets, decent jobs, new homes, good transport links, thriving high streets and opportunities for young people. But after 14 years of a Tory Government unwilling to take the tough choices to make life better for working people, it is no wonder that people have lost hope that real change is possible. And we have a plan to change that—a plan to give people with skin in the game real control over their lives and the power to have a real stake in their place and share in our country’s success.

Our landmark English Devolution and Community Empowerment Bill will deliver this and more. It will help us to build a modern state based on a fairer, stronger partnership between Government and local people, with the aim of renewing people’s faith that the state can work for them. That faith has been sorely tested in recent years. After more than a decade of broken promises from those on the Conservative Benches, people associate Whitehall with failure and decline. The communities that once built Britain have seen good jobs disappearing, secure homes crumbling and once-strong communities divided. Things that our parents and grandparents once relied on—that I relied on as a young mum—have fallen by the wayside. It is my mission to rebuild those foundations of a good life for all communities in all parts of our country.

I worked on the frontline of local government and I saw how it changes people’s lives. I know that I will not achieve our goals unless we fundamentally change the way that our country is run. That means handing power back to where it belongs—to local people with skin in the game—so that they can make decisions on what really matters to their communities. This Bill will drive the biggest transfer of power in a generation out of Whitehall to our regions and communities and end the begging bowl, micro-managing culture. It will make devolution the default setting by: giving mayors new powers over planning, housing and regeneration to get Britain building as part of our plan for change; rebuilding local government, so that it can once again deliver good local services that people can rely on; and empowering local communities to have a bigger say in shaping their local area.

Angela Rayner

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I am really disappointed, because I thought that the previous Government were the ones to turbocharge devolution, and we are moving on that agenda. We actually do believe that devolution is a good thing and that these measures will enable mayors and local areas to be empowered more to drive that growth that we desperately need in all parts of the country.

This Bill is long overdue. England is one of the most centralised developed countries in the world. Too often, the system works against rather than with local people. Too many decisions affecting too many are made by too few. That, combined with short-term, sticking-plaster politics, has left the country in a doom loop of worsening regional divides.

Angela Rayner

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I thank the hon. Member for his guidance. I always look north—contrary to what other people believe. I am very proud of the north. I gently say to him that the challenge at the moment lies with the Government of Scotland. Hopefully, we can reverse things and have a Government who truly believe in putting the power in local people’s hands.

We only have to look at the difference being made by our mayors to see that there is a better way. From building tens of thousands of new social homes with Mayor Rotheram in Liverpool, to fighting child poverty with Mayor McGuinness in the north-east, to making people’s commutes quicker and cheaper with Mayor Burnham in my own Greater Manchester, and to creating London’s summer of al fresco dining and world-leading culture with Mayor Khan—

Angela Rayner

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I will happily give way.

Angela Rayner

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As another Greater Manchester MP, my hon. Friend will know that Mayor Burnham has been trying to address taxi licensing for some years. I think, Madam Deputy Speaker, you were here for the previous statement, which I listened to intently, in which the Minister made it clear that there is a commitment to introduce that legislation as quickly as possible. We need to make sure that that vehicle is there, and sitting next to me is the Leader of the House, whose job it is to make sure that happens.

We have also increased opportunities and given young people a voice in decisions in the east midlands with Mayor Ward. We are driving forward a new mass transit network for West Yorkshire with Mayor Brabin, supporting women and girls into activity and sport with Mayor Skaith in North Yorkshire, and, not to forget, working to secure the future of Doncaster Sheffield airport with Mayor Coppard in South Yorkshire. We are also securing the extension of the Birmingham tramline with Mayor Parker.

Angela Rayner

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I thank my hon. Friend for his intervention and again give full credit to Mayor Richard Parker, who has been working tirelessly with the Labour Government to invest in the future of Birmingham. I also thank my hon. Friend for his campaigning, pressing the case that his constituents are better off for such an investment, which will bring new jobs and better transport links. This Bill is just the start of that.

Angela Rayner

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I absolutely agree with my hon. Friend. This is about unlocking growth in all parts of the country. I hope that most hon. Members can see that people with skin in the game are working across the board to make sure that that potential is reached. I am talking not just about London—although London is incredibly important to that—but about all regions across our country.

Angela Rayner

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I welcome the hon. Member’s comments on the mass transit network for West Yorkshire, which I am sure will bring added benefits to his constituents. To his other point, obviously elected officials in local councils make decisions, and I would gently say to him that councils have faced significant pressures since the austerity measures of 2010, which I am sure he is aware of. I was in local government at the time, and I remember being a union rep and seeing the devastation.

We are trying to restore and empower local government, instead of this situation where they have to make incredibly difficult decisions that are harmful to their constituents. It is about being able to grow our economy and have a bigger slice of the cake. We are already investing more into local government so that we can deliver the services that people want. Within this Bill is the community assets element, which may be able to help communities in relation to high streets and to sports facilities, which can be utilised as an asset that they value in their local area.

We are also improving local transport for people in the west of England with Mayor Godwin. Our brilliant, ambitious mayors are making a difference every day for their regions. Working with them, we have already achieved so much after just a year in office. We are on track to achieve devolution across almost 80% of the country, covering 44 million people. We have created integrated funding settlements for Greater Manchester and the west midlands, giving their mayors the tools and freedoms to make decisions to get growth going, with Liverpool city region, London, the north-east, South Yorkshire and West Yorkshire set to benefit from the same freedoms next year.

Angela Rayner

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I can hear much provocation from the Conservative Benches, but any new tax is, of course, a matter for the Chancellor at the Budget, and it must balance the potential revenue and benefits against the impact on taxpayers and the economy.

Angela Rayner

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The Renters’ Rights Bill does contain measures that mean that renters can challenge unfair rent hikes. The previous Government said many times that they would do something about section 21 no-fault evictions but they did not. Our Renters’ Rights Bill will ensure that we end those evictions, which are causing so much harm to my hon. Friend’s constituents and many around the country.

Our devolution revolution is well under way, with others queueing up to join it. This what we committed to in our manifesto, and we are delivering it through this Bill. Crucially, the Bill will make devolution the default for how the Government do business, with new strategic authorities having powers to pilot and request new functions and Government having a duty to respond to certain requests. It will mean that we can deliver devolution further and faster.

Angela Rayner

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I will pay attention to that, Madam Deputy Speaker.

The hon. Lady is right that there is a challenge in housing at the moment, which is also contributing to the rental situation for people. That is why we have a big ambition to build more houses. The Bill gives us more powers for strategic planning so that we can get on with building the homes that people need. The Renters’ Rights Bill does start to make progress toward making housing fairer for renters—something that the previous Government promised but failed to deliver.

I will now make progress, Madam Deputy Speaker.

Angela Rayner

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The strategic authorities will be created as a new category of authority in law. They will make it easier for local leaders to work together over larger areas to drive through big pro-growth projects such as integrated transport networks and housing. These will operate at three levels—foundation, mayoral and established mayoral—and the particular powers and responsibilities that each of them will have are to be defined by the Bill.

Working alongside parliamentarians and local councillors, mayors drive forward the delivery of people’s priorities—driving growth, unlocking infrastructure and powering a national renewal from the ground up. That is why the Bill will give mayors wide-ranging new powers in areas such as transport, planning and economic development.

Angela Rayner

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I will make progress.

We will create new planning powers to raise the mayoral community infrastructure levy, which has generated over £1 billion since 2012 in London and, alongside investment and leadership from Mayor Khan, has helped to fund the Elizabeth line. With the expansion of their remit, the Bill will allow mayors who choose to raise a precept to spend it on the full range of functions, ensuring that local taxes are spent on local priorities.

I am sure that the shadow Secretary of State, the right hon. Member for Braintree (Sir James Cleverly), will welcome this change given that it was the Conservatives who first introduced the mayoral precept nearly a decade ago and that Mayor Boris Johnson used a business rates supplement to help pay for Crossrail. I hope the shadow Secretary of State will wholeheartedly support the new powers in the Bill, which will mean that mayors can intervene in major strategic planning applications to unlock housing—as long as that housing is nowhere near his constituency, of course.

We will also introduce powers to license shared cycle schemes so that they work for everyone and so that bikes are not lying across pavements. The Bill will see more mayors take on police and crime commissioner functions and become responsible for fire and rescue functions, allowing them to take a joined-up approach to improving public safety.

Angela Rayner

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One more time, and briefly.

Angela Rayner

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I absolutely agree with my hon. Friend. This is about all areas being able to join up and create inclusive growth for their areas, and that is broader than at local authority level. By combining those efforts we can unlock the potential, and his constituents will feel the benefit of that as we take this forward.

The new powers also mean new duties, including to produce a local growth plan demonstrating how mayors plan to unlock growth through planning and house building. There will also be a duty to co-operate with local government pension scheme managers so that mayors can attract investment into their local areas, unlocking jobs and opportunities. Mayors across the country will also be able to appoint commissioners to support them as their responsibilities grow, just like in London. The Bill also strengthens the ability of mayors to work with the public sector, convening local partners so that they can lead with a helicopter view of public services across their region.

We are backing the ambition and untapped potential of local areas with a more ambitious role for the mayors representing them. That must be underpinned by elections that command public confidence. Because of changes made by the last Government, mayors can be elected on just a fraction of the vote, despite serving millions of people and managing multimillion-pound budgets. We can do better than that. The Bill will therefore revert to a supplementary vote system for electing mayors and police and crime commissioners after the May 2026 elections to provide greater accountability and a strong, personal mandate for mayors. In addition, the Bill will bar mayors from also sitting as MPs, ensuring that local places benefit fully from having dedicated local champions.

Angela Rayner

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Millions of people are represented by mayors, who have huge powers over big regions. We want mayors to have strong personal mandates for the communities they serve rather than being elected on a fraction of the vote. It is right that first-past-the-post remains in place for general elections to maintain the constituency link.

Angela Rayner

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I will give way to the right hon. Gentleman, who has been very patient.

Angela Rayner

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I thank the right hon. Gentleman for raising that important issue. We intend to bring forward legislation. Our response to the local government standards consultation sets out our plans for whole-system reform, including empowering local authorities to suspend councillors who are guilty of serious misconduct for up to six months, with the option to withhold allowances and institute premises and facilities bans. We are committed to ensuring that misconduct is dealt with swiftly and fairly across the country at local and regional mayoral levels. We do want to take action on the issue.

Let me be clear that stronger mayors and strategic authorities will not replace councils, nor the crucial work of the House. MPs on both sides of the House will continue to be vocal champions for their areas, and we expect mayors to engage in regular and constructive dialogue with MPs, working together in the best interests of their constituents. Alongside the freedom for mayors to focus on local priorities, my Department is continuing to explore a local Public Accounts Committee-style model to improve the system of accountability and scrutiny of local spending.

The Government expect mayors to use their new powers to deliver real change, not retain the status quo. This is not about grandstanding or making a political point; it is about using the levers of growth to unlock infrastructure and drive investment. The role of local authorities in delivering vital local services and improving local neighbourhoods is essential, and it will continue. We also expect to see strategic authorities working hand in glove with their constituent councils to deliver for their residents.

The Bill will help rebuild local government for the communities who depend on it day in, day out. As a fit, legal and decent foundation of devolution, the Bill will establish the Local Audit Office to help fix the broken, fragmented local audit system. We will also reform local authority governance, requiring councils with a committee system to move to a leader and cabinet model and putting a stop to new local authority mayor roles being created. That change will streamline decision making across all councils and make it easier for people to understand how their council is run. It will also give the Government the tools to deliver local government reorganisation, resulting in better outcomes for residents and significant savings that can be reinvested in public services and improving accountability.

At all levels, we are backing local people to drive growth and greater opportunities for all, because, from top to bottom, the best decisions for communities are made by those who know their area best. That is why the Bill will also give local communities across the country much-needed new powers, like a bigger say in shaping their place through effective neighbourhood governance, with councils required to make sure that this is happening, as well as the tools to transform their high streets and neighbourhoods through a new community right to buy—to save much-loved community assets, like pubs and shops, from being lost and to protect sports grounds, which are at the heart of so many communities and a source of great local pride. The Bill will also support our high streets by banning the unfair practice of upwards-only rent reviews, preventing the blight of vacant shop fronts, because it is only when every community succeeds that our country succeeds.

The Bill and our reforms herald a new era for Britain: a new way of governing that puts politics back in the service of working people. Where previous Governments promised and failed the British people, this Government are keeping faith.

I note the Conservatives’ reasoned amendment. I must say that after they left the country with the worst housing crisis in a generation, I am dismayed that they would oppose a Bill that will unlock housing and planning on a vast scale. This Bill will empower local communities to take back control of their high streets by ending the Tory policy of upward-only rent reviews, and it will end the begging-bowl culture of the last Government.

While the Tories made empty promises to level up the country, this Labour Government are getting on with the job. Within days of taking office, Secretaries of State were passing down newly-won powers for the sake of our towns, cities and villages, with the Prime Minister leading the way. It has not always been easy, but real change takes hard work. We are rewiring Britain and, with it, growth and opportunity. This is how the British people will take back control, and how we will unite our country in times when we have never needed it more. I commend the Bill to the House.

