(2 days, 21 hours ago)
Lords ChamberMy Lords, I remind the House of my interest as co-president of London Councils and, like the noble Baroness, Lady O’Neill, as a former borough leader. I think I was also the longest-serving leader in my particular borough at various times, and I am a former member of the London Assembly.
I rise particularly to address government Amendment 243, to welcome it and to say how grateful I am to my noble friend the Minister for the consultations that she had with me and also with London Councils about the content of it. The amendment that has come forward is a welcome compromise. Obviously, there is a desire from London Councils that perhaps written in somewhere should be a formal requirement to consult. But I am very pleased that the Minister and the department have been able to respond in this way, and I am pleased that it is now going to be in the Bill.
To underpin the comments made by other noble Lords in respect of the other amendments, I think that what is being forgotten is that the basis of the settlement in London was that people should work together. I do not know whether that is a criticism of the three mayors that have been, the various iterations of London Councils or the relationship with government, but I suspect that that could be improved. Whether it requires the sort of review that the noble Baroness, Lady O’Neill, has suggested, I do not know. But all I would say is that noble Lords should be careful what they wish for in such a review, because it might produce outcomes that they do not like.
I will sit down by concluding again with my thanks to my noble friend the Minister for bringing forward Amendment 243.
My Lords, I thank the noble Baronesses, Lady Scott, Lady Pidgeon and Lady O’Neill, for their amendments on the functions and governance of the Greater London Authority and London boroughs.
I turn first to Amendments 81, 154 and 156. This Government are committed to delivering a permanent transfer of power from Whitehall to our regions. Strategic authorities, including the Greater London Authority, will not be able to deliver for their residents if they fear that a future Government will be able, on a whim, to easily remove functions that have been devolved. Parliament is, of course, sovereign. The Government will always be able to introduce primary legislation that changes which functions should sit with which level of authority. However, this Bill makes sure that the Government will have to make that argument through the various stages of a parliamentary Bill; it must not be easy to take devolved powers away from strategic authorities. That is why this Bill limits the ability of this Government and future Governments to remove functions from strategic authorities using secondary legislation so that they can be exercised again by central government. It would be wrong to single out the Greater London Authority and allow its functions, and only its functions, to be removed by secondary legislation.
On Amendment 82, I thank the noble Baroness, Lady Pidgeon, for meeting me to discuss this issue. Her insight into the governance of London was very valuable to me. First, I would note that the Mayor of London is already required to appear before the assembly 10 times a year for Mayor’s Question Time. This affords assembly members an opportunity to question the mayor on a regular basis. It is a tried and tested mechanism for questioning the mayor, and is backed up by a strong incentive for the mayor to attend, in that generally, if they fail to attend six consecutive meetings, they will be removed from office. This amendment would not remove the existing mayor’s Question Time mechanism; rather, it would represent an additional burden on the mayor of London potentially requiring them to appear before the assembly multiple times within a given month.
Secondly, this amendment would enable the assembly to summon witnesses who are not connected to the Greater London Authority or work on its behalf. In using a broad definition, it could allow the assembly to require attendance from virtually any entity linked to activity in, or related to, Greater London. The assembly’s power is backed up by powerful enforcement mechanisms. A person who fails to comply with the assembly’s request can be liable for a fine or even imprisonment for not more than three months. I am sure noble Lords can appreciate that the expansion of a power with such an enforcement mechanism needs to be considered very carefully. In London, the assembly has broadly either the same or similar powers to those being introduced for local scrutiny committees. As London’s devolution settlement continues to evolve, the Government will continue to work with relevant partners, including the noble Baroness.
I turn to Amendment 83, for which I am very grateful to the noble Baroness, Lady O’Neill. I recognise her very long and dedicated service to Bexley and to London. The Mayor of London is directly elected by the people of London every four years, alongside the London Assembly, which scrutinises the mayor’s work. This model is unique among strategic authorities, and it has successfully served the people of London for the last 25 years. The Government are regularly in contact with the GLA to understand how its governance, scrutiny, arrangements and partnership working arrangements are delivering for London and Londoners. As London’s devolution settlement evolves, we want to continue to see positive working between the GLA and its partners, including London borough councils, to deliver on shared priorities.
With this ongoing conversation already happening, it is not necessary to impose a formal review of London governance to be reported on at an arbitrary point. Indeed, it would be unusual to put such a requirement into primary legislation. The accountability arrangements for all mayoral strategic authorities, including the Greater London Authority, will also be strengthened by revised guidance, such as new iterations of the English Devolution Accountability Framework and scrutiny protocol.
I turn to Amendment 84 from the noble Baroness, Lady Pidgeon. Simple majority voting in London would make it harder for the mayor to exercise executive authority and deliver for Londoners in areas where other mayors are being empowered. As I have said, London’s devolution settlement has served Londoners well for 25 years, striking the balance between the executive authority of the mayor and the scrutiny of the assembly. Mayors in combined authorities and combined county authorities can have their budget amended only by a two-thirds majority, and there is no reason why London should be different.
Finally, my Amendment 243 would enable central government to pay grant funding directly to a London joint committee, such as that run by London Councils. This will address a long-standing anomaly in London’s governance. I am very grateful to the noble Lord, Lord Harris, among others, for bringing this issue to my attention, and I also thank him for his very long service to London government.
Where there are cross-borough initiatives which are outside the remit of the Greater London Authority, the committees established by London Councils are best placed to receive and direct related funding on behalf of boroughs. Among many other examples, this is evident in the Freedom Pass, which the London Councils transport and environment committee negotiates with Transport for London and pays for on behalf of boroughs. At the moment, when central government wishes to pay funding for initiatives co-ordinated by London Councils, it must use cumbersome workarounds, such as paying to a nominated lead borough or routing it through the GLA. This creates additional barriers in time and complexity to getting money where it needs to go. It also lacks transparency, making it hard for citizens to follow who is involved in the spending of their money.
This amendment is a simple yet significant change that will allow money to flow directly from central government to joint committees established by London Councils, speeding up and simplifying delivery for Londoners. It is important that any entity receiving public money has the appropriate governance and oversight in place. Therefore, this amendment enables payment to take place only once the Secretary of State has made regulations setting out eligibility requirements. Those regulations will be approved by resolution of this House and the other place.
I commend my own amendment to the House and ask the noble Baronesses, Lady Scott, Lady Pidgeon and Lady O’Neill, not to press their amendments.
Before the Minister sits down, could she clarify something? With the new mayors of strategic authorities, I understood that the committees voted using a simple majority. Are we now saying that it is a two-thirds majority, the same as for London, in the new mayoral authorities?
My advice, as I read out, is that it is a two-thirds majority.
I read the Bill yesterday and thought that it was a simple majority, but there we are.
I thank the noble Baroness, Lady Pidgeon, for making the clear and compelling case for the need for change to specific London governance arrangements. These amendments are ultimately intended to help improve services for Londoners and to strengthen democratic scrutiny of the mayor, whoever he or she might be, by elected members.
I thank my noble friend Lady O’Neill of Bexley for making the case for a full London governance review. I restate our support from these Benches for her amendments. We feel strongly that this is necessary in London, as is happening across the whole country. The Government may wish to contemplate further the possibility of that review, and therefore consider more seriously at the moment our proposed amendments to Clause 15, which would allow for the removal of functions from, as well as the conferral of functions to, the GLA.
If the London governance arrangements are so unique, as the Minister made plain in Committee, we believe Parliament ought to have further oversight and that democratic scrutiny should be strengthened in London. I hope that the Government will not dismiss these proposals but give them serious consideration. I beg leave to withdraw the amendment.
My Lords, would it be in order to make a correction in relation to what the noble Baroness, Lady Pidgeon, has just said?
I have double-checked the voting arrangements. It is a two-thirds majority for combined authority and combined county authority budgets. It is a simple majority, including the mayor, for most other things in a combined authority, and a combined county authority. The Bill does not override existing voting arrangements set out in the Levelling-up and Regeneration Act, or the Local Democracy, Economic Development and Construction Act. This has to be done by consequential SI. The existing voting arrangements are set out in Article 8 of the Combined Authorities (Finance) Order 2017, and will continue to stand. I hope that is helpful.
My Lords, does the noble Baroness wish to test the opinion of the House on Amendment 84?
My Lords, I thank the noble Lords, Lord Bichard, Lord Wallace of Saltaire and Lord Ravensdale, for amendments on collaboration. I will start with the government amendments in this group, which are minor and technical in nature. Their purpose is to align relevant definitions across the Bill. Taken together, they update wording in Clauses 21, 22 and 51. In doing so, they make the wording consistent with that used in paragraph 4 of Schedule 25 in the definition of “eligible function”.
The effect is to clarify that mayors may convene local partners, collaborate with neighbouring mayors or request an additional function in relation to any aspect of any area of competence. This reflects the Government’s clear policy intention to provide mayors with the flexibility that they need to use these powers effectively in addressing local priorities. For example, the health, well-being and public service reform area of competence should be read as covering its individual component parts of health and well-being and public service reform, rather than as a single inseparable policy heading. These amendments therefore promote consistency across the Bill, avoiding ambiguity or an unnecessarily narrow interpretation of how these powers relate to the areas of competence.
I hope that, with this explanation, the House will support these amendments. I will listen to the noble Lords introducing their amendments before I respond to them.
My Lords, I rise to talk to Amendment 181, which is grouped with this. Britain has an unwritten constitution, which gives us flexibility but also lacks constraint on changing Prime Ministers or Governments beyond trust in their behaving like good chaps. As we have discovered in recent years, not all Prime Ministers do behave like good chaps or chapesses. The Minister herself earlier today referred to the question of whether a future Government might “on a whim” change the way they operate in crucial ways. The purpose of this amendment is to entrench the role of the mayoral council in the future governance of England and to make sure that a future Government cannot simply muck things up on a whim.
Lord Jamieson (Con)
My Lords, I rise to speak on this group of amendments on collaboration. I will not comment on the government amendments, other than to say that we consider them to be technical and will not stand in the way of the Government. I must declare my interest as an ex-chairman of the Local Government Association.
Amendment 181 from the noble Lord, Lord Wallace of Saltaire, raises a number of serious points that the Government need to respond to. However, we have some concerns that a mayoral council risks duplication of work that is already happening in other forums, such as with the Local Government Association, and therefore risks increased bureaucracy.
On Amendment 309 in the name of the noble Lord, Lord Bichard, we share his ambition for joined-up public services that co-operate effectively. That will be important to deliver the high-quality services we would all like to see locally. The Government need to consider how best this can be achieved. However, we have some concerns about how this amendment would work in practice as regards the legal duty to attend meetings and the interpretation of “reasonable”. We are therefore not convinced that the amendment as set out is the right way forward, but I agree with the noble Lord, Lord Bichard, that the Government need to think about how this can be made to work in practice.
My Lords, I am grateful for the debate on this group. I will start with Amendment 181. I absolutely agree with the noble Lord, Lord Wallace, about the overcentralisation of decision-making in England, and that is part of the whole rationale for bringing the Bill forward. I must be clear that I appreciate the spirit of the amendment, as I know how much good work the mayoral council has done since this Government established it.
I will say just a little bit about the mayoral council: the existing mayoral council, and the Leaders Council of local authority leaders, are non-decision-making bodies so do not need to be in statute. The current format of the mayoral council and the Leaders Council has received very positive feedback on their collaborative nature from members of all political parties. The mayoral council has run a shadow right to request process, ahead of that process being made statutory through the Bill, without needing to be a statutory decision-making body. As a statutory process, the right to request provides certainty that engagement will take place.
The mayoral council and the Leaders Council are still relatively new forums, and they have already adapted to respond to feedback from members and the Government. As more devolution is delivered across the country and we get more mayors with more powers, their needs and best use may change. Retaining flexibility by not having forums set in statute will allow us to once again respond quickly to feedback to make sure these continue to be useful forums.
The Bill is already establishing a process to extend devolution in a more streamlined way and to deepen that devolution through the mayoral right to request process, so it is not necessary for the mayoral council to create a framework for further devolution. Funding is discussed regularly at the mayoral council, but it is right and proper that local government funding is provided through the local government finance settlement process, where allocations of needs-based funding are done fairly across the country.
Before the noble Baroness sits down, can she clarify one point? We are heading towards a model of English governance in which there will be roughly 35 elected mayors. Do the Government envisage that the Council of the Nations and Regions will then have the Scottish Government, the Welsh Government, the Northern Irish Government and, on the same basis, 35 English mayors?
Those bodies are new bodies, and they will be evolving and changing as we evolve and change the model. They are not decision-making bodies. That is the main reason for saying we do not want to put them in statute, particularly in view of the fact that they will change fairly rapidly as we increase the mayoral model across the country.
My Lords, I am also grateful to the noble Lord, Lord Ravensdale, for bringing forward Amendments 93, 119 and 183, which address regional collaboration and the vital issue of social mobility, as we have heard.
Amendment 93, in the name of the noble Lord and supported by my noble friend Lady Barran and the noble Earl, Lord Clancarty, is a very sensible amendment that will encourage and enable collaboration between strategic authorities. We believe that this can only be a good thing for regional economic development, to the benefit of local residents. I will not repeat all the points so ably set out in support of this amendment, but if the noble Lord, Lord Ravensdale, decides to press this amendment to a Division, he will have our full support.
Amendments 119 and 183 go to the heart of what devolution is ultimately for. It is not simply about shifting powers between tiers of government; it is about improving life chances, particularly, in these amendments, for young people who are not in education, employment or training. Amendment 119 was ably supported and explained by my noble friend Lord Young of Cookham, and it highlights the importance of the partnership approach in tackling youth unemployment. This is an area where local knowledge and collaboration between authorities, employers, education providers and community organisations can make a real and lasting difference. Devolution should enable that kind of joined-up working, and it is right that the Bill reflects that ambition. Again, we will support this amendment if pressed to a Division.
Amendment 183 raises an equally important point about measurement and accountability. Taken together, these amendments remind us that economic growth alone is not enough. We must ensure that opportunity is shared and that devolution contributes to widening access to education, skills and employment. We are grateful to the noble Lord for bringing these issues before the House, and we look forward to the Minister’s response, particularly on how the Government intend to embed social mobility considerations into the delivery of devolved powers.
