Grand Committee

Monday 18th March 2024 Grand Committee

Monday 18 March 2024

Arrangement of Business

Monday 18th March 2024 Grand Committee

Announcement

15:45

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

My Lords, I am obliged to point out that if there is a Division in the Chamber, we will have to adjourn immediately and resume after 10 minutes. It seems highly unlikely to me.

Terrorism Act 2000 (Code of Practice for Authorised Officers) Order 2024

Monday 18th March 2024 Grand Committee

Considered in Grand Committee

15:45

Moved by

[Lord Gascoigne]

That the Grand Committee do consider the Terrorism Act 2000 (Code of Practice for Authorised Officers) Order 2024.

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee

[Lord Gascoigne (Con)]

My Lords, in addition to the draft Terrorism Act 2000 (Code of Practice for Authorised Officers) Order 2024, I shall speak to the following three draft statutory instruments: the Proceeds of Crime Act 2002 (Search, Recovery of Cryptoassets and Investigations: Codes of Practice) Regulations 2024; the Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) Order 2024; and the Proceeds of Crime Act 2002 and Terrorism Act 2000 (Certain Information Orders: Code of Practice) Regulations 2024.

Before I address the contents of these SIs, I will give some background. The Government are firmly committed to tackling all forms of economic crime. We already undertook unprecedented action to prevent kleptocrats and organised criminals abusing our open economy when we expedited the passage of the economic crime Act through Parliament in 2022. The Home Office measures in that Act reformed the unexplained wealth orders regime to improve transparency of ownership structures and to allow more time for law enforcement to review material relating to unexplained wealth orders.

Building on that Act, the Economic Crime and Corporate Transparency Act 2023 contains a wide range of reforms both to the Proceeds of Crime Act 2002 and to terrorist financing legislation through the Anti-terrorism, Crime and Security Act 2001 and the Terrorism Act 2000. These reforms include: powers to allow the effective seizure of both criminal and terrorist crypto assets; reforms to enable targeted information sharing to tackle money laundering and remove reporting burdens on businesses; new intelligence gathering powers for law enforcement; and provisions to reform outdated criminal corporate liability laws.

The reforms to the unexplained wealth orders regime and corporate liability laws and reforms to enable targeted information sharing and reduce reporting burdens are already in force. The new offence of failure to prevent fraud will be brought into force once government guidance has been published and businesses have familiarised themselves with it. We intend to publish the guidance shortly. Most of the remaining Home Office measures will be commenced on 26 April 2024.

Today, we will debate the statutory instruments that underpin the codes of practice for those measures. Therefore, with respect, I do not intend to cover the powers themselves, as they were debated extensively in both Houses during the passage of the Act.

Four draft affirmative instruments, including one laid by the Attorney-General’s Office, are required to update six codes of practice. Four existing codes of practice are being revised and two new ones are being made. This includes a search, seizure and detention of property code, issued by the Home Secretary to guide the exercise of search and seizure powers in the context of criminal confiscation investigations for officers operating in England and Wales. It also includes two codes to guide the exercise of search and seizure powers. One is issued under the Proceeds of Crime Act 2002 and the other is issued under the Terrorism Act 2000, in relation to powers in the Anti-terrorism, Crime and Security Act 2001. These codes are to guide law enforcement in the use of these powers for civil forfeiture and counterterrorism investigations. These codes are also issued by the Home Secretary. It also includes two codes to guide the exercise of powers to investigate suspected criminal property. One code is issued by the Home Secretary and an equivalent code for prosecutors is issued by the Attorney-General for England and Wales and the Advocate-General for Northern Ireland. The final code being introduced by these draft instruments is a new code to guide National Crime Agency officers on the appropriate use of new information order powers. This code is issued by the Home Secretary under both the Proceeds of Crime Act 2002 and the Terrorism Act 2000.

The codes clarify the circumstances in which the powers may be exercised to ensure that they are applied consistently. This is of vital importance given the broad range of law enforcement agencies to which the powers apply. The use of the powers in these codes of practice may impact upon individuals’ rights and should therefore be proportionate to the outcome sought. Guidance on the exercise of the powers in these codes is required to safeguard against improper use.

The Proceeds of Crime Act 2002 and the Terrorism Act 2000 mandate that the Secretary of State must publish a draft code, consider any representations made and modify the draft in the light of such representations, prior to laying revised codes. The draft codes we are debating were therefore subject to separate public consultations. Information on the consultations can be found in the Explanatory Memoranda that accompany these statutory instruments.

In conclusion, these four draft instruments are required to deliver on the Government’s objective to complete commencement of the 2022 and 2023 Acts. This will ensure that all necessary legislation is in place and that there is legal certainty for the judiciary, respondents and the legal profession as to how cases will be dealt with before the courts. I beg to move.

[Lord Coaker (Lab)]

My Lords, I thank the noble Lord for his helpful introduction to these detailed and important SIs. He is right to highlight the importance of tackling economic crime, which is something that we all believe we could and should be doing more about.

The four SIs that we are discussing this afternoon follow on from the Economic Crime and Corporate Transparency Act and the previous Act, the Economic Crime (Transparency and Enforcement) Act. As the noble Lord pointed out, there are six new or revised codes of practice on how various authorities use their powers when tackling money laundering and terrorist financing. Consultation on these changes took place last summer. I have a number of questions, which I hope the noble Lord can answer for us.

Given that the consultation on these changes took place last summer, why is it only now that the changes are being implemented, some nine months later? Given that, for some of these instruments, the consultation took place before the Economic Crime and Corporate Transparency Act was passed, will further changes be required?

The Economic Crime (Transparency and Enforcement) Act, which gained Royal Assent over two years ago, and the Economic Crime and Corporate Transparency Act left a significant number of changes to be made through secondary legislation. The noble Lord may have mentioned this, but what is the timetable for implementing all these various changes? There were many provisions in the primary legislation that referred to secondary legislation that would be forthcoming in due course, but what does that actually mean? When can we expect all of that, given—and the noble Lord talked about the importance of tackling economic crime—we need the supporting secondary legislation to be passed as soon as possible?

The Economic Crime and Corporate Transparency Act spans several departments. How is the Home Office working with other departments, such as the Department for Business and Trade, to bring about the effective implementation of these changes?

Can the noble Lord outline for us what assessment will be made of how the Government believe these two Acts are working in practice, and what further steps, if any, need to be taken to combat economic crime?

In reading the various codes of practice, I noticed that they refer to different law enforcement agencies. How is their activity to be co-ordinated? We have the National Crime Agency, the City of London Police as the lead for economic crime, and then we have the individual police forces. How will all that work be co-ordinated, so that it is as effective as we would all want it to be?

The Minister mentioned the impact that we hope to have on Russia-related economic crime, but what else needs to be done, given the impact that we hope economic sanctions have on Russia, particularly with respect to the conflict in Ukraine?

When I raised the issue of enforcement in respect of economic crime, I should have asked what the Government are doing to monitor the effectiveness of the Act. Have they ensured that the consultation outcomes are easily accessible from the consultation web page, as recommended by the Secondary Legislation Scrutiny Committee? I did not find it the easiest consultation response to access, and clearly the Secondary Legislation Scrutiny Committee also had some trouble, so can the Minister say anything more about that?

