Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority Order 2014
Baroness Stowell of Beeston
That the Grand Committee do consider the Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority Order 2014.
Relevant documents: 24th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, the order we are considering this afternoon, if approved, will bring about the establishment of another combined authority in another major area of our country—this time across the area of Durham, Northumberland and Tyne and Wear.
The order is very similar to those that the Grand Committee considered on 24 March, and I am happy to report that the combined authorities for the areas of greater Merseyside, South Yorkshire and West Yorkshire were established on 1 April. Noble Lords may also recall that I explained to the Committee then that the establishment of the combined authority enables the councils and their partners to work together more effectively and efficiently to promote economic growth, to secure more investment and to create more jobs.
The establishment of this combined authority opens the way for more effective collaboration between the councils and their partners to pursue more efficiently economic development and regeneration. Crucially, all the drive and initiative for establishing the combined authority has to come from the places involved. It is a process where the first steps are taken by the councils involved—what we sometimes call bottom-up.
As with the others, this combined authority will be responsible for economic development, regeneration and transport across the functional economic area. The combined authority will take over the transport functions currently exercised by the Tyne and Wear Integrated Transport Authority, which will be abolished when the combined authority is established. The combined authority will also undertake similar transport functions currently exercised by Durham County Council and Northumberland County Council. The seven councils within the area have agreed that the combined authority will be able to exercise their functions on economic development and regeneration.
By taking on those functions, the combined authority will be central to delivering the outcomes envisaged in both the Newcastle City Deal and the Sunderland and South Tyneside City Deal, the latter of which the Government have recently agreed. The combined authority will also provide the governance needed for any future growth deals drawing on resources of the local growth fund.
As I set out to the Grand Committee the other week, the Government’s approach to combined authorities is one of localism, which reflects our belief that residents and their representatives are best placed to decide what happens in their area. Where councils come forward with a proposal for a combined authority that commands wide local support and we consider that the statutory conditions have been met, we invite Parliament to approve a draft order to establish the proposed combined authority.
If in future local councils decide that changes are in the area’s best interest—perhaps another council joining, or one leaving—and statutory conditions have been met, we would bring a new order to Parliament for approval to enable the change to take place. What is important here is the area’s best interests.
We have considered the particular circumstances of this proposed combined authority, as made by the councils, against the statutory conditions, as the law requires, making sure that the proposal: is likely to improve the exercise of statutory functions relating to transport, economic development and regeneration in Durham, Northumberland and Tyne and Wear; is likely to improve the effectiveness and efficiency of transport in Durham, Northumberland and Tyne and Wear; and is likely to improve the economic conditions in Durham, Northumberland and Tyne and Wear. The Government consider that the tests are unambiguously met. The Government have also had regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government. Further, we are clear that the combined authority would command wide local support—from local businesses, other public bodies, and local people and their democratically elected representatives.
The draft order specifies the formal, legal name for the combined authority to be the Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority. All those councils have consented to that legal name but, as we discussed previously, how that authority will brand itself, including the use of any brand name, will be entirely a matter for the combined authority. That was an important point that we debated the other week, and I am sure it will be raised again by noble Lords in the discussion that follows. The draft order makes provision: for the abolition of the Tyne and Wear Integrated Transport Authority; about the transport and economic functions that the combined authority will have; and about its membership and constitutional arrangements. The combined authority will be for a larger area than that currently covered by the Tyne and Wear Integrated Transport Authority, reflecting the functional economic area. Accordingly, the combined authority will also have some of the transport functions currently exercised by Durham County Council and Northumberland County Council.
The combined authority will be governed by its members and subject to scrutiny by one or more committees with a membership drawn from members of the councils concerned, to hold the combined authority to account. As we discussed previously, good governance practice will mean that such committees will be politically balanced, enabling appropriate representation of councils’ minority parties in the governance of the combined authority. I am pleased to inform the Grand Committee that, following my exchange with my noble friend Lord Shipley during the debate on the other combined authorities, the Government have now written setting out the good practice guidance, and a copy of that letter is being published on the Government’s website. We, of course, intend to write to this combined authority in similar terms.
Noble Lords may have seen that the councils concerned with the combined authority have already confirmed that its constitution will be formally adopted at its first meeting and provides for a politically balanced overview and scrutiny committee of two members from each constituent authority, in line with good practice. Combined authorities are also subject to the same transparency and audit requirements as local authorities, so the combined authority will be audited by an external, independent auditor. Meetings of the combined authority and its committees are open to the public and minutes of the meetings are made publicly available, in the same way as for local authorities. In future, people will have the right to film and use social media to report on council meetings; that applies equally to meetings of combined authorities as it does for local authorities. Again, noble Lords may have seen that the councils have confirmed that the meetings of both the overview and scrutiny committee and the combined authority will be open to the public and their minutes published.