My Lords, I am grateful to the noble Lord, Lord Ravensdale, for these amendments, and for taking a great deal of time and trouble to discuss them with me in recent weeks. The amendments relate to pan-regional collaboration, tackling youth unemployment and gathering social mobility data. I agree with the words of my noble friend Lady Blake: where you come from should not determine where you get to. I am a living example of that myself, and I know that there are many around your Lordships’ House. That should apply to anybody, wherever they start out—they should be able to get as far as their aspirations and their ability take them.
Amendment 93 is about pan-regional collaboration, which we have debated in Committee. I recognise the spirit of this amendment and its aim of empowering our strategic authorities to collaborate across administrative boundaries, to tackle shared challenges and to seize regional opportunities. As your Lordships will know, there is already significant pan-regional co-operation taking place between authorities, with mayors encouraged to collaborate across their regions, as set out in the English Devolution White Paper. To give one example, the Great North was established last year by northern mayors as a mayor-led partnership to unlock jobs, opportunity and prosperity across the north.
I appreciate the intentions of the amendment before us, but it largely mirrors what has already been provided for in Clause 21, which gives mayors the power to convene meetings with local partners, and Clause 22, which provides a formal process for mayors to collaborate. These clauses establish a more formal framework for local engagement and partnership working, while allowing strategic authorities to determine their own methods and priorities for collaboration.
We will be publishing statutory guidance on the operation of the duty on mayors to collaborate. This guidance, to which mayors of strategic authorities must have regard, will elaborate on the importance of cross-boundary working and the benefits it can deliver for those who live and work across functional economic areas.
In response to the noble Baroness, Lady Barran, I am grateful for her words, which really encapsulated some of what we are trying to do. However, on pan-regional partnerships, we had to take very tough decisions on funding because of the legacy we were left. As she indicated, we believe that these functions should now fall into the mayoral remit and it should be for mayors to build up those clear partnerships. I know that some of the pan-regional partnerships continue to exist because they had moved themselves to self-funding, and I am sure our mayors will want to work with them.
In response to my noble friend Lord Berkeley, regarding Cornwall and the Isles of Scilly, he and I have discussed this on many occasions, and I have been to the Isles of Scilly with him. The Isles of Scilly are a sui generis authority, so they are not covered by the Bill. Nevertheless, we expect all areas to co-operate across boundaries, and I know there are useful discussions taking place between our friends in Cornwall and in the Isles of Scilly.
I will say a few words in general support of the principle of this amendment. We supported it during the passage of the Planning and Infrastructure Act, so it would make sense to do so here.
It was good old John Prescott who first promoted “brownfield first” and, ever since then, councils have been encouraged to promote it, for all the reasons that the noble Lord, Lord Jamieson, has just outlined. But brownfield alone cannot meet our housing needs, and that is the real issue I have with this. Brownfield development is more costly. Decontamination and development costs alone make it much more costly. There is a fear of lopsiding development, and I would be interested in further discussion—but clearly not here now—about how we square the very emotional debates we have had over the last day on Report with rural issues, the lack of housing in rural areas and how people need it, for all the reasons given. This amendment squarely says, “Leave the green areas alone”, so I have a little problem with it, although we on these Benches absolutely support the overriding principle.
Given the large area of combined authorities, there will clearly be a massive range of sites, covering all sorts of greenfield and brownfield sites, so I will leave the Minister with the thought that perhaps the Government need to give more incentives to develop brownfield first. There are lots of ideas that I am sure she is aware of that would encourage that more, but the key thing is that brownfield alone will not meet housing needs. Rural areas need more housing, but clearly we need strong protections for our green belt and our countryside.
My Lords, I thank the noble Lord, Lord Jamieson, for Amendment 121 about brownfield land. I agree that we should always use brownfield land wherever possible. As succinctly articulated by the noble Baroness, Lady Thornhill, one reason for promoting the development of town centres and cities is that there is more brownfield land there. We are trying to promote that kind of development as part of the reorganisation process, but there will always be a need for some development in rural areas. We have a rural housing crisis that we must tackle, and there are other uses, such as data centres, for which it might also be appropriate.
Once the relevant provisions of the Planning and Infrastructure Act are commenced, combined authorities and combined county authorities, including those with mayors, will be required to prepare a spatial development strategy. These strategies will provide the framework for local plans and will identify broad locations for growth, key infrastructure requirements and housing targets for individual local authorities, but they will not allocate sites for development. In preparing a spatial development strategy, authorities will be required to have regard to the need for consistency with national policy.
The effective use or reuse of brownfield land is strongly encouraged in the current National Planning Policy Framework, which expects substantial weight to be given to the benefits of developing suitable brownfield land within existing settlements. The revised National Planning Policy Framework, mentioned earlier, goes further still. New proposed policies on development within and beyond settlement boundaries are designed to promote a more sustainable pattern of development by directing growth to appropriate locations, maximising the use of suitable urban land and taking a more selective approach to development outside of settlements.
Mayors will also have the ability to grant upfront planning permission for specified forms of development on identified sites through mayoral development orders. We want the legislation to be sufficiently flexible to allow mayors to use these powers across a range of uses and land types in line with their ambitions for growth. It is right that we continue to promote the effective use of previously developed land. However, we should be cautious about introducing overly rigid legal requirements that may not be appropriate in all circumstances and could risk constraining the growth that this country needs. While I understand the intention behind the amendment, it is for these reasons that I do not consider it to be necessary or proportionate. I would ask the noble Lord to withdraw it.
Lord Jamieson (Con)
I thank the noble Baroness, Lady Thornhill, for her comments and the Minister for hers. Let us be clear: this is about doing what everyone has said that we need to do, which is developing on brownfield first. It is not about preventing development anywhere else. This is about creating more sites, it is about getting more building done, but it is also about regenerating cities and providing the homes that we need. I am afraid that I do not agree with the Minister. This is not about blocking; it is about enabling. I therefore wish to test the opinion of this House.
My Lords, I will speak briefly to the amendments in the name of my noble friend Lord Fuller, which all address an important and practical issue: the clear separation of duties between the mayor and the Local Government Pension Scheme. At its heart, this is about avoiding conflicts of interest, as we have heard.
Under the Bill, mayors will rightly have a central role in promoting investment opportunities in their regions, championing growth, attracting capital and supporting local economic development. That is an essential part of the devolution agenda. However, we must be equally clear about who is making investment decisions and on whose behalf. Pension funds exist to serve their members and local taxpayers. Their primary duty is fiduciary: to act in the best financial interests of those beneficiaries.
There is a distinction here that matters. The mayors may promote opportunities, but they should not be in a position to directly or indirectly influence the allocation of pension fund assets. In simple terms, one body promotes the opportunity and another independently decides whether to write the cheque. As has been noted, there are important differences between funding and financing and between providing the capital and structuring the deal. Both require clarity of responsibility and robust governance.
Co-operation between mayors and pension schemes is not only desirable, it is inevitable, but the co-operation must not drift into anything that could be perceived as pressure or direction. We must guard against any blurring of lines. What begins as collaboration must not become, even inadvertently, connivance. These amendments are therefore modest but necessary. They seek to put beyond doubt the separation of roles to protect the integrity of pension decision-making and to give reassurance to local taxpayers and scheme members alike. For those reasons, I support them.
My Lords, I am grateful to the noble Lord, Lord Fuller, for Amendments 129 to 131 and for the time he took to discuss them with me. I recognise his intention to clarify the roles and responsibilities of strategic authorities and pension funds in making local investments. I agree that it is very important for roles and responsibilities to be completely clear. We want strategic authorities to play an active role in bringing forward investment and guidance. We will further explain the Government’s expectations.
I just point out that there is in the Pension Schemes Bill a reciprocal requirement for local government pension funds to co-operate with strategic authorities. The wording of “identify and develop” in this context is consistent with that requirement, which makes it a bit late to change that just now. The meaning of “development”, however, can be clarified in guidance. Pensions guidance will confirm that there is no requirement to invest in assets that are not deemed suitable as pension investments. This should provide the noble Lord reassurance.
Schedule 20 includes a requirement for local growth plans to set out key projects for achieving economic growth through private or public investment. The guidance on local growth plans already makes clear the expectations and support available to mayoral combined authorities and to mayoral combined county authorities for developing and taking forward that pipeline of investment opportunities. Further, government guidance for local government pension funds will explain the meaning of this requirement for them. This guidance will further clarify our expectations in this context. I am very happy to discuss this with the noble Lord outside the Chamber as we develop the guidance. Therefore, I respectfully ask the noble Lord, Lord Fuller, to withdraw his amendment.
My Lords, I thank my noble friend Lord Rees for Amendments 135, 138 and 174 and for being available to explain why he has brought this forward from other mayors. He has passed on their views for us.
I will speak first to Amendments 136 and 137 in my name. As I set out in Committee, these are essential amendments to Schedule 23. They would not create a new duty or expand powers, but they would ensure that existing provisions apply consistently when a mayoral combined authority is acting as a fire and rescue authority. Amendment 136 would bring the inspection regime for mayoral combined authorities and mayoral combined county authorities—I do hope we can call them the same thing at some point, because I am getting fed up with saying it twice every time—
Yes—that would be my amendment.
Amendment 136 would bring the inspection regime into line with the existing exemptions for other fire and rescue authority governance models, maintaining consistency and fairness across England.
Amendment 137 would confirm that, where a mayoral combined authority or a mayoral combined county authority assumes fire and rescue responsibilities, it is treated in the same manner as established fire and rescue authorities. This amendment would extend the application of Part 5 of the Local Government and Housing Act 1989 to mayoral fire and rescue authorities relating to companies in which local authorities hold interests. It would similarly bring them within Section 155 of that Act for the purposes of emergency financial support.
Furthermore, Amendment 137 would clarify the process for handling Section 114 reports for mayoral fire and rescue authorities and the corresponding duties under Section 115 of the Local Government Finance Act 1988. When a chief finance officer issues such a report, it must be provided to the relevant scrutiny committee. The authority’s response must then be sent to the chief finance officer, the external auditor and the relevant scrutiny committee. In Committee, the noble Baroness, Lady Pinnock, raised concerns about accountability in relation to fire and rescue authority functions, and I trust that her concerns have now been addressed by the introduction of local scrutiny committees.
Turning now to Amendments 135, 138 and 174, I stress that Clause 47 is a key provision, ensuring that fire and rescue services in a mayoral combined authority area are subject to clear and direct accountability through elected mayors. These amendments would cut across that approach by creating a separate legal entity for chief fire officers. Doing so risks blurring the lines of accountability and making it less clear who is ultimately responsible for the delivery of fire and rescue services. The amendments could also introduce unnecessary complexity into fire governance arrangements and move away from the integrated model of local leadership that the Bill is designed to support. For those reasons, the Government cannot support the amendment. I do, however, recognise the strength of feeling on this issue and the interest in exploring alternative governance models. We will continue to consider this very carefully and work with partners across the sector to explore the model in due course.
With these reassurances, I hope my noble friend Lord Rees feels able to withdraw his amendments. I commend the minor and technical amendments in my name to the House.
Lord Rees of Easton (Lab)
I beg leave to withdraw my amendment.
My Lords, I am grateful to noble Lords from all sides of the House for the seriousness with which our new proposed strategic licensing measures were considered during Committee. The attention given to the detail of these clauses and to their practical implications has been valuable.
I begin by stating clearly that this Government recognise the important role of local licensing authorities, which are often best placed to make licensing decisions based on their local knowledge. This is reflected in the design of the new strategic licensing functions for the mayor and the Greater London Authority—for example, by requiring the Mayor of London to consult London licensing authorities before determining the London-wide strategic licensing policy. The Government intend to consider this and may seek to engage with key licensing stakeholders before setting out thresholds in regulations of what is meant by “potential strategic importance” to Greater London.
London licensing authorities remain the default licensing decision-makers in Greater London, and the mayor will be able to “call in” decisions made by a London licensing authority only on applications of potential strategic importance to Greater London and in a limited set of circumstances. Even then, the mayor may choose to uphold the decision of the London licensing authority.
The Greater London Authority has launched a consultation on the new London-wide strategic licensing policy. I am pleased to hear that many London licensing authorities have responded. This will help to inform the criteria by which the Secretary of State will be responsible for setting out in regulations what “potential strategic importance” to Greater London means. We intend to conduct further engagement with London borough councils and other licensing stakeholders before laying these regulations, as well as any other statutory instruments that are needed to determine the procedural elements of the call-in process.
Nevertheless, our amendments establish some important parameters that prevent the mayor encroaching on local licensing authorities’ decision-making unnecessarily. This includes preventing the mayor rejecting an application that would otherwise have been granted by a London licensing authority, reflecting our intention to establish a clearly defined role for the mayor in promoting London-wide strategic objectives to drive growth in London’s sporting, cultural, hospitality and nightlife sectors. The call-in power is intended to be used as a measure of last resort and only in specific circumstances—effective as much in its existence as in its use—to encourage a more enabling and joined-up approach to licensing across the capital.
I turn to some of the concerns raised by the noble Baroness, Lady O’Neill of Bexley, in Committee. While my time in local government was spent some 30 miles outside of London, I am acutely aware that large urban areas cannot be treated as homogeneous—least of all our diverse capital. I therefore recognise that the licensing priorities of inner and outer London boroughs will vary significantly, as will their demographics and local policing capacities. There is no inherent contradiction between this reality and the establishment of new strategic licensing functions at the mayoral level. When determining strategic licensing policy, for example, the mayor will be under a duty to have regard to the requirements on local licensing authorities when carrying out their licensing functions—including, for example, the setting of local licensing policies—as well as locally published cumulative impact assessments. The mayor will be required to state his reasons for giving any direction to ensure an appropriate level of transparency. New rights of appeal against mayoral directions will also be established to mitigate against improper use of the call-in power. The Government will monitor the new strategic licensing measures, and the Secretary of State will be able to repeal the measures up to five years after they come into force.