Is there any oversight of the use of these powers? I understand that, with respect to the terrorism codes of practice, it is presumably the Independent Reviewer of Terrorism Legislation. Can the Minister confirm that and say whether there is any other oversight of these particular powers?

Can the Minister explain the differences in the proceeds of crime statutory instruments and their different application to the nations of the UK? The Minister will know that that is a favourite topic of mine, but I am not trying to be awkward. Clearly, for the territorial extent of the terrorism codes of practice before us, that is relatively easy because the application of those powers is UK-wide. But, on the other territorial application, some parts of the statutory instrument related to England and Wales, while other parts related to England, Wales and Northern Ireland. Can the Minister give a general explanation for all that, particularly, as always, with respect to Scotland? If it is devolved and a matter for the Scottish Government—I suspect that will be the Minister’s answer—how will we ensure that the work that Scottish law enforcement does with the other law enforcement bodies across the rest of the UK has the co-ordinated effectiveness that we want?

We of course support the moves that the Government are making. We all believe that economic crime needs to be more effectively tackled, which is why we supported the various provisions contained in the primary legislation. I look forward to the Minister’s responses to my questions because, as I say, we want this to be effective and we want economic crime to be tackled in a better way than perhaps it is presently.

[Lord Gascoigne (Con)]

My Lords, I am grateful to the noble Lord, Lord Coaker, for his support. Although it is literally a debate between him and me, he obviously made a good, thoughtful and insightful contribution, as expected. I do not wish to go back through the points I made in my opening, but I will seek to address a number of the noble Lord’s questions. I am afraid I do not have answers to some of them at this moment, but I will answer as many as I can, although I will not be able to do justice to a number of them. I assure the noble Lord that I will write to him on those. I will address his questions in no particular order.

On the timing from when the Act received Royal Assent through to this stage, the noble Lord will know that, in this case, the consultation had to be carried out on the codes, and consideration had to be given before the codes could be finalised and laid before the House.

16:00

These statutory instruments are subject to the affirmative procedure, which obviously requires the relevant committees to go through them. If they are approved by Parliament, the intention is, as I think I said at the beginning, they will come into force on 26 April 2024.

On liaison with agencies, my understanding is that the department has consulted the agencies in this process. We have a very good working relationship, and we will continue to do all we can to work with them going forward.

On the devolved issues, the noble Lord has also asked about this on other unassociated matters. I will try to set out the interface between how these codes work and the devolved nations of the UK. First, the code relating to confiscation will apply to England and Wales only. Each UK jurisdiction has its own confiscation regime. Confiscation is linked to criminal justice and sentencing. Northern Ireland will bring its own confiscation reforms into force at a later date.

Secondly, the code for civil forfeiture applies to the whole of the UK. Scotland and Northern Ireland gave consent for the changes in the Act to apply in those nations. The independent Rules Council in Scotland is determining whether amended Scottish court rules will be required prior to those measures in the Act coming fully into force in Scotland. The UK Government will then commence those measures fully for Scotland.

Thirdly, the two codes relating to investigations will apply to England and Wales and Northern Ireland. Scotland has separate powers in the same Act.

Finally, the codes relating to terrorist crypto assets and to information orders will apply to the whole of the UK as, as the noble Lord will know, counterterrorism and anti-money laundering are matters of reserved competence for the UK. I appreciate that response is lengthy, but I hope it covers the different angles of how the regulations apply.

There was a question relating to Russia. While I do not have specifics about what we are doing in tackling that, obviously some of its origins come from what happened from the conflict in Ukraine. The noble Lord is absolutely right that we are acutely aware that many of these assets are internationally held and could be outside the UK.

I want to set out some of the other work that we are doing internationally. The Act contains measures to include and cover as many entities as possible where there is a link to the United Kingdom. That includes provisions about requests for assistance in relation to crypto assets. This allows law enforcement to detain crypto assets for a period while investigations are ongoing. In addition, the new information order powers will ensure that the capabilities of the UK Financial Intelligence Unit within the NCA are up to international standards and increase our ability to support requests from partners to prevent illicit funds entering our economy. We recognise the need always to be vigilant. That requires cross-border working, which is why we are firmly committed to working with many of our international partners, utilising our approach and sharing and co-ordinating learning as much as possible.

In terms of how it is working and whether it will be adequate, the noble Lord obviously infers that the crypto-asset technology is evolving quickly. There are specific powers in the regulations for the Secretary of State to amend definitions associated with crypto assets. We always remain vigilant and will always keep this under review, but we believe these powers strike the right balance in strengthening the legislative framework and promoting technical innovation. We believe that, compared with other countries, we are ahead of the curve in the global efforts to tackle economic crime and terrorist financing involving crypto assets.

The noble Lord made a point about the consultation response. I completely understand the point he is making, and I will take it back to the department.

One of the questions the noble Lord asked was about oversight. I assure the noble Lord that I will write to him about that and specifically about Russia and the impact it has had there.

[Lord Coaker (Lab)]

That is very helpful. I am talking about the proceeds of crime oversight SI, as I assume that the terrorism SIs will have the normal oversight of the terrorism independent reviewer.

[Lord Gascoigne (Con)]

Yes, that is correct.

[Lord Coaker (Lab)]

The point about Russia is also quite important, for obvious reasons; I would appreciate it if the noble Lord could look into that and see what impact the Government think this may have on the sanctions that we are trying to impose on Russia.

[Lord Gascoigne (Con)]

I thank the noble Lord and give him that undertaking.

I am very grateful for the noble Lord’s comments and thank the Committee for considering these instruments, which are necessary to deliver the Government’s objective to complete commencement of the Economic Crime (Transparency and Enforcement) Act 2022 and the Economic Crime and Corporate Transparency Act 2023. I beg to move.

Motion agreed.

Proceeds of Crime Act 2002 (Search, Recovery of Cryptoassets and Investigations: Codes of Practice) Regulations 2024

Monday 18th March 2024 Grand Committee

Considered in Grand Committee

16:05

Moved by

[Lord Gascoigne]

That the Grand Committee do consider the Proceeds of Crime Act 2002 (Search, Recovery of Cryptoassets and Investigations: Codes of Practice) Regulations 2024.

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee

Motion agreed.

Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) Order 2024

Monday 18th March 2024 Grand Committee

Considered in Grand Committee

16:06

Moved by

[Lord Gascoigne]

That the Grand Committee do consider the Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) Order 2024.

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee

Motion agreed.

Proceeds of Crime Act 2002 and Terrorism Act 2000 (Certain Information Orders: Code of Practice) Regulations 2024

Monday 18th March 2024 Grand Committee

Considered in Grand Committee

16:06

Moved by

[Lord Gascoigne]

That the Grand Committee do consider the Proceeds of Crime Act 2002 and Terrorism Act 2000 (Certain Information Orders: Code of Practice) Regulations 2024.

Relevant documents: 12th Report from the Secondary Legislation Scrutiny Committee

Motion agreed.

South Yorkshire Mayoral Combined Authority (Election of Mayor and Transfer of Police and Crime Commissioner Functions) Order 2024

Monday 18th March 2024 Grand Committee

Considered in Grand Committee

16:07

Moved by

[Lord Gascoigne]

That the Grand Committee do consider the South Yorkshire Mayoral Combined Authority (Election of Mayor and Transfer of Police and Crime Commissioner Functions) Order 2024 Consideration in Grand Committee.