This draft order will enable the seven councils concerned and their partners to work together more effectively to deliver economic growth across their areas. Establishing the combined authority is what the councils and their partners in these areas want, because they believe that it is the most effective way for them to do what councils across the country should be doing: putting the promotion of economic growth at the heart of all that they do. That is a priority for them, and a priority for the Government. I commend the draft order to the Committee, and beg to move.
Lord Adonis (Lab)
My Lords, I strongly support the order and I commend the noble Baroness for the extremely able way in which she introduced it—though, taking up her point about the title, it is one of the greatest mouthfuls in the history of mouthfuls. I am sure that the authority will rapidly come to be known as the north-east combined authority, which is the right thing.
Two years ago I was privileged to chair the North East Independent Economic Review. My fellow commissioners included the then right reverend Prelate the Bishop of Durham before he was translated—or as some in the north-east think, demoted—to become the most reverend Primate the Archbishop of Canterbury, and the noble Lord, Lord Curry of Kirkharle. The key recommendation of that review was for a combined authority, broadly as proposed in this order, uniting seven authorities of the region, together with the local enterprise partnership, with a mission to improve transport, infrastructure, skills and economic development in the region.
I pay tribute to the chair of the local enterprise partnership, Paul Woolston, and his team, and to the leaders of the seven local authorities for embracing this agenda, which has led to the order before us today. I also congratulate Simon Henig, the leader of Durham County Council, on his election as chair-designate of the combined authority, and I am also very glad to see that all seven leaders of the local authorities within the north-east region are taking constructive leadership roles within the new combined authority.
This order is about the legal structure and mechanisms of the combined authority. However, it cannot be stressed too much that the combined authority is a means to an end. The report of the independent review highlighted five priorities in particular, on which we very much hoped the combined authority would focus. First, we hoped that it would champion North East International, promoting the region at home and abroad as a magnet for trade, talent, tourism and inward investment. The north-east is doing very well on inward investment. It is the only region of the country with a positive balance of trade. Nissan is one of the most successful exporters in the country, and I am delighted that recently another major Japanese exporter, Hitachi, has also invested in the north-east. It is creating upwards of 700 jobs and is at the moment constructing its new factory in the north-east. However, much more can be done. As those companies have said, they are sure that the north-east could do even better in attracting inward investment and using it as a basis for exporting to the continent. I am glad to see the noble Lord, Lord Wrigglesworth, the former chair of the Port of Tyne in his place. The ports in the north-east are excellently placed for exporting to mainland Europe. The potential for using the north-east as a platform for significant further exporting industries is huge with the right economic infrastructure in place.
The second priority that we identified for the combined authority was doubling the number of youth apprenticeships to tackle the evil of low skills and high youth unemployment, alongside higher skill standards and an increase in the proportion going on to higher education. The north-east needs a further skills revolution. It will not be able to compete successfully without higher skill levels. Regrettably, it has a lower than national average proportion going on to higher education and fewer than one in 10 of 18 year-olds goes on to an apprenticeship. That situation needs to change radically if the north-east is to be able to compete. A focus on a really significant improvement in skill levels by the combined authority is important.
The third priority we identified is the development and strong innovation in growth clusters, stimulating universities and their graduates, existing companies and public institutions to create and finance new high-growth enterprises and jobs. The north-east has four outstandingly good universities that are all strongly committed to economic growth and regeneration within the north-east, and the combined authorities of which their representatives would also be members through the local enterprise partnership could make an important contribution there, too.
The fourth priority identified was the need for big improvements in transport infrastructure and services to overcome the relative national and international isolation of the north-east, and to improve connections within the north-east so that people can get to and from work more easily. It cannot be emphasised too strongly that transport connections and improvements in national and international connectivity are crucial for the future of the north-east. The west coast main line has significantly improved in recent years, which has brought Manchester and the north-west relatively closer to London. The journey times on the east coast main line have regrettably slowed down over the period. Despite the debate that we had within the north-east economic review about what we hoped was the imminence of a transatlantic flight starting from Newcastle Airport, that still has not happened, and improving transport connections will be important. Within the region, there is significant room for improvement in the ITA’s activities but it has done good work. However, this order also brings County Durham and Northumberland within the ambit of the combined authority, and that could be very beneficial for improving transport connections within the region.