I must conclude by emphasising that licensing decisions are, by their nature, nuanced judgments. They involve weighing competing factors and exercising discretion, rather than arriving at a binary outcome. Through the piloting of new strategic licensing measures in Greater London, our intention is to give greater weight to economic growth and the reputational importance of London’s hospitality and nightlife sectors, while recognising the importance of promoting the licensing objectives to help ensure that people’s local concerns are protected.
I commend to noble Lords the amendments in my name, and I will listen to other noble Lords before I comment on theirs.
Baroness Pidgeon (LD)
My Lords, our Amendments 140 and 148 seek to remove the London licensing provisions in the Bill. Talking to a number of London boroughs, I found that many of them were quite unaware of this proposed change, seeing it, in effect, as a power grab by the Mayor of London, potentially causing real issues locally in boroughs, where licensing can be a very sensitive issue.
Licensing decisions should be taken locally, with local context and knowledge. For example, in Kingston, I understand that for any licensed premises, their security staff are required to work closely with the police, street pastors, the VAWG team and VAWG charities. This is not just during operational hours but after closure and at local events. This is a detailed local arrangement that works for this borough. Having the Mayor of London call in a licence application and change conditions or impose longer hours on a community would simply not be right and would go against the spirit of this legislation, which is supposedly about devolving down local powers. Those are our concerns. Are the Government really confident that a future mayor, perhaps of a different political persuasion and approach, would not be far more interventionist, blocking the very growth opportunities it is claimed that these new powers are seeking to free up?
The Minister has talked just now about the important role of local licensing authorities. Licensing works best when it is grounded in detailed local knowledge, through local councillors and local communities working together. These proposed call-in or direction powers for the Mayor of London risk overriding this expertise, increasing tension and introducing uncertainty in the system for boroughs, businesses and residents. A key concern I have picked up is how potential conflicts between local priorities, which are reflected in a council’s licensing policy, and pan-London priorities, potentially driven by the mayor’s decisions, will be resolved. There is a genuine fear that this could lead to an additional burden on boroughs, including increased casework, appeals, additional workloads for borough staff and, no doubt, additional costs to the boroughs.
We talked earlier about this being strategic. What does that mean? Take sectoral activity zones, such as Wembley or Twickenham stadia, which sit in the middle of highly residential areas. Those boroughs work really closely with communities. They know what hours and noise levels are acceptable. I am concerned that centralising this in some way could cause a huge risk. We urge the Minister to think again on giving these additional powers to the Mayor of London at this time.
I thank the noble Baroness, Lady Pidgeon, and the noble Lord, Lord Jamieson, for their comments. I thank the noble Baroness, Lady Pidgeon, for Amendments 140 and 148. Our intention behind introducing the new strategic licensing measures in London is clear: to enable a more strategic approach to licensing to boost London’s nightlife and hospitality industries. These industries are essential to London’s economy, supporting over 1.4 million jobs and generating £46 billion in economic activity annually. They also play a vital role in shaping the capital’s global reputation as a vibrant, diverse and welcoming city.
However, there is evidence of unmet potential, particularly when it comes to London’s night-time economy. Night-time spending in the capital fell by 3% from 2022 to 2025. A YouGov survey found that 45% of Londoners stated that they might have ended a night out before midnight in 2023-24, despite wishing to stay out later. Of course, the reasons for this are multifaceted, and licensing is not by any means the sole factor at play. Nevertheless, the Government believe that licensing in London should operate as more of an enabling framework—one that allows responsible businesses to thrive, while continuing to protect residents and public safety. That is very important.
London operates across 32 boroughs and the City of London, with each rightly rooted in its local context and responsive to the needs of its communities. However, when licensing decisions are made in isolation within each of those authorities, the cumulative effect can be a fragmented and inconsistent approach to issues that may have consequences across the capital. For example, a venue of regional or international significance, such as the ones that noble Baroness, Lady Pidgeon, mentioned, a major cultural destination or a late-night operation tied closely to transport hubs and visitor economies, does not serve one borough alone. Yet, at present, the licensing system often means that proposals are assessed solely through a local lens, even where their impacts and benefits are distributed far more widely.
It is precisely to address this gap that a carefully constrained strategic role for the Mayor of London and the Greater London Authority is justified. Other major cities, such as Amsterdam and New York, have shown what is possible when licensing is approached not solely as a reactive regulatory tool but as part of a broader strategic framework for nurturing culture, hospitality and the night-time economy.
Our underlying aim is to enable London to be the best version of itself: vibrant, safe, inclusive and globally competitive. The measures before us are a necessary and proportionate step towards that end. I hope that my reassurance about the consultation we intend to carry out relating to the meaning of “potential strategic importance” to London will have helped reassure the noble Baroness. I ask her therefore not to press her amendments.
Two more votes: that always makes you feel better. Thank you, Deputy Speaker.
Government Amendments 171 and 180 are technical amendments that provide greater clarity on how Schedule 25 will allow the functions of strategic authorities to be updated and modified over time. Amendment 180 clarifies that Schedule 25 to the Bill allows the Secretary of State to modify and confer functions on new mayoral strategic authorities during the period between their establishment and the inaugural mayor taking office. This amendment ensures that the functions of mayoral strategic authorities can be modified if needed ahead of the mayor being elected, ensuring that the authority is able to operate effectively during this period. A good example is the transfer of fire and rescue authority functions to devolution priority programme areas whose mayoral elections will take place in May 2028. Where local government reorganisation will see the abolition of current fire and rescue authorities in April 2028, the amendment will ensure that we have a mechanism to provide for the new mayoral strategic authorities to become the fire and rescue authorities, thereby ensuring the continuity of service provision critical for public safety.
Amendment 171 clarifies that Schedule 25 allows the Secretary of State to specify whether a function which has been conferred on a particular class of strategic authority is to be exercisable by different strategic authorities within that class at different times. This flexibility will, for example, be important in enabling the appropriate transfer of fire and rescue functions from existing fire and rescue authorities to strategic authorities at the right time for each area. In some areas, strategic authorities may be established in advance of local government reorganisation being completed, and it may not be appropriate to transfer those functions until the reorganisation is concluded. The amendment therefore ensures that such functions can be commenced at a point when an individual area is ready to exercise them.
I turn to Government Amendments 192 and 193. I am grateful to members of the Delegated Powers and Regulatory Reform Committee and to the noble Lord, Lord Lansley, for their consideration of the Henry VIII power in Schedule 26, concerning the conversion of a combined county authority to a combined authority following local government reorganisation. The Government have carefully considered the committee’s recommendation to remove the Secretary of State’s power to amend primary legislation made in future Sessions as it relates to this power. We have concluded that any necessary transition of a combined county authority to a combined authority can be delivered without taking a delegated power. I am therefore able to confirm that the Government not only accept the committee’s recommendation in relation to this specific power but intend to go further, by removing the delegated power to alter any existing primary legislation when undertaking conversion, save for amendments to the 2007 Act that may be necessary. I beg to move.
I know that the House will sit tomorrow on the terminally ill adults Bill, but as I am not likely to participate in those debates, I wish all noble Lords a restful and relaxing recess, and we will continue our deliberations on this Bill on 13 April.
I thank the Minister for these amendments. They help to clarify certain things and are tidying-up amendments. We fully support them. I also wish the House a very happy Recess.
(4 days, 21 hours ago)
Lords Chamber
Lord Jamieson
To ask His Majesty’s Government how they define “court readiness” in the context of the answer by the Minister for Housing, Communities and Local Government, Matthew Pennycook MP, on 14 January 2025 (HC Deb col 258) during debate on the Renters’ Rights Bill.
My Lords, “court readiness” means ensuring that courts and tribunals can operate effectively and maintain swift access to justice under the new tenancy system. We are supporting the justice system with funding to ensure that courts and tribunals have the resources and capacity they need to handle the additional workload these reforms will generate.
Lord Jamieson (Con)
My Lords, in the other place, the Minister, Matthew Pennycook, said that
“court readiness is essential to the successful operation of the new system”
and that he was working
“to ensure that the Courts and Tribunals Service is ready”.—[Official Report, Commons, 14/1/25; col. 258.]
The Minister also gave this House that assurance during the passage of the Bill. Yet the time for a landlord to regain possession through the courts has increased dramatically across the country since 2024, particularly in London, increasing from 7.5 months to 15 months, and that is before bailiff delays. Given that the Government have failed to ensure that the courts are ready for this Act, will they now delay implementation until they are?
It certainly would not help tenants to delay implementation of the Act. Tenants are waiting for this, and have been for a very long time indeed. We are working very closely with our colleagues in the Ministry of Justice on a number of fronts, including digitisation of the system, ensuring that more staff are prepared and making sure that we are ready for this. We are working closely with the judiciary and the ministry to ensure that the First-tier Tribunal has the capacity to deal with applications.
My Lords, I declare my interests in the private rented sector, with cottage lettings in Buckinghamshire and Lincolnshire. Sadly, there is not just the current delay of up to 15 months in the court granting a repossession; there is then an additional delay of up to seven or eight month waiting for a bailiff to carry out the eviction. What plans do the Government have to improve the bailiff service? A further point is the bankruptcy service’s increased granting of a breathing space to enable the tenant to put his affairs in order, though there is no consultation with the landlord on this. This can result in a further two-month delay in obtaining possession, along with the time necessary to appoint a bailiff. Is this the level playing field promised by the Government?
I do not think we should exaggerate the situation as it currently stands. The Ministry of Justice quarterly possession statistics show that median timeliness for claim to order is 7.3 weeks and that the median average time from landlord claim to repossession is 27 weeks. However, not all landlords will experience the whole court process. Of the landlord possession claims issued in 2024, only 28% progressed to the stage where bailiff enforcement was necessary. Bailiffs are responsible for a range of sensitive work. HM Courts & Tribunals Service is working to make sure that the timeliness of bailiff enforcement is improved.
My Lords, further to my noble friend Lord Jamieson’s Question, the Master of the Rolls has warned that ending Section 21
“will undoubtedly create more contested possession cases than we have had hitherto”.
As we have heard, the average delay last year, according to the MoJ’s figures, was eight months. Ministers have repeatedly said that court readiness is a prerequisite for the success of the system. The courts are not ready. They will not be ready in six weeks’ time, when Section 21 will no longer be operative. What is the Minister going to do?
I do not know how many times I am going to repeat this, but I will carry on doing so. We are working very closely with the Ministry of Justice and HM Courts & Tribunals Service to prepare county courts for implementation of the tenancy reforms. These are very important reforms for landlords and tenants; landlords do not want to see the actions of bad landlords helped and tenants want to make sure that they are secure in their tenancies. Existing possession processes will be updated to reflect the reforms in the Act and we will ensure that sufficient capacity is in place for the courts to handle new cases. There is an increase in capacity, including an additional 115 court staff, in anticipation of the increased demand for hearings under the Section 8 claim process. Staff managing possession claims are receiving detailed training, supported by refreshed training materials and process guidance. Working practices have been reviewed and best practice shared in readiness for 1 May, and the Judicial Office is taking forward judicial training on the new legislation.
My Lords, as the Minister has mentioned, the First-tier Tribunal clearly has a critical role to play here. Ministers have continually said that they will act if it is “overwhelmed by increased claims”, yet I was surprised to find that the MoJ does not even collect the data needed to assess its case loads. How can the Government credibly promise intervention without the basic monitoring information required to trigger some action? When will they begin collecting and publishing monthly data on rent appeals so that Parliament can assess mounting pressure? If the tribunal becomes overwhelmed, will Ministers commit to using the backdating safeguard immediately?
Data is collected and published—otherwise I would not have the figures for the current situation. MoJ statistics, as I said, tell us both the median time from landlord claim to repossession and how many possession claims progress to bailiff stage. Data is available. On the noble Baroness’s other point, the Government decided to put in place a proportionate safeguard if the tribunal system is on course to be overwhelmed, as we discussed during the passage of the Bill. That involves the creation of a new power for the Secretary of State to make regulations to enable the backdating of rent increases following determinations by the tribunal in respect of new rent amounts.
My Lords, in response to a question during Oral Questions on 11 February about the risks of the First-tier Tribunal becoming overwhelmed by rent increase appeals brought by tenants who have nothing to lose, the Minister stated that
“there is a case for the use of an alternative body or mechanism to make initial rent determinations”,—[Official Report, 11/2/26; col. 216.]
yet an amendment to that effect tabled by the noble Baroness, Lady Wolf of Dulwich, to the Bill was rejected by the Government on 1 July last year. What alternative body or mechanism is now being considered after all and how will it meaningfully be done without the force of legislation?
I was very grateful to the noble Baroness, Lady Wolf, for her contribution on the Bill. To ensure long-term sustainability, we have concluded that there is a case for the use of a non-judicial alternative body or mechanism to make initial rent determinations. We are continuing to work with partners across government to develop this rent determination function as quickly as possible.
My Lords, this House has often said, and Ministers agree, that justice delayed is justice denied. Has it occurred to the Minister or her colleagues in government that the more rules they make and the more laws they pass, the more pressure they put on the judicial system, which is already overloaded? Ministers have expressed concern about delays at all levels of our judicial system. Perhaps the answer would be to stop making so many rules.
The Government are acting as they should according to their manifesto and putting the legislation in place. On top of that, we have had to correct the 14 years of decline of effective action in the justice system. We have had a lot of work to do and my colleagues in the Ministry of Justice are taking that action urgently.
Given the need to provide families living in the private rented sector with greater certainty and stability, it is not appropriate to delay implementation while assessments of court readiness are carried out. An assessment of the possession process would provide no new insight or benefit to interested parties, and quarterly data on the operation of the court possession process for rented properties is already published by the Ministry of Justice and will continue to be. My department has allocated increased funding for the court service to enable it to deal with the increase in workload, and we are working very closely with our colleagues in the Ministry of Justice to make sure they are able to cope.
My Lords, some of the worst cases I had as an MP were to do with housing. We had children who had to move home every six months, absolutely wrecking their life chances. They were unable to stay in the same schools or with the same friends unless they travelled for hours on buses, going from stop to stop. Can my noble friend think of a single reason why we would delay the implementation of this Act?