Relevant document: 15th Report from the Secondary Legislation Scrutiny Committee, special attention drawn to the instrument

[Lord Gascoigne (Con)]

My Lords, this order was laid before the House on 7 February. If approved by both Houses, it will transfer police and crime commissioner functions from the South Yorkshire PCC to the Mayor of South Yorkshire. It will also bring forward the next scheduled mayoral election in South Yorkshire from 2026 to May 2024, thereafter taking place every four years, so that the South Yorkshire mayoral election cycle is aligned to the existing PCC election cycle. We are grateful to the incumbent mayor, Oliver Coppard, for providing his consent to the transfer and to the amendment of his current mayoral electoral term to enable this alignment.

This first mayor to exercise PCC functions in South Yorkshire would do so following the next mayoral election, which is to be rescheduled for Thursday 2 May 2024. This maintains the direct democratic accountability for policing and crime in South Yorkshire, as the mayor will be elected by the people of South Yorkshire on the basis that they are to exercise the functions of the PCC in that area. The incumbent PCC for South Yorkshire will continue to exercise the PCC functions until the end of his elected term of office. The person elected as mayor, from the point of taking office on Tuesday 7 May following the mayoral election, will act as the single, directly elected individual responsible for holding the chief constable and police force to account. They will be accountable to the people of South Yorkshire for this.

Their functions would include issuing a police and crime plan; setting the police budget, including the PCC council tax precept requirements; appointing and, if necessary, suspending or dismissing the chief constable; addressing complaints about policing services; providing and commissioning services for victims and vulnerable people; and working in partnership to ensure that the local criminal justice system is effective and efficient.

Part 1 of the Government’s review into the role of PCCs cemented the Government’s view that bringing public safety functions together under the leadership of a combined authority mayor has the potential to offer wider levers and a more joined-up approach to preventing crime. The Government’s levelling up White Paper, published in February 2022, sets out the Government’s aspiration to have combined authority mayors take on the PCC role where feasible. By working in partnership across a range of agencies at local and national level, mayors can ensure that there is a more holistic, unified approach to public safety.

As is required by Section 113 of the Local Democracy, Economic Development and Construction Act 2009, the Home Secretary launched a public consultation on the proposed South Yorkshire police and crime commissioner functions transfer on 20 December 2023; it ran for six weeks to 31 January. Just over 3,000 responses were received to this public consultation and the Home Secretary considered the views gathered when deciding whether to lay this order enabling the transfer of PCC functions to the Mayor of South Yorkshire.

It is this Government’s view that incorporating PCC functions into the role of the Mayor of South Yorkshire, who is elected to deliver across a range of other functions, will bolster their mandate to bring greater join-up across the responsibilities that they are accountable for and help to facilitate a whole-system approach to crime reduction. It preserves the democratic accountability that underpins the PCC model while, at the same time, reducing the risk of competing democratic mandates within the South Yorkshire Mayoral Combined Authority area, providing greater clarity for the electorate on who is responsible for public service functions in their area.

The exercise of PCC functions by the Mayor of South Yorkshire is a significant step towards realising our ambition for more combined authority mayors to take on PCC functions, as is already the case in Greater Manchester and West Yorkshire. It means that people in South Yorkshire will be served by a mayor with a range of functions and levers comparable to the Mayors of Greater Manchester, West Yorkshire and London, and will be able to hold their mayor to account for this enhanced range of responsibilities. I beg to move.

[Lord Coaker (Lab)]

My Lords, I thank the Minister for the careful way in which he outlined the case and reasons for the order before us, on the South Yorkshire Mayoral Combined Authority. He will know that, the other day, concerns were raised with respect to the West Midlands—that will follow its course, notwithstanding the judicial review of it—but this order refers to South Yorkshire, which is a totally different situation. We support the Government’s proposition here for the reasons that the Minister outlined.

I do not have much to add to what the Minister said. I just want to ask him this: what steps do the Government propose to take in order to inform the people of South Yorkshire of the proposed changes and the reasons for them? Also, can the Minister explain to us the Government’s view on the discussions they intend to have with the various local authorities in South Yorkshire, Members of Parliament and other local representatives? For these sorts of changes, we make the decision here—in this case, we support what the Government are doing—but it is of course important for us to consider how we both take it forward and explain, to local residents as much as anybody else, what we are doing.

With those brief comments, I have nothing further to add to the important points that the Minister made.

[Lord Gascoigne (Con)]

Yet again, as ever, I am grateful to the noble Lord, Lord Coaker, for his comments and his support in this. He is absolutely right to mention the debate on the West Midlands the other day; I am personally glad that this debate has not been as excitable as that one.

I want to try briefly to run through a few things. One thing that I want to set out concerns the public consultation; it relates specifically to the noble Lord’s question on what engagement has been done and some of the local views that were expressed.

16:15

The noble Lord asked what engagement there has been. In addition to the consultation, my understanding is that there has been engagement at a local level with the mayor, the PCC and the returning officer. In terms of the local MPs, there was a debate in the other place the other day. The noble Lord is absolutely right that there should be more engagement; if this is passed, the work will then start on making sure that the electorate, as they will be, are informed of what is taking place. I do not have specific details as to what the steps and plans will be, but I assure the noble Lord that I will write to him setting that out.

As I said, the public consultation ran from 20 December to 31 January and the Government’s response was published when this order was laid before Parliament. Just over 3,000 responses were received—a great deal more than have been received by other consultations on similar devolution proposals. As was noted in the debate in the other place, 65% of those responses expressed the view that they did not agree with it. However, my understanding is that some of those responses were not specifically about opposition to this; it may just have been that they were expressing views on local issues rather than being opposed to this per se.

That consultation helped obtain views and information for the Home Secretary, rather than just find out who was opposed to it. While the numbers for and against the transfer were taken into account, the most helpful aspect of the consultation, for the purpose of making the decision, was the information provided in the responses. The Home Secretary’s decision was informed but not bound by the responses in that consultation. In making his decision, the Home Secretary also had regard to information concerning the statutory tests and duties relevant to his decision. Ultimately, the Home Secretary is satisfied that the making of this order meets the statutory tests required of him.

I have been handed a note from the department saying that, in terms of the earlier points I was trying to make—I am more than happy to write to the noble Lord as well—local MPs and the mayor were involved in the consultation last December. The mayor, the PCC and the local authorities all support the merger. Once the election is called, the candidates can be announced in due course, as the noble Lord will know all too well.

[Lord Coaker (Lab)]

It is very helpful to hear that the mayor, the PCC and the local MPs were in favour of this. That is an important consideration for us all. My other point was that, while it is obviously important for the Government to work with MPs, the mayor and the PCC, they should also continue to inform the public about the different changes that are made. Obviously, this is quite a big change in their area, and it would be helpful for the Government to work with local representatives and support them in making sure that the public are fully informed about and aware of the changes and the reasons for them.

[Lord Gascoigne (Con)]

Yes. To clarify one point, MPs were engaged in and aware of the consultation, but that does not mean that all of them supported it, as I am sure the noble Lord is aware. However, they were certainly aware of it. The point I was making earlier is that the mayor and the PCC were both in support of it.