The Minister for Local Government and English Devolution (Jim McMahon)

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I thank hon. Members from across the House for their contributions to today’s important debate. The sheer number of Members who wanted to speak demonstrates how important these issues are, and the passion and enthusiasm shown by Members of this House makes absolutely clear their care for their communities, as well as their desire to see local economies thrive and for the benefits of growth to be felt by every community across the country.

This Bill represents a generational shift in power that will see community empowerment enshrined in law and local leaders and mayors with skin in the game, trusted to get on and do the job they have been elected to do in a new relationship of equals with central Government—one built on a shared commitment to people and place, mutual respect and co-operation. The English Devolution and Community Empowerment Bill does exactly what its title says. It effects a top-to-bottom redistribution of power in this country, putting decision making in the hands of our regions, towns, cities and communities and delivering real change for working people in the places they call home, bringing growth and opportunity and empowering local leaders and our mayors to make the right decisions alongside their local communities. As my right hon. Friend the Deputy Prime Minister said at the start of the debate, this is a landmark Bill that will help us build a modern state based on a fairer, stronger partnership between central and local government.

For too long, power and opportunity has been centralised in Westminster and Whitehall, holding back growth across the country and denying millions of people the opportunity to realise the potential they have within them. Our new approach to devolution and empowerment begins the work of fixing that—powering up our regions through devolution by default and the right to request, as well as new powers, resources and freedoms, and introducing measures to fix local government and its fragile audit regime through sustainable structures and governance. It also gives real power to communities through the community right to buy local assets, rooted in our high streets, neighbourhoods and sporting grounds, and it gives them a greater say in local issues, with frontline ward councillors given the respect, power and tools they need to make a difference in their communities through neighbourhood working arrangements in every council across the country. When we said this was a top-to-bottom transfer of power, we meant it.

Before I turn to the main issues raised in the debate, I will first address the reasoned amendment tabled by the right hon. Member for Braintree (Sir James Cleverly), and also maybe touch on some of the points made by the shadow Minister, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds). Anybody would think that the Conservatives had not been in government for 14 years, absolutely smashing local government to the core. Anybody would believe that councils were not falling over like dominoes, going bust on their watch, and that the fragmented, deal-by-deal, backroom-negotiated devolution we have had so far did not take place on their watch over 14 years. Let us forget the past, though, and look to the future.

The reasoned amendment raises concerns about local government reorganisation, which—as we have heard from Members across the House—is a big and important issue. It also talks about housing delivery and claims that the Bill means higher bills for local residents. I can assure the House that those concerns are misplaced, and frankly, the Opposition know that. First, the Bill will not affect the process for the 21 areas already undergoing reorganisation. Those 21 areas have responded to their invitation to reorganise already.

Jim McMahon

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They absolutely had a choice. It was an invitation that 21 counties have responded to, demonstrating without a doubt that the appetite and interest for reorganisation was there within communities, and they responded in that way.

This process will deliver strong, sustainable unitaries, capable of leading their communities, shaping neighbourhoods and convening local public services to deliver better outcomes for local residents. This process is separate from the Bill. In fact, the devolution priority programme areas of local government reorganisation will be submitting their final proposals to Government on 26 September. All other areas will submit their final proposals on 28 November. Before this Bill even gets out of Committee, local government reorganisation will have final proposals for the 21 counties in the two-tier area. The idea that the Bill is bringing an end to the two-tier system is for the birds. By the time it reaches Royal Assent, the work will have been done and the consultations will be taking place and well under way. The Opposition know that, of course, because they used exactly the same process of reorganisation so many times when they were in government to reduce the number of councillors, reduce the number of councils and end the two-tier system in counties across the country.

To the Opposition’s credit, ending the two-tier system is a proven model, because once local government reorganisation has taken place in an area—by the way, I have not heard anybody calling realistically for a return to the old system—savings can be made. There is a world of difference between those and the savings that Government will take, as central Government is making no savings from local councils. That change gives the freedom to move money up and down that two-tier system to where the real pressures are being faced: adult social care and SEND in particular. If we do not take action after 14 years of inaction, the system will fall over, and we will not allow it to fall over on our watch, however bad the inheritance might have been. The Opposition know all that, because they laid the groundwork and were the architects of the current system.

This Bill also gives ambitious planning powers for mayors to unlock housing and infrastructure, working alongside parliamentarians and local councillors, with powers to intervene in major strategic planning applications and to grant mayoral development orders.

Jim McMahon

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I am afraid that with the time we have, I need to canter through.

The Bill also allows mayoral development corporations to be established and for a mayoral community infrastructure levy to be charged, so that we can unlock much-needed housing and infrastructure to get Britain building once again.

Thirdly, the Opposition claim that this Bill introduces a new precept and will raise bills for working people. I remind them that the mayoral precept has been in law since 2017. In fact, it was a Conservative Government who brought it into law, giving all mayors the power to introduce a precept, so we will not take lectures from them on those powers. I will say this, because I believe in devolution: pound for pound, local people—through their local councils, their local mayors and their combined authorities—see the benefit of that investment in a real way in their neighbourhoods, their communities and their towns. For large parts of Government spending, for different reasons, they do not get that in a tangible way. The accountability that then comes alongside it is important.

Finally, the reasoned amendment tabled by the Conservatives claims that this Bill fails to empower local people. As the House has heard, that is far from the case. This is a generational change, moving power away from Whitehall, with the tools needed at a local level to get things going through community right to buy, neighbourhood governance and all the things that were being asked for. We urge all colleagues to vote against the reasoned amendment in a few moments.

This Bill sees the system of devolution move away from an ad hoc, inconsistent and deal-by-deal model, replacing it with a model that is clear about what places can access, when they can access it, and under what conditions. Our new system confers functions on classes of strategic authority to allow us to deliver our commitment for devolution by default and to streamline those functions, so that all parts of England can be clear about what powers they can access.

Members have raised the supplementary vote a number of times. The Government have no plans to change the electoral system for the UK Parliament or for local council elections in England. The Government believe that while the first-past-the-post system has its place, the SV system is the right thing to do for those executive positions where an individual holds that executive power, and the mandate from local people is important. That has been raised a number of times, and I hope that puts that to bed.

On local authorities, this Government have been clear that we will fix the foundations of local government and create a system that is fit, legal and decent. Changes to governance arrangements are one way that we are simplifying local government. Alongside our intention to strengthen the role of frontline ward councillors, this will provide the tools that will make it possible to act on the local issues that people believe are important.

By abolishing the committee system, we will simplify local authority governance arrangements and ensure that all councils operate an executive form of governance. I have heard the representations from Sheffield Members and others, and meetings will take place to discuss that further, but abolishing the committee system will provide clarity and accountability for local people, and importantly will strengthen that direct line of democratic accountability. We have accepted the continuation of the 13 legacy directly elected council mayors, while introducing measures to prevent the creation of any new ones.

The subject of neighbourhood governance has also been raised. The Bill sets out a clear ambition for all local authorities to hardwire community engagement and neighbourhood working into their governance. I do, of course, hear the calls on behalf of town and parish councils, and I share Members’ commitment to that local level, but if all we have are town and parish councils operating at a local level and no neighbourhood governance in the principal councils, we will miss the opportunity to hardwire localism in everything that councils do. We believe that we must have that hardwiring so that local people feel genuinely empowered. That is the only difference, however: this is completely compatible with town and parish councils working in partnership. When that is effective, they work in unison for the benefit of the local community, which is what we want to see from now on.

A significant amount of attention has rightly been paid to the subject of assets of community value. As we have all seen, community spaces such as pubs, cultural venues and places of worship are the life of our communities. They bring people together, foster a sense of community pride and support local economies. However, 14 years of the previous Government saw a total dismantling of that social infrastructure. People will be far too familiar with the sight of high streets being boarded up one by one, and with community centres being sold off, libraries being lost and parks being forgotten. Places that once defined a locality have been stripped away by 14 lost years. Too many of those critical assets are being lost, which is leading to soulless high streets and less vibrant local communities.

That is not because of a lack of will in local communities. It is because they do not have the tools and the powers to protect those assets and take them on. With the Bill we are starting the work to build back strong communities, which is due in no small part to the significant campaigning of the co-operative movement and the MPs here in the House who have made the case clearly that, in the end, ownership matters. We will give communities the tools and the real power to take on the assets that they love, because that is the right thing to do.

On all these issues the previous Government could have done far more, but what did we hear over the course of today’s debate? We heard Opposition Members say, “You are going too far—it is a power grab”, and in the same breath, “You are not going far enough, and you could have done more.” The truth is that this is a generational shift in power which will see a break-up of the stranglehold that Westminster and Whitehall have retained for far too long against communities across the country. This will be done with local communities, not to them, and indeed that is what has happened so far. Whether we are talking about our approach to fair funding and repairing the foundations, our approach to local government reorganisation or even our approach to devolution, this has all been done in genuine partnership with local leaders who are working together.

What I find so astonishing—and there is a night-and-day difference here—is the almost soulless response from Opposition Front Benchers who decry all these measures, omitting to say that their own local councillors are leading the charge at a local level. The leadership that has been shown, even by Conservative council leaders, puts those Opposition Front Benchers to shame. I do not know how many visits they make around the country, but I cannot imagine that their local representatives value the interpretation that has been presented from the Conservative Front Bench, whether it is about elections, devolution or reorganisation. We are not asking Conservatives Members to be as good as the Government, but we are asking them to be at least as good as their own councillors, and to stand with them instead of standing against them. I urge all Members to support this landmark Bill.

Question put, That the amendment be made.

The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)

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Q My first question is for Councillor Chapman-Allen. First, I should put on the record that the 500,000 number that has been cited is not fixed. The Government will prioritise making sure that there are clear links and that we have that democratic basis, so that communities feel connected to their local institutions. That is a priority for us and we will proceed on that basis.

Strategic authorities are made up of constituent local authorities, and at their best, where they work, it is based on partnership. Can Councillor Chapman-Allen give the Committee examples from among his membership, where strategic authorities already operate, of that collaboration among the constituent authorities, which will always have a key role, working in tandem with the mayor to deliver for communities?

I also have a question for Mr Griggs. The role of neighbourhoods and the connection between communities and the places where elected representatives serve is fundamental to what we are trying to do with the Bill. The part of the legislation on neighbourhood governance is looking to bolster and strengthen that. What are your views on how that will create new opportunities not only for community partnership working but, critically, for community voice and power?

Sam Chapman-Allen: Thank you for your question. To start, I think the 500,000 figure as the initial threshold has caused confusion. I think that many of the submissions that will be received in the devolution priority areas next week and then in the rest of the country in November will show that many councils are submitting models of 500,000-plus. Let us put that into context: they will be some of the biggest councils in the western developed world. I think that will ensure there is a democratic deficit.

In relation to strategic authorities and constituent members, the only model where all district councils, or all principal councils, are members are in Cambridgeshire and Peterborough. If you look at what is taking place there, you will see it is a really successful model. Yes, there is a little bit of grit every now and then, but that is why scrutiny, governance and accountability are so important. We will not always agree on everything.

If we look at a model in which all principal councils are members—I cite Greater Manchester, with Andy Burnham and his 10 councils within that area—they all share responsibility together. All of them within that locality are the responsible authorities for housing and for planning, and they are working together to drive the agenda forward around the real challenges that localities face. They have had some real successes, and I do not think anybody should take that away from them. I know that you have Lord Houchen giving evidence later; he will give exactly the same example of where you have those principal councils able to pull the levers to get stuff done.

Justin Griggs: First of all—

Miatta Fahnbulleh

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Q I have a question for Councillors Bentley and Hicks first on unitarisation, and then, if I may, a question to Councillor Craig on strategic authorities. Obviously you are going through the process of working hard with colleagues to put together a proposal for unitarisation. I am really interested in your perspectives and insights about how you—because we are putting it in the hands of local areas to do the heavy lifting—and we get that right. Critically, we are not doing this for fun; we are doing it because we fundamentally believe it will drive better services and better outcomes. I am interested in your perspectives, from your individual areas, about the sorts of impact that you think we can deliver if we get this right.

Kevin Bentley: Thank you, and welcome to your new role; I am sure we will be seeing a lot of each other the coming months, Minister.

In Essex, there are 15 councils. If you want to look at councils of any shape or size, come to Essex; we pretty much have them all, and a lot of them, as well. And while there are four different business cases coming from Essex—and you would expect that, as it is a huge county in terms of population and people have differing views—each has been done thoughtfully and carefully. The overriding message is that the 15 councils are made up of all political parties and none, and there is common cause. No one has fallen out. There is no argument. There is no row going on at all. We meet regularly in something we call the Essex leaders and chief execs meeting—I am talking about Essex here; I will talk about the LGA in just a second—and certainly our experience is of collaboration.