My noble friend is quite right. Her experience as an MP was similar to mine as a councillor. I had client after client come to me to discuss the horrendous impacts of homelessness. But we are implementing this Act not just for tenants but for landlords. As I said, good landlords deserve support, and they do not like to see poor landlords not having action taken against them when they are not acting in the interests of tenants. This Act actually benefits everybody in the private rented sector.
(4 days, 21 hours ago)
Lords ChamberTo ask His Majesty’s Government what progress they have made towards implementing a code of practice under the Parking (Code of Practice) Act 2019.
It is me again, I am afraid. The Government are committed to raising standards in the private parking sector. Last summer, my department consulted on proposals to raise standards across the private parking industry, ahead of implementing the new code and accompanying compliance framework for parking operators. The consultation attracted over 4,500 responses—which was no surprise to me; I know people have a great interest in this subject—a significant volume, and it is right that these are considered very carefully before the code is finalised. I add that the Government intend to lay the code in the House in autumn 2026.
It certainly will not be illegally parked if I am doing it—I can promise the noble Lord that. In February 2022, the previous Government introduced a private parking code of practice, which reduced the level of private parking charges and banned debt recovery fees. However, as the noble Lord will know, the parking industry subsequently challenged the charge caps on the grounds that the economic impact on the sector had not been sufficiently assessed and that caps were not supported by robust evidence. In the light of that challenge, the previous Government took the decision to withdraw the code in order to review the level of charges and the ban on additional fees. That review has been thorough: there was a call for evidence, and an impact assessment, an options assessment and a full public consultation, which I mentioned earlier, were published. It has been necessary to minimise the risk of further legal challenge and, crucially, to ensure that the impact of any future charge caps is understood and achieves the intended objectives. I recognise that the noble Lord’s patience is being tested and the process has taken time. However, we are committed to raising standards across the private parking sector and will lay the code in autumn 2026.
Baroness Pidgeon (LD)
My Lords, according to the RAC, private parking companies have issued a staggering 76 million parking tickets in the seven years since the Parking (Code of Practice) Act became law. In addition to this long-awaited code, what update can the Minister provide on work to introduce a regulator with appropriate powers to protect motorists and ensure transparency across the system?
A parking regulator was considered as an option in the options assessment published last year. However, it was dismissed as disproportionate. Establishing a regulator would have involved significant cost, complexity and even further delay, duplicating functions that can be delivered more efficiently through the 2019 Act and existing sanctions, including access to DVLA data.
I put it to my noble friend the Minister that wheel clamping took some 20 years from the Scottish courts declaring it illegal in Scotland, against lots of obstructionism within officialdom in the Department for Transport and other departments, to finally being banned in England. We must know now what we want to do. Motorists are still being ripped off, companies are still behaving badly, and the appeals system often does not work. Should we not just take action and get on with it? It might even be rather popular.
It would be popular with me, but we need to make sure, once we put something in place, that it is legally robust and understands the impacts that the code will have—that is really important. We consulted on the appeals process last year to understand the concerns that motorists have with it—I have also heard many concerns from around the House when we have discussed this before—and we are working to address them. Is it very important that motorists have confidence in the appeals process and trust that they will get the right outcome as quickly as possible. For motorists, this means ensuring that appeal decisions are fair and, importantly, that those decisions are made independently from the private parking industry.
Lord Jamieson (Con)
My Lords, on many new housing estates, the roads have not been adopted by local highways authorities, despite residents paying council tax. What are the Government doing to ensure that they are built to adoptable standards and then adopted? That would allow local authority enforcement of parking offences.
That is slightly tangential to the Question. I know that this is a real frustration both for those living on new estates and for the local authorities that are sometimes charged with picking up the bill for the insufficient quality of roads. Steps will be taken in the forthcoming leasehold and commonhold Bill to address many of the issues with these so-called freehold estates. I am sure that we will have a very useful discussion on that when the Bill comes before the House.
My Lords, I hope the Minister has heard what the noble Lord, Lord Kirkhope, had to say. I think that his argument has prevailed. As was just demonstrated, parking covers a very wide landscape, so may I draw the Minister’s attention to the difficulty one has in parking electric bikes in London? They are now geolocated, so you park it outside a station, but the app will not let you close. Can the Government please sit down with the mayor and the London boroughs to create a win-win—for people who hate these bikes being parked randomly on the street and for those of us who depend on them, who would just like to see more parking places for them?
I understand the frustrations that people feel, but if you are parking the bike where you are supposed to park it, you should be able to log out of the system. It is absolutely unacceptable for bikes to be left in some of the places that I see them being left, and it causes a great obstruction, particularly to our residents with less mobility. If there is a bike in the middle of a pavement it is very hard to manoeuvre around it, particularly if you are in a wheelchair. We are looking at all these issues. New powers are being granted to local authorities as part of the Bill we will be debating later this afternoon, so I hope that will help the situation.
(4 days, 21 hours ago)
Lords ChamberThat the draft Regulations laid before the House on 11 and 12 February be approved.
Relevant document: 52nd Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 23 March.
(4 days, 21 hours ago)
Lords ChamberMy Lords, this group of amendments raises important issues concerning accountability and transparency within our evolving system of devolved governance. Amendments 49, 95 and 96 in the name of the noble Lord, Lord Shipley, engage with the central principle that, where power is exercised, it should be subject to effective and visible scrutiny. I am sure that all noble Lords agree with that principle. These amendments would ensure that it extends directly to elected mayors.
Amendment 49 proposes dedicated scrutiny committees with powers to summons and to report. This reflects a desire to ensure that mayoral commissioners are properly held to account. Amendments 95 and 96 similarly seek to strengthen direct lines of accountability, whether through public-facing forums such as the People’s Question Time in London, which we have heard about, or through structured engagement with elected members of constituent authorities. We recognise the intent behind these proposals, particularly the effort to align arrangements more closely with established practices, as we have heard about on the Mayor of London.
Government Amendments 67 and 68 introduce substantial new schedules at a very late stage in the Bill. They set out an extensive and detailed framework for overview and scrutiny committees in mayoral combined county authorities. While the aim to strengthen scrutiny is clearly welcome, the scale and complexity of these provisions inevitably raise a number of questions that merit careful consideration. It is regrettable that this has been tabled at such a late stage in the parliamentary process of the Bill’s passage.
The proposed role for independent or external experts on scrutiny committees is notable. It would be helpful to understand more clearly who these individuals might be, how they are to be appointed and how their independence will be defined and safeguarded. Questions also arise as to whether there is sufficient capacity and expertise available across the country to support this model in practice. I look to the Minister for a response on these matters.
Further, there are important practical considerations about how members of these committees are to be appointed, the role of elected councillors within them and the extent to which their proceedings and findings will be made publicly accessible. The mechanisms by which members of the public can raise issues and engage with the scrutiny process are also of clear importance. There is perhaps a broader question as to whether lessons might be drawn from existing models, including the arrangements that have been in place for some time in Greater London for the scrutiny of directly elected mayors.
Finally, Amendment 182 in the name of the noble Lord, Lord Bichard, raises the interesting proposal of local public accounts committees. We believe that the principles of strengthening financial oversight and cross-agency accountability are important, although the precise design and implications of such bodies, as we heard from the noble Lord, would clearly require careful thought and planning. Therefore, I very much look forward to the Minister’s response on this proposition.
This group highlights the central importance of scrutiny within any system of devolved governance. I look forward to the Minister addressing how the Government intend to ensure that these new structures are both effective in practice and clearly understood by those they are intended to serve.
My Lords, I thank the noble Lords, Lord Bichard and Lord Shipley, and the noble Baroness, Lady Pidgeon, for their amendments on scrutiny and accountability. These have been recurring themes during debates on the Bill. I thank the noble Baronesses, Lady Scott and Lady Pinnock, and the noble Lords, Lord Jamieson and Lord Wallace, for their contributions to these discussions. I am particularly grateful to the noble Lords, Lord Bichard and Lord Bassam, for their very constructive engagement and the insights they have shared with me on this issue. While I appreciate the comments from the noble Baroness, Lady Scott, on the late introduction of these amendments, I felt that our discussions on scrutiny in Committee were too important for us not to respond as a Government.
In the English devolution White Paper, we committed to exploring a local public accounts committee model to provide a vehicle to scrutinise local public spending. This recognised that the powers afforded for local scrutiny were not commensurate to the increased scale of powers and responsibilities devolved to mayoral strategic authorities. Local scrutiny committees will replace overview and scrutiny committees in mayoral combined and combined county authorities, providing an enhanced scrutiny regime with stronger oversight and a broader remit to reflect the scale of mayoral responsibilities, with greater teeth to hold mayors to account.
To answer the points about some of the detail raised by the noble Baroness, Lady Scott, as with the existing system, the chair of the committee must be from a different party from the mayor or be an independent person appointed through an open and fair competition. At least 60% of committee members must be councillors from constituent local authorities, rather than the current requirement that at least half of members must be local councillors. These committees must also reflect the political make-up of the area. They will be able to shape early decision-making and undertake value-for-money assessments across the full scope of a mayoral strategic authority’s work. I know that the noble Lord, Lord Shipley, was particularly interested in that ability to shape decision-making before things came before the boards for decision.
The committees will have the power to make recommendations on the quality of decisions and on the use of public funds. They will have the authority to challenge decisions taken by the mayor, commissioners and senior officials and to require attendance and information at evidence sessions. This will also extend to key stakeholders outside the mayoral strategic authority, who will be defined in regulations. Those who fail to comply without reasonable excuse will face a civil penalty, on which further details will be established in regulations.
My Lords, it seems to me that all the amendments in this group would amount to good practice; this is what should happen. I hope the Minister will confirm that the amendments are agreeable.
My Lords, I thank the noble Baroness, Lady Scott, for her Amendments 69 to 74. While I recognise her commitment to accountability in local government, the Bill provides that combined and combined county authorities and independent remuneration panels must take account of any guidance issued by the Secretary of State for this clause.
That guidance will be issued in due course and will provide further details on the matters raised in these amendments. None the less, on the principles raised, I agree with the noble Baroness’s point about transparency. We will seek to be pragmatic, ensuring that we balance clear accountability and transparency against overburdening the authorities in their reporting arrangements. I therefore ask that the noble Baroness withdraws Amendment 69.
We have heard from the Minister that the functions may already exist to provide a degree of oversight. However, the question before us is not simply whether information is recorded; rather, it is whether that information is made very visible, accessible and consistently available to the public.
These amendments do not seek to impose unnecessary burdens. They set out a reasonable expectation that reporting should be regular, transparent and accessible; in short, that it should meet the standards that the public are entitled to expect. This is not about questioning the integrity of those involved. It is about ensuring that the systems within which they operate command public confidence, and that confidence rests on transparency.
I listened to the Minister. We will wait until the guidance comes out to ensure that it reflects what we think the public deserve. At this point, I beg leave to withdraw my amendment.
My Lords, I agree with the noble Lord, Lord Jamieson, on this matter, which I have raised on a number of occasions in your Lordships’ House because I have never been clear about who will actually pick up an overspend when one exists. So this partly about the ability to repay debts incurred and partly about who is actually responsible. In other words, are council tax payers of the constituent authorities liable to help to repay debt?
My understanding is that the scrutiny function can now stop this happening in the first place. In other words, one of my concerns about the failure of the scrutiny system has been that it would not be certain that a scrutiny committee would prevent bad financial investment decisions. But what the Government have done by introducing further amendments makes it possible for the overview and scrutiny function to work effectively in that respect.
So I hope the Minister will clarify those matters. I am worried about who is liable for debt and about who is able to authorise substantial expenditure without certainty that a debt can be repaid. But, in the end, will the scrutiny function the Government have now introduced actually prevent the problems the noble Lord, Lord Jamieson, has identified?
My Lords, I thank the noble Lord, Lord Jamieson, for this amendment, requiring the Secretary of State to report on strategic authorities’ exercise of powers to borrow money. I recognise that this is a well-intentioned and well-reasoned amendment, but I do not believe the provision is necessary. Like the rest of local government, combined authorities and combined county authorities must operate within the prudential framework. This comprises statutory duties and codes intended to ensure that all borrowing and investment is prudent, affordable and sustainable. The framework already provides robust oversight and accountability. I agree with the noble Lord, Lord Shipley, that pre-scrutiny of key decisions by local accounts committees will also help.
In addition, this amendment contradicts the Bill’s aim of furthering devolution and increasing financial autonomy for these authorities, because it would shift reporting requirements up to central government. For these reasons, the proposed amendment is burdensome and duplicative, and I ask that it be withdrawn.
Lord Jamieson (Con)
I just have a quick question before I make my closing speech. Local authorities are required to have a Section 151 officer. Will the strategic authority be required to have one?
I do not want to give a definitive answer to that from the Dispatch Box, but I think the answer is yes—it would certainly be in accordance with local government accounting procedures and practice for anybody involved in spending local government finance to have the professional assistance of a Section 151 officer. I will reply in further detail to the noble Lord.
Lord Jamieson (Con)
My Lords, I am very grateful for the Minister’s response on this matter and her continued engagement since Committee. I also thank the noble Lord, Lord Shipley, for his comments.
We will not push this further beyond reminding the House that this is an aspect of local government finance that deserves continued scrutiny and oversight to ensure that authorities can repay the debts incurred through their powers to borrow. I thank noble Lords for their valuable contributions on this first day on Report and thank the Minister for her responses. With that, I beg leave to withdraw the amendment.
(4 days, 21 hours ago)
Lords ChamberMy Lords, I thank all noble Lords, particularly for such a positive response to the changes brought forward in this group. I hope we continue the evening as we have started; that would be wonderful. I thank noble Lords for their insightful and continued engagement on this Bill, both through Committee and since then, in the various meetings we have held.
In response to those debates, last week the Government tabled a package of amendments that address a number of the points raised during Committee. As I have said before, this Bill is the floor, not the ceiling, of the Government’s ambition for devolution. It will deliver a landmark transfer of power out of Whitehall to mayors, local leaders and communities, and deliver on the Government’s commitment to fit, decent and legal local government. The amendments the Government have brought forward continue in that spirit, and I look forward to debating them with noble Lords throughout Report.