[Lord Coaker (Lab)]

I accept that. The mayor and the PCC were in favour and all the local MPs were consulted; that is right. The point I am making is that the Government have taken the decision they have. We support that decision, but I ask them to consider how they will work with the mayor, the PCC and all those MPs, whatever view they took, in taking this proposal forward, if it is passed by Parliament. I also ask them to consider how they will work with all those representatives to make sure that the public are fully informed about the changes and why they are happening.

[Lord Gascoigne (Con)]

The noble Lord is absolutely right. There is also a read-through to the next SI; there is a constant lesson to be learned in terms of what engagement is done. Obviously, it is very good that there is significant local support for this, but there is certainly a lesson for us always to be aware of the need for public buy-in for any changes that we make. As I tried to say, part of the mission here is to ensure that the electorate are always kept in mind; that they are involved; that there is accountability in terms of the public services that they want; and that they have the chance to vote for whoever their representatives will be.

I am more than happy to take this away and write to the noble Lord, but hopefully that clarified some of his points. I am grateful yet again for the noble Lord’s comments and support. With that, I beg to move.

Motion agreed.

North East Mayoral Combined Authority (Establishment and Functions) Order 2024

Monday 18th March 2024 Grand Committee

Considered in Grand Committee

16:22

Moved by

[Baroness Scott of Bybrook]

That the Grand Committee do consider the North East Mayoral Combined Authority (Establishment and Functions) Order 2024.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, with the agreement of the Committee and its Chairman, I would like to say a few words in tribute to Paul Rowsell, who was head of the governance reform and democracy unit within DLUHC. He died suddenly on Thursday on his way to work at the age of 71. Paul had worked as the head of that unit since it was formed in 2011. Before that, he had dealt with all things to do with local authority governance since the 1990s.

Paul and I worked together on a weekly basis in the early 2000s on the Wiltshire unitary bid; he became a good friend of mine, and I hope I became a good friend of his. I will miss him terribly—including his not sitting behind me today. Paul was a wonderful public servant and he will be very sorely missed, not just by his colleagues in DLUHC but by the many people in local government whom he met and supported over the years. May Paul rest in peace.

[Baroness Taylor of Stevenage (Lab)]

With permission, I would like to respond to that tribute. I have been in local government for nearly 30 years now, and I knew Mr Rowsell for most of that time. He was a formidable public servant, as the noble Baroness, Lady Scott, said. He was one of the great experts on local government finance—there are not many of those. Paul probably knew more about local government finance than anybody else in the country. I remember the trepidation that you would feel—I was a deputy leader of the LGA for many years—when you went into a meeting with him because you knew, however good your arguments were and however well you had been briefed by the LGA, he would pick it apart in five minutes and decimate your argument.

In spite of his tough approach to those of us who came up against him in meetings, he was very much a trusted member of the team in DLUHC and its predecessor departments—it has had many names over the years. I first encountered him way back when we were working on some of the “best value” initiatives. He was trusted, effective, incredibly knowledgeable and a consummate professional. His public service to this country in the local government department—that is what I will call it—was exemplary. I hope that he will rest in peace and that, for those who knew him personally, his memory will be a blessing. I thank him from our side of the Committee for his wonderful service to local government.

[Lord Shipley (LD)]

My Lords, it is deeply sad news to learn of Paul Rowsell’s death. I think back to the advice that he gave me during the passage of the Localism Act in the period of the coalition Government from 2010 to 2015. He had the ability to listen, to explain and to stay very polite, even if I was completely wrong on the issue. He had the ability to make things clear so that the understanding of those of us who were dealing with legislation was improved. It is a sad day for local government. He will be sorely missed. I appreciated his presence as part of the Bill team so many times. You knew that if Paul was leading a team, the work had been done and was of an enormously high, professional standard. It is with deep regret that we say that we will miss Paul profoundly.

[Baroness Scott of Bybrook (Con)]

My Lords, the purpose of this order is to implement the devolution deal agreed between the Government and seven councils across the north-east—County Durham, Gateshead, Newcastle upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland—on 28 December 2022.

We have been working closely with these seven councils. On 2 February 2024, they consented to the making of the order. The institutions that are to be abolished by the order—the two existing combined authorities and the North of Tyne Mayor—consented to the making of this order, which also provides the foundation for the deeper devolution deal for the north-east that we announced in the Budget on 6 March 2024. This trailblazing deal deepens and extends the devolution settlement in the north-east and provides new tools for the future mayor and local leaders to drive regional economic growth.

The order provides for the establishment on 7 May 2024 of the north-east mayoral combined authority, comprising as constituent councils the seven north-east councils. It simultaneously abolishes the existing North East Combined Authority and the North of Tyne Combined Authority, together with the office of Mayor for the North of Tyne. It provides for a new mayor for the whole of the north-east to be elected by local government electors across the area of the seven constituent councils with the first election to take place on 2 May 2024.

That elected mayor will take up office on 7 May with a four-year term ending after the next mayoral election in May 2028. Thereafter, there will be elections every fourth year to be held on the ordinary election day for that year—that is, the first Thursday in May. Following the enactment of the Elections Act 2022, the mayoral election will use the first past the post voting system.

16:30

The order provides for significant functions, as agreed in the devolution deal, to be conferred on the new mayoral combined authority. These include functions on housing and regeneration, mayoral development corporations, transport, skills and adult education. I will briefly summarise each of these functions in turn.

On housing and regeneration, the mayoral combined authority will have powers to be exercised concurrently with Homes England, enabling the combined authority, working closely with Homes England, to improve the supply and quality of housing and facilitate the regeneration of the north-east. The mayor will have powers to compulsorily purchase land, with any such decision requiring consent from the constituent council member whose local government area contains any part of the proposed land.

The order confers the power to designate mayoral development areas in the combined authority area to be exercised by the mayor individually. This power is designed to support the regeneration of strategic sites, though it is worth noting that, although this designation is the first step towards establishing a mayoral development corporation, a further order will then be necessary to create such a body. Decisions on mayoral development areas require the consent of respective constituent council members whose council areas contains any part of the designated area and of the Northumberland National Park Authority if any part of the designated area sits within the national park.

The order also provides for the conferral of a duty on the mayor to produce a spatial development strategy for the area. However, the conferral of this duty is dependent on there first being a unanimous vote in favour by all seven constituent council members of the combined authority.

On transport, the mayoral combined authority will be the local transport authority for the whole of the north-east. Nexus, the passenger transport executive for Tyne and Wear, which is an executive body of the two current combined authorities, will become an executive body of the new mayoral combined authority. The mayor will also have control over a consolidated and devolved transport budget, with the power to pay grants to the constituent councils in relation to the exercise of their highways functions to improve and maintain roads and to bus service operators for eligible bus services operating within the north-east area.

The order further provides for the combined authority to take on adult education functions for the area, alongside the management of its adult education budget from August 2024, following the north-east successfully meeting a series of readiness conditions.

As previously indicated, a number of these different functions will have elements for exercise by the mayor individually. Provision is therefore also made for the mayor to be able to issue a precept to fund the exercise of these functions if the mayor wishes to do so.