We may have different views from the Government for them to consider, but the understanding that we need to do things differently is really there. That goes for all political parties. We understand that the current system cannot carry on, because it will just run out of money if we are not careful. We are already seeing that.

The one thing to say is that everyone across the sector should be allowed to have their view and decide what is right for their area. When I started as a leader, the one question that I continually asked myself, and still do today, is, “What does this mean for the public and does it improve their lives?” Unless you can answer that question affirmatively, you should stop. So far, for me the answer has been yes—yes, we can do it better than we currently do it—and I think colleagues are in the same position.

It is also important that our colleagues in local government across the country consult not only with each other but with the public to ask whether we can do this better. If they believe we cannot, okay, but I think they will find that we can. The most important thing is to not lose sight of why we are doing it. It is for the public and the people of this country, not for politicians and councils.

Matthew Hicks: I would echo that. For us, it is about building on the experience of others who have been through this. We have been out to places such as Cumbria to ask for advice on what they learned and what works well. We have learned how others delivered on business cases or struggled to deliver on some of the items they included.

Ultimately, for us, this is about a new and more positive relationship between local government and our residents and businesses; it is about doing things differently. With the two cases in Suffolk, ultimately, everyone has the interests of our residents at heart. The big issue is how you analyse the data that people are using, and the forecasting. That is where we are seeing the major variants, but the delivery and what we want to deliver are not too different.

Miatta Fahnbulleh

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Q Councillor Craig, obviously Greater Manchester has been at the forefront of devolution and the development of mayoral strategic authorities; I had the pleasure of being there at the outset a decade and a half ago. I am interested in your take on the impact the difference and it has made on your communities and, critically, on the collaboration between constituent authorities and the mayor and the strategic authority. During the last panel, the concern was about the power, onus and importance of constituent authorities. I am interested in how it has worked in practice and what we can learn from that.

Bev Craig: That is an important question. The difference for Greater Manchester was that we asked for devolution. That started the journey across the north of England initially, but it went out across the whole country. It has come off the back of a generation of co-operation in Greater Manchester, so it was built into a system. When the Greater Manchester authority was disestablished in the 1980s, my predecessors carried on with the meetings and kept that model alive.

I will come on to accountability, but what helps is that people do not identify with local authority boundaries. We represent people who, in their normal lives, say that they are from a place. A colleague might say that they are from Middleton and they are proud to be from Middleton, but when they are on holiday and people ask where they are from, they say “Near Manchester.” There is something about creating a place that people can identify with; that has been really strong. When you look at models where mayors have been successful, it is because they have tapped into a place identity. That links to my point that rural areas can still have place identity.

On accountability, in the Greater Manchester model of combined authorities, which moved to strategic authorities, we all have a role to play. Think about the role of the city. It is a major economic driver for not just Greater Manchester but the north of England as a whole. The whole region needs Manchester city centre to do well, in the same way that Manchester city centre needs the rest of Greater Manchester to do well if it is to have people with skills, good education, homes to live in and places to celebrate that they enjoy spending time in. That is why, through our model, we all hold portfolios. I am just as interested in getting Atom Valley in the north of the conurbation to be a success as I am in growing my life sciences sector in the city centre. There is something about getting people to take responsibility.

When we look at the competencies, that is why the LGA argues for clarity in the Bill that local authorities will still have a stake in some of the areas that we might think mayoral strategic authorities lead on. I say this with kindness, and I often say it to my Mayor’s face: he can give the parameters of the homes that we build and he can help fund them, and I will put on his logo and picture if we need to, but fundamentally it is Manchester city council that is out there building council homes. That is why we built more council and social homes last year than at any point over the last decade and a half. It works when we work together.

To clarify the role of commissioners in the context of the Bill, where they have been useful in Greater Manchester has been in an advisory capacity. We have been able to draw in people like Dame Sarah Storey as an active travel commissioner. She does not need to be a deputy mayor or take away my authority as a leader of a place, but she brings something that is additional. We must not lose sight of the fact that devolution models work with systems and Bills in place to deliver them, but actually it is about collaboration. There will need to be investment in the time that leaders of a place spend together if you are to get that relationship with the mayor to work.

Kevin Bentley: The identity question was raised before and it is important that we say political boundaries might change but communities do not. Identity of communities will always remain strong, whether you are in a district or county council. I represent 1.5 million people. That could be a disparate place. If you want to say, “Which is the most important to your leader?” they are all important, because they all have their own identities.

Miatta Fahnbulleh

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Q I have a question for Mr Fletcher and then a question for both witnesses. You have expressed some reservations and concerns about the upward rent review. Is it fair to say that the position among your members is not unanimous? Mark Allan of Landsec, who I think was the previous president of the organisation, has said that he thinks the changes are favourable, and that the status quo is complex and suboptimal. It would be good to clarify that there is not a single position that thinks this is averse.

Northern Ireland went through a very similar reform about a decade and a half ago. I am interested in your assessment, because most people would look at that property market and think it works well. There was a transition, and it has ended up in a position that, most people would argue, is not just benign and effective but consistent with what we see in other countries. I am interested in your views, and then I will have a question for both of you.

Ion Fletcher: I think that Mark would also say that the way it was announced was not great; it should have been done with prior consultation. One of our main concerns is about how one of our members was recently in Malaysia and Singapore, and his investors were asking him questions about it: “Where did it come from? Why was there no consultation?” It has been noticed overseas, and by people who are deploying capital into our towns and cities. It was not something that was trailed, either in the Labour manifesto or in any of the discussions about devolution. In fact, it is a bit odd to find commercial leasing provisions in a Bill that is mainly about local government reorganisation and strategic authority powers.

There is also the focus on the high street. Upward-only rent reviews are not what is keeping shops empty at the moment. That is more to do with business rates and a lack of demand for space. Most high street shops are on leases of five years or less, so upward-only rent reviews are not going to be an issue; they do not have those clauses in them.

The real value of upward-only rent reviews to investors and developers is that they provide predictability of income. If you are thinking about undertaking a new development project or refurbishing an existing commercial building, having the confidence about the level of income that you are going to get gives you much more security, and it de-risks the project. It makes it more likely to happen. At the moment, there is a shortage of development going on—there is a bit of a development viability crisis across both residential and commercial property—so adding more uncertainty in the form of unexpected policy changes does not help.

In relation to your point about international comparators, yes, Ireland went through this, as did Australia about 20 years ago. There is a transition period. The industry can and would find ways to adapt, but the point is: what problem is it really trying to solve? Is the disruption that it is going to cause in the meantime—the transitional costs, for example—worth the candle?

Miatta Fahnbulleh

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Q But if I may, Mr Fletcher, do you recognise that the UK is an outlier? What we are doing is moving to a system that is consistent with other major economies and works well. Commercial investors operate in those systems with no issues.

Ion Fletcher: England and Wales is an international outlier in that; it is also an international outlier in the strength of the rights that it gives to occupiers to renew their leases. Generally speaking, where countries offer occupiers the automatic and statutory right to renew their commercial leases, it tends to be restricted to particular sectors. That is not the case in England and Wales. You have to look at it in the round.

Miatta Fahnbulleh

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Q We think that strategic planning and the role of strategic authorities within that are quite important—in the context of how we want to “build, baby, build”, to quote my boss, the Secretary of State for Housing, Communities and Local Government. I am interested in your take on how, if we get this right, it will have an impact on the Bill, and critically, where you think we might need to go further to make sure that we are delivering the buildings and the growth that we need?

Catriona Riddell: What is set out in the Bill is going to help to develop things more quickly. We have just talked about viability; that is such a massive factor in everything that we do at the moment. In relation to strategic planning and spatial development strategy, I think the Minister for Housing and Planning, Matthew Pennycook, has referred to it as a spatial investment framework. If you look at it as that, and not as a big local plan, and if it does that role, that is going to set the precedent. It is going to say: “This is where we want to invest.”

They are also long-term plans; they are 10, 20 or 30-year frameworks. Again, that is to start building investor confidence in these areas. What is needed, in terms of building investor confidence, is leadership and that is where the strategic authorities can help. Some of the planning mechanisms in the Bill are really important, but actually, it is more about the wider powers, such as the convening powers and the duty to talk to your neighbouring mayor—the sum of the parts has to add up to a national picture. We do not have a national spatial framework in this country, so the sum of the SDSs has to add up to that national picture. I think the softer powers in the Bill that mayors and strategic authorities will have to bring together stakeholders will be really important.

I would say the measure needs to go further. My understanding of the convening powers is that they are largely about bringing local authorities and the public sector together, but one of the biggest challenges we have is around the infrastructure side of things—with utility companies, such as water companies and electricity companies, that engage at the very end of the process. We need to use these mechanisms—the convening powers—to bring them into the plan-making bit about the spatial development strategy from the start, so that there are no surprises at the end and nobody says, “We don’t have enough water or electricity to plug into these new homes that we have already permitted,” because that is what is happening all over the place. This is about getting the system working up front, much further upstream, so that the decisions on planning applications are much easier further down. The strategic authorities have a huge role to play in that.

The only other, minor change I would mention is on national parks. I think that once we have gone through local government restructuring, all local planning authorities will effectively be a constituent member of a strategic authority. National parks will continue to be local planning authorities. They have plan-making powers and development management powers. At the end of this, they will be the only planning authorities that will not actually be part of the strategic authority, so I guess we need a shout-out to national parks and some thinking about what their role should be in this.

Miatta Fahnbulleh

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Q Thank you for setting out how we are building on the community right to bid and the additional powers that are baked in to the legislation that will generally give communities the power to take over assets. One of the things that we have done a huge amount of work on over the past decade and a bit is building the capacity of our community organisations to be in the position to do this. I am interested in your take on the relationship with the neighbourhood governance powers in the Bill and the extent to which you think that this is an opportunity to build the capacity of some of our community organisations both to take over ownership but, critically, to have voice and power to change their places.

Nick Plumb: I want to make a couple of points. It was a really interesting conversation this morning on neighbourhood governance from colleagues from parish councils and local government. Power to Change is a member of the We’re Right Here campaign, which has been campaigning for community power legislation such as some of the measures in this Bill. We are keen that the neighbourhood governance measures that are introduced through the Bill allow for local variation and for a whole range of different organisations that exist at a neighbourhood level to be a part of that neighbourhood governance arrangement. We think that one of the risks with the area committee model is that it is a prescriptive top-down model that says, “This is the way to do things,” rather than saying, “What exists already in a neighbourhood, and how do we build on that?”

One of the ideas that Power to Change has been working on and testing in place is a community covenant. We have been testing that so far in Market Drayton in Shropshire through a partnership of 20 local organisations—everyone from the local authority to community organisations to representatives from town and parish councils—on the idea of a family and neighbourhood hub. So far, the results from that work are really positive. There was some initial scepticism about a new way of working, but one of the council officers has fed back that the new approach is a real gift that has helped them to move much further and faster with their communities than they would have done if they were just doing things from the council down.

One of the calls from us through this legislation is to try not to be too prescriptive with neighbourhood governance but lean into a model that puts people on an equal footing and gives people an equal seat at the table. I will not spend too long on this, but my other point is that it is great that we have a piece of legislation with “community empowerment” in its title, and I think that community right to buy and neighbourhood governance, if done right, go some way. Power to Change and the We’re Right Here campaign would like to see community right to buy as one of several community rights. We have been calling for a community right to shape public services, which would entail involving the people who receive services from the state in the design, delivery and development of public services. That would build on provisions in the Localism Act, such as the right to challenge, and it would make that a much more expansive right.

We would also like to see a community right to control investment, which would involve certain bits of investment from central Government sitting at that neighbourhood level. Both of those rights really lean into some of the Government’s existing agenda. The plan for neighbourhoods is a real example of that. There are some questions still to be answered on what that looks like, but it could involve trusting neighbourhoods to take hold of money and think, “How do we improve our lot together?”

The right to shape public services is very in line with some of the test, learn and grow work that is happening in the Cabinet Office. We would see the community empowerment element of the Bill really living up to its name if it was the beginning of a set of community rights rather than the community right to buy tick and done.

Miatta Fahnbulleh

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Q Mr Whittaker, I want to pick up on the sporting asset of community value measures within the Bill. Obviously, sporting community assets are of huge value to our local communities, and I am interested in your view on whether the measures create a pathway to far greater community control and ownership of these assets.

Robbie Whittaker: Thank you, Minister. We are certainly very encouraged by the proposal to create a new designation of a sporting asset of community value. It builds on what we have traditionally had before. It is something that we have lobbied for because we think—as we would—that sporting institutions have a valuable role to play in local communities, particularly in promoting empowerment of the kind that Nick was talking about.

One of the interesting benefits of this proposal is that in the last year, as you will all know, we have created an independent regulator for football, which is going to bring profound change for a relatively small number of clubs—only 116 clubs at the very top of the English pyramid. The proposal in the Bill potentially attracts a far larger cohort of clubs further down the pyramid, which are not necessarily as commercially attractive to buyers from outside the country. Therefore, the right to buy is actually a realistic aspiration that some of those communities can have.