I thank the noble Earl, Lord Clancarty, and the noble Lords, Lord Parkinson of Whitley Bay and Lord Freyberg, for their comments. Government Amendment 2 adds culture as a distinct area of competence within Clause 2. Culture—and its associated sectors, the arts, heritage and the creative industries—has been a topic of considerable debate during the passage of the Bill. I am very grateful to all those who have participated, including the noble Earl, Lord Clancarty, and the noble Baroness, Lady Prashar, for their constructive engagement and valuable contributions.
This Government and I personally believe that culture in its many forms—visual arts, music, theatre, museums, libraries, combined arts, digital media, literature and heritage—enriches our quality of life, supports economic growth, and strengthens social cohesion and pride in place. As your Lordships will know, it has always been the Government’s position that mayors and strategic authorities can, and should, support cultural initiatives. By including culture as a distinct area of competence, the Government are codifying that role in legislation; this is a clear signal of this Government’s commitment to the cultural life of our nation.
My Lords, I thank the noble Baronesses, Lady Bakewell of Hardington Mandeville and Lady McIntosh of Pickering, as well as my noble friend Lady Royall of Blaisdon, for their amendments, for the many discussions that we have had and for their engagement on rural issues in the Bill.
Before I comment on the individual amendments, let me say that a number of noble Lords have mentioned the Commission for Rural Communities. This body, which had primary responsibility for rural-proofing, was formally abolished in 2013, a decision taken by the coalition Government in the bonfire of the quangos. I mention this just in case anyone was left with the impression that it was this Government that had abolished it.
On Amendment 5, I have noted previously that strategic authorities will operate across a wide range of geographies in England, encompassing both highly urbanised regions and more rural areas. The Bill is therefore intended to equip mayors and strategic authorities with the powers that they need to support communities across their entire areas. That is why the areas of competence are deliberately broad. This allows a wide range of activity to fall within scope. In this way, rural issues are already reflected in, for example,
“transport and local infrastructure; … housing and strategic planning”,
and
“the environment and climate change”.
Already we are seeing strategic authorities support rural communities. The East Midlands Combined County Authority has set out a programme of rural affairs and farming projects. These include examining the potential to promote microgeneration and energy independence for farmers and small businesses and committing to convene rural partners to discuss solutions for flood prevention.
I thank the noble Lord, Lord Cameron, for his welcome for the Government’s recent move to recognise the very sharp increases to fuel costs faced by rural communities because of the current conflicts in the Middle East. I welcome that too.
I turn now to Amendments 52 and 61. The Government have introduced amendments to increase the number of commissioners a mayor may appoint. This will increase flexibility by allowing multiple commissioners to operate in a single area of competence and ensure commissioners can operate in one or more aspects of an area rather than the area as a whole. Doing so will enable mayors to appoint commissioners with local cross-cutting briefs and allow them to enlist additional support within a given area. This could mean, for example, two commissioners operating within transport and local infrastructure, with one focused on rural connectivity and the other on active travel.
However, commissioners are intended to be an optional appointment for mayors, whereas the amendments tabled by the noble Baroness, Lady McIntosh, would mandate the appointment of a rural commissioner, removing the mayor’s right to choose. There is already considerable scope for a mayor to appoint a commissioner and provide them with a bespoke brief and title—for example, to position them as an advocate on rural matters within the combined authority or the combined county authority area. The areas of competence are intended to capture broad thematic priorities affecting all communities irrespective of whether they are rural or urban.
The challenges faced by rural communities are addressed within the existing eight areas. Not all strategic authorities have substantial rural populations; some are predominantly urban. A stand-alone competence for rural affairs risks implying that the challenges faced by rural communities are unique to those settings alone. While the specific factors affecting communities will vary place by place, many, such as poor transport connectivity, are shared across rural and non-rural areas alike. In fact, to respond to the noble Baroness, Lady Scott, you could have had a party in the bus stops in my area until very recently when, thanks to some active campaigning, we did get evening buses, but only a couple of years ago there were no buses after 7 pm at all.
Where there is a significant rural population, strategic authorities should be considering the particular challenges and opportunities affecting those communities. This includes housing, where local authorities in local plans and mayors in strategic plans must consider the needs of rural housing and it will be mayors who set the strategic priorities for their area.
The noble Baroness, Lady Bennett, mentioned the powers of the mayor and the land use framework. Of course, mayors, like all other planning authorities, will have to take account of relevant documents including the land use framework, which sets out clearly the need for land for food production.
I turn to Amendment 310. Supporting rural communities is a priority for this Government. We want rural areas to feel the benefits of devolution just as strongly as our major towns and cities. The Bill already equips strategic authorities and mayors with powers that can be used to respond to rural priorities, including in areas such as transport, housing delivery, economic growth and skills. We can already see how mayors and strategic authorities are using these powers to deliver for rural residents. The noble Baroness, Lady McIntosh, may not like strategic authorities very much, but York and North Yorkshire is trialling new affordable housing models for rural communities and the North East Combined Authority has established a dedicated coastal and rural task force to ensure rural and coastal communities have a clear voice in investment decisions.
Finally, I turn to Amendment 326. The Government should not assume they have a better understanding of rural needs and opportunities within strategic authority areas than those areas themselves. Strategic authorities working closely with their constituent councils and communities are best placed to assess local rural circumstances. This amendment would add bureaucracy without improving outcomes. Therefore, I respectfully invite the noble Baronesses not to press their amendments.
My Lords, I thank the Minister for her considered comments and thank all those Peers who have taken part in this debate. Between us, we have managed to cover nearly every aspect of the disadvantage of living in rural communities.
I was very disappointed to be reminded about rural-proofing, because we were championing that years ago—and here we are today, trying to get it back again. It is so important that those who live in rural areas have tailored approaches to those areas, as has already been said. We need to think about agriculture, food production and housing. Housing is so important, along with jobs.
I hear the Minister’s reassurance that rural areas are covered in all the other competences. I have not been here for as long as some people, but I have been here nearly 13 years. I have heard that phrase so many times, but it never happens for rural areas. I feel that it is really important that rural affairs are given the weight they deserve by being in the Bill as a competence. I therefore wish to test the opinion of the House.
I will just say very briefly: what a load of hypocrisy from the other side of the House. I was a member of Cumbria County Council from 2013 onwards. In 2021, a Conservative Minister took a decision to ignore our wishes and create two unitary councils in Cumbria instead of what would have been the most sensible solution: a single unitary council. I hope that when my noble friend on the Front Bench responds, she will agree with me that the Government are not proposing what previous Conservative Ministers did.
I say to the noble Lord, Lord Wallace, who I have great respect for, that I see the Bill as a foundation on which further devolution can be built. If you mess around with it, you will prevent the whole thing going ahead.
My Lords, I thank the noble Baroness, Lady Scott, for these amendments on the establishment of combined authorities.
The Government are very clear that devolution has the potential to drive economic growth, unlock investment and deliver meaningful change, led by local leaders who understand their communities best—I totally agree with my noble friend Lord Liddle. This is why we want more places across England to access devolution, ensuring that no area is excluded from its benefits. As I have said previously, it is to support that objective that we are introducing these powers, alongside clear safeguards to ensure that they are exercised appropriately and only when justified.
Our clear preference, and established practice, is to work in partnership with local areas to develop devolution proposals that command broad support from local leaders and stakeholders. I hope that this will be evident from the orders that we have laid for new mayoral combined authorities and combined county authorities in recent weeks: in Hampshire and the Solent, Sussex and Brighton, Cumbria and Cheshire and Warrington. The Government have been clear throughout the passage of this Bill that the powers are intended to operate as a last resort. These powers would be used only where no viable locally led proposal has emerged.
The amendments from the noble Baroness, Lady Scott, would also remove the provisions in the Bill that simplify and streamline consent, consultation and statutory test requirements for creating and changing the arrangements of combined authorities or combined county authorities. That cuts across one of our core objectives, which is to put in place a quicker and less complex framework so that devolution can be delivered more efficiently and be less onerous for local authorities. Removing these measures would entrench the existing complex processes and risk delaying areas accessing the practical benefits that strategic authorities are already delivering.
Consultation and consent will remain key features of that process, where proposals are developed by a local area. A new, consolidated statutory test will also apply to the establishment of any new authority. These ministerial powers are therefore a backstop mechanism in the Bill, allowing the Government to establish strategic authorities in areas where local leaders have not been able to agree on how best to access devolved powers. This will help ensure that all parts of England can benefit from devolution and that no area is left behind. As I have made clear in many discussions on this subject, we cannot accept proposals that would block other areas from accessing devolution or would risk creating devolution islands.
Finally, I point to the oral evidence given to the Public Bill Committee following the introduction of this Bill in the other place. When asked whether these powers were necessary, opposition witnesses were clear that such powers were indeed needed to advance the course of devolution in England. For these reasons, I invite the noble Baroness to withdraw her amendment, so that the way is clear for all residents to benefit from the funding powers and functions that are set out in the Bill.
Can the Minister explain what a “devolution island” is?
I am very happy to do that. Where local areas are putting together their proposals and a small area in between those areas is left out, it may be necessary to use the powers for that.
Lord Jamieson (Con)
My Lords, I am grateful to noble Lords for their contributions, to the noble Lord, Lord Wallace of Saltaire, and the noble Viscount, Lord Trenchard, for their support, and to the Minister for her reply.
I am afraid that I am not reassured by the Minister’s response. I return to the principle that underpins this group of amendments. Any reconfiguration of local governance must be rooted in the clear, explicit and democratically expressed consent of those authorities affected. Amendment 8 and the consequential amendments simply seek to protect safeguards, safeguarding the relationship and genuine partnership between local and central government.
The question is simple: should change to local government be based on consent or ordered by the Secretary of State? We stand firmly on the side of consent. For these reasons, I intend to test the opinion of the House on Amendment 8 and its consequential amendments and would be grateful for the support of other noble Lords across the House. I beg leave to withdraw Amendment 7.
My Lords, the government amendments in this group are technical amendments. Amendments 75 and 106 correct references to combined county authorities where the provisions are intended to apply to combined authorities. Likewise, Amendments 25, 26, 27, 32 and 37 correct references to combined authorities where the provisions are intended to apply to combined county authorities. I beg to move.
Lord Jamieson (Con)
My Lords, I am grateful to the Minister for setting out this group of amendments. As has been outlined, they are technical in nature, correcting references between combined authorities and combined county authorities to ensure consistency across the Bill. We recognise the need for that consistency.
Briefly, my Lords, this has been another important group of amendments. The response by the Minister will be important, because a lot of very good and important issues have been raised. I am grateful to the noble Earl, Lord Clancarty, for remembering what I said in Committee. Like him, I have concluded that I was right on that occasion, but I will not repeat it now.
I want to say something about Amendment 307, in the names of the noble Lords, Lord Best and Lord Lansley, because I have signed it. This really matters: if you are devolving power over planning, including infrastructure planning, if you are serious about driving growth and want to improve local infrastructure, and if you want good-quality key decisions on land use, you need a very senior planning person named as a chief planning officer. This is not new. I have raised this matter on several Bills in recent years and still think it needs to be done, because it is about raising the status of the profession as a career option, but it is also about giving the general public the necessary respect for views expressed by a chief planning officer.
I noted the comments of the noble Lord, Lord Best, about my city of Newcastle-upon-Tyne and the North East Combined Authority, and I agree entirely with what he said. He is absolutely right: it needs to be a statutory role. This is not a complex issue. The Government should just do it, and have the confidence to do it, because we want devolution to be a success—and to be a success, you have to have the right quality of decisions being made by the right level of senior officer, who recommends the right answers to politicians. With that, I hope very much that we shall hear from the Minister that the Government are minded to agree Amendment 307, at the very least.
My Lords, I thank the noble Baronesses, Lady Scott, Lady McIntosh and Lady Bennett, the noble Lord, Lord Best, and the noble Earl, Lord Clancarty, for amendments relating to planning, and I thank all noble Lords who have spoken in this debate. I will speak first to Amendments 41, 122, 123, 125 and 126 from the noble Baroness, Lady Scott, moved or spoken to by the noble Lord, Lord Jamieson. While I agree with the need to ensure that places are identifying and meeting growth opportunities, these amendments are not necessary. The Planning and Compulsory Purchase Act 2004 already requires strategic planning authorities to have regard to any plan or strategy that they have published, and consider relevant, while preparing their spatial development strategies. This could include a local growth plan.
We set out in the draft revised NPPF that spatial development strategies should give
“spatial expression to strategic elements of Local Growth Plans”,
as mentioned by the noble Lord, Lord Lansley. Further, to respond to the noble Lord, Lord Lansley, local growth plans will be required to include a pipeline of investment opportunities to enable economic growth. We expect those pipelines to include investment opportunities linked to infrastructure or development. I hope the noble Lord contributed to the consultation on the National Planning Policy Framework with the other points that he made.
I turn to Amendments 124, 127 and 186. As I have set out, the Government want arts and culture to thrive across the country. That is why we are introducing culture as a new area of competence for all strategic authorities. It is also why we have committed to working with mayoral strategic authorities, including through a devolved fund, to drive growth in this important sector. Many are already supporting the cultural sector in their local growth plans, while some places are taking this further with dedicated culture strategies and industry partnerships. Local growth plans look across a wide range of needs and opportunities in their regions, including the cultural sector.
As I mentioned, our guidance on local growth plans asks mayoral combined authorities and mayoral combined county authorities to set a pipeline of projects critical for unlocking growth. It must be up to local areas, working with relevant stakeholders, to determine which projects fit this requirement. That is why we have avoided being overly prescriptive about the content of local growth plans. The additional requirement proposed by these amendments would risk upsetting that approach, which is already under way in many places.
I turn to Amendment 120. I reassure the noble Baroness that the Government are firmly committed to taking a systematic approach to tackling drainage issues and to strengthening the implementation of sustainable drainage systems. However, these matters are more appropriately dealt with by local planning authorities, rather than strategic authorities. We are putting in place a robust framework to guide and support local planning authorities in this important work.
The National Planning Policy Framework already requires all developments that may have drainage implications to incorporate sustainable drainage systems. However, we are proposing to go even further. The consultation on a new framework, which closed on 10 March, proposed that
“Sustainable Drainage Systems should be designed in accordance with the National Standards”
introduced last year to improve their design and implementation.