Alongside the transfer of the various policy functions that I have already mentioned, this order also provides for the combined authority’s governance arrangements. Each constituent council is to nominate one of its members to be a constituent council member on the combined authority. In addition, each constituent council is to nominate two other members, each of whom may act as a substitute if its nominated member is unavailable. It is also open to the new mayoral combined authority to appoint associate members and to invite nominations for non-constituent members under the Levelling-up and Regeneration Act 2023.

The mayor is to be the chair of the combined authority and is required to appoint one of the constituent council members to be the deputy mayor. Whenever the deputy mayor is required to act as the mayor, one of their substitute members may act in their place for any proceedings. The combined authority is required, under Schedule 5A to the Local Democracy, Economic Development and Construction Act 2009, to have at least one overview and scrutiny committee and one audit committee. These are appointed by the combined authority and consist of an equal number of representatives from each of the constituent councils that are not members of the combined authority.

The order also includes constitutional provisions reflecting how decision-making for the powers conferred will be operated and on the role of the mayor. It also provides for the establishment of an independent remuneration panel to recommend the allowances for the mayor.

This order is to be made, if Parliament approves, under the Local Democracy, Economic Development and Construction Act 2009, as amended by the Cities and Local Government Devolution Act 2016. As required by the 2016 Act, along with this order we have laid a Section 105B report, which provides details about the public authority functions we are devolving to the new combined authority.

The statutory origin of this order is in a governance review and the scheme adopted by the constituent councils and then informed by a public consultation they carried out in accordance with the requirements of the 2009 Act. Although the Levelling-up and Regeneration Act 2023 introduced a new procedure for orders such as this—whereby areas publicly consult on a proposal rather than a governance review and scheme—the process followed by the north-east remains valid, because we made provision in the 2023 Act to ensure that those who had started the process under the previous system could continue to proceed.

As provided for by the 2009 Act, the seven councils for the north-east consulted on the proposals in their scheme. They promoted the consultation in a number of ways, including by producing a communications toolkit, so that key local partner organisations and other stakeholders could help encourage local participation in the consultation; promoting the consultation through council websites and those of the two predecessor combined authorities in the north-east; engaging the local press and the use of social media; and making paper versions of the consultation available at a range of public venues across the region.

In addition, a total of 24 engagement events took place across the region, comprising 15 separate public consultation events across the north-east, together with nine regional stakeholder events aimed at specific sectors including the voluntary and community, business, transport and education sectors. Consultation responses could be made online or directly by email or paper.

This consultation ran from 26 January to 23 March 2023, and some 3,235 people or organisations responded through a variety of platforms. As statute requires, the constituent councils provided the Secretary of State with a summary of consultation responses on 23 June 2023. The results of the consultation were that over 60% of respondents supported the overall proposals for the establishment of, and governance arrangements for, a new mayoral combined authority and elected mayor. Specific questions seeking views on the proposal to confer transport, adult education and skills, and housing, regeneration and planning on the combined authority and its mayor received similar levels of support. There was also a question on the conferral of finance functions to the combined authority, where a majority of respondents, approximately 53%, supported the proposals.

In laying this draft order before Parliament, the Secretary of State is satisfied that the statutory tests in the 2009 Act are met, namely: that no further consultation is necessary; that conferring the proposed powers would be likely to improve the exercise of statutory functions in the area and would be appropriate, having regard to the need to reflect the identities and the interests of local communities and to secure effective and convenient local government; and that, where the functions are local authority functions, they can be appropriately exercised by the combined authority.

The making of this order enables us to begin providing considerable funding for the area, as agreed in the December 2022 devolution deal. The largest single element of this funding is £48 million per year in investment funding for 30 years. In total, this will provide £1.4 billion to invest in the area to drive growth and take forward local priorities. There are also significant funds for investment in transport infrastructure and services, worth up to £732 million over the next five years. There is an additional £17.4 million for building new homes on brownfield land, subject to sufficient eligible projects for funding being identified, as well as a further £20 million of capital funding to drive place-based economic regeneration.

In addition, from August 2024, the core adult education budget will be devolved to the new combined authority, empowering the authority and the mayor to tailor the delivery of adult education and skills to the needs of the area. It is also envisaged that the authority will plan and deliver the UKSPF funding from 2025-26 if this is continued and the geographies remain the same.

As I mentioned at the start, the order not only implements the December 2022 devolution deal but provides the foundation for implementing the deeper devolution deal we announced in the Budget on 6 March. This includes £37 million of new funding to support the region’s growth ambitions, a growth zone with retained business rates and a number of innovative collaborations between the mayoral combined authority established by the order and the Government to drive growth in existing and future industrial strengths. These include, for example, a green superport, where the mayoral combined authority and the Government will work together to unlock barriers to growth at the ports of Blyth and Tyne and Wear, as well as Newcastle International Airport and the International Advanced Manufacturing Park. This will harness the potential of the region’s existing offshore, engineering and green manufacturing industries to drive growth.

In addition, under this further deal, the mayoral combined authority established by the order and the Government will work in close partnership to support the delivery of quality public services for all the people of the north-east, including joint work to tackle homelessness, improve homelessness prevention and develop new pilot employment programmes. This is a clear demonstration of levelling up in action.

Noble Lords may have seen Friday’s exciting announcement on the Crown Works Studios investment in Sunderland. This illustrates that, when government provides the tools, local leaders are able to take decisions that support businesses and create jobs. As other combined authorities have shown, there is good evidence that devolution to geographies that reflect functional economic areas enhances economic performance, fiscal efficiency and policy delivery at both national and local levels. It can make government action more coherent locally and enhance local government’s contribution to solving problems in areas falling between individual policy fields. I am sure noble Lords will agree that all this will help the new mayor and local area drive economic growth and development for rural, coastal and urban communities across the north-east.

I am keen to recognise and thank the local leaders and their councils for all they have done and continue to do to address local priorities and support businesses, industries and communities across the north-east. I beg to move.

[Baroness Quin (Lab)]

My Lords, I welcome the opportunity to speak in this debate. I welcome this order, although it is very sad that it coincides with the death of Paul Rowsell, to whom tribute has rightly been paid across all sides of the Committee.

This is an important step for the north-east. I represented a north-eastern constituency in the other place for many years and was always conscious that, while each of us spoke up for our constituents, there was a need for an overall voice to articulate the needs of the north-east and be heard at a national level in all our political and economic institutions. In many ways, the fact that this gives a voice to such a large part of the north-east is almost as important as the various powers that the Minister rightly outlined.

16:45

This is an important step in redressing the rather lopsided state of devolution in the UK. It stresses the point that devolution is about not just national identity, important though that is, but devolving powers to regions, which have a real need to be able to exercise them. As we know, many regions in England have populations that are larger than some national territories, so there is a strong case for devolution in some way or another. I say this as someone who enthusiastically supported the ill-fated north-east assembly. None the less, I welcome this order as an important step forward.

The Minister rightly emphasised the economic aspects of this deal. The north-east economy is a distinct economy; it has a distinct economic history and particular economic needs at the present time. I also welcome what she said about funds, which will be needed to support this process. However, I was utterly dismayed at the report on levelling up from the Commons Public Accounts Committee last week, which seemed to show huge deficiencies in the system and that very little money overall had been put in place to start off important economic processes, at a time when local authorities are facing such financial difficulties. I say this with some feeling because my local authority of Gateshead has a proud record of supporting and funding economic projects that have benefited the whole north-east, not just Gateshead, yet at the moment it is very squeezed financially and is even closing such things as leisure centres simply to concentrate on core, key services. I hope that, further to this order, the Government will look again at the important funding needs of individual local authorities and the region as a whole.