We are increasingly seeing valuations of football clubs at the top end of the pyramid that take them beyond the reach of local community or fan groups. But that is not the case lower down. The extent to which you can create an opportunity here for local communities and people who follow relatively small clubs to feel that it is a pathway that they can go down and sustain is very welcome.

I echo what Nick said about community ownership funding, or some equivalent thereof; the existence of that fund played a large part in the creation of the phoenix club at Bury. You may remember that Bury AFC failed spectacularly in 2019, and has caused a lot of angst within the football community ever since. The existence of that fund was quite crucial to enabling a new club to emerge in Bury that was able to play at the ground that had been used for around about a century.

The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)

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Q Let me start by thanking you for the support, encouragement and enthusiasm for what we are trying to do through the Bill. You are completely right that this is our baseline—our floor—and our ambition as a Government is to build on it. In that spirit, I want to pick up on the right to request that we are introducing through the Bill. I am interested in your views on how we can ensure that the right is as effective as possible in taking us on the journey of empowering our mayors to deliver for their communities.

Tracy Brabin: I will be pithy—and congratulations on your role, by the way; I know that we have a champion by our side. What is important is the way that we can collectively come to a consensus on the Mayoral Council and say, “The mayors are agreed that this is the next step,” and then the Government have to explain why we cannot have it. There is also an opportunity for individual mayors to have something of value that relates to them and their region specifically. The key to that, Minister, is surely for it to be as straightforward and efficient as possible, rather than hoops and processes.

As mayors, one of the things that we are discussing at the moment is taxi licensing. Just to give you the numbers, 49% of private hires operating in Greater Manchester are licensed by authorities outside of the 10 local authorities. We know, from Baroness Casey’s work about violence against women and girls, how that is a weakness in the system when it comes to the safety of young women. As mayors, we are looking to the council to help us to understand how we can do that more efficiently, but that may be something that affects only some urban metro mayors and not others. It is about how we can collectively ask, which is a really fast-track process, but then there will be individual conversations.

Donna Jones: I really welcome the right to request. Following on from what Tracy just said about mayors and their unique geographical areas, in my patch, I—or whoever is successful next year—will have the largest island, aside from Ireland itself, of course, that we represent in part of England: the Isle of Wight. That piece of water creates a lot of problems for the Isle of Wight in terms of the supply chain and the skills market; things are a lot more expensive on the Isle of Wight.

One of the things that I am really pleased about is that the Government are looking, through the Bill to establish Great British Railways, which is coming forward, to give mayors greater powers around the planning, performance, improvement and project management of rail networks in their areas. I argue that that should be extended to ferries, particularly for my area. The Isle of Wight has three main transporters: Wightlink and Red Funnel are the two car and foot passenger ferries, and Hovertravel is a hovercraft that runs until 6.30 pm every day. For a lot of people who live on the island, it is cost prohibitive to travel off it and back. If it is not included in Committee or picked up by you, Minister, I will be requesting the right to have a regulator power over the ferry companies that operate across the Solent, because of course they need Crown permission to operate across that piece of water.

Following on from Tracy’s point about the uniqueness of certain geographical areas, I think that there are other good things, such as lane rental approval. I love the idea of that. Utility companies are given permission by the highway authority to dig up the road, and it goes on and on. That has an effect on transport, pollution and people’s travel to work time, and it has a knock-on effect on economic growth in the area, putting people off travelling to or from work or taking up jobs. We have to look at that. Giving mayors the ability to effectively tax or fine companies every day they go over the set period of two weeks, or however long it would be, is absolutely key. I could go on—there are some brilliant things in here—but I welcome what you are trying to achieve.

Ben Houchen: The right to request is an interesting one. There is a bit of an academic argument about the Government wanting to standardise mayoral powers so they are same across the board, but then the right to request, if done correctly, would allow for differentiation. There is an issue about whether we are looking for a standard model or whether we want more of a patchwork. That is for members of the Committee to think about, but it is important: at the nth degree, if you have differentiation through the right to request, you could have areas with hugely different powers. That is going to create political problems, with people feeling like one area has more control than another.

Administration from a central Government point of view is also difficult. Irrespective of devolution, there is always a clawback into central Government. That is probably right, rather than giving us carte blanche over everything, but it goes back to the strategic question about what you want to happen. The ultimate right to request—this is where you are going to have proper devolution that allows for earned autonomy over time—is the relationship between combined authorities, the Department and the Treasury. The key question that needs to be answered is how you get the combined authority to have an accountable officer within the organisation. Where I think combined authorities should get to is being treated as geographical Departments. We should be treated in the same way as a Department, bidding into Budgets and spending reviews, with our full, eclectic mix—from housing to transport and everything in between—and we should be accountabledirectly to the Treasury.

The only thing holding that up is the internal civil service mechanism of having an accountable officer outside Whitehall. That sounds flippant, but it is a difficult thing for the civil service to deal with; once you deal with that, it negates the need for a right to request or anything else, because over the years organisations will mature with that direct relationship with the Treasury.

It also gets into some key niggles that I know other mayors care about: “Why do you therefore need organisations like Homes England?”. If you get into the right to request, you do not need them. At the minute we are already doing half of what Homes England does. The Government have again gone into this halfway house of strategic partnerships, instead of taking the bold leap they should have taken: where you have mayors, you do not need Homes England, so make them the financially accountable body and ensure there are ties back in to central Government for oversight and value for money. Something more strategic could be done, but for me it goes back to the point that the Government did not want to address the strategic question of where devolution is going over the next five or 10 years.

Miatta Fahnbulleh

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Q Thank you, Ms Vaz. You have both campaigned to remove upward-only rent review clauses. Could you give us a sense of the negative impact that those clauses have had on your members, and, if we remove them, the impact that will have on both your members and the wider economy?

Miatta Fahnbulleh

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Q To follow up on the point that you made around local growth, which is a big driver of everything that we are doing, what things should we think about in the context of local government and powers and resources in order to deal with the huge challenge that we have around reviving our high streets?

Andrew Goodacre: We touched on good examples, and we should look to learn from them. On local engagement, you need local leadership, but they need help sometimes. That help could be internally from the next level of authority up, or it could be from an external body. One body that I thought was beneficial to high street regeneration at a local authority level was the high streets taskforce that was set up as part of the Institute of Place Management for Manchester Metropolitan University. It has now ended as a body, although in name it carries on because stakeholders—we were one of those stakeholders—would meet on a quarterly basis to discuss opportunities, challenges, good news and bad news on high streets and high street regeneration. We would share those ideas and share them back with the high streets taskforce, and they would help that local decision making.

Quite often what you find is that people know what they want to do. They just do not quite always know how to do it. A think-tank independently managed and run could help them with that “how” and the implementation of their ideas. If you do not bring it back as it was, something similar would really help that local decision making, because sometimes the pride is there, the passion is there; they just do not always have the nous to make it work in the way they hoped for.

With regard to high streets, I see it from a retail point of view, but I recognise the fact that high streets are increasingly dominated by experiential elements—cultural, leisure, more hospitality driven—and I have no issue with that. It does mean that we need better change of use of some of the retail sites that become empty. I know planning is part of this whole issue, so speeding up the planning process is important.

Ideally, I would like to bring homes back into high streets where the possibility exists. There are some large, empty buildings. I live quite near Stratford-upon-Avon and I still go past a VHS store that closed in 2016. It is still empty. I find it remarkable that a landlord can let a big place like that stay empty for so long. We have not looked at the opportunity of what more we could do with that, or what we could do differently with that. If we can bring homes and people back into high streets as places where people want to live, preferably with affordable properties for younger people, I think you would start to create local economies that would drive some of those high streets as well.

Allen Simpson: The question is what level you devolve at. Clearly, we are all nimbys. Nimby is an irregular verb—you are a nimby; I am concerned about my local environment. There are circumstances in which we need to find ways of treating high streets like strategic infrastructure. There will be asymmetric benefits and costs if you live close to a high street or, as people used to, above shops—that is less common than it was—versus being in the surrounding community. Sometimes local politicians do need help. We have seen an approach to that in London that the Committee will have views on.

I am very much in favour of hospitality zones, which have specific licensing approaches, where there is some form of recognition that you get to a “yes” more quickly. There is a specific question around Andrew’s point about bringing people back into former high street or commercial areas, in the City of London or elsewhere, around agents of change. I am very in favour of placing a burden on developers to fit the development around hospitality, rather than buying a flat next door to a pub and then being annoyed that there is a beer garden, for which I have zero sympathy.

Miatta Fahnbulleh

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Q I am interested in you giving us an assessment of the current system and the current state of the local audit regime. What your views are on the key benefits of us getting that system working right?

Gareth Davies: I will start, and then Bill can come in with some facts and figures on the current state of play with the firm’s contracts. First, it is important to say that, before I did this job at the National Audit Office, I was an auditor in local government, so in the past I have had a foot in both camps. Audit in the public sector is a fundamental part of our democracy; in local government, it is a fundamental part of local democracy.

Ensuring effective local accountability through independently audited council accounts, governance and value for money arrangements is a fundamental part of a healthy, functioning, tax-paying society. There is no doubt that we have run into some very serious problems with that in recent years, such as big backlogs of unaudited accounts. When those backlogs start to be cleared, at first we are seeing disclaimed audit opinions, which are essentially the auditors giving no assurance on those accounts. That is an unprecedented and unacceptable position to find ourselves in for a significant amount of public money. People have a right to expect audited accounts as a bare minimum when they pay their council tax and business rates, so this is a big system failure that needs fixing as quickly and robustly as possible. That is my starting point.

The obvious question is: why has this happened? Unusually, we have a natural experiment in the UK on this. No other devolved country has the same problem as England, with a failure of local government accountability and audited accounts. Everybody has had a pandemic and changes in auditing standards and so on, but only one country has dismantled its audit machinery and expected it to function nonetheless. Those changes were not implemented in Wales, Scotland and Northern Ireland, so we do not have to look far for the explanation. That is why I welcome the creation of the Local Audit Office in the Bill. It is the right measure to correct that problem. It is necessary, but it is not sufficient. We will want to explore what else will be necessary.

The reason it is necessary is that it brings back together the essential functions that make for a robust audit regime. That includes letting the contracts with the firms to do the work, specifying that work; holding the firms to account for delivery on time and to the right quality standard; supporting the firms with technical advice and help with tricky issues, many of which we are seeing across local government; and robustly speaking with local government about where problems need to be fixed.

It also includes working as a partner with local government to improve the quality of accounts, and make them less burdensome to local authorities and more useful to taxpayers and businesses. There is a big agenda beyond just the creation of the Local Audit Office—it is a necessary but not sufficient requirement.

Bill Butler: I should also declare an interest, although mine is slightly more historic than Gareth’s. I spent 35 years in local government audit before I escaped. As you can see, Chair, I have been dragged back. I hope I am not going to sound too much like an echo, but I agree with everything that Gareth said. The effective audit of public bodies, which are funded by compulsory taxation and not by voluntary shareholders, is fundamental to proper democracy, governance and the financial credibility of English local government.

The world looks down on the large number of disclaimed audit opinions. We should not underestimate what bankers in New York and the large accountancy firms are thinking. When they look at that, they cannot comprehend how we have ended up in this position. We therefore strongly welcome the commitment to reform, the changes in the Bill and the creation of the Local Audit Office.

We particularly like the fact that it will reestablish a co-ordinated local audit system, and bring together responsibility for audit appointments, the code of practice, audit quality and the performance of auditors, because local government audit is in a very bad position. The only option available that anybody could think of to tackle the increasing backlog of delayed accounts was to disclaim opinions. It is really important that we do not replace a backlog with disclaimed opinions. Currently, there are 273 bodies that have received disclaimed opinions—51% of the bodies in England and Wales that we are responsible for appointing to. That is up to ’23-’24. Of those, 236 are for two or more years, and 53—that is 11%—are for four or more years. In total, that means there are 716 sets of accounts in English local government for which there is no assurance from the auditors. Gareth did not mention this, but it also affects his opinion on the whole of Government accounts, which he has had to disclaim owing to the disclaimers in local government, which affect and knock on to the credibility of Government across the country.

We also think that there is a risk to the broader proposed local government reform because of the bad apple in the barrel. If you are constituting a new authority and you are incorporating an authority with a number of years of disclaimed opinions, sorting that out will get in the way of the effectiveness of those bodies at exactly the time when you want them to be focusing on their new responsibilities and opportunities. I will say the same thing as Gareth, but in a slightly different way: we cannot envisage a solution without the Local Audit Office, but it is not the solution. Bold action is required to cut through the Gordian knot that exists at present. The sector seems unlikely to resolve the underlying issues without, as Gareth has made clear, support both to those bodies preparing accounts and to those auditing the accounts.

Miatta Fahnbulleh

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Q Thank you, Mr Davies and Mr Butler, for setting out the gravity of the situation, the urgency and need to reform, and how the Local Audit Office is an important step. You both candidly made the point that it is necessary, but not sufficient. I am interested in what key building blocks are needed in addition. Obviously, we need to deal with the backlog—that is a given—but, alongside creating this institution, what are the top three things that the Committee should have in mind in order to deal with the problem we have today?