The consultation also included a proposed plan-making policy expecting early engagement between plan-making authorities and wastewater companies to ensure that there is a clear understanding of drainage and wastewater capacity constraints and any additional infrastructure requirements, with particular regard to the impacts of planned growth and relevant infrastructure plans. We have recently laid regulations for the new plan-making system. These regulations prescribe water and sewerage companies under the new requirement to assist. They will be obliged to assist with plan-making where a plan-making authority reasonably requests it. Therefore, this amendment is not necessary, given the actions I have set out.
I turn to Amendment 307, tabled by the noble Lord, Lord Best. I appreciate the strength of feeling which has brought this amendment before us again; it is an important issue. However, as I said in Committee, I do not believe it is something we can take forward in legislation without first having further engagement with local authorities and the sector to understand the full implications. New legislative requirements on local authorities in this area must have a clear purpose and add value. In particular, I am keen to monitor how our national scheme of delegation reforms from the Planning and Infrastructure Act works in practice and to get feedback from local planning authorities on the role of chief planners and the equivalent officers in this process.
As the noble Lord is aware, we consulted last year on reforms to planning committees, which will give chief planners a strong role in deciding which applications should go to planning committees. We hope to publish the statutory consultation on the draft regulations and guidance shortly. We welcome views about these important new arrangements, and the House will have an opportunity to debate the final regulations later this spring.
Turning to Amendment 246, I am sympathetic to the need to ensure that our drive for new homes does not come at the cost of existing business. However, I do not believe the statutory route is the most effective way forward. The issues the agent of change policy needs to address are inherently scheme-specific, requiring case-by-case assessments of potential impacts and mitigations as part of the overall planning balance, which lends itself to a policy approach. National planning policy already clearly enshrines the agent of change principle as a material consideration. The onus is squarely on applicants to provide suitable mitigation where existing development in the vicinity is likely to have significant adverse impacts.
Moreover, the new planning policy framework proposes to strengthen the agent of change principle. It sets out more clearly the matters to be considered, including the need to identify the nature of potential impacts and engage early with existing uses. Following analysis of the responses, we will publish the final version in the summer. Local planning authorities can require noise impact assessments when they consider that a proposed development is likely to be affected by existing noise sources. Guidance is clear that a range of mitigation measures should be considered, including good design to reduce the impact of noise from adjoining activities, incorporating noise barriers and optimising sound insulation.
Additionally, local authorities can already take the agent of change principle into account under the existing licensing regime. The legislation recognises that different areas face different challenges and licensing authorities may reflect the principle in their statements of licensing policy where they consider it helpful or necessary. We conducted a call for evidence last November on reforming the licensing framework, which sought views on whether it would be beneficial to strengthen the existing approach. A full analysis of responses to this proposal will be published in due course.
Finally, local authorities have a duty to take such steps as are reasonably practical to investigate a statutory nuisance complaint. They consider a number of relevant factors, including the noise level and frequency and the character of the local area. Therefore, while I recognise the importance of protecting cultural venues from the impacts of new housing nearby, I do not consider a statutory approach to be the right solution. Existing policy and legislation already give local authorities the tools to apply these principles in their decisions and we are taking further steps to strengthen implementation across the planning and licensing systems.
Before we test the opinion of the House, when the time comes, could I just ask: if it is working well in Scotland, where there is a statutory basis, why are the Government so opposed to this? Does the Minister not realise that the guidance is simply not being adhered to, and practitioners are at their wits’ end on that basis?
I am very happy to take back the points about Scotland, but we have conducted an extensive call for evidence on licensing, and we are carrying out an extensive review of the National Planning Policy Framework, so there has been plenty of opportunity for people to contribute their views on that. In both cases, we will be analysing the responses and publishing our responses on the NPPF in the summer and on the licensing framework in due course.
Turning to Amendment 306, tabled by the noble Baroness, Lady McIntosh, I do not believe this amendment is justified or proportionate. We are concerned that adopting it now could have unintended consequences. The Government have recently consulted on reforms to the statutory consultee system and consultation feedback is now being reviewed. It is important that we allow this process to conclude before taking any decisions on consultation outcomes. Introducing fire and rescue services as statutory consultees in the planning process at this stage would therefore run ahead of the review’s conclusions and impose additional administrative responsibilities on these services.
Of course, I am aware—we have discussed it many times—that battery energy storage system developments are a particular area of interest. These installations are already governed by a robust regulatory framework overseen by the Health and Safety Executive, which places clear responsibilities on designers, installers and operators to uphold high safety standards. In addition, planning practice guidance encourages developers of larger battery energy storage system schemes to work proactively with fire and rescue services. This guidance also encourages local planning authorities to consult with these services for these types of larger schemes and to take account of guidance published by the National Fire Chiefs Council when determining the planning application.
Alongside this, the Government are actively exploring whether further measures are needed to enhance the regulatory oversight of environmental and safety risks linked to battery energy storage systems. Defra’s recent consultation on modernising environmental permitting included proposals to bring battery energy storage system sites within the environmental permitting regulations. Defra is now considering the feedback received and will publish its response in due course.
Finally, I turn to Amendment 308. The Government’s position remains unchanged. Given the significant changes to local plan-making that we have recently set out, now is not the time to introduce neighbourhood priorities statements. On the question from the noble Lord, Lord Jamieson, on when neighbourhood priorities statements will be introduced, we will consider the progress on them once the local plan reforms have taken effect.
The second aspect of this amendment would substitute arrangements made under Clause 60 for neighbourhood fora as the bodies permitted to prepare neighbourhood priorities statements. This is not the purpose of Clause 60. While neighbourhood planning groups, including neighbourhood fora, may be involved in arrangements made under Clause 60, their functions are separate, and should remain so.
My Lords, I will start by thanking noble Lords for their rigorous and detailed representations on the mayoral commissioners model that the Bill introduces. I think it is fair to say that there is a plurality of views on this important area, evidenced by the substance of the amendments tabled and the hours of considered debate in both Houses. The government amendments that I am introducing today follow considerable deliberation on those contributions. They focus on ensuring that we balance the operational flexibility of the commissioner model with appropriate accountability and scrutiny—issues that have been raised repeatedly in this House.
I will take these amendments in five groupings. First, government Amendments 42 and 46 increase the maximum number of commissioners the mayor may appoint from seven to 10. Secondly, government Amendments 50, 53, 55, 59, 62 and 64 allow multiple commissioners to operate in a single area of competence. Thirdly, government Amendments 51 and 60 ensure that commissioners can operate in one or more aspects of an area, rather than only the area as a whole. Fourthly, government Amendments 54 and 63 clarify that a commissioner must not carry out work in cases where a mayor ceases to hold office early, with the exception of winding down their office. Finally, government Amendments 56 and 65 clarify that an appointment can end in accordance with contract law if not otherwise provided for in the terms and conditions of their appointments.
These changes will increase the overall flexibility of the model, enabling mayors to appoint commissioners with local cross-cutting briefs related to an area of competence, and allowing them to enlist additional support within a given area. This could mean, for instance, two commissioners operating within the transport and local infrastructure area of competence, with one focused on rural connectivity and the other on active travel. I emphasise that the ability to appoint up to 10 commissioners recognises that we expect the devolution framework to grow over time, thereby providing a contingency as mayoral duties and powers expand. It does not mean mayors frivolously appointing people based on patronage. We know that mayors want high-calibre individuals whom they can trust to help them deliver for their regions. Therefore, to bring in people with a track record of success, these appointments should be on merit.
While combined authorities and combined county authorities will have the ability to remunerate commissioners, that does not give mayors carte blanche to pay them what they want. Commissioners may only be remunerated in line with the recommendations and maximum amount specified in a report from an independent remuneration panel.
To be clear, no additional funding is being provided for these appointments. We expect combined authorities and combined county authorities to make appointments prudently on the basis of where they determine that a commissioner will add value to achieving public outcomes. Part of that success relies on commissioners being accountable and their performance being open to scrutiny. That is why, alongside the mayor being able to terminate appointments, the overview and scrutiny committee may also recommend a termination. The decision on whether to accept that recommendation must then be put to a vote of the authority’s board.
Commissioners will also be subject to the strengthened accountability measures being introduced through local scrutiny committees. This includes removal from post for failing to attend six consecutive meetings of a local scrutiny committee, and financial penalties for failing to answer questions or provide information, or for misleading a local scrutiny committee. I beg to move government Amendment 42, and I commend government Amendments 46, 50, 51, 53 to 56, 59, 60 and 62 to 65. I reserve my right to speak later in response to other noble Lords’ amendments.
My Lords, this is going to be the shortest speech I have ever made in the Chamber, but it is really meant. I thank the Government and the Minister for the three amendments that I moved at an earlier stage, which are now tabled as government Amendments 42, 46, 51 and 62. These make three excellent changes that will very much assist the flexibility that will be enjoyed under the new devolution principles. Again, I thank the Minister very much for her and the department’s assistance with these three very good amendments—I think that is now probably the unanimous view—that will add to the Bill.
Lord Jamieson (Con)
My Lords, I have expressed my strong reservations and serious concerns about the appointment of unelected commissioners on a number of occasions during the passage of this Bill, and I again join the noble Lord, Lord Shipley, in his criticism of Clause 9. Again, I ask the Minister: do we really want or need more unelected bureaucrats involved in running local authorities? To make matters worse, they now propose to increase the number of commissioners from seven to 10—why? What possible reason could the Government have for allowing mayors to appoint even more?
In Committee, we asked why senior councillors could not take on these roles, and we have not had a satisfactory answer. This is a perfect example of how, if you create a bureaucracy, it grows. We need to ensure that this does not happen, because it is all paid for by the taxpayer and we need to ensure value for money. That is why I, along with my noble friend Lady Scott of Bybrook, tabled my Amendments 44 and 45.
Amendment 44 would reduce the number of commissioners who can be appointed from seven to five. Reducing the costs of local government to taxpayers should be a priority. Amendment 45 would require the appointment process for commissioners to be fair, open and transparent. I thank the noble Lord, Lord Shipley, for his support in this. It is important that these appointments of unelected officials are transparent. The Local Government Association has expressed concern about the role of commissioners and wants assurances that there will be robust scrutiny arrangements to hold them to account, given their potentially significant role and remit. Can the Minister outline how the Government will ensure that accountability is maintained in the appointment of commissioners? I am doubtful that the Government will be able to satisfy me that the process will ensure value for money and democratic accountability, so, when Amendment 45 is called, I will seek to divide the House.
I thank all noble Lords for their contributions to this debate. As I said earlier, I recognise that this is an important issue, and we want to get it right, not least because we care about bettering those places and communities that are personal to all of us.
Amendment 44, tabled by the noble Baroness, Lady Scott of Bybrook, seeks to reduce the number of commissioners a mayor can appoint to a maximum of five. I remind noble Lords that ensuring that mayors have the capacity and capability to undertake the new responsibilities we are devolving to them is essential to ensuring that devolution is a success. Commissioners are a key part of a mayor’s toolbox. Reducing the number of appointments to a maximum of five simply limits the flexibility and scope of the model. In particular, it would mean that a mayor would not have the option to appoint at least one person to operate in each of the eight areas of competence should they want to. We have had much discussion, both in the Chamber today and during Committee, with noble Lords wanting other areas of competence, including rural and cultural areas. We do not want to inadvertently force mayors to neglect particular areas of competence because they lack the support they need.
I must reiterate that these are optional appointments. We expect combined and combined county authorities to make their appointments prudently, based on where they determine a commissioner will add value to achieving public outcomes.
To respond to the question from the noble Lord, Lord Jamieson, about why council leaders cannot do this work, commissioners are expected to be politically restricted posts, which means that they should not be able to undertake certain activities that someone sitting as a council leader would do, such as canvassing on behalf of a political party. It would therefore not be appropriate for a council leader to be appointed as a commissioner. Council leaders acting as portfolio leads play an important but distinct role from commissioners, and we expect both to work together and will detail this in forthcoming guidance.
(5 days, 21 hours ago)
Grand CommitteeThat the Grand Committee do consider the Sussex and Brighton Combined County Authority Regulations 2026.
Relevant document: 52nd Report from the Secondary Legislation Scrutiny Committee
My Lords, these regulations were laid on 11 February 2026. Before I proceed, I draw the Committee’s attention to a correction slip that has been issued for these regulations. It corrects the name of the appropriate administering authority for pension purposes from East Sussex to West Sussex. This change was requested by, and agreed with, the constituent councils. When referring to the Sussex and Brighton Combined County Authority, I will use the term “strategic authority” hereafter unless there is a reason to be specific.
Devolution is a critical lever for delivering growth and prosperity, with mayors and local leaders being best placed to take the decisions that benefit local communities. This Government were elected on a manifesto commitment to widen and deepen devolution across England. The English Devolution White Paper set out our plans to achieve that. Much of that White Paper is now being taken through Parliament via the English Devolution and Community Empowerment Bill.
The White Paper also launched the devolution priority programme to provide a fast track to establish a new wave of mayoral strategic authorities. Following an expressions of interest process, in February 2025 we announced six places on the programme, including Sussex and Brighton. This statutory instrument will establish their strategic authority and provide for mayoral elections. In doing so, it represents substantial progress towards fulfilling our commitment to move power out of Whitehall and back to those who know their areas best.
The Government have worked closely with the constituent councils in Sussex and Brighton on the instrument. The constituent councils are West Sussex County Council, East Sussex County Council and Brighton and Hove City Council. All the constituent councils have consented to the making of this instrument, and I thank local leaders and their councils for their support in getting us to this point.
The instrument will, if Parliament approves, be made under the enabling provisions in the Levelling-up and Regeneration Act 2023. The strategic authority will be established on the day after the day on which the instrument is made. The inaugural mayoral election is due to take place on 4 May 2028, and the elected mayor will take office on 8 May 2028 for a four-year term.
The instrument makes provision for the governance arrangements of the strategic authority. Each constituent council will appoint two of its elected members to be a member of the strategic authority, with the mayor also a member once in office. The strategic authority can also appoint non-constituent and associate members to support its work. Each voting member is to have one vote, and the vast majority of decisions are to be determined by a simple majority of the members present and voting. Once the mayor takes office, that majority must include the mayor, or the deputy mayor when acting in place of the mayor.