Your Lordships’ House is always keen to highlight the role of culture in economic regeneration, a view that I strongly share. It is a very important aspect of economic regeneration, as well as helping a region to feel good about itself, particularly given the distinctive culture of the north-east and the important industry that the cultural and creative sectors represent. I can hardly resist saying that the Labour candidate for mayor, Kim McGuinness, is very keen on this approach —I say that having served alongside her when we were chair and vice-chair of Tyne & Wear Archives & Museums, which plays an important role in culture and economic regeneration.

I reiterate my support for this order and hope that the election and its aftermath will be highly successful for the north-east region.

[Lord Beith (LD)]

My Lords, it is a pleasure to follow the noble Baroness, resident as she is of the constituency I used to represent. She is a tireless supporter of the north-east. I particularly endorse her point that the creative industry and cultural work have a very important place in the economic successes of the region, and could much more into the future. Of course, we are both veterans of the referendum to which she referred, when the Labour Party sought to introduce a measure of devolution. In my view, it was a very underpowered one, which did not help to achieve success in the referendum. It was opposed tooth and nail by the Conservative Party, so it is a slightly strange experience to be discussing a scheme of devolution put forward by the Conservative Government. This has the same problem of being underpowered in some important respects.

I tend to view this from the standpoint of the more rural and remote parts of the region, partly because of where I live, in Berwick-on-Tweed, and partly because we are so outnumbered and outvoted in the region as a whole. I tend to look at what is proposed here as, in some respects, an enlargement of local government or a more distant local government, which we have already seen with the amalgamation of authorities—things are decided far away, not locally to us, and dominated by an urban area that is 60 miles away and obviously far more numerous in population. In fact, many parts of the area we are discussing today are 120 miles from where I live.

When we look at functions, we must see that there are dangers and limitations in what is proposed in this order. For example, if you take transport, which the Minister rightly referred to, there are quite a lot of things that cannot be done under this order. The continuing failure to deal with the A1—a subject of constant promises and abandonment of promises by successive Governments—is outside the remit of the authorities created by the order. The slashing of train services from Berwick—I have just come directly from a meeting with a Minister about the halving of train services from Berwick-on-Tweed—will be outside the remit of the bodies we are discussing in this order. There is more scope for the provisions in the order to be used for the problems of operating rural bus services, but I am worried that they will be outnumbered by the need to deal with the urban bus problems.

The Minister made reference to skills and adult education, and she said this was tailored to the needs of the area. Well, there is no college of further or adult education in north Northumberland at all, and those who seek further or adult education find themselves involved in 50-mile or 60-mile journeys each way, if they are able to persevere with getting the qualifications they need for their work. All we have is one or two outstations of a college 50 miles away, dealing with hairdressing, the construction industry and one or two other things like that. But the absence of any centralised institution that is even partly centred locally seriously limits people becoming equipped to do jobs or change jobs, which is one of the functions that adult education seeks to meet.

Clearly, I hope that this new authority will address these and other concerns, but I fear that it does not have the resources to do that. The figures the Minister produced sound very good until you work out over how many years they are to be spent, and recognise that the cost of a small piece of new road soon eats up a large part of the sort of figure she cited.

I worry that we will be constantly outnumbered and outvoted when rural and remote area needs are considered. I worry that this is a concentration of power in one person. I supported a regional assembly, and I would have supported a trimmed-down regional assembly on a slightly smaller scale if it had the powers. With the powers, I will accept almost any system that is genuinely democratic. But I am worried by a heavy concentration of power in one person, who is elected because of legislation we have already passed by the first-past-the-post system, which again limits the influence of the remoter and minority areas. I have hopes for what will be done, but I have anxieties about some of the problems inherent in what we are agreeing today.

[Lord Shipley (LD)]

My Lords, I first welcome the comments of the noble Baroness, Lady Quin, whose experience as an MP in the region, and of living in Northumberland, have been extremely helpful to the cause of the north-east in economic development terms. I agree with a number of the comments of my noble friend Lord Beith. He said that the order is underpowered, which is true, but I think it can become more powered over time—that will need to be done. I have always shared his concern about the concentration of powers in one person, and I am also concerned by those major potential capital investment projects that are outside the remit of this mayoral combined authority, not least the A1 and trains.

As this is such a big geographical area—I think it is the biggest of any of our mayoral combined authorities—there are issues around the availability of skills training, particularly in further education, and of T-levels. One thing that it would be helpful for the Government to pursue is whether the availability of T-levels is as successful in the rural and coastal areas of this combined authority as it is in the urban areas.

That said, I congratulate the north-east mayoral combined authority on getting to this stage. Having been the leader of Newcastle City Council, a regular member of the Association of North East Councils and a board member of the regional development agency One North East for seven years, I think that this measure is a tribute to its vision, ability and willingness to work together over such a large geographical area. I see what is happening as a partial return to the status and powers that regional bodies had just a few years ago.

This is an important step for the north-east. It is particularly pleasing to see the successful all-party work that has gone into its delivery to this stage. Durham County Council has a Liberal Democrat leader; Northumberland County Council has a Conservative leader; and each of the five Tyne and Wear local authorities has a Labour leader. It helps drive public confidence and consent when the leadership across the region has such a common purpose, despite their political differences. That is because political consent is vital, as we know from recent debates on the West Midlands.

As the Minister said, this order generated more than 60% support across the north-east, which is very encouraging. That consent needs to be maintained; I hope that this new mayoral combined authority will reflect on the problems that have arisen further south, in Tees Valley. I hope that the north-east mayoral combined authority will review its procedures on scrutiny, audit and risk to ensure that they are sufficiently robust. That said, I strongly welcome this further step towards devolved powers in the north-east of England.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I too congratulate the seven authorities involved in negotiating this deal with the Government. We are all aware of the additional challenges that, as the noble Lord, Lord Shipley, said, were present in the north-east in achieving consensus across political, geographical and demographic boundaries. Not only has that been achieved but the deal has gained trailblazer status, which will hopefully enable it to attract the high levels of funding needed to tackle the many challenges faced by the north-east.

I am grateful to my noble friend Lady Quin for bringing her great experience in the area to this debate. As she said, having a single voice for the north-east will be helpful. We on this side are committed to devolution, so we will not put any obstacles in the way of a deal that has been subjected to such thorough and intense negotiation and collaboration at local level, but that does not mean that we do not have some questions for clarification purposes. I appreciate that, as I did not submit them to the Minister in advance, it might be necessary for some of them to be answered in writing. I would be quite happy with that.

It is good to see that, in the negotiations that took place over this deal, local government put place before party; that has always been my experience and it certainly shines out from this deal. That is the real power of devolution. We recognise the potential benefits of creating this new combined authority, which will have functions to grow the whole economy of the north-east. We are hopeful that, if our outstanding candidate for the mayoral election, Kim McGuinness, is successful, she will soon be working across the areas of her seven local authorities to grow the economy for all its people and businesses.