Gareth Davies: The first would be skills and capacity. This sector has suffered from a loss of skilled expertise. Public audit is not interchangeable with company audit; it is a specialist field—you are auditing political institutions and reporting in the public interest. It is a different skillset, with some common areas with the rest of the auditing profession, and it attracts people who are interested in how public bodies become successful and how they achieve value for money, and so on. The pool of experts in that area has reduced sharply, so the system faces the challenge of building up that body of expertise and skills.

It is not just the auditors. In the past, the auditors did a lot of the training, and people then went on to careers in local government, the rest of the public sector and other sectors. It was a breeding ground for the finance function of local authorities. Individual local authorities cannot typically sustain large training programmes of accountants on their own, so having a regime that supports the development of that skillset is vital.

The other essential is getting hold of local government financial reporting and radically simplifying it, streamlining it in a way that can still be incorporated into the whole of Government accounts. That is always the caveat, and the reason for some of the complexity, but I do not believe that it is an impossible task. At the moment, the accounts are too easily dismissed as only of interest to the auditor because they are long, complex and quite difficult to follow in many places. There is no reason why we should put up with that. I know the Chartered Institute of Public Finance and Accountancy and the wider profession have started work on what professionals think would represent a high-quality, meaningful financial statement that would clearly explain to taxpayers how we have used their resources.

There is a danger that everyone focuses only on the council budget and ignores the accounts. That is dangerous, because the balance sheet matters as well as annual expenditure.

Bill Butler: I can save quite a lot of time by saying that I agree with all of that. This may happen on a number of occasions, and we have not shared briefs. If you start with those who prepare the accounts, that needs to be revitalised. It is moribund, and people are looking at the scale of this task and finding it difficult. Some of this can be the support that Members and Ministers can bring to bear in terms of its importance, because—again, echoing Gareth—it is not considered to be interesting and it is too easily put aside, but that is not going to get any better. There is a real risk that it will get worse unless preparers are properly supported, and unless it is clear what revisions are possible to make the accounts simpler and deliverable.

There are issues around how we encourage colleagues who work in the audit firms. That is a broader issue, because they are bound by the technical standards imposed across the firms by their relationship with the Financial Reporting Council. However, at the moment, that seems occasionally to act as a block to overcoming that risk. We need to be honest about the fact that that risk assessment is there and about what we can do around it.

As Gareth said, we have been looking, with CIPFA, at reforming local government accounts for some considerable time. The clock has now ticked down, I think. One of the things I hope for is that the commitment shown to reform so far carries on across these broader areas, not of all of which are susceptible to legislation, but all of which would be, I hope, susceptible to encouragement.

Gareth Davies: I would like to add one other thing, because an important bit of the full picture is governance arrangements in local authorities. I know that the Bill includes provisions on audit committees, but it is important that local authorities have robust audit committee-type arrangements. I am not prescriptive about exactly what form they should take, but meaningful engagement with internal and external audit and a connection to the governance of the authority as a whole through its political leadership are essential to good governance. That means having somewhere where difficult questions can be asked and answers gained.

In quite a few of the disasters we have seen in local government finance in recent years, it is the governance arrangements that are primarily at fault in not picking up on excessive risk-taking and lack of understanding of the nature of the risk being taken on, and so on. It is another example of where a more robust audit system will not, on its own, solve everything—although it will definitely help, because it will bring those questions to the audit committee table—but the audit committee itself needs to be a functioning, robust and effective part of the governance of the authority.

Bill Butler: If I may say so, these are not things that can wait for the Local Audit Office, which has a massive task to perform anyway. If we wait, these problems become intractable, and the organisation’s chances of succeeding, if it has any at all, are very low,. They are issues that need to be addressed now, while we have the opportunity and—I hope everybody agrees—a pressing need.

Miatta Fahnbulleh

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Q In the last panel, we got a sense of some of the challenges in the local government audit system. Clearly, multiple organisations currently oversee and regulate the audit sector. I am interested in your views on the impact that has had on the system more broadly. Aligned to that, the Government are introducing a set of local government audit reforms through the Bill. How do you see that impacting the private sector audit landscape?

Mark Stocks: I have done this for a rather long time. I was an auditor with District Audit back in the day, then with the Audit Commission, and I am now with Grant Thornton. I have seen quite a lot of changes. The division of the Audit Commission duties has probably been the most impactful change, because it has created quite a confused landscape in terms of what the priorities are. The National Audit Office maintains responsibility for the code, which sets out the basis of our work, but our primary regulator has been the Financial Reporting Council, whose focus tends to be on the accounts. Public Sector Audit Appointments sets out the fees, and the Institute of Chartered Accountants in England and Wales decides whether we can act as a key account partner. That is quite difficult to cope with.

Throughout my whole history as an local auditor, the accounts have been important, but it has been equally important that I spend my time on value for money. I have to look at the financial sustainability of authorities, as well as their governance and performance. That has changed, to be candid, over the last 10 years. The code changed, so we spent less time on value for money. Then it changed again, so we spent more time on value for money. However, our primary focus in the last five years has been on the accounts, which has led to a confused environment in terms of how local auditors have acted.

In terms of what the Bill does, bringing in the Local Audit Office is crucial. Somebody needs to speak to the Government about the issues that auditors are seeing and what is actually happening out there, because some of the pressures on local government are quite immense. To be candid, I need somewhere to go and someone to speak to when I am concerned about what I am finding—someone who can say, “Let’s do this, or we’ll speak to the Ministry of Housing, Communities and Local Government.” The changes in the Bill are crucial for a functioning local audit in the future.

Miatta Fahnbulleh

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Q And in terms of the interaction with the private sector?

Mark Stocks: You only have the private sector. It provides all of local audit now. We are used to working with the PSAA, so I do not see any issue in working with the Local Audit Office. It will make it easier; we will have a single code and a single arbiter of what quality is for a local auditor. I think that will be easier for us, as the private sector auditors, than it is now. I would not want the Committee to go away thinking that there is no commitment to this from the private sector. It was a difficult procurement the last time round, but the PSAA did manage to appoint sufficient auditors and we remain committed—I certainly remain committed—to a successful local audit system.

Miatta Fahnbulleh

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Q I have a final question, if I may, Chair. We heard very clearly from the last panel that the reforms that were put in place are necessary but not sufficient, and that we need to think about how we build on things such as skills and capacity. From the perspective of someone at the coalface, what are the things that we need to get right? What should we reflect on as we take through these reforms in the Bill?

Mark Stocks: It is still fragile. I thought Gareth and Bill were accurate in what they said. We need to have more capacity so that we are not reliant on just a few suppliers. For that, there has to be consistency in terms of message. We need to get to grips with local authority accounts. If I went and did a set of NHS accounts, they are perhaps 100 pages long. The average local government accounts are 200 to 250 pages long, so the work involved is immense. That is why it takes longer, so we have to get that right.

We need to start to deal with some of the risks in local government, to be candid. It is quite difficult to deal with the breadth of what local government does. If you add on top of that the financial issues that they face and the issues that are asked of them in terms of policy, that layers on quite a scope for auditors, which means that we have to bring in specialists to do some of the work. I do not think that will get any easier under the current landscape.

Miatta Fahnbulleh

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Q I want to talk a bit about the Bill, and I know you have publicly shown support for the direction of travel. I want to get your views on how important it is for us to be putting strategic authorities and our devolution framework on a statutory footing, in the way that we are for the first time, and what the impacts and implications are for the longevity and momentum that we are trying to create around devolution.

Professor Denham: Thank you very much, Minister. It is absolutely crucial that the Bill underpins a really robust legal framework for devolution if it is to last—it cannot be for one Parliament. I will talk today about work that I have developed with Sir David Lidington—so that was a Labour Minister and a Conservative Minister coming together to say, “You need to have a consensus that lasts; otherwise, the Government changes.”

This is where I would say we are at the moment: there are many good things in the Bill, but there are some real areas of weakness that could lead to it being undermined quite quickly. It depends on financial commitments to integrated settlements and long-term funding, which are not even mentioned in the Bill. The Bill creates no forum in which finance can be discussed between strategic authorities and central Government. One of the ways in which that could be mitigated, at least to some extent, is to put the mayoral council on a statutory basis. Mayor Brabin said earlier today, “Well, the mayoral council is where we talk about new powers for mayors.” The mayoral council is not in the Bill. If Ministers decided tomorrow that it was not going to meet any more, it would not. It has no terms of reference and no secretariat. The mayors have no legal right to put items on its agenda.

I would give that as one example of where things could be embedded much more deeply. Parliament would have to come back and say, “We are going to abolish it”, in order to stop that meeting happening. If that sounds very radical in our system, every other European nation with a devolved system of government has a layer between the devolved level and central Government. I would suggest that it will be of benefit to Ministers, too. It is probably possible to manage relationships with a relatively small number of powerful mayors, but when there is one for every part of the country, there will be a cacophony of people demanding special treatment for their areas. The ability to corral that into a proper process would be an advantage.

This has to be embedded. Prior to this, regional arrangements lasted for about 10 years before Government lost interest in them. If you want this to be here in 30 years’ time, doing the Bill, but adding to it, is crucial.

Zoë Billingham: I absolutely agree that it is essential that devolution through this Bill should be put on a statutory footing. I would highlight a few things that I think achieve that entrenchment, in addition to the legal aspect of that. First, the broadening and deepening is absolutely essential, with the right to request in combination with that, so that strategic authorities can decide what further powers they wish to request from Government. I agree with John that the integrated settlement is a really important entrenchment to give places the flexibility they need to demonstrate how different places make different choices about how they spend public money. That will be essential to showing how devolution can deliver differently according to the needs of different places.

The moves towards votes at 16 and returning to a supplementary vote system for our mayors is absolutely essential to broaden the number of people who can take part in in local democracy. I would urge the Committee to consider going further in a few areas in the Bill, to build on that entrenchment from a statutory footing. Fiscal devolution has so far been completely omitted from the Bill. We at IPPR North have been looking at options, including a visitor levy to start with, to start the process of fiscal devolution that we think will really help to mature the model that we have today. Accountability is another key area. I know that you have talked in previous sessions today about LPACs, and we absolutely agree that we need to beef up the accountability of mayoral combined authorities—that is a two-way street, but I am sure we can get on to it later.

Finally, in terms of public support, the flip side, if you will, of further empowering and rolling out devolution to the country is demonstrating to the public what devolution can deliver for them. The evidence shows that in places that have more powers and freedoms, voting turnout and engagement with local democracy go up, so we think it is important not just for the economy, but for democratic reform.

Miatta Fahnbulleh

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Q If I can pick up on the point about scrutiny and accountability, there are two parts to my question. Some evidence has been raised in these sessions about the connection between people and communities and the mayors who serve them. We have had a decade and a half of this experiment, so I am interested in your views on whether the claim of a democratic deficit—which I do not buy—is about something genuine in the experience we have seen.

Secondly, we need to ensure strong scrutiny and accountability for any institution. We heard in the last session about some of the challenges with local government accountability and scrutiny. I am interested in your views on what we need to do to strengthen that and the provisions in the Bill to build on that.

Zoë Billingham: First, to your point on the democratic engagement of mayors, I do think, and I stand by the evidence that suggests this, that the more powers that mayors get, the more they are able to demonstrate to the public how they can tailor and do things differently in their places, according to what the public want. That is essential for the responsiveness of democracy; therefore, I also think that votes at 16 and the return to a supplementary vote are helpful additional aspects to this Bill, in terms of demonstrating that the Government are serious about broadening engagement with mayoral combined authorities.

I would also pick up the proposal in the Bill for neighbour area committees. Something along those lines is essential. We know that, as currently drafted, the Bill is proposing full unitarisation of local authorities to a 500,000 population level, which is far larger than we see in local government in our European counterparts, for example. There is a question about how those unitaries engage with those communities, not on an ad hoc basis, but as an ongoing community conversation. I wonder whether, for instance, the neighbourhood area committees could be predominantly made up of community representatives and young people, so that they do not replicate the district level that the Bill proposes to abolish, but instead create an ongoing, democratic renewal at that local level.

Secondly, to pick up your point on scrutiny, this is essential. If you speak to local leaders, mayors included, they are absolutely game for it. It is not something that central Government are imposing; it is an essential part of both enabling the further devolution of power and resources, and ensuring that the current model is not undermined because there is not enough scrutiny in place for what is already there. I totally support the proposal for a local public accounts committee—we have built on that idea ourselves at IPPR North, looking at mayoral accounts committees, which bring together overview and scrutiny, and local public accounts committees.

We think that those committees need to represent place leadership; this is no longer narrow lines of inquiry about certain budgetary lines or solely about audit. It must be much broader. This is about place-based leadership, not only by the mayor and the mayoral cabinet, but by other public leaders locally who could be brought in front of such committees. We think that is a really important thing to go hand in hand with the future of devolution.

