Greater Manchester Combined Authority (Amendment) Order 2015

Monday 23rd March 2015 Grand Committee

Motion to Consider

15:30

Moved by

[Lord Ahmad of Wimbledon]

That the Grand Committee do consider the Greater Manchester Combined Authority (Amendment) Order 2015.

Relevant documents: 25th Report from the Joint Committee on Statutory Instruments, 29th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the draft order was laid before this House on 25 February. It makes vital changes to enhance the leadership capacity of the Greater Manchester Combined Authority in order to promote economic growth and support Greater Manchester in delivering the devolution agreement made with the Government in November last year. As I will discuss with the Council of Europe when I address it tomorrow, the Greater Manchester devolution agreement is part of the Government’s plan to create a northern powerhouse. The agreement will see Greater Manchester having significant additional powers over, for example, transport, housing, planning and policing. These proposals will build on the success to date of Greater Manchester by creating a powerful devolved administration with strong political leadership that can drive through policies to stimulate economic growth and plan strategically across the city, as well as nationally and internationally.

With such powers, it is essential that there is within Greater Manchester leadership which is clearly and directly accountable to the people of Greater Manchester. A central tenet of the devolution agreement is that by 2017 there will be for Greater Manchester a mayor directly elected by the people, but this needs primary legislation. To enhance leadership capacity in the mean time, Greater Manchester leaders have asked us to enable them to appoint an additional board member who will chair the combined authority. This is exactly what the order does.

The draft order amends the 2011 order which established the Greater Manchester Combined Authority. It enables the combined authority to advertise, shortlist and ultimately appoint an additional board member who will chair the authority for a maximum of two years. This person, the interim mayor, will not exercise any functions individually. He or she will have one vote, and no casting vote—exactly the same as the other 10 board members. To be eligible to be appointed as the interim mayor, a candidate must be a resident of Greater Manchester and already hold an elected position; that is, they must have some form of democratic mandate and accountability to residents. This could be as an existing councillor or local authority mayor, Member of Parliament or the police and crime commissioner. The order also sets out the process for resignation and termination, and how the interim mayor’s allowances will be set. Additionally, all the existing arrangements for overview and scrutiny of the combined authority will continue to apply.

We have laid this draft order after following the statutory process for making changes to a combined authority as set out in the Local Democracy, Economic Development and Construction Act 2009. Crucially, it is a bottom-up process. The first steps must be taken by the councils and the combined authority. The Greater Manchester Combined Authority has, as the statute requires, requested this change through undertaking a governance review and preparing an appropriate scheme, and as the statute also requires, the Government have consulted on the proposed change. Having done so, my right honourable friend the Secretary of State for Communities and Local Government is satisfied that if these changes are made, the statutory conditions for such an order will have been met.

In short, making these changes is likely to improve: first, the exercise of statutory functions relating to transport in the area; secondly, the effectiveness and efficiency of transport in the area; thirdly, the exercise of statutory functions relating to economic development and regeneration in the area; and fourthly, the economic conditions in the area. 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.

In conclusion, this draft order will enable the Greater Manchester Combined Authority, an already effective combined authority, to enhance further its leadership capacity in order to deliver effectively the additional powers within the devolution agreement and to help drive growth in Greater Manchester and across the north as part of the Government’s vision for a northern powerhouse. Making this change is what the civic leaders of Greater Manchester want in order to help them to do what councils across the country should be doing: promoting economic growth; that is, putting the promotion of economic growth at the heart of all they do. This is a priority for them and it is a priority for the Government. I commend the draft order to the Committee.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for introducing this order and wish him well with his address to the Council of Europe tomorrow. The order, as we have heard, covers a narrow but very important point concerning the governance of the Greater Manchester Combined Authority. By way of background, we note that on 3 November 2014 the combined authorities endorsed the devolution agreement negotiated with the Government which sets out the new powers and new responsibilities to be transferred but alongside governance changes which will eventually lead to a directly elected mayor being introduced.