17:00

I will start with some general questions before I move to the specific powers set out in the SI. In his speech on this instrument in the other place, the Minister said that combined authorities will now cover the whole north-east once this new combined authority sits alongside that for Teesside. As the noble Lord, Lord Shipley, said, the Minister will be aware of previous discussions in your Lordships’ House about the report produced on the Teesside mayoral development corporation. This SI also provides for mayoral development corporations within the north-east mayoral combined authority. What lessons can be learned from the 29 recommendations in the Teesside report to ensure that the governance introduced by NEMCA is more transparent and auditable and works in the interests of the people in the local area?

As my noble friend Lady Quin mentioned, just last week we heard from the Public Accounts Committee that less than 10% of the allocation of levelling-up funding has been spent and less than a third of the allocations have left the department in the first place. The report said that:

“We recognise the Department’s plans to evaluate these funds in the short-term, but we are concerned it has no long-term plans to measure the impacts”.

I quote the chair:

“The levels of delay that our report finds in one of Government’s flagship policy platforms is absolutely astonishing … DLUHC appears to have been blinded by optimism in funding projects that were clearly anything but ‘shovel-ready’, at the expense of projects that could have made a real difference”.

This highlights the need for devolution deals to have adequate monitoring arrangements in place at local level. I have argued that local public accounts committees may be the solution to that, but what is the department considering for such local monitoring arrangements?

We all know the extraordinary pressures that local government funding is under in relation to adult care services, children’s services, especially SEND, and temporary and emergency accommodation. Today we had yet another report, this time from the County Councils Network, which showed that, compared to a decade ago, councils are spending over £200 per person more on children’s services and adult social care. These two services alone now consume two-thirds of the average local authority’s budget. What steps are in place to ensure that these increasing demands do not overwhelm the funding that has been provided to new combined authorities to grow local economies? I appreciate that capital and ring-fenced funding will be protected, but will it not be difficult to hold the line when services for the most vulnerable continue to be underfunded? There is no levelling up for young people whose special educational needs have not been dealt with.

Last week, at the Convention of the North, the Institute for Public Policy Research revealed stark data on healthy life expectancy. It found that the north-east is the worst-performing region in England. I do not see any additional powers for health or health prevention measures in this SI. Is that because leaders in the north-east did not ask for them, or did they request them and have them refused or postponed? In either case, are the Government prepared to extend powers over health matters to combined authorities when, in due course, they demonstrate that they can make a real difference to the health of their communities if they are given additional powers and the funding to do so?

My noble friend Lady Quin also mentioned the culture sector. Its importance to regeneration cannot be underestimated. I live in Hertfordshire and have seen the massive regenerative powers of the film, television and creative industries in the south of our county. That has already started in the north-east and must be supported. The noble Lord, Lord Beith, also mentioned this.

It is great to see the wide-ranging transport powers proposed for transfer under this SI, particularly for the transfer of bus partnerships and the option of franchising. With over 1 billion bus journeys being taken every year, that is the best-used option for public transport, but data shows that urban bus journeys have fallen by 48% and rural bus journeys by 52% because of the unreliability of services, cancellations and late arrivals. So we were delighted when, at the end of last week, Tracy Brabin, the Mayor of West Yorkshire, announced that she will be taking on new powers. I hope that the powers given to the north-east mayoral combined authority will enable it to take back control of vital bus services, provide accountability, reinvest profits into better services and not shareholders’ pockets, set routes, timetables and service standards, and return the lost services that have had such dramatic consequences at local level—particularly to some of the more rural areas of the country, as the noble Lord, Lord Beith, said.

Lastly on transport, I can see the division of responsibility for highways between local councils and NEMCA, but can the Minister tell us where low-traffic neighbourhoods fit in this plan? There has been considerable controversy over them recently, and it would be helpful to know where the powers and accountability would fit in this new combined authority structure. The A1 seems to be the Cinderella of highways routes because at my end—my town in on the A1—and at the north-east end, it is underinvested and completely troublesome. What on earth is National Highways going to do to sort out this key trunk route?

In relation to education and skills, in 2023 there was a record attainment gap between schools in the north-east and those in the south. More than 28% of entries by pupils in London were awarded grade 7 or higher, equivalent to A or A*, compared with just 18% of entries by pupils in the north-east. This has a knock-on effect on the local economy, so we welcome the introduction of powers for the new authority to tackle those skills shortages, but the SI seems to be silent on liaison with the business community in the north-east about shaping the skills profile. Does that mean this is left entirely to the mayor’s discretion? How will local skills strategies be integrated with any industrial strategy for the country and the north-east, and how will that help to make up the huge attainment gap between the north-east and the rest of the country?

The housing, regeneration and planning powers set out in the SI are considerable, and that is welcome. Government data for 2023 shows that youth homelessness is higher in the north-east than anywhere else in the UK—we had this debate in the House last Friday. Almost one in five of the individuals who applied for and were due homelessness support were aged 18 to 24. Will it be a requirement of the spatial development strategy that such demographic disparities are taken into account? Will it be the responsibility of PINS to see that the north-east mayoral combined authority is planning to tackle those issues?

On environmental protection, can the Minister reassure us that the special protections for Northumberland National Park will not be weakened or undermined by conferring planning powers on the north-east mayoral combined authority?

Turning to mayoral functions and funding, I have already made points about audit and monitoring, but can the Minister tell us what consultation with local councils and the business community will be required to enact the new mayoral power to introduce a supplement for business rates? We think it is positive that the mayor must appoint one of the constituent council members as a deputy mayor. As noble Lords are aware, this is not always the case in all agreements, certainly not for police commissioners, who can appoint anyone to be their deputy. Perhaps the Government could give further thought to the process of the appointment of deputies because electing somebody by the local area is good practice.

I have a further question relating to governance. It appears from the SI that neither the business board member nor the voluntary sector member will have voting rights on the combined authority. Can the Minister confirm whether that is the case?

The Minister will be aware of the turmoil in the audit industry in relation to delays and lack of capacity for local government audit. There are provisions in the SI relating to setting up an audit committee, which is vital. What assessment have the department carried out of the capacity of the audit industry to take on not only the additional work of combined authorities but the additional complexities they are likely to bring for the audit of complex projects? As the Minister is aware, I have a Question relating to Teesside in your Lordships’ House on Wednesday, but it is equally relevant to all combined authorities and mayoral development corporations.

In discussing previous SIs to set up combined authorities, we have made lots of comments on the fact that, in spite of considerable efforts on consultation, the results are fairly limited. In this case, there were just over 3,000 responses from a combined population of—I think—more than 2.5 million people. The outcome was pleasing because over 60% said that they supported the changes, but have the Government carried out any work to identify better methods of consultation that could enliven the discussion in communities? How will the concerns of the objectors be dealt with? We note that they were worried about higher council tax; disadvantage for rural areas, which was mentioned by the noble Lord, Lord Beith; the concentration of power in the hands of the mayor; inefficiencies caused by the complexities of dealing with such a large area; and how an appropriate transport, skills and housing offer can be developed across such a broad geography. I am not asking for solutions to all those problems; I am just asking how they will be dealt with in terms of responding to consultees.