Fifthly and finally, we identified the need for the creation of stronger public institutions, including the location of key national institutions in the north-east. In the report we identified the British Business Bank as a possible candidate for location in the north-east. I regret to say that that opportunity was passed by, but there are many other candidates that we ought to review. In what noble Lords think was one of my more quixotic moments, I even suggested that your Lordships’ House might be relocated, and I cannot think of a better location for it than the north-east. However, I mainly offer that as an illustration of the possibilities that might be available.
Lord Shipley (LD)
My Lords, I, too, strongly welcome the draft order. I agree with every word that we have heard from both the Minister and the noble Lord, Lord Adonis. It is a tribute to the noble Lord’s leadership—this was one of the five key recommendations that arose from the north-east economic review—that we are in the position that we are today. There has been a lot of discussion on the way, and I hope that discussion is now at an end; as the noble Lord has said, the combined authority is a means to an end. It has to achieve real outcomes, and for that it has to work with a clear understanding of its remit, with clear joint working with the local enterprise partnership and with the support of all parts of the north-east combined authority area, both rural and urban.
I thank the Minister for what she said and particularly for having issued guidance on the issue of transparency and membership, following the discussion that we had about greater Merseyside, West Yorkshire and Yorkshire. I am particularly pleased about the specific draft order because it represents another step in the gathering pace of devolution and decentralisation in England, and because combined authorities provide a structure within which that devolution and decentralisation can be achieved. There are now several combined authorities in place deriving from the legislation of 2009, and I am really very pleased that that has been achieved. It is very welcome because, as so many local authorities now realise, sharing power can drive faster and more sustained growth, both in the functional economic area that they are part of and in their own council area.
I shall not repeat here some of the things that I said about greater Merseyside, West Yorkshire and South Yorkshire, except to say this: I think it will be important for this combined authority to demonstrate clearly its capacity to cover rural as well as urban issues, to work very closely alongside the LEP and to include opposition political parties at every level in what must be an open decision-making structure. This is because we know that councils working together will achieve more than if they just compete with each other. Investment and risk can be shared and co-ordination can be more effective.
More broadly, I have every confidence that combined authorities will prove a success in taking on greater powers. That leads me to suggest two ways in which further devolution might start to be considered.
First, once they are working effectively, the next step for combined authorities might be to secure London-style powers in transport and strategic planning, among other areas. It is hard to see why London should have a different set of powers from other cities or why the combined authorities may have slightly different powers and responsibilities from each other. The right way forward seems to be to move towards a common approach.
Secondly, other major natural sub-regions do not have a combined authority and could benefit from having one, or at least a more formal structure for collaboration. I hope that the Government will now encourage this as we move on from the combined authority orders that we have had in recent weeks.
I will make one final, important point. In all that I have said, the role of the local enterprise partnerships will be essential to the success of the combined authorities. They must have a clear strategic purpose and a clear leadership role, and they must remain at the heart of delivering economic growth in their areas.
As in Greater Manchester, the LEP and the combined authority each has a key role to play in driving jobs and growth. The same can be true in the other combined authorities, in particular in this one, and I wish it every success. As the noble Lord, Lord Adonis, made absolutely clear, a combined authority as a structure is a means to an end, but not the end in itself.
Baroness Quin (Lab)
My Lords, I, too, believe that what we are considering today is a very significant and welcome development, and echo the comments that were made on this by both previous speakers.
This combined authority brings together authorities of a distinctive part of the country, which have a common heritage. In many ways it is the core of the north-east and, if we go back even further, of the kingdom of Northumbria, although that covered a much wider area. It has a very strong industrial vocation, which it has had since the beginning of the Industrial Revolution, and still has a manufacturing and industrial vocation today, as well as many of the related skills of those sectors. Certainly the area covered has an economic coherence, which is important when we are talking about a combined authority, one of the main objectives of which is to be the promotion of economic development.
This move can also be very significant as regards transport, which was mentioned by my noble friend Lord Adonis. To pick up on a point made by the noble Lord, Lord Shipley, it is good that in the combined authority we are bringing together urban and rural areas, particularly on transport issues. The authority will be able to make a success of bringing closer to the Tyne and Wear conurbation, through transport infrastructure, what we think of as the outlying areas of the old Durham and Northumberland coalfields, which are perhaps not classically rural, but which have become semi-rural today. There is a real need for people there to be able to access easily and successfully the conurbation itself.
The authority is an excellent basis for co-operation with the economic forces within the area. Certainly the authorities concerned are used to working with both industry and representatives of employees’ trade unions. It was the area where the regional development agency was the most successful and where good relationships, despite the change, have already been established with the LEP to try to promote the economic development of the area as positively as possible.
I very much echo what my noble friend Lord Adonis said about the excellence of universities in the area concerned. Again, they have a tradition of working together and of working with the wider community, in particular as regards research and development, looking for advantages for the local and regional economy as well as the wider economy.
I, too, echo what was said about the welcome investment we have seen, particularly the recent announcement about Hitachi. My only slight reservation here is that while I am delighted that Japanese investors have seen the potential of the north-east, I still urge British investors to look closely at the region, perhaps more than they have done. There is still a bit of a psychological north-south gap in that respect. It always seems to me that British investors do not fully appreciate what a great place the north-east is in which to live and work, and the fact that it has a positive trade balance and great economic assets and potential which need to be exploited.
I am glad that the council with which I have been most associated in my career, Gateshead Council, is a key part of this organisation. I always like to pay tribute to it at every possible opportunity; I happen to think that it is the best council in Britain. It has a proud record as a public entrepreneur, working with private industry and being very outward-looking in order to promote the regeneration of the region. I believe that the combined authority, too, will be able to work alongside the private sector and make a very successful public/private partnership. Very often, we see these two things as opposites, but I know from my experience that it makes huge sense for these sectors to work closely together for the future benefit of the region.
I conclude by again wishing this project every success. I hope that it will co-operate with neighbouring areas, both to the south on Teesside and to the north in Scotland—where I hope it will be able to continue to do so following a successful no vote in the Scottish referendum later this year. I am sure that, given the outward-looking nature of this enterprise and of the councils and the people involved in it, it will have every success. I think that this debate today, with the warmth of the tributes that have already been paid to the project, is strong evidence that that will be the case.
Lord Walton of Detchant (CB)
My Lords, I shall speak very briefly because I have to confess that local government is not a matter which usually brings my interest to the attention of your Lordships. However, the order gives me the opportunity to make one or two personal remarks. I was born in a little place called Rowlands Gill, the son of a schoolteacher and the grandson of a miner. I went then to a little school at the Hobson colliery near Burnopfield in Durham county and later to a grammar school in Spennymoor, County Durham, before moving to the medical school in Newcastle, which was then part of Durham University.
I feel a great loyalty to the north-east of England, which has meant a great deal to me throughout my life. I now live in north Northumberland, but I spent much of my professional life in Newcastle. I am greatly honoured by the fact that, in 1980, 34 years ago when I was dean of the medical school in Newcastle, I was one of eight people honoured to become an honorary freeman of the City of Newcastle. I know that the noble Lord, Lord Beecham, played a part in that particular decision. Five of the eight honorary freemen were former lord mayors; the other four were Colonel George Brown of Newcastle Breweries, Cardinal Hume—whose father, Sir William Hume, was professor of medicine at Newcastle and taught me briefly as a medical student in wartime—and then Jackie Milburn and me. I shall never forget that, in his speech of acceptance on behalf of all the honorary freemen, Cardinal Hume said that it was the greatest day of his life—because it was the first time that he had an opportunity of meeting Jackie Milburn. That was his remark, which I have always remembered since that time.
I come to the reason why I am so enthusiastic about this new organisation. Its name is not exactly characterised by brevity, but it seems to me nevertheless to be the proper name for it because some of us look back upon the ill fated Tyne and Wear authority of many years ago. What that authority did was to impose an additional layer of bureaucracy on local government throughout the north-east. Within a few years, seeing that everybody had to recognise that almost every decision had to be stamped by the Tyne and Wear authority and discussed by it, even if it should have been made at local council level, that authority had to be dissolved. This is why I am glad that the new authority will not be called the Tyne and Wear authority, which I think would bring back to many people unhappy memories.
It is good to know, according to the information we have been given, that this new combined authority will use a light touch in its relationship with the local authorities. As such, it will continue nevertheless to have an extremely powerful voice. I am very glad that it is going to exercise its authority in collaboration with the local enterprise partnership. This means that it will probably bring back and be able to implement many of the policies which were, I think, effectively carried out by One North East. This should be greatly welcomed. It is good to know that the combined authority will have an overview and scrutiny committee made up of members across the parties, thereby increasing transparency and accountability. As a proud Northumbrian, I welcome the establishment of this new authority.
Lord Wrigglesworth (LD)
My Lords, it gives me great pleasure to support the comments that have been made by other noble Lords during the debate and to support the draft Order.
I think everybody these days is in favour of extending resources and power to the people and decentralising power. Many of us have been in favour of it for a very long time. Getting government to do it is another thing. I can think back very many years and the resistance of Whitehall departments to devolving people, power and resources to the regions. It is therefore a very welcome step today to see the combined authority being established and I hope that the united support of the region will enable it to get the resources and enhanced powers that my noble friend referred to in the future.