Professor Denham: May I pick up and develop a couple of those points? There is no doubt that the Bill has a danger of an upwards movement of power: things are being moved from local authorities to strategic authorities and mayors have more autonomy. I understand why that is being done, but the Bill needs to build in a healthy counterpoint to that. I, too, would go beyond the neighbourhood governance proposal, which sounds a bit narrow and a bit prescriptive, as though the same model will work everywhere.

Sir David and I proposed what we called community empowerment plans, and we proposed them even when we did not know there was going to be local government reorganisation. The strategic authorities should have a legal duty to set out how they will engage with local people across the whole range of activity—I should have declared an interest, in that I am the honorary president of the Hampshire Association of Local Councils—

Miatta Fahnbulleh

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Q I have two questions, one at the strategic level and one at the community level. Obviously we are pushing through strategic planning powers for mayors. I am interested in your assessment, given your huge expertise, of whether that is the right function, and what we need to do to ensure that it delivers sustainable development, which is obviously our objective.

At the community level, we obviously want to build in a way that is sustainable, but we need to make sure that there is public consent. I am interested in how we ensure that strategic planning powers sit alongside community engagement and community consent to make sure that there is a whole place sense of the direction of travel and the development that needs to happen, in a way that builds public support.

Naomi Luhde-Thompson: On public participation, the UK is a signatory of the Aarhus convention. Article 393 of the trade and co-operation agreement is really clear that when you are doing something that has an impact on the environment you must have a proper process of public participation. It must happen at an early enough time to influence the outcomes; otherwise, what is the point of having people involved? You are literally just asking them, “What colour do you want the gates to be?” You are not asking them to be involved in the full decision.

The issue that you have here—I will talk about the products that are produced—is that, if you look at the spatial development strategies, it specifically says in the Planning and Infrastructure Bill, in proposed new section 12I of the Planning and Compulsory Purchase Act 2004:

“No person is to have a right to be heard at an examination.”

That is completely the opposite of what you have on local plans: any person who makes representations must be given the opportunity to be heard in front of the examiner. That is not going to send out a strong signal that you actually want people to participate in the making of these spatial development strategies.

It is not a sell-out event to go to a plan examination, so I do not think that you need to be worried about that. I do, however, think that you need a right to be involved at that stage, and it cannot be at the discretion of someone else. I think that is one of the issues: if you have to wait for somebody else to give you consent or permission to enter that space, you do not have a right to enter it, because it is at somebody else’s discretion. That is why the formulation of such a right of access—a right to participate—is really important.

Your other point was about the duties, and how that is carried out. I would be really interested to see how the local growth plan is supposed to comply with, for example, the environmental principles policy statement. How does it combine with that? How does it combine with the spatial development strategy? What is the interaction there? It is quite complex, if you look at the organogram of the different plans that, if you are a member of the public, might affect and shape the place in which you live, and therefore what the purpose of all these plans are—whether they are there to achieve sustainable development in the public interest—and how you are supposed to get involved in influencing the outcome of the decisions that are made through these plans.

Richard Hebditch: It is probably also worth talking about the resourcing of all this. As people have discussed, we have the local government reorganisation at the same time. The new format for local plans, which are out of date, has new housing targets as well. Then we have the SDSs—spatial development strategies—on top of that. How do we make sure that we have the resourcing to develop all those things, which are happening at the same time? We then have wider planning reform, and we might have another planning Bill in the new year. There is a lot of potential chaos at the same time. I am sure the Government want to address that, and the resourcing for planners to develop the SDSs is very helpful, but there is a risk of not necessarily having a clear road map for how you get to that place. As I was saying, we are very supportive of the idea of spatial development strategies and the strategic layer, but the journey there is going to be quite chaotic. I think it would be good to look at issues around workforce skills and the timing of all the different things that are going on.

Miatta Fahnbulleh

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Q The Government will do our very best to make sure that chaos is not the thing that comes out of this set of reforms. I think most people would concede that the status quo is not optimal and therefore reform is required. The piece that I want to push back and follow up on is the need for public participation. That is the whole basis on which our planning system works, but there is something about accountability and the mandate that sits with the mayor. Ultimately, if people do not like the set of decisions that the mayor drives through a development plan, they can boot them out in an election, so there is a specific piece around the function of the mayor that means that they can hold that development plan and the public are able to hold the mayor to account.

Naomi Luhde-Thompson: I think we need to reflect on what became of the regional spatial strategies, and on whether that was an issue around social licence and public consent. Obviously, an examination was attached to them in their development, and there was accountability in different formats. If it is not clear to people that they are going to be involved, you will just get disempowerment and disenfranchisement, and then people are just going to say, “Well, it’s nothing to do with me. I haven’t been able to be involved, and I haven’t been able to have an influence.” Those routes to influence and to participate properly, which means having an impact on the outcome, need to be very clearly laid out so that people can participate. I agree with you that it is a whole discussion. Planning is the way we organise ourselves in space, in society and in places. That is what it is supposed to be, so we need to make it like that.

Your point about democratic accountability is really important. One of the things that the Better Planning Coalition has been looking at is the national scheme of delegation, which will have a huge impact on whether there is democratic accountability for planning decisions at local level. If people realise what is happening only when the bulldozer turns up at the end of the road, that is obviously a failure of the system. If they feel that a decision has not been made in a way that is accountable, if there is no one for them to go and talk to, and if they do not have public speaking rights at planning committees any more and cannot have their say on that decision, I think that will lead to a democratic deficit.

Miatta Fahnbulleh

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Q My first question is about your views on how the community right to buy provision in the Bill will help communities to better make use of and take ownership of community assets.

Sacha Bedding: We welcome the community right to buy. It is a good step, a big step, and it is important. Communities often do not feel that they have those rights, because they do not, and when they see a treasured building or space go up for sale, and they have no opportunity to purchase or reclaim it—lots of these things are already ours—they feel disillusioned and hopeless. To have an avenue and pathway to change that will be important and helpful. It will need to be properly resourced; I think we should look again at a community ownership fund or a successor to it. Places that do not have capacity but have a willingness and desire should be supported in creating that. But it is a great opportunity for the people of this country.

Miatta Fahnbulleh

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Q To build on that, vibrant, strong communities and community organisations are critical to our vision and to taking advantage of the powers that we are providing through the Bill. I am interested in your views on the new duty on local authorities to make effective arrangements at the neighbourhood level. Also, with your vast experience in the sector, what is your sense of what we need to get right to ensure that we genuinely empower community organisations, when we know that they have the capacity to have a voice, representation and power for the communities they represent?

Sacha Bedding: I watched some of the proceedings, and I understand why there is a desire for an expansion of parish councils. It is what we look like, and it is a reflection of this at a local level, but it is not right for everywhere. There are places up and down England where organisations like mine—Locality has hundreds of them as members—have the opportunity to create an active role in making sure that decisions reflect the will, the want and the need of the people who are going to be affected by those decisions.

That will happen only if we do not prescribe a one-size-fits-all solution to what neighbourhood governance looks like. Neighbourhood governance should mean that when the people in that community are asked, “Do you feel you have a stake in this place and the opportunity to shape where you live?” the answer is yes. At the moment, our opinion is no: roughly 80% of people say they do not feel they have that stake in their community. We see that in election turnout: the by-elections in Hartlepool, which I know well, had turnout of under 20% or 15%. That is an issue, and I am afraid that it is not going to be solved by creating another layer of councillor. I live in a parish area, by the way. Where parish councils do tremendous work, perfect—build on it—but where it is not right, let’s not mandate it. Let’s be creative and braver than we have been so far.

Miatta Fahnbulleh

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Q You make the point about creating organisations and capacity that reflects the will and want of the people. A big part of that is diversity and representation. One of the challenges that we have had in the community sector is that it tends to be those parts of the community who have the social capital, the time and so on who are at the forefront of that. I am interested in your views on what we should be thinking about to ensure that whatever neighbourhood governance structures we create are genuinely representative and have that diversity of views and opinions to genuinely drive the will and want of the community.

Sacha Bedding: The first thing is that we have to make it accessible. I will always advocate for a community organising approach, because I think that releasing people’s agency, so that they feel that they can take action on the things they care about, is a route to that. However, whether it is asset-based community development, old traditional community development or community organising, that is where we start. We start where people are, not where we would like them to be.

If we can do that and resource that, there are thousands of people willing to roll up their sleeves and get involved where they live. I see it every day; you see it in your constituencies every day. This is not some great big secret—it is just, “Go out and ask them.” On the flipside of that, our sector, like every other sector, has been hammered for a long time, but releasing the skills and talents of local people to take action on the things they care about will answer that question.

The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)

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It is a pleasure to serve with you in the Chair, Sir John. Before I speak to the first group of amendments, I put on the record my thanks to the witnesses who gave up their time in September to give evidence to the Committee. Their comments were insightful and will inform our scrutiny over the remainder of Committee stage.

The English devolution White Paper committed to introduce in law the concept of strategic authorities, which sits at the heart of our new devolution architecture for England. The clause makes good on that commitment and establishes a more consistent and simple model of devolution. The clause sets out the three levels of strategic authority: the single foundational strategic authority, the combined foundational strategic authority and the mayoral strategic authority. Each category will have access to a consistent set of devolved powers and functions.

Mayoral strategic authorities that meet specified eligibility criteria may be designated by secondary legislation as established mayoral strategic authorities, unlocking further devolution. We believe that that will deliver a permanent shift in power from Whitehall to all parts of the country, with consistent powers at the right level across all of England, so that empowered mayors can drive growth, unlock house building and infrastructure, and deliver the change that our communities want.

Miatta Fahnbulleh

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We absolutely recognise the hon. Member’s point about democracy. Directly elected mayors can play a powerful strategic role. They are a key new part of the devolution architecture that we have seen work well across the country. I point to Greater Manchester, which has delivered the fastest growth of any local economy. They sit alongside strong democratic structures that we will have in local government. The Bill is complementary to that and does not cut across or undermine those structures.

Miatta Fahnbulleh

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I am sympathetic to the intentions behind the new clause, and the hon. Member for Brighton Pavilion makes a good point regarding the tapestry of terms that we have in a very complicated local government structure; however, the Bill already includes defined terms relevant to interpreting local government structures. For example, clause 1 defines exactly what strategic authorities are. My concern is that taking a one-size-fits-all approach might have unintended consequences by altering existing definitions that have been deliberately tailored to work in specific legislative contexts. My view is that as we go through this process of standardising the new structure, with strategic authorities now established in legislation working alongside local government and community structures, the roles and the definitions of different structures of government will become much clearer. I hope the hon. Member will not press the new clause.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Functions of Strategic Authorities and Mayors

Miatta Fahnbulleh

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I shall start by setting out the purpose of clause 2, then turn to amendment 261. The clause provides some broad thematic policy areas under which functions and powers of strategic authorities are arranged in the Bill. Defining those areas on the face of the Bill will bring clarity and purpose to the role of strategic authorities, which all parties agree we need to do. We want to empower mayors, who know who their areas best, to respond to local needs, so they can be the ones driving change and improvements in economic prospects and living standards and poverty. These thematic policy areas are deliberately broad, to allow for a wide range of activities.

I have a lot of sympathy with the intention behind amendment 261. Alleviation of poverty and tackling socioeconomic inequality should be a core part of what we do and a core metric of economic success. However, as the hon. Member for Ruislip, Northwood and Pinner set out, those duties are already baked into the very function and purpose of local authorities and, critically, they cut across all the thematic areas that we have set out.

Miatta Fahnbulleh

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Both the policy intent and the practice with places going through the devolution process are locally led. The impetus is coming from local leaders and local authorities that are working with their communities to drive the process.

On amendment 4, the Government have been clear that we will consider non-mayoral devolution arrangements for single local authorities on an exceptional basis where certain criteria are met. Designation is not intended as the end point; it is a stepping stone towards deeper devolution, which is what we hope will be the journey for all parts of the country. It is therefore most appropriate for the process to be initiated by the Secretary of State rather than the local authority. However, to be clear, the Secretary of State will not be able to designate a council as a foundation strategic authority unless the council itself consents to that designation. That is a robust safeguard that will protect the interests of the single local authority concerned. I agree with the sentiment behind the amendment to ensure that the Secretary of State has regard to the need to secure effective and convenient local government. I am pleased that those criteria are already embedded in the Bill when conferring functions on a single foundation strategic authority.

Amendment 28 seeks to remove the Secretary of State’s proposed power to direct for there to be a mayor for an existing combined authority without local consent. The Government have been clear about the benefits of mayoral devolution; we are seeing it across the country. For example, South Yorkshire mayoral combined authority brought the Supertram network back into public control after 27 years, and there are already drops in fare evasion, increases in usage, ticketing apps and improved clearing. Greater Manchester authority has taken control of its bus service, resulting in increased punctuality and ridership and cheaper fares. The North East combined authority has secured a £450 million development for one of the largest film studios in Europe, with the potential to create over 8,000 jobs.