Whether we look at economic, health, education or housing data, there is clearly a great deal to do to make sure that every person in the north-east realises their full potential. Action is required as urgently as possible. So far, devolution under the current Government has been fragmented and piecemeal. To a certain extent, the north-east has been a victim of that in the past, as much as anywhere else. However, the powers and resources that are now being granted do not really touch the sides of what is required for communities to have control over their areas and their own futures. Frankly, the failure of the levelling up department to able to demonstrate effectively in any way to the Public Accounts Committee that the policies and funding the Government are allocating to levelling up are making a difference is quite astonishing after 14 years.

[Baroness Scott of Bybrook (Con)]

My Lords, I thank all noble Lords—in particular, the noble Baroness, Lady Quin, and the noble Lord, Lord Beith—for their input into this because of their long experience of living and working in the north-east. We do not always get the voice of the area so it is lovely to hear it. I thank them very much for taking part.

As we have heard, this order is widely welcomed by the people of the north-east. It is a significant development for the whole area. Unifying two combined authorities into a single cohesive institution and uniting seven councils to build on a history of collaboration to shape the north-east as it has never been shaped before—or been given the opportunity to shape itself before—is a significant step in English devolution and in furthering this Government’s levelling-up agenda. We have heard that in the debate; I thank all noble Lords for supporting this move for the north-east.

I will address a few specifics. The noble Baroness, Lady Quin, mentioned culture, which is really important. As I said in my opening speech, Crown Works Studios is investing in Sunderland. Perhaps this will be the catalyst for culture, as well as for joining up culture across the north-east. I look forward to that investment, as I am sure the noble Baroness does. Other things are also being done. In Durham, £19.9 million from the future high streets fund has been granted to support the town’s culture, heritage and visitor economy. Things are beginning to come in for the cultural industries in that area; I wish them all well.

The noble Baronesses, Lady Quin and Lady Taylor of Stevenage, mentioned levelling up. Levelling-up funds have been made available to a number of individual councils. For example, in round 1, Durham got £20 million to improve transport connectivity, particularly between rural areas and around the areas of Bishop Auckland, and £20 million was given to the Gateshead Quays conference centre. Levelling-up funds, together with other government funds such as the town deals funding that I mentioned, show commitment to a large number of other investments coming to the north-east.

The noble Lord, Lord Beith, who knows the area so well, mentioned transport decisions. I quite understand his point that not all transport is covered, but this deal gives a very strong voice to the mayor and the mayor’s team when any other transport decisions are being made. On local funding, particularly for rural transport —having come from Wiltshire, I know all about rural transport and the issues it brings—this is an opportunity for the mayor, working with the individual councils, to plan that in a proper way that is efficient and effective for rural areas in the north-east. They may not get all the money, but there is a huge opportunity to change the transport systems. I encourage them to lobby hard on those decisions being made by others.

17:15

On adult education and skills, the issue is that local mayors and local people know what skills are needed in an area for their growing economy, not just today but in future, because you do not start educating and skilling up people for today’s jobs. This has to be thought of as a plan for an area. The noble Baroness, Lady Taylor of Stevenage, brought up the business community, and I am sure it will be involved in those decisions; it has to be, because it is the future. Going back to the cultural issues, if the north-east is going to grow as a cultural area for the whole of this country, young people will have to have the skills to work in the cultural industries. I see the leadership of the mayor and the mayoral organisation helping with that.

This relates to the view, which came up, that perhaps it is too much for one person to lead all this. I disagree: leadership of an area or a place is very important. In the past, where there has been strong leadership in a particular place, things got done. The leadership cannot do it all itself; it has to be done together with the local councils, businesses, community sector and of course people. But strong leadership in one person is important.

The Teesside report was brought up. As a department, we are developing guidance to address the recommendations in the review. This will clarify governance within mayoral development corporations. I am waiting for a date of publication, but we will let the noble Baroness know as soon as possible. Connected to that, scrutiny and audit have to be important. Yes, this will be quite complex, but I am pretty sure that, in the order, there is availability for the mayor to have more than one piece of scrutiny and more than one audit. That allows people to have real experience and knowledge of certain subjects. That may be how they decide to do it, but that is up to them.

The noble Baroness, Lady Taylor, mentioned additional powers. The local area did not ask for health functions, but these things are rolling and moving, and it is quite healthy for local areas and mayoral authorities not to have too much at one time. They can get used to doing the things they have to do, and then there is always the opportunity to ask for more.

I thank the noble Lord, Lord Shipley, for supporting this. He mentioned that it is about not just the towns but the rural areas and particularly the coastal towns in this area. Local people will understand better than anybody else where those issues occur and what they have to do about it. If we can get a common purpose among the mayor and the leaders of those areas, we will get more done than perhaps we have in the past there.

A few other things came from the noble Baroness, Lady Taylor of Stevenage. We have talked about the levelling up fund, and we have talked about scrutiny and audit. Consultation is an interesting one: you have to know your people, your place and your communities to know how best to consult. It seemed to me that the consultation done by the north-east on this was quite wide-ranging. It included online as well as paper; for me, that is really important in making sure that everybody has access. They did quite a lot of face-to-face which, again, is important. They, as leaders of that place, need to continue to consider what is the best way to consult and how they get the most people engaging in it.

We talked about temporary accommodation and whether the funding will be overwhelmed. Most of the money that is going in is capital funding, which of course will not affect it, but I still think that the conversations that can be had across a number of councils about how they manage these really interesting —no, not interesting, but serious—issues can perhaps bring out some more efficient and effective solutions. I look forward to that.

On the regeneration and housing issue, my answer is: yes, through local plans. You will need to what type of housing you will need in your area. You will be expected to know the demographics, to know how many young people are coming into the system, to know about disabled people and about youngsters coming out of care. I would expect those plans to look at what local people need in the future and to plan for that.

What else was there? I think I am almost finished. I think that I have covered the attainment gap. It is for local mayors, working with local businesses, to know what the skills are that are required today and to make sure that they are being delivered, while planning for the future skills that will be needed.

I think that I have probably covered everything, but we will have a look as a team tomorrow and, if there is anything on which we need to write to noble Lords, we will certainly do so.

[Lord Shipley (LD)]

Before the Minister sits down, can I add one thing to her list? In relation to the mayoral development corporations, she talked in terms of scrutiny and audit and said that guidance will be issued at some point—I hope sooner rather than later. However, it is not just the question of scrutiny and audit; it is also about risk. In my view, mayoral development corporations should quite separately think about their structures for assessing risk. Scrutiny tends to come slightly after an event as opposed to alongside a decision being made. Audit normally comes significantly after, in practice. It is that management of risk in a mayoral development corporation to which I think greater attention needs to be paid.

[Baroness Scott of Bybrook (Con)]

I absolutely agree; I think that is the same in all local authorities, however small or large. I see that as part of the overview and scrutiny. We have used “scrutiny” too often without using the word “overview” before it. I would expect that the overview, before anything is delivered, should look at the risks of delivering.

In conclusion, this order, which is strongly supported locally, is a significant step forward for the north-east, for its businesses and its communities. It is key to the future economic development and regeneration of the area, and it will enable local leaders to effectively invest in and address local priorities. I commend the order to the Committee.

Motion agreed.

Committee adjourned at 5.25 pm.