However, the region is undoubtedly facing many challenges. I want to refer to the central challenge for this organisation and others in the region in the years ahead. Before doing that, I will say a word about what I think is of absolutely crucial importance: the relationship between the combined authority and the LEP. They both have the job of building up the economy of the north-east, which is central to the interests of the region, the people who live in it and the national economy. That can be done only if those two bodies work harmoniously and closely together.
As well as being chairman of the port, to which the noble Lord kindly referred, I have spent the past 25 years—I declare a continued interest in this—building industrial estates and offices around the north-east. I think I have probably done more to regenerate the north-east in that capacity than I ever have done in Westminster. I have certainly created a lot more jobs. However, I have seen it from a worm’s-eye view in relation to local authorities and other bodies that are responsible for development. As a developer of industrial estates and offices, I can tell you that it is sometimes a nightmare dealing with so many different bodies in the region that are dealing with the same thing. I see this happening with the LEP and with the local authorities. That is why I say that they have to work harmoniously together. They have to do it also in relation to inward investors. I was a director of the Northern Development Company and we had a very good routine which we had worked out with the local authorities so that they each got a turn when an inward investment came along. Those of us who were involved will recall that the debates over where Nissan was going to be placed within the region were extremely difficult but were resolved, successfully. The task of doing the job with inward investors, developers and other investors is crucial.
I assume each local authority is going to continue with its own economic development department. How are they going to relate to each other? Seven economic development departments—that is a pretty big number of people and a big budget—and the LEP will be doing very similar things. I am not going to prescribe how it should work; I just want to flag it up as one of the crucial issues if this new arrangement is going to succeed. If there is a will, it will succeed. I hope that the economic development departments of the local authority, because of the success of the LEP and because of the whole thing, will gradually wither away and will not be seen to be as necessary, as they have often been in the past by individual local authorities.
I have those reservations but, to me, the crucial issue for the region and for the development of its whole economy is not to do with the physical infrastructure; it is to do with our people. The reason we have a millstone around the economy of the north-east is that we have too many people who do not fulfil their great potential. Look at the LEP economic plan: it has highlighted that as one of the most important issues facing us. I hope that the combined authority, the LEP and everybody in the region will do whatever they possibly can to help all the Easingtons and the Benwells—we know the places in the north-east—that have people leaving school without qualifications of a high enough standard to be able to get them into the labour market. That is the challenge above all for the north-east.
The substantial growth of apprenticeships has been one of the most encouraging things that one could have imagined. I checked the figures: we have 61,000 apprentices in the region, a tremendous number. That brings hope to those many young people who get training of that sort, but there are many other skills that they have to get—computer skills and all sorts of modern skills to deal with the businesses expanding in the region today. Look through the names of all those businesses that have had money from the regional growth fund: what a wonderful roll call of high-tech, pharma, engineering and other businesses. They are just the sort of businesses that we all want to see, many of them exporting products throughout the world. However, to work in those businesses, you need qualifications.
The focus of all of us in the region, and of the organisations in the region, must be on those people who have not been able to achieve their full potential and will not be able to in the future unless they are given the tools to get the jobs available to them. I very much hope that the new combined authority will work well; it certainly has my best wishes, and I am sure that we in this House will do everything to support it. The whimsical comment about this House possibly moving to the north-east would no doubt please many people in the Room today. I would only say that if any whimsical person should come along and take it seriously, there is a wonderful county hall becoming available in Morpeth. It has a wonderful chamber and lots of administrative facilities. We could move there overnight, almost. That would make up for the bank that we did not get to which the noble Lord, Lord Adonis, referred. I wish the organisation well and look forward to seeing it operating.
Lord Scott of Foscote (CB)
My Lords, I have a short point about the order, which came in front of the scrutiny Select Committee of which I have the honour of being a member some weeks ago; I made the same point there. It relates to the name of the new combined authority. It will of course be a corporate authority in its own right. It may sue and be sued in its proper name. My recollection of the wording of the order is that it states that the combined authority shall be “known as” and then sets out the name. I said on the previous occasion—I repeat it—that it is an absurd name for a corporate entity. It would be easy for somebody to make a slight slip and get the name wrong, upon which the lawyers might go to town and deny the proposition that action has been properly brought or defended, as the case may be. In the Select Committee, I suggested that a provision be added to the order to say that the new combined authority may sue or be sued as the “north-eastern combined authority”. I do not know whether that has been done; I imagine that it has not, but if it has not it really ought to be.