Of course this is all part of the northern powerhouse, in recent times seemingly and belatedly so beloved of the Chancellor, with the agreement on an elected mayor referred to in glowing terms in the Budget speech—a new promise for the combined authority to be able to keep 100% of the additional growth in local business rates. We are thoroughly supportive of the Greater Manchester Combined Authority, which was created under legislation of the previous Labour Government, and acknowledge the innovative approach of the authority and its 10 constituent members. Indeed, the briefing note provided by the authority correctly asserts that Greater Manchester has been at the forefront of the debate about fiscal and functional devolution for some time. It states that greater devolution has been a cross-party objective for many years. The stated ambition is to develop a new “place-based” partnership with government over the lifetime of the next Parliament to influence, if not control, all public spending in Greater Manchester.

The thrust of all of this sits full square with our position of wanting, across the piece, to transfer some £30 billion of funding over five years from central to local government to resource transport, skills, employment support, housing and business support. But our ambition is not just to empower cities such as Manchester; it is to empower all parts of England that are prepared to join together in city and county regions. Unlike this Government, we would not give with one hand and take with the other by hitting the most vulnerable communities with the largest cuts.

It is understood that, under the 3 November 2014 agreement, the powers and functions of individual authorities will be retained by them but the combined authority will be strengthened through the transfer of existing powers and functions from central government. Perhaps the Minister will confirm that those cover transport, skills, business support, housing, planning, public service reform and health and social care. A set of governance protocols for the combined authority have been developed to reflect this, which widens and strengthens participation among local members. This has been built on to develop the agreed revised GM model which introduces a directly elected mayor as the chair and 11th member of the combined authority. There will be a cabinet of leaders with clear portfolio responsibilities.

It is understood that the plan is for an elected mayor to take responsibility for the newly gained powers in respect of planning, transport, housing and policing. Perhaps the Minister will confirm that that is so. We are influenced in our acceptance of the model by the fact that the combined authority has itself signed up to it. Clearly, this is all dependent on further primary legislation, which will fall to the new Parliament. It will be known shortly to which party or parties this opportunity will fall. However, so far as primary legislation is concerned, can the Minister say—assuming it fell to his party—what would be proposed in terms of consultation in advance of that legislation? Would the primary legislation require a referendum to approve the creation of an elected mayor? If so, what would happen if a referendum rejected the concept? It has been rejected in the past. Would there be an endless succession of interim appointed mayors? Where would such a rejection leave the devolution agreement?

The deal entered into between the combined authority and the Government is ground-breaking and the issues of governance are clearly an integral part of the negotiations and the agreement. However, can the Minister say whether other forms of additional governance capacity and chairing were considered apart from the elected mayor and the interim arrangements?

How will the interim mayor be held to account? Other members of the combined authority are leaders in their individual authorities, it is understood. An interim mayor may have to initially have held an elected post, but presumably it can be relinquished subsequently, and in any event it may not be the appropriate channel for judging performance.

Finally, the Secondary Legislation Scrutiny Committee of your Lordships’ House has drawn attention to the paucity of the consultation which has taken place in respect of this order. It points out that albeit the order is concerned with an interim appointment, the powers involved are potentially wide. How do the Government respond to that criticism? However, as indicated at the start, we support this order.

[Lord Bradley (Lab)]

My Lords, as the Secondary Legislation Scrutiny Committee pointed out on this interim order for the appointed mayor, there were barely three weeks of consultation, and the only people who effectively were consulted were business representatives and local councils. Although it was on the website, there was very little public involvement in the discussions and the decisions that were subsequently taken. It is essential that, under the forthcoming primary legislation, there is full consultation. Can the Minister give an absolute assurance on the length and depth of that consultation with the public in Greater Manchester? What timetable does he envisage for that primary legislation? If we are to move towards an ultimately elected position, the two-year time period might be shortened in that process.

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lords, Lord McKenzie and Lord Bradley, for their contributions. I welcome the support across the Committee for the way that we are moving forward with Greater Manchester. Various questions were raised and I shall try to answer all of them.

The noble Lord, Lord McKenzie, asked what powers the Greater Manchester Combined Authority will receive. To give a bit more detail on some of the issues over which it will have control, they include: control of apprenticeship grants for employers; power to reshape and restructure the further education provision within Greater Manchester; control of an expanding Working Well pilot with central government funding linked to good performance; the opportunity to be a joint commissioner with the Department for Work and Pensions for the next phase of the Work Programme; and the GMCA and Greater Manchester clinical commissioning groups will be invited to develop a business plan for the integration of health and social care across the area based on the control of existing health and social care budgets.