We know the impact of this devolution model. We are seeing it across the country and we want to see it in more areas. We are clear that mayors with skin in the game are best placed to drive forward growth, reform public services and deliver the change that their communities want. Every resident in England should be able to benefit from deeper mayoral devolution in their area.

Miatta Fahnbulleh

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I completely disagree. I have been having conversations, for example, with our strategic combined authorities that are going through the process. The difference between this Government and the last is that we have created a clear sense of the powers and the economic opportunities that areas can take forward. Take, for example, our current devolution priority area. I am the new Minister, and I am having the first set of conversations with them. Every single one is excited and enthusiastic about the prospect. At the moment, the demand for devolution deals is outstripping our ability to respond, because we have attached to them clear powers, access to funding and the ability to drive the change that we want to see in those areas. So I completely reject the premise that places are being driven to do this.

Miatta Fahnbulleh

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I spoke to the leaders of Hampshire and the Solent just last week, and they were unanimously enthusiastic about what was being proposed, because they could see the opportunity. I am pleased that it is being voted on, and ultimately it is for places to come forward. What we have said to them is, “If you go through this journey, there are powers that you can draw down that will allow you to drive change in your areas.” The strategic authorities, combined authorities and constituent authorities can see the economic prospect. They see what is happening in Greater Manchester, the Liverpool city region and the west midlands, and they want that for their residents. That is absolutely right, and what we are doing is enabling and supporting that.

Let me talk about the backstop power provided here. We do not expect to use it, which is why it does not come into force at Royal Assent; it is there if we need to draw on it. The only reason it is there—because we think the demand and the momentum created by devolution will do the job for us—is in the instance where there are blockages. That means when constituent authorities that want to move forward are being resisted by a particular authority, we give ourselves the ability to intervene. The reason we are doing that is because we do not want any residents to be left out. We do not want areas to be devolution deserts, not being able to benefit from the economic opportunities and prospects provided.

Miatta Fahnbulleh

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It is absolutely right that we say that, in order to drive economic success in particular areas, there are powers that relate to economic drivers and levers that we want, and there is an investment fund that can be deployed at that functional level. I will not resile from that; it is absolutely the right thing to do. We are clear with places that we think a strategic authority operating at a functional geography is the way to unlock their economic potential, and we are building powers alongside that. Places that want to take it up absolutely can. At the moment they are queuing up to do so, and I am incredibly happy about that.

I am very disappointed in the hon. Member for Hamble Valley for not getting on in support of his area, which is enthusiastic for this and moving forward. Ultimately, there is momentum around devolution because the benefits of it are being seen already. It is not theoretical; it is not on paper. We are seeing it in our areas, and I want it for every part of the country, not just the ones that have gone through the journey.

Miatta Fahnbulleh

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I will not press this point. All I can say is that I sat down with the leaders last week as a new Minister—the newbie—and I asked them how it was going. They told me, “we are enthusiastic and there is momentum around this because we can see the value that it will provide for our communities, so we are driving forward. What we need is for Government to get out of the way and for the Government to support and enable us.” I take that as a ringing endorsement of what we are trying to do. I can only go by the conversations I have had with local leaders. At the moment, I am seeing momentum and support for this, and rightly so because we are seeing the impacts of this on the ground and the Bill will extend that across the country.

Question put, That the amendment be made.

Miatta Fahnbulleh

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I will respond to amendments 30, 31 and 33 first, and then amendments to 266 to 280. I appreciate the intention of the Liberal Democrat amendments, and I reiterate that I think we are completely aligned in this Committee in our desire not just to push power down, but do so in a locally driven way. On the specifics of the lead amendment, the principal body affected by the designation that we are seeking will be the unitary council or the county council. The Bill already provides that no designation can be made without the consent of the relevant councils.

On amendment 31, the Secretary of State must already notify the proposed constituent councils, and any other persons that the Secretary of State considers appropriate, about a proposal to direct the establishment of a combined authority. The Secretary of State must consider the representations of that body. As my hon. Friend the Member for Mid Cheshire said, there is no shortage of representation and voice from individual town and parish councils. We think that the process of engagement is already there and that to impose additional requirements to consult every town and parish council in the proposed areas would be disproportionate and also risks conflating the distinct roles of town and parish councils, which, as I said at the evidence stage, we absolutely see having a role to play in the new architecture of strategic authorities.

Strategic authorities have been created to tackle regional issues and to capitalise on the opportunities that exist over a significant economic geography, such as pursuing, for example, integrated transport. Town and parish councils, meanwhile, will continue to represent their local communities, managing neighbourhood services and supporting initiatives that improve the day-to-day lives of their residents. Each tier of local government will be accountable to their local communities and should continue to represent their interests and to work in alignment.

Miatta Fahnbulleh

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We will discuss neighbourhood governance and neighbourhood boards later in the Bill. When it comes to areas that do not have town and parish councils, we recognise there is an opportunity for us to create structures so that there is stronger community representation and a stronger community voice. There is an opportunity for us to design something that works in areas where town and parish councils do not exist or may not be appropriate. We want to create flexibility so that local areas can find the right structures for them, so that neighbourhoods and communities have the voice and representation that we want to see across the country.

I turn to amendments 266 to 280. As I have said before, we have been accused of compulsion, and all I can do as a new Minister is point to the feedback that I get from the local areas that we speak to. Our engagement to date suggests there is genuine enthusiasm and momentum, because areas can see the economic opportunity and what a strong Mayor can do for their area. The Government have been clear in our aims: we want to get universal coverage of strategic authorities across England, because we can see the benefits that places like Greater Manchester and Liverpool are experiencing. We want that for every single resident across the area.

Miatta Fahnbulleh

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That is not the feedback that I heard in that evidence session. At the moment the places in our devolution priority areas are going through a process of consultation. They are talking to their constituent councils, voting it through the council chamber and taking it to their residents to make the case.

What we are seeing is positivity and momentum. Our job as a Government is to build on that and support and enable that. I come back to the point that there is a backstop power that we do not expect to use. But in the instances where we have got a blockage, we want to be able to help create a strategic authority so that we do not have devolution deserts and parts of the country left behind. We are very clear that the powers will commence only at the point that they are needed, rather than on Royal Assent.

Finally, new clause 23 would impose disproportionate consent requirements for these processes, requiring strategic authorities to seek the consent of all district, parish and town councils in their area. As I have said, there are already provisions in place to ensure a level of consultation. A primary aim for us in this Bill is to make the process simpler, more streamlined, more effective and less expensive. That is the feedback that we have had from places that have gone through the process and the feedback that we are getting from places going through the process.

My worry is that the proposed amendments would undermine the principle of having a process of devolution that is far more streamlined and far easier for places. Again, the feedback we are getting from conversations is that there is enthusiasm, appetite and commitment to do this. We want to make it as easy as possible for places, which is why I hope that hon. Members will not press the amendments.

Question put, That the amendment be made.

Miatta Fahnbulleh

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I thank the hon. Member for Ruislip, Northwood and Pinner for highlighting the deep cuts that were imposed on local authorities during a decade and a half of Conservative government, which fundamentally weakened our civic infrastructure. We should never forget that. We absolutely appreciate that, as a result, local government is operating in a difficult context. I welcome the intent behind the amendments: it will be important for strategic authorities to ensure that they have the capacity funding so that they are established.

Amendment 38 concerns single foundation authorities. We do not anticipate that there will be transition costs for such authorities. When a unitary or county council is designated as a single foundation strategic authority, it will retain its existing voting and governance arrangements. The designation will sit alongside its status as a local authority. In other words, there will be no transition involved, so transitional funding is unnecessary.

We recognise that the mayoral strategic authorities that we are creating will need funding to support the transition and build capacity. All Members across the House want to see strong, capable authorities in their area, with the tools and capacity to deliver for their local communities. That is why in the English devolution White Paper we committed to provide new strategic authorities with capacity funding to kick-start their organisation. I am pleased to confirm that all areas on our devolution priority programme will receive £1 million in mayoral capacity funding this year to help establish new institutions, once the legislation has been laid before Parliament. They will also receive capacity funding in future years, so that they are ready and prepared to deliver the benefits that we believe devolution will unlock. As the Government are committed to providing funding for establishment expenses through the mechanism of mayoral capacity funding, we do not believe that amendment 39 is necessary, but we recognise the intent behind it, which is why are we are taking action.

Amendment 361 would require the Government to report on funding allocated to support the establishment of new strategic authorities. I am pleased to say that that is already established practice. Clause 19 amends the Cities and Local Government Devolution Act 2016 to ensure that all funding devolved to strategic authorities is reported. That will include any funds to support their establishment. Again, therefore, we agree with the intent behind the amendment but we do not believe that it is required.

Miatta Fahnbulleh

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We have established a principle that there should be mayoral capacity funding. We have established a principle that for places that are going through the transition, to ensure that any mayor that is created is able to hit the ground running, capacity building needs to be a core part of that. That applies to the places that are going through the devolution priority programme at the moment, but the same principle invariably will apply across the piece.

Miatta Fahnbulleh

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Clause 4 introduces schedule 1, which will streamline and simplify existing processes for establishing new combined authorities and combined county authorities, and for changing the arrangements of existing authorities. The Government have been clear that their goal is to achieve universal coverage of strategic authorities. We are therefore confident that clear and tangible benefits of devolution will be experienced across the country. We have also been clear that we want to create mechanisms that will ensure that the process is streamlined—that it is fast, and effective and efficient locally—and allows representation, but fundamentally allow us to move through the process that we see appetite and demand for across the country.

The powers introduced by the clause will be used as a backstop. They will be deployed only where we have devolution deserts and we want to work with areas to remove blockages, to the benefit of residents.

Miatta Fahnbulleh

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I beg to move amendment 62, in schedule 1, page 80, line 19, at end insert—

“5A After section 105B insert—

‘105C Non-mayoral combined authority: consent to budget

(1) A non-mayoral combined authority may only exercise the following functions with the consent of each constituent council—

(a) adopt or amend the authority’s budget;

(b) where it is not part of the budget, approve the total sum of the transport levy.

(2) In this section a reference to the “transport levy” is a reference to any levy issued by the combined authority relating to the exercise of its functions relating to transport in accordance with any regulations made from time to time under section 74(2) of the Local Government Finance Act 1988.”’

This requires that a non-mayoral combined authority must have consent from its constituent councils to the approval and amendment of the budget and to the approval of the transport levy (if separate).

Miatta Fahnbulleh

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I will begin by talking to Government amendments 63 and 65. The Government recognise that the creation of a combined authority or combined county authority can cause some concern in prospective constituent councils. One of the main worries is that the new institution could create new financial burdens on existing councils.

Many existing combined authorities and combined county authorities already include provisions in their constitutions that enable constituent councils to veto decisions that could create a financial liability on them. We recognise that those provisions have helped to soothe concerns about establishing new combined authorities and combined county authorities. That is why the amendments will create a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of affected constituent councils before exercising their functions in a way that could create a financial liability on these councils. That will ensure that any future non-mayoral combined authorities or non-mayoral combined county authorities will need to comply with this requirement without the constituent councils needing to secure agreement to its inclusion in the individual authority’s constitution.

I turn to Government amendments 62 and 64. In the English devolution White Paper, the Government set out that in combined authorities and combined county authorities without a mayor, most decisions would require a simple majority vote. That is provided for in clause 6. However, in the White Paper, we also said that key strategic decisions would require unanimity in non-mayoral authorities. The budget for the authority is one of those decisions.

Similarly to amendments 63 and 65, amendments 62 and 64 introduce a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of all their constituent councils when adopting or amending their budget. That includes the direct contribution of those councils to transport expenditure.

Government amendments 66 and 67 are minor, technical amendments. They amend the terminology used in schedule 1 so that references to secondary legislation within the Levelling-up and Regeneration Act 2023 use the term “regulations” rather than “orders”.

Miatta Fahnbulleh

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I thank the hon. Member for his detailed, complicated questions. We will write in response, particularly on the public accounting standards.

We have set what we think is a good baseline. There will obviously be some flexibility for constituent authorities. The hon. Member will remember from the evidence session that the accountability and financial framework across local government is a current challenge, so we are looking to drive improved standards across the piece. That will apply to strategic authorities as much as to local authorities, but we will write fully in response.

On the wider question about the balance and the trade-off, our judgment is that for non-mayoral combined authorities, where constituent authorities operate together, we should put in those safeguards. In essence, constituent authorities act in concert, collectively, to make decisions. Whether it is a question of financial liabilities or transport budgets, it is right that all the constituent authorities provide consent. In the case of the mayor, however, our view is that because the mayor has his or her own democratic mandate and the ability to direct, that is separate from what we see in non-mayoral combined authorities.

Inevitably, there will be safeguards. In the evidence session, we heard really powerful evidence that the mayoral model works well when the mayor works in lockstep with constituent authorities and the two are aligned, with a strategy that they work around. We have seen examples of where the model does not work well, and we have had to go in and support and remediate the process when the mayor works without their individual local authorities. The model drives that. However, we think that there is something specific in the mayor’s democratic mandate; we have a model where there is a majority vote, with the mayor on the side of the majority, in order to drive through big strategic decisions.