Baroness Armstrong of Hill Top (Lab)
Part of the problem is that the new combined authority does not cover the north-east. I am sure that the Minister replying will want to—I am sorry; I thought that the noble Lord from Teesside was replying. However, this problem is where we are and I am very supportive of what we have got.
However, I must be getting old. We have been around these houses time and time again. When I was first elected to Parliament in 1987, my good friend and neighbour, now my noble friend Lord Radice, brought forward a Private Member’s Bill to establish a north-east assembly. Governments have responded to these proposals, but the next Government then want to unpick everything that has been done and we start again. I do not want to bear a grudge today, but the Government have taken us around the same sort of territory yet again. We will do it, because what we in the north-east want more than anything else is for our region and the people living in it to have every possible opportunity. I am sorry that the region has now almost been split in two. It is not a large region, and the region as a whole should be coming together and acting together. However, that was undone in the first years of the coalition, and we are not going to get back to that, even though folk like me get a bit worried about it every now and again.
I pay tribute to my noble friend Lord Adonis. He did a magnificent piece of work for the north-east LEP—as it is called, even though it does not include Teesside. He did a really good job of getting people who were fed up with what was being done to them from London around the table to think about the future and what the priorities should be. In his report he identified the key priorities for the region. I looked on it as an exemplary piece of work from a member of the Opposition working in a cross-party way and making sure that the Government knew exactly what was going on. We in the region owe him an enormous debt of gratitude.
I did not have quite the same view of Tyne and Wear met as the noble Lord, Lord Walton. Apart from anything else, the one good, important thing that it did—even if it did nothing else—was to identify and secure large pieces of land for development. I suspect that Nissan would never have come to the north-east if it had not been able to get permission on such a large site with the potential for further development. You needed a large organisation, working across authority boundaries, to come up with those sites. That has been important in our development. I hugely welcome Hitachi coming to Newton Aycliffe with the promise of many more jobs.
As the noble Lord, Lord Wrigglesworth, said, that also really heightens our focus on getting skills. This morning I was with people from Sunderland and the chair of the university council, Paul Callaghan, who was for a short period chair of the regional development agency until, two weeks later, the Government had a different idea about them. He runs a significant global IT company. He has just opened his offices in Australia and is now looking to four other countries; he has them already in America and goodness knows where else. That is a Sunderland-based company that is at the absolute forefront of IT. He chaired a conference a couple of weeks ago on bringing together IT companies in the region, and said that while they do not have problems with premises or local authorities, the one thing they have problems with is getting a suitably skilled and educated workforce. That was from about 70 local companies. This needs addressing, and the combined authority is really going to be pushed to come together to address this across the board. It is a real challenge to our universities. We have good universities in the region; Sunderland has been acknowledged as the university that does most in the country about widening access, and that is very important in our region because we still have the lowest proportion of young people going into higher education.
Baroness Williams of Trafford (Con)
My Lords, I apologise for arriving late for the Minister’s introduction. As one of 10 leaders who worked in the Greater Manchester authorities in the lead-up to the formation of the combined authorities, I welcome the order today.
The backdrop to this is that nearly 30 years ago in Greater Manchester we had something called the Association of Greater Manchester Authorities, which was, if you like, a voluntary combined authority. We worked together because we wanted to. The combined authorities will have a great ability to strengthen leadership, but will not necessarily create it where it is not there. However, it will give a real opportunity for a strategic approach among those combined authorities that have been set up, and that is the first step towards devolution.
I will comment on a couple of things that the noble Baroness, Lady Armstrong, said about transport just before she finished. It is no great surprise or coincidence that Greater Manchester has been allocated to high-speed stations or that it was so successful as regards the Northern Hub. I declare an interest on both those topics. House prices have seen the greatest increase in Manchester, which has been named the second city. I know that some people would like to think that Hebden Bridge is the second city, but it is in fact Manchester. Manchester Town Hall features so much in television dramas on the Houses of Parliament that if the administrative centre is to be moved, it should be moved to Manchester. I thank noble Lords for indulging me.
Lord Beecham (Lab)
My Lords, I am grateful to the noble Baroness for making a contribution from outside the north-east today. We have heard from seven speakers from the region and, but for the fact that he is a Whip, I dare say that the noble Lord, Lord Bates, would have been contributing to the debate. We are very glad that we have a Minister from the north-east in the Government, at least for the next year. I hope that during that time he will continue—as I am sure he does quietly behind the scenes—to advocate our cause.