The instrument provides some functions in relation to transport and economic development, but there is a strong link here with the English Devolution and Community Empowerment Bill. Subject to Royal Assent, the Sussex and Brighton strategic authority will be classed as a mayoral strategic authority and the functions reserved for that tier will automatically be conferred. Even before the mayor is in office, the strategic authority will be able to exercise mayoral strategic authority functions, with the exception of those that are specifically reserved for the mayor. That is why this instrument confers fewer functions than previous instruments establishing strategic authorities. The functions that it confers, focused around local transport and economic development, are designed to support the work of the strategic authority before the Bill is in force and enable it to deliver the benefits of devolution from day one.
MHCLG consulted on a proposal to establish the strategic authority between 17 February and 13 April 2025. The purpose of the consultation was to gather evidence and information on the effects of establishing the strategic authority. The consultation was promoted using social media, a communications campaign, a dedicated website, online and in-person events and distribution of consultation materials. Responses could be made online, by email or by post. They were received from a wide range of stakeholder groups, including members of the public, businesses, councils, universities, the third sector and other bodies. A summary has been published on GOV.UK. The Government carefully considered the responses and on 17 July confirmed to Parliament that the statutory tests to establish a strategic authority had been met.
Subject to the making of this instrument, the strategic authority will receive devolved funding. This will include devolved funding for transport and adult skills, capacity funding and a 30-year mayoral investment fund to support key local priorities.
To conclude, this instrument represents clear progress in our mission to widen and deepen devolution in England and will make this a reality in Sussex and Brighton. It will empower local leaders to deliver for their communities, improving the lives and opportunities of their residents. I hope noble Lords will join me in supporting the draft regulations, which I commend to the Committee. I beg to move.
My Lords, I thank the Minister for her introduction to this statutory instrument, one in a series of statutory instruments creating county combined authorities that we have discussed over several months.
I start with what the Minister said about the purpose of this statutory instrument: that the Government wish to “widen and deepen devolution”. We Liberal Democrats support devolution and have long advocated for it. However, the Secondary Legislation Scrutiny Committee noted in its report on this SI that of the more than 6,000 responses received from the public,
“71% disagreed that it would support … local communities”.
The SLSC asked, given that local opposition—the overwhelming majority of those 6,000 responses not in favour—how the Government will ensure that the mayor has a “firm democratic mandate” and that local residents are able to “engage” with the system. That seems to be fundamental for any devolution proposal—that it takes people with them. Clearly, from the response to the consultation, that is not the case. I hope that the Minister has some responses to that committee’s report.
The Government have given a formal response to the committee’s report, which included a commitment to future strengthening of scrutiny. As the Minister will know, every time we discuss this, I criticise the scrutiny arrangements in mayoral authorities as being totally inadequate for the range and depth of functions that the mayor will have. One of the easy ways to improve scrutiny would be by ensuring that pre-decision scrutiny is the norm. I wonder whether the Minister can give us any hope that this will be the case.
I have a couple of other points to make. The financing of the mayoral model—if I have read it right—is to be from the constituent councils until the mayoral elections. If that is the case, can the Minister quantify the financial call on the constituent local councils until that time?
The main concern I have is that the Government are proceeding with mayoral devolution alongside very significant local government reorganisation. Two major reorganisations in local government are taking place in that area, which will inevitably cause increased expenditure in the first instance. Establishing the different and new authorities will inevitably be a call on the constituent authorities’ finances. It will not all be funded by grants—it never is—and that will inevitably mean a call on financing of basic public services. Does the Minister agree with that?
Finally, the Government and the previous Government are very keen on the mayoral model, but at no point have we had an assessment or a review of its achievements and its failures. Looking across the metro mayors that have been established, there have been some notable successes. The bus transport system in Greater Manchester has been a success, but there are other parts of the country—looking towards the north-east of the country—where it has not been such an overwhelming success and great question marks have been raised about the way that the mayor and the authority have fulfilled their statutory requirements. It is important that the Government do a review and an assessment of the various mayoral models that have been instituted across the country.
Lord Jamieson (Con)
My Lords, I also thank the Minister for her introduction to these regulations. We on these Benches support the principle of devolution. As the Minister outlined, these regulations will establish a new combined county authority for Brighton, Hove, East Sussex and West Sussex under the framework set up in the previous Conservative Government’s Levelling-up and Regeneration Act 2023. However, there are some issues that merit closer scrutiny.
The noble Baroness, Lady Pinnock, has already raised the Secondary Legislation Scrutiny Committee’s comment on the consultation underpinning these proposals, which revealed significant public concern, particularly around the implementation of a mayoral model. A clear majority of respondents did not believe that such a structure would reflect local identities or deliver meaningful benefits. That raises an important question about how devolution is being delivered. If it is to succeed, it must carry public confidence. Does the Minister agree?
Secondly—I would welcome further clarification from the Minister here—there are questions about timing, funding and democratic accountability. The Government have been clear that they intend to establish mayoral strategic authorities in devolution priority programme areas as quickly as possible. Indeed, we are told that the legislation for Sussex and Brighton is already being progressed and that institutions will be set up with the consent of constituent councils. However, as my noble friend Lord Porter pointed out, at the same time the Government have confirmed that the inaugural mayoral elections in these areas have been delayed until May 2028. That is much later than originally planned and is accompanied with a delay to the full powers, such as strategic planning, CPO and, importantly, full mayoral funding, which will be only 40% of that originally promised in the interim. Parties had already selected their candidates and were preparing for an election, so why is the mayoral election being delayed? Why can the full funding not be implemented now? It was on that basis that the councils involved embarked on the devolution programme, but the Government are not fulfilling their end of the programme.
The justification offered for this delay is that it allows time for local government reorganisation and the establishment of robust institutions. That is a weak excuse. Having experienced devolution first hand, I know that previous programmes have been delivered to a tighter, clearer timetable without the need for constant postponement of elections or, more recently, their reinstatement. It creates an unusual and uncomfortable position. We are being asked to approve the creation of a new strategic authority, the transfer of powers to it and the establishment of an institutional framework without a directly elected mayor in place for another two years. In effect, structures of devolution are being put in place while the democratic leadership is deferred until later. Can the Minister clarify the interim governance arrangements and, in particular, who is ultimately accountable to the public during this interim period for the exercise of these new powers? We appreciate that this instrument does not in itself determine the timing of elections, but it is inseparable from that broader context, and it is entirely reasonable for this Committee to probe how these arrangements will operate in practice.
To be clear, we are supportive of the creation of the Sussex and Brighton combined county authority in principle, but we are aware that devolution must be locally supported and democratically grounded from the outset. Also, the terms of the deal with the residents of Sussex should not be changed half way through the process. On that basis, I hope that the Minister can provide some reassurance on how accountability will be maintained in the period before May 2028 and whether any consideration has been given to shortening that timetable. I also commend my noble friend Lord Porter on his important question regarding pensions and look forward to the Minister’s response on that.
My Lords, I thank noble Lords for their contributions and their broad support for the Sussex and Brighton authority, which I think is broadly welcomed in the local area.
The noble Baroness, Lady Pinnock, asked me about the 6,000 responses. The purpose of the consultation was to gather evidence and information on the effect of establishing a mayoral combined authority over that proposed geography. Unsurprisingly, respondents provided a range of views, including evidence setting out the potential benefits, as well as some concerns. The Government carefully considered the responses received. The results of the consultation formed part of the assessment made by the Secretary of State on the relevant statutory tests, as set out in Section 46 of the Levelling-up and Regeneration Act 2023. The Secretary of State’s decision was that those tests were met. It is not surprising that knowing how exactly this will work might have been a concern for some people, but I have looked at the evidence that came back and there was a pretty equal balance between the concerns and the things that people thought were a plus.
The noble Baroness mentioned scrutiny arrangements. I am not sure whether she was here the other day when we debated this on the English devolution Bill. The Government are bringing forward arrangements in that Bill to introduce local scrutiny committees with powers to scrutinise what the mayor is doing. Her noble friend Lord Shipley has raised this with me on a number of occasions, as he was concerned that those bodies should have powers to undertake pre-scrutiny. They will have those powers. This will be a powerful body to make sure that the mayor’s work gets scrutinised properly.
The noble Baroness and the noble Lord, Lord Jamieson, raised LGR and asked why the mayoral arrangements are not being put in place until the foundation strategic authorities have been set up. The Government’s carefully considered decision is that we need resilient and sustainable authorities in place, and then the mayors will be elected. That is how we are taking that forward.
On the noble Baroness’s point about the review of mayoral arrangements, there are a huge number of advantages to them. Mayors can use their mandate for change to take the difficult decisions needed to drive economic growth. They have standing and soft power to convene local partners to tackle shared problems, directly exercise devolved powers and attract inward investment. They also have a platform for tackling the obstacles to growth that need a regional approach. Mayors are accountable directly to their citizens and have the profile to stand up for them on the national stage. They are able to both partner with and challenge central government where needed. That partnering on the national stage is critical. We now have the mayoral council to enable the regions represented by mayors to sit around the table and represent them to national government, which is really powerful. We are seeing that voice being amplified for local people in many areas that already have mayors, including Manchester, which the noble Baroness mentioned, London and the West Midlands, as well as other areas that are still developing but nevertheless are exercising their mayoral role powerfully.
The noble Baroness also asked whether councils and taxpayers will fund the CCA. The Government will support with the costs associated with the new authority through capacity funding, and the authority will also receive its investment fund as well as devolved funding for specific functions such as transport and adult skills. Beyond the support provided by the Government, the budgets of strategic authorities and how any costs are funded will be a local decision. The extent to which the constituent councils need to contribute at all to the running of the authority will therefore be decided locally.
I thank the noble Lord, Lord Porter, for his comment about this being a price worth paying to get power out of Westminster. That has long been my view, and we have had many discussions about it over the years. First, on the pensions pot, we are still making decisions on how the LGR will be taken forward, but that has not yet been announced. The Government are considering those questions and will respond in due course, so the foundation strategic authorities will hold the ring on pension provision for now, until the mayors come into post.
The noble Lord, Lord Jamieson, asked why we cannot have mayoral authorities now. I think I have explained that we want to make sure that these foundation strategic authorities are on a firm footing before we bring in the mayoral arrangement. He spoke about democratic arrangements. Once they come into post, the mayors will be directly elected across the whole area. Nevertheless, representatives on the foundation strategic authorities have their own democratic mandate, because they will be nominated from the councils concerned.
On the funding that the strategic authorities will receive, we will support with the costs associated with the new authorities. Sussex and Brighton have received £1.5 million this year in capacity funding to help towards establishment, and will receive a further £7.5 million over the next three years to help with core running costs. They will also receive the 30-year mayoral investment fund once the mayor is in post, as I have said. That will be £38 million a year, £1.14 billion over the 30 years. They will receive a portion of this in the two years prior to the mayor being elected to support the early delivery of growth priorities, and will also receive other devolved funding such as for transport and adult skills.
It is essential that the benefits of devolution are not delayed, and that is why, in the interim period between the establishment of the mayoral strategic authority and the inaugural mayoral elections, we will provide the authorities with a proportion of their investment funds, so that they can start delivering on key local priorities and deliver some benefits ahead of the mayor taking office. The strategic authority will have a number of functions available in the interim period to enable and encourage investment in the area, subject to Royal Assent to the Bill. These include: the general power of competence, with the duty to develop a local growth plan and the power to borrow to an agreed cap; a health improvement and health inequalities duty; functions to acquire land, provide housing and build infrastructure, enabling it to make strategic interventions and support local growth ambitions; and responsibility for public transport and local transport planning, joining up the transport network across the region and helping people get to work, education and leisure activities.
In conclusion, this instrument delivers the commitment made with Sussex and Brighton to establish a combined county authority. I hope the Committee will welcome the regulations.
Lord Jamieson (Con)
When we have requested a timetable for devolution elsewhere, the Minister has said that elections in May 2028 would be held not only in the six priority areas but in a number of other authorities, as part of this devolution. I am slightly confused as, if there is a need for the six priority areas to have this period of time, having already started the process towards May 2028, how will those that have not even started the process be able to do it by then? By inference, if the others can do it more quickly, why can these not do it more quickly, so that we could have those elections earlier? My noble friend Lord Porter suggested possibly May 2027.
The time periods are quite compressed, as the next tranche of 14 areas will be decided before the Summer Recess. The decision-making is quite close together and it is up to us to make sure that we get these SIs through, so that the foundation strategic authorities are in place before the mayoral elections all take place in 2028.
(5 days, 21 hours ago)
Grand CommitteeThat the Grand Committee do consider the Non-Domestic Rating (Rates Retention and Levy and Safety Net: Miscellaneous Amendments) Regulations 2026.
The most exciting ones always come at the end.
As many noble Lords will know, the Government are embarking on a much-needed funding reform for English councils to ensure that resources are aligned with need across the sector, with the first multi-year settlement in a decade delivering that reform. The business rates retention system is a major part of the overall local government finance system under which English councils retain a share of the business rates they collect, as well as a portion of any growth in that income. Resetting the system is a key element of the wider reforms, ensuring that funding is better aligned with need while preserving the incentive for authorities to continue to drive local growth.
In parallel with these reforms, the Government are also implementing substantial changes to business rates tax policy, which I am sure noble Lords will agree is also an essential task. As a result, the Government must make technical updates to the business rates retention system to ensure that, as far as is practicable, local government funding is not impacted by these changes, which are outside the control of local councils.
The instrument before the Committee today will update the business rates retention system to factor in local government finance reform and to accommodate changes to the tax. It amends two key sets of regulations on which the rates retention system is run. The levy and safety net regulations establish the safety net through which authorities are protected from large drops in business rates income; they fund that protection by applying a levy to business rates growth. The rates retention regulations set out the fundamentals of how the system operates, including how business rates income is calculated and shared between central government, billing authorities and major precepting authorities. The amendments are technical but clear in purpose; I will explain them now.