Miatta Fahnbulleh

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I am happy to provide that clarity in writing.

Miatta Fahnbulleh

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Yes.

Amendment 62 agreed to.

Amendment made: 63, in schedule 1, page 80, line 19, at end insert—

“5A After section 105B insert—

‘105C Non-mayoral combined authority: functions imposing financial liability

(1) This section applies where a non-mayoral combined authority considers that the exercise of a function by the authority may result in a financial liability being incurred by one or more constituent council (each such council being a “relevant constituent council”).

(2) The function may only be exercised with the consent of each relevant constituent council.

(3) When deciding whether subsection (1) applies, the authority must have regard to the “Code of Practice on Local Authority Accounting in the United Kingdom” published by the Chartered Institute of Public Finance and Accountancy, as amended or reissued from time to time.’”—(Miatta Fahnbulleh.)

This restricts a non-mayoral combined authority from exercising a function that might impose a financial liability on any of its constituent councils unless those councils have given their consent.

Amendment proposed: 269, in schedule 1, page 80, line 20, leave out paragraph 6.—(David Simmonds.)

See explanatory statement for Amendment 266.

Miatta Fahnbulleh

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I put on record my thanks to hon. Members who are championing specific areas that have a unique identity, which the Government completely recognise. On amendments 43 and 44, I pay tribute to the hon. Members who have been championing the Isle of Wight and its proud history. The Government understand and support the intent behind the amendments, but we will not be taking them forward. Let me explain why.

Earlier this year, Isle of Wight council, Hampshire county council, Portsmouth city council and Southampton city council submitted a joint expression of interest in the Government’s devolution priority programme. They went through a consultation process, based on the proposed name of Hampshire and the Solent. This was not imposed by the Government; it came as a proposal from the local area, and on that basis a public consultation was conducted.

It is worth saying that of the 6,000 responses we received, only a small minority commented specifically on the name of the proposed combined authority area. The Government’s response to that consultation is online, if hon. Members want to look at it. It is important to say that once it is established, it is completely open to any combined authority or combined county authority to change its name by resolution, with the consent of its members and using existing powers. That is already in the Bill. The Liverpool city region combined authority and the South Yorkshire mayoral combined authority have both changed their names in the same way. There was no constraint from Government; the powers are there. It is within the gift of local areas to go ahead and do that.

Miatta Fahnbulleh

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I do not have those figures, but we can write to the hon. Member with them. However, the principle remains that the power is there. It is within the gift of constituent authorities; it is not being imposed by Government. If there is a name change that the combined authority wants to take forward, it can take it forward. We have seen that in Liverpool and South Yorkshire. There is no constraint from us. It is a determination for, and with the consent of, the constituent authorities. It is within the gift of Hampshire and the Solent to make that change.

Miatta Fahnbulleh

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I say gently to hon. Members that we absolutely recognise the desire. I have had multiple conversations with the leader of Isle of Wight council, who was enthusiastic about this devolution deal. It is within the gift of constituent authorities to change their name; it is not for Government to impose. I hope that there is now a constructive conversation and relationship among the leaders of all the different parties. The leader is an independent politician, and I hope that in that spirit they will move forward.

I recognise the uniqueness of the name, but what really matters is what devolution will deliver for residents and constituent authorities. I hope that as much energy and time will be put into the nuts and bolts, the bread and butter, and the impact of what we are trying to do through devolution as will be put into the name. However, I recognise the particular sensitivities in relation to the Isle of Wight.

My hon. Friend the Member for Camborne and Redruth spoke about the issue of Cornwall. He has been a long-standing champion of Cornwall and its distinct identity. He has prosecuted the case incredibly effectively, not just in the context of this debate but across the piece. He is a proud Cornishman and I know that he wants the best for his constituents. I have put it on record in Committee, and I do so again, that we recognise the uniqueness of Cornwall. We are keen to continue engaging not just with my hon. Friend, but with other Cornish MPs, to ensure that we recognise that uniqueness and status and, critically, that we are doing a set of things that can enable local leaders to respond to the challenges—

The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)

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The amendment would require the Secretary of State to publish a statement when directing the establishment of a new combined authority, setting out how the proposed combined authority would affect the physical geography, community identity and boundaries of other public services in the local area. I have no doubt that the intention of the hon. Member for Stratford-on-Avon is absolutely right and that such matters are important; as I have said, the examples of the Isle of Wight and Cornwall highlight that. In practice, however, such matters will already have been considered through the process set out in the Bill.

In deciding whether to establish a new combined authority, the Secretary of State will already be required to have regard to the likely effect on the exercise of functions in neighbouring local government areas. In addition, the Secretary of State is already subject to the statutory tests requiring them to have regard to the need to secure effective and convenient local government in relation to areas of competence. The proposal itself can be expected to cover those issues. There is therefore no need for a separate statement, and so I hope that the hon. Member will withdraw the amendment.

Miatta Fahnbulleh

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On Hampshire and Solent, for example, our conversation was very candid. The leaders were clear about some of the debates that they had had within the council; as the Minister, I said what opportunities would be open to them, and I expressed the fact that in the context of the Isle of Wight, the name was completely down to the constituent authorities. We support constituent authorities working together collaboratively to ensure that all the constituent parts are happy with the deal and the proposal.

On Cornwall, I believe that the Secretary of State, my boss, had those conversations, but I have also had some with MPs. We absolutely recognise the uniqueness of Cornwall and its identity. There are clear things that we know Cornish MPs and the council want, such as protection for the Cornish language, which we are in discussion about. There are clearly opportunities to build on the existing devolution deal. The previous Government provided a devolution deal for Cornwall in recognition of that exception. Another issue might be housing, which is big in Cornwall, for example, and the area is especially exercised about that, in particular in the context of the impact of tourism. We are happy to have a conversation about continuing to support the local authority to make inroads on some of those issues.

Question put, That the amendment be made.

Miatta Fahnbulleh

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Once the Bill comes into force, there will be various ways in which functions can be conferred on a combined authority or combined county authority that will be operating as strategic authorities. The clause makes the necessary amendment to existing legislation to clarify these wider options. It is a small but important clause that will ensure our new devolution framework can operate effectively.

Miatta Fahnbulleh

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Moving from devolution by deal to devolution by default is at the heart of the Bill. Clause 6 and schedule 2 are essential to achieving that. The Bill ensures that strategic authorities have a consistent set of functions, and these provisions standardise how they exercise those functions. Many existing strategic authorities have complex and varied arrangements for agreeing fundamentals such as budgets and transport plans. That makes it hard for the public to understand how decisions are made and, therefore, to hold the strategic authority to account.

The provisions in clause 6 and schedule 2 would create a transparent and consistent default voting arrangement—a simple majority. It would unblock decision making to ensure that the right decision, even if it is difficult, can be made. In mayoral strategic authorities, the mayor must be in the majority for a vote to pass. Mayors are directly accountable to all voters in their area, so it is right that decisions cannot be made if they disagree. The Government expect mayors and other strategic authority members to continue to work together to build consensus. We heard time and time again in the evidence sessions that the model works well when the mayor works in partnership with its constituent authorities, but it is important that one member cannot get in the way of the right decisions being made for the entire area. It is therefore imperative that clause 6 and schedule 2 remain within the Bill to ensure that mayoral strategic authorities can operate effectively, and to provide the public with clarity on how decisions are made, so they can hold these institutions to account.

Miatta Fahnbulleh

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I will respond to the amendment to clause 48, and then I will pick up the specific questions from the hon. Member. The GLA has a different and long-established governance model. In London, the mayor is elected by the people of London to make decisions; the Assembly’s role is to scrutinise those decisions. As a London MP, I think that model has worked well for London for well over 25 years. It is tested and it strikes the right balance between the executive authority of the mayor and the scrutiny of the Assembly.

Miatta Fahnbulleh

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We think that the model works well. We have heard representations from constituents, local authorities, Assembly members, and the mayor himself. Any model needs to evolve; as we think about how we expand the powers of the mayor, which we want to, we will also be thinking about reforming the GLA to make it fit for purpose in the 21st century. We will take into consideration some of the points that have been made in this Committee.

On the specific question about decisions at the strategic authority level putting an individual local authority in breach of its legal obligations or jeopardising its financial viability, all our experience of combined authorities is that they always operate within the legal duties of constituent authorities. I struggle to think of an example where constituent authorities have been put in such a position by their mayor and the decisions of the collective. There are sufficient safeguards in place to mitigate that risk.

I hope that majority working will benefit the collective area. This Government will make sure that clear legal obligations on constituent authorities are not breached. I am happy to write to the hon. Member to provide further reassurance on that point. I think we agree that we want clear and effective decision making with a democratic mandate, that will not jeopardise individual authorities by forcing them to breach their legal requirements and/or putting them in financial distress.

Miatta Fahnbulleh

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I thank the hon. Member for that very detailed and specific example. The concerns he raised have been heard and noted. Both in practice and principle, ensuring that no constituent authority is put in either financial or legal jeopardy underwrites all of this. I will take the hon. Member’s points away and write to provide the relevant reassurances.

Miatta Fahnbulleh

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Clause 7 is a small but important clause that supports the wiring of our new devolution framework. As hon. Members will know, the Bill introduces a systemic approach, ending one-off deals and creating a standardised devolution framework in which strategic authorities and mayors are given a clear and coherent set of functions. However, the Government recognise that it may, on very rare occasions, be necessary to tailor the exercise of specific functions to reflect local circumstances and to preserve the smooth running of public services. Clause 7 provides that existing powers that allow Ministers to modify how a function is exercised by an individual combined authority or county combined authority can continue. Exceptions will be rare, but this flexibility, where appropriate and necessary and where it reflects local circumstances, will be essential to ensure the smooth running of public services.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8

Combined authorities and CCAs: designation as established mayoral strategic authorities

Question proposed, That the clause stand part of the Bill.

Miatta Fahnbulleh

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The devolution White Paper set out our commitment to introduce a new category of established mayoral strategic authority, representing the highest level of devolution in England. The clause delivers on that commitment. It enables a mayoral strategic authority that meets the eligibility criteria set out in the English devolution White Paper to submit a written proposal to the Secretary of State for designation as an established mayoral strategic authority. Designation will provide a strategic authority with access to the highest level of powers and functions in the devolution framework, as well as the right to request additional devolved functions and eligibility to receive an integrated funding settlement.

In the event that a Secretary of State decided not to designate an authority as an established mayoral strategic authority, they would be required to notify the authority in writing of the reasons for their decision. It would remain open to the authority to submit a fresh request at some future point. Importantly, once an authority has been designated as an established mayoral strategic authority, it will not be possible for Ministers to remove its status through secondary legislation. In that way, we will hardwire the powers and functions of established mayoral strategic authorities into our system of government, future-proofing arrangements against unnecessary change and ensuring permanent and enduring devolution.

Miatta Fahnbulleh

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The clause does two things. The proposal to become an established mayoral strategic authority will come up from the locality. The power is about the ability of the Secretary of State to designate it as such at its request; it is not about the Secretary of State imposing the status on any area. Critically, it will lock in the established mayoral authority for good, and will, in fact, contain and curtail the power of future Secretaries of State to decide that they will change the status of an established mayoral authority, therefore locking in devolution for the long term.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Appointment of commissioners by mayors

Miatta Fahnbulleh

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I beg to move amendment 68, in clause 9, page 11, line 19, leave out from “function” to “, or” in line 20.

This would omit this wording is because of its replacement by the new section 30A(2) of LURA 2023 (see Amendment 220).

Miatta Fahnbulleh

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Government amendments 68 and 69 are consequential to Government amendment 220, which we will discuss later. Government amendment 220 will ensure that responsibility for fire and rescue functions sits directly with the elected mayor, who can delegate them only to a public safety commissioner and not to deputies or officers, thereby strengthening accountability. Government amendments 68 and 69 simply remove wording that will be superseded should Government amendment 220 be accepted.

Amendment 68 agreed to.

Amendment made: 69, in clause 9, page 12, line 7, leave out from “function” to “, or” in line 8.—(Miatta Fahnbulleh.)

This would omit this wording is because of its replacement by the new section 107DZA(2) of LDEDCA 2009 (see Amendment 220).

Question proposed, That the clause, as amended, stand part of the Bill.

Miatta Fahnbulleh

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The public rightly expect that mayoral strategic authorities will have access to the expertise they need, that they will work with businesses and other stakeholders, and that mayors will work full time to deliver for their communities. Mayoral strategic authorities will undertake critical new functions, including a stronger set of planning, transport and skills powers and, increasingly, police, fire and public health duties. The authorities will also represent their region in engagement with national bodies, and undertake joint working with partners. It is simply not realistic to expect a single mayor to do all that on their own.

The appointment of commissioners will be a local decision and no additional funding will be provided. I will gladly take Members’ questions now, but when we discuss schedule 3 in four groups’ time, I will expand on some of the checks and balances we are introducing to ensure that commissioners add real value to local decision making. I commend clause 9 to the Committee.