It is also a particular pleasure for me that the noble Lord, Lord Walton, contributed to this debate. He has contributed an enormous amount to the region and its reputation. Like him, I very well remember the occasion when the freedom of the city was conferred upon him and others, including Cardinal Hume. I had the pleasure of nominating them all at that ceremony, and well remember the cardinal’s remarks at that time. Perhaps he might have a celestial word with the powers that be in favour of the team which at least the noble Lord and I support, and perhaps also in favour of the team which the noble Lord, Lord Shipley, supports, which is a little further away in Sunderland. We can certainly do with some divine intervention at the moment. I hope that the noble Baroness will receive some of that benefit this evening.
I also thank my noble friend on my left, Adonis to the north-east’s Venus, as it were, whose report was clearly very influential in promoting the cause of the region.
Like those who spoke in last week’s debate—by the way, there were not as many from those four combined authorities as there have been speaking today for just this one—I extend a very warm and unreserved welcome to this order and congratulate the seven local authorities and the Government on this important measure. It follows the creation of the Greater Manchester combined authority some years ago, currently chaired by my noble friend Lord Smith of Leigh, under the auspices of the Labour Government’s legislation. It is right for us in the north-east to thank the local authorities in Greater Manchester for successfully blazing the trail for this new approach to sub-regional co-operation and development. I am glad that one of the leaders of Greater Manchester at that time is with us today.
Even in the closest families, sibling rivalry is often present, and elements of such tribalism in the north-east have existed, and perhaps always will. Thirty years ago, I circulated anonymously, via the then leader of Northumberland County Council, a paper calling for the creation of a north of England councils association, to speak for the region. The association, now the Association of North East Councils—since Cumbria was subsequently hived off to the north-west—survives to this day. I fear it would have been still-born if its paternity had been revealed at the time.
Happily, however, the seven local authorities in today’s order have now come together. They encompass five metropolitan authorities and two counties, with a rich history and culture, fine cities and attractive coastline and countryside. It is not quite the desolate and underpopulated area described by one of the Minister’s colleagues last year in some remarks about fracking. The region’s coalfields, shipyards and engineering works have made a huge contribution to the UK economy, and its people yearn to do so again. As we have heard, overseas companies such as Nissan, Hitachi and Siemens recognise what the region has to offer. However, as my noble friend Lady Armstrong has pointed out, sadly British business has too often overlooked its potential, though in Sage and other companies operating in the fields of high-tech and the biosciences, there are companies able to compete in world markets.
Welcome though the new authority and the two City Deals which have been negotiated are, we have to recognise that the region comprising both the combined authority and Teesside has been ill served by the abolition of the successful regional development agency, the closure of the government regional office, and particularly by the appalling cuts in local government funding, still to reach their estimated total of 40% of local council budgets. The local authorities comprising the combined authority have demonstrably suffered from an increasingly unfair distribution of government grant and a skewed allocation of infrastructure investment to other better-off areas. Even as we hear of the HS2 programme, which will not reach the area for decades, we learn that the vastly expensive Crossrail line is to be extended to Reading, another example of the much higher infrastructure investment per head in London and the south-east.
The combined authority, the LEP and its business partners will undoubtedly seek to use their powers to maximise investment in skills, infrastructure and business support. To do that they will need a fair allocation of resources to, for example, improve transport links within the region and sub-region and to the conurbations of Yorkshire and the north-west, and, I hope, to see the dualling of the A1 to Scotland.
However, other resources need to be harnessed. As we have heard, there are four very good universities in the area of the authority, and several FE colleges. They need to be involved in developing the skills of the area’s young and linked ever more closely with industry, translating research into production, as so often our economy has failed to do.
Similarly in health, education, the environment, culture, leisure and welfare there needs to be strategic co-operation within the combined authority area across the public sector, together with the private and voluntary sectors. The Labour Government proposed the concept of Total Place, seeking to look at the totality of public expenditure across an area rather than from the perspective of service or departmental silos. Will the Government revive what seems to be a flagging concept in the combined authority area, and play their part in ensuring local accountability and locally driven programmes to achieve major strategic goals? In this way, we can better meet the social and economic needs of an area and its people suffering from high unemployment. At the same time, through a drive to share services, efficiency savings can be engendered.
Baroness Stowell of Beeston
My Lords, first, I join the noble Lord, Lord Beecham, in welcoming so many noble Lords with genuine knowledge of the area that we are debating today. I certainly welcome the support of my noble friend Lord Bates alongside me today, although he does not have a speaking role, and noble Lords will have to settle for me instead.
I join the noble Lord, Lord Adonis, in congratulating those in the area who have worked hard together on the proposal for the combined authority. I also want to acknowledge at the start how positive, inspiring and exciting I found all the contributions today—until, perhaps, the noble Lord, Lord Beecham, just now. It is important that we all focus on the opportunities for the north-east and the people who live there.
The noble Lord, Lord Adonis, my noble friend Lord Shipley and, perhaps most powerfully of all, my noble friend Lord Wrigglesworth, talked about the importance of the combined authority being an effective collaboration between the councils, the LEP and all the different interested parties in the area. My noble friend Lord Wrigglesworth said that what is really important is the focus on people—that was echoed by all noble Lords who spoke today—and on making sure that the skills are available in the north-east to take advantage of new inward investment. The point was not lost on me. I certainly share that view and am pleased to be part of a Government who are making a great deal of effort to improve the skills of our young people and promote apprenticeships.
I think that it was the noble Baroness, Lady Armstrong, who mentioned the university technical college proposed for that area. She and others referred to the recent commitment of Hitachi to move its global rail HQ to the UK. It is already planning to build a factory in Newton Aycliffe. It is worth noting that Hitachi is one of the key employers supporting a UTC bid which, sadly, failed its first submission but will be resubmitted for the next round, led by Sunderland University. The college, to be based on the Newton Aycliffe business park, would open in September 2016. I very much hope that we will be able to celebrate that soon, because, like other noble Lords, I feel very strongly about the importance of the arrival of UTCs and their role in our education system.
Many noble Lords referred to the name of the new combined authority. The noble Lord, Lord Adonis, mentioned that it was a bit of a mouthful and somebody else said that it did not trip off the tongue. There are a few important points to make about the name of the authority. First, the noble and learned Lord, Lord Scott of Foscote, queried whether the name would create any legal difficulties. The name has been formally consented to by all seven councils, so I think that we can be confident that there will not be any legal difficulties. As the noble Baroness, Lady Armstrong, mentioned, while the councils concerned asked for “north-east” to be included in the name of the combined authority, in response to the consultation some neighbouring local authorities and the Tees Valley local enterprise partnership asked the Government not to include “north-east” in the name for risk of confusion. So we went for the approach that was signed up to by all the local authorities; that is, to list the names that are in the order. However, as I said in my opening remarks and am happy to restate now, it is very much up to the combined authority to decide what it wants to call itself and how it markets itself to the rest of the country and the rest of the world. That is a matter for it.
The noble Lord, Lord Adonis, said that he expected the authority to be called the north-east combined authority. That is a matter for it, but one of the reasons why the Government were keen not to offer that as a name in the order was that we did not want to imply that there is an additional tier of government. I can reassure the noble Lord, Lord Walton, who gave us an important history lesson, that it is certainly not a repeat of what he described. What we are looking for from this combined authority is for those existing local authorities to collaborate and not to introduce a separate, independent layer of government. To the point made by the noble Lord, Lord Beecham, I say that it is most definitely not a replacement for the RDA; it is not a new tier of government.
My noble friend Lord Shipley asked about more powers for combined authorities. Certainly, we would be interested to hear from combined authorities about what more they believe could be done to empower them to deliver economic growth—from today’s debate, we know of the real commitment from people in the area to get behind that clear strategic objective. However, we should be careful as well not to rush to give new or additional powers to combined authorities before they have been able to exercise what they have already been given, so I would not want to commit to something more prescriptive in addition to what exists already.
My noble friend referred also to other areas having a combined authority. As I said earlier, it is very much for local councils to come forward with their proposals for a combined authority. If they do that, we will consider it carefully against the framework that exists.
The noble Baroness, Lady Armstrong, was clear in the points that she raised about transport being a key part of this new entity’s responsibilities. I agree that transport is a key issue and the combined authority will improve the area’s ability to make the case for transport improvements. Overall, though, it is safe for me to conclude that we are in general agreement that establishing this combined authority will support these councils to drive their commitments to deliver growth and prosperity for their area, a priority which should be at the heart of everything that councils across the country do.
We have already made reference to Hitachi. I agree with the noble Baroness, Lady Quin, that it should not just be foreign firms that are looking to invest in the north-east. I hope that that will not be the case, and that there will be greater investment from national organisations as well.
I am not going to comment on the House of Lords moving to the north-east, but I will commit to a visit to the north-east myself. I regret that I will not be able to do so on HS2, because it would clearly be a long wait before I got there. However, HS2 will bring benefits to the north-east, and I am told that the rail service patterns have not yet been developed but indications to date suggest that HS2 services going on to the north-east will improve connectivity. I look forward to visiting.
I am grateful to all noble Lords for their support and contributions today.