The safety net and levy determine the balance of risk and reward in the business rates retention system. To ensure that this balance is appropriate through the multi-year settlement, the Government announced changes at the settlement; this instrument puts them in place. First, the level of safety net protection is being increased to 100% of baseline funding level or need, provided through rates income for 2026-27. This is something that local government has welcomed and which noble Lords will, I am sure, agree is sensible. Secondly, the levy on business rates growth will now operate on a marginal basis, with different rates applying as growth increases up to a maximum of 45%. This balances the reward of business rates growth with the need to fund safety net protections.
Moving on, in response to the reset and wider tax policy changes, we are making changes to ensure that grant compensation paid to councils in lieu of business rates is treated in the same way as the rates themselves, streamlining local government accounting.
Next, the instrument updates key formulae and figures that are used to run the rates retention system in order to reflect changes and updated values from the funding reforms delivered through this year’s settlement. This includes figures used to calculate different measures of local authority income for the year.
Finally, we are making a series of minor amendments that are aimed at reducing complexity across the system wherever possible, which noble Lords will, I am sure, value. These include disapplying provisions that are no longer required, future-proofing routine calculations and streamlining a number of small funding mechanisms.
These amending regulations make technical changes to the business rates retention system, putting into effect what is required due to funding reform and changes to business rates tax policy. If approved, they will ensure that councils receive the business rates income the system is designed to deliver. I beg to move.
My Lords, I draw the Grand Committee’s attention to my interest as a councillor on Kirklees Council.
This is a very technical measure and a bit of a mixed bag. The reset of the business rates retention system is long overdue and welcome. For too long, the distribution of resources has been based on figures from when the system was introduced in 2013, so recalculating each authority’s assessed need and business rate tax base to redistribute funding on a needs basis is welcome. Given that aim, it is surprising that the Government have not produced an impact assessment. The Explanatory Memorandum says within it that most authorities will find that the system works for them, but some will not, so an impact assessment would be very welcome to understand the winners and losers, and to what extent they are winning or losing. Can the Minister provide some basic impact assessment, not for all authorities but for those that will benefit most and least so that we can see how this will work in practice?
The safety net established in this SI is to be supported because, while any fundamental changes in the business rates system take place, it will enable local authorities to have stability in their known income. That is positive, but as far as I could see it is not explained how authorities already in a pooled system will be impacted, such as those in West Yorkshire. All the data provided is based not on a pool of authorities but on individual ones, so it would be helpful to understand how that works. The proposal for Section 31 grants is welcome, because it will also help remove the impact of volatility in the system.
The downside is, I guess, the move away from the whole purpose of the business rates retention system, when introduced 10 or 12 years ago, as an incentive for growth. The introduction of marginal tax rates—which is what they are—on growth that exceeds the limits could be viewed as a tax on success. That is somewhat at odds with the Government’s fundamental position that growth is everything. It does not seem to apply in this case. How far do they think that these marginal tax rates of 30% and 45% will encourage or discourage investment and growth in particular areas?
This is a mixed bag. The reset is necessary for fairness and a safety net is good for stability, but having worked figures would have been really helpful so that we could understand the consequences.
My Lords, I am grateful for all those comments. It is absolutely important to get the balance right between incentivising growth and ensuring that areas needing it benefit.
Like the noble Lord, Lord Fuller, I took the decision to go into a pooling arrangement. I will cite my area as an example of the difficulty. These are figures from a few years back, because I am not involved with it now, clearly. Our collection of business rates was around £44 million, and we got about £2 million back. We need to make sure that we continue to incentivise the growth we want to see. I will cover in a bit more detail some of the points that noble Lords raised.
On the impact assessment that the noble Baroness, Lady Pinnock, raised, the changes made by the instrument will put in place reforms delivered via the local government finance settlement. More information on the impacts of the charges is included as part of that settlement. The instrument will put in place the technical figures and formulas relating to that. I add that because these are technical regulation amendments, policy officials in the department have undertaken extensive engagement to prepare for their implementation, including consultations and targeted technical engagement with sector representatives and specialists, to make sure the proposed amendments achieve the correct policy intent. I hope that answers the noble Baroness’s points on impact assessment.
I am grateful to the noble Lord, Lord Fuller, for his welcome for multi-year settlements. He and I both argued long and hard for that over the years, and I am very pleased that we have been able to deliver that.
The noble Baroness, Lady Pinnock, asked about local authorities being affected by the Government changing how they are compensated for business rates relief. Now that we are compensating for reliefs via Section 31 grants, based on data collected from the authorities themselves, they will receive pound-for-pound reimbursement. They will be compensated by the usual annual data collection process, based on their returns, and this mirrors the way compensation for reliefs via Section 31 grants currently operates. Previously, authorities were funded for most reliefs through a reduction to their tariff or an increase in their top-up. Given that these amounts remained fixed in real terms over time, they were expected to absorb some of the costs associated with certain reliefs. We think that this will actually be of benefit to local authorities.
Both the noble Baroness, Lady Pinnock, and the noble Lord, Lord Fuller, raised questions about the pooling method used. Transitional arrangements are in place to take local authorities, including those in pools, from current arrangements to their new arrangements, and this includes a measurement of the income they started from, including any income from pooling. Following consultation, we are making a change to better reflect income from business rates pooling, which is included in local authority transitional funding baselines.
The Government’s objective across this process has always been to make the best possible estimate of current local authority income. The revised method will still ensure that pooling gains are allocated across the locally pooled area. Within each pool, 50% of levy savings will be allocated between tariff authorities and 50% will be allocated between top-up authorities. The complexity and variety of pooling arrangements, which the Government are not directly involved in, mean that a central assumption is used to estimate pooling gains for this specific purpose. To help councils adjust for the change, the Government will provide a one-off adjustment support grant in 2026-27 to authorities that would otherwise see their core spending power reduce in 2026-27. The pooling assumptions for 2027-28 and 2028-29 will be subject to consultation at the next settlement. I have already started talking to local authorities about this.
I think all Peers who have spoken referred to the potential for growth disincentive. The business rates retention system was designed to be reset periodically to update the way it redistributes locally retained business rates between local authorities, which is a core aspect of the system. The reset will move business rates income, which is retained locally by local authorities, to where it is needed most, based on an updated assessment of need. Recalculating available business rates alongside a new assessment of funding need will ensure that business rates income is reallocated to meet changes in relative need, restoring the business rates retention system to its intended purpose of providing a responsive funding stream for local government while also rewarding authorities for business rates growth. Business rates growth can be realised. A proportionate levy will be applied to growth to ensure that income protections can be offered to local authorities. Of course, business rates growth generated within designated areas such as freeports, enterprise zones and investment zones will be exempt, in line with the current policy.
In setting levy rates, the Government are balancing the reward of business rates growth with the need to fund safety net protections. This will always be a balance. I think all noble Lords agreed that the reset was necessary. The approach we are taking will better support growth across the sector, with a lower percentage levy charge for early business rates growth in comparison with the current scheme, and the highest margin at a lower rate than the current 50% levy that many authorities are currently subject to.
To conclude, the technical amendments made by this instrument are necessary to ensure that the business rates retention system operates as intended for the coming year. I hope that the Committee will join me in supporting it.
(1 week, 3 days ago)
Lords ChamberTo ask His Majesty’s Government what steps they are taking to support councils to regenerate struggling high streets and towns.
My Lords, this Government recognise the very real pressures facing high streets and town centres, from long-term vacancy and rising costs to crime and changes in how people use town centres. That is why we are backing councils with long-term investment through the £5.8 billion Pride in Place programme, and with new powers such as high street rental auctions to tackle vacancy and shape high street uses, strengthened community right to buy, and bringing forward a cross-government high street strategy later this year, backed by at least £150 million. Together, these measures give councils the funding, powers and flexibility that they need to drive regeneration locally and restore pride in place.
My Lords, Pride in Place is a programme delivering to 300 communities over the next 10 years. In those next 10 years, what financial support will be available to those hundreds or maybe thousands of communities across this country that are not included in the scheme but whose high streets are also struggling, mainly due to the Government’s policies, taxes and national insurance increases?
I think that might be more due to 14 years of letting high streets sink into decline. However, the places that are subject to Pride in Place funding will also be joined by the new cross-government high street strategy, which will look at all high streets. This will be backed by £150 million of targeted support, which will help to tackle some of the structural issues holding high streets back and the challenges facing retail, leisure and hospitality. We will align policy across government and strengthen our councils’ roles as leaders of place-based regeneration. We will develop that with councils, businesses and communities. We recognise that there is no one-size-fits-all for high streets, and this builds on our commitment to pride in place everywhere.
Lord Walker of Broxton (Lab)
My Lords, I declare my interest as the executive chairman of Iceland Foods. Does the Minister accept that it is retail businesses which are the catalyst that make a high street thrive? Yet many fail to survive because of the outdated Victorian taxation system of business rates, which are simply too high. Although the recent reduction in the multiplier is welcome, the balance between bricks and mortar retailers and online giants remains badly out of kilter. Will the Minister do all that she can to speed up the rollout of a new, fairer system that we promised in our manifesto and consider including an online sales tax? I say that as one of the biggest online retailers in the UK.
I was tempted to ask whether my noble friend wanted to answer the Question rather than me; I am sure he knows a great deal about high streets. I thank him for his support for the new business rates multipliers announced at the Budget. The new multipliers replace the temporary relief that has been winding down since the pandemic. Unlike RHL relief, the new rates are permanent, giving businesses certainty and stability. There will be no cap, meaning that all qualifying properties on high streets across England will benefit. The Government are introducing a higher rate on the most valuable properties, which he rightly pointed out should and will include large distribution warehouses, such as those used by online giants. The high-value multiplier is 33% more than the multiplier for small RHL properties. We are carefully considering representations to the call for evidence, which asks for much more detailed evidence on how the business rates system influences investment decisions. I hope that will result in some movement on business rates.
My Lords, the Minister will be aware—obviously, because it has been discussed already—that pubs are a vital part of the high street. Is she also aware that, since Labour came to power, on average one pub per day has closed? A total of 10,000 jobs have been lost in pubs and hospitality. This Government came in on an agenda for and a commitment to growth. What has gone wrong?
We do have an agenda for growth, but we are having to tidy up the mess that was left behind before we can achieve it. We are introducing the hospitality support fund, which has been more than doubled to £10 million over three years, helping over 1,000 pubs to diversify, boost productivity and support people into hospitality jobs. Those measures sit alongside business rates support and the wider planning and licensing reform that we have introduced.
My Lords, initiatives such as “health on the high street” in Doncaster, where the NHS uses buildings in the city centre to provide scans, blood tests and physiotherapy, are a very good way of drawing people into the city centre and regenerating the area. Will my noble friend the Minister talk with the NHS and other departments about how initiatives such as this can be spread to other areas and help with overall regeneration?
My noble friend is quite right. One thing that happened as a result of Covid was seeing vaccination centres, for example, introduced into high streets. In my own regeneration scheme, part of the plan was to have a healthy hub in the middle of the town centre so that people could come and get their health treatment there. I absolutely understand the point that she is making. I talked about the high street strategy, which will be a cross-departmental strategy. I know that the Secretary of State for Health and Social Care is determined to have neighbourhood health hubs and I am sure that our discussions will consider how we can incorporate those into high streets.
My Lords, will the Government look at implementing a commercial landlord levy, which would help small businesses by moving the cost from them on to commercial landlords? It would also have the benefit of ensuring that landlords have an incentive to fill vacant units.
We are very keen to make sure that vacant units get filled. We have introduced lots of powers to enable councils to do that, but we also recognise upward rent pressures. Many landlords have upwards-only rent reviews now, so we are bringing in a step in the English devolution Bill to make sure that there are no more upwards-only rent review clauses by which rents can only stay the same or rise. We are legislating to ban those in order to help smaller retailers have more stability in their outgoings.
My Lords, I hate to be a killjoy, but will the Minister accept that she has no hope of regenerating our high streets unless she works closely with the Minister from the Home Office to sort out the ever-increasing infection of streets full of county lines drugs and drug dealing? The shops that call themselves Turkish barbers, vape shops and everything else are cash only and have no interest in business rates. They are not paying business rates. They are destroying our high streets and our way of life. What is she doing to work with the Home Office to change this?
I do not share the noble Baroness’s pessimism about high streets. It is perfectly possible to re-energise our high streets. We are already working with the Home Office, and one of the things we are doing is stopping the shoplifters’ charter, introduced by the last Government, of discounting or decriminalising thefts worth under £200. We are also providing over £7 million to support the police in tackling retail crime, including continued funding for a specialist policing team to tackle organised retail crime gangs and identify more offenders. Through the Crime and Policing Bill, we will scrap that failure to prosecute shop thefts worth under £200. We are also introducing more training for the police to identify illegal trading and fraudulent shops, and supporting trading standards officers through more funding to local government.
My Lords, although the 10-year Pride in Place funding is a welcome step towards longer-term investment, and there are other funds available for town centre regeneration, some towns in Nottinghamshire, such as Mansfield and Newark, continue to face increasing vacancy rates, declining footfall and concerns about safety in the town centres. What assessment have the Government made of the role of churches and other community groups using vacant shops to set up services that create social capital locally? Will the Minister reassure the House that faith communities and charities are enabled to apply for the various funds?
The right reverend Prelate makes a very important point. Meanwhile uses in our shops can often help regenerate whole areas, because they bring footfall into those areas. Junction 7 Creatives has been a very successful project in my town centre. We are taking steps to allow communities to take back control of some of those vacant shops and give them the power either to purchase valued local assets, such as shops, pubs and community centres, or to take them over as meanwhile uses.
(1 week, 3 days ago)
Lords ChamberThat the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 4, Schedule 1, Clauses 5 and 6, Schedule 2, Clauses 7 to 9, Schedule 3, Clauses 10 to 20, Schedule 4, Clauses 21 to 23, Schedule 5, Clause 24, Schedule 6, Clause 25, Schedule 7, Clause 26, Schedule 8, Clauses 27 and 28, Schedule 9, Clauses 29 and 30, Schedule 10, Clause 31, Schedule 11, Clause 32, Schedule 12, Clause 33, Schedules 13 and 14, Clause 34, Schedule 15, Clause 35, Schedule 16, Clause 36, Schedule 17, Clause 