The elected mayor of Greater Manchester will receive greater responsibility for a devolved and consolidated transport budget with a multiyear settlement to be agreed at the next spending review, for a franchised bus service, for integrating smart ticketing across all local modes of transport and for exploring on an urgent basis further opportunities for devolving rail stations across the Greater Manchester area. The elected mayor will also receive powers for strategic planning, including the power to create a statutory spatial framework for Greater Manchester; control of a new £300 million housing investment fund; control of a reformed earn-back deal with the current envelope of £300 million a year for 30 years; and incorporate the role and responsibilities of the Greater Manchester police and crime commissioner.

15:44

The noble Lord, Lord McKenzie, also asked how the legislation would come about. As I said in my opening remarks, there will be a transition period before the legislation creating a Greater Manchester mayor is passed and he or she is elected, which we expect to be in early 2017. During that period the combined authority will receive additional flexibilities to reform public services, specifically around business support skills and complex dependency. It will also assume responsibilities which will eventually be transferred to the elected mayor, such as the housing investment fund, and steps will be taken to amend the combined authority to create an 11th member as a chair, who will be the interim mayor until the mayor is elected.

As to the timeline, primary legislation for the election of the mayor will be required and this will be laid in the next parliamentary Session. Accordingly, the first mayor is due to be elected in early 2017. As to when we plan to bring forward legislative proposals following the November 2014 devolution agreement between the Government and Greater Manchester, it is envisaged that a Bill will be introduced into Parliament with a provision that would enable the mayor for Greater Manchester to be elected in early 2017.

The noble Lord, Lord McKenzie, asked about the circumstances under which the reappointment of the interim mayor of Greater Manchester may be necessary. Until Parliament legislates for an elected mayor, it is at the discretion of the Greater Manchester Combined Authority to appoint an interim mayor. Any such appointment would be for a fixed term to be determined by the combined authority for up to a maximum of two years. It is our intention that there will be primary legislation in the next Parliament to directly facilitate elections in 2017, as I said.

I have already referred to mayoral powers. On the public consultation, an issue which the noble Lord, Lord Bradley, raised, the devolution agreement provides for the Greater Manchester Combined Authority to agree with the Government its plans for evaluation, with the first review to be completed in 2019-20. These plans will be expected to include the extent of any public consultation considered appropriate in the evaluation.

On the question of a referendum on the introduction of the directly elected mayor, this is not about replacing one form of governance with another: it delivers the same services with the same resources—which, in effect, is what previous referendums have been about. There will be greater democratic accountability. I was asked what would happen if there was a rejection of the proposal for an elected mayor. There will be no referendum for the reasons that I have just talked about. Clearly, if there were a referendum that rejected the proposal, the proposal could not be proceeded with at that time. As I said, this is about ensuring good governance. The combined authority’s current members are elected by residents in individual wards and, as the new devolved powers will affect the whole of the Greater Manchester area, we believe that the best way of achieving the necessary greater democratic accountability is for all residents of Greater Manchester to decide who would take the position of the elected mayor.

The noble Lord, Lord Bradley, also asked about the existing consultation and expressed his concern that it took only three weeks and did not give residents an opportunity to comment. The order is technical and limited in scope and we consulted all the statutory consultees—in this case the Greater Manchester Combined Authority and the 10 local authorities within the Greater Manchester area. Other appropriate consultees were considered to be the local enterprise partnership and the Business Leadership Council. I trust that I have answered all the questions.

[Lord Bradley]

Perhaps I may clarify what the Minister was saying about consultation on the primary legislation. He seemed to be saying that there would be an evaluation of it in 2019. My question was whether there would be consultation with the public on the primary legislation to be introduced early in the new Parliament.

[Lord Ahmad of Wimbledon]

My understanding is that, as the deal has been done on laying the primary legislation, it will proceed in the next Parliament. That has already been negotiated between the Government and the leaders, so there are no plans for additional consultation on the primary legislation.

Motion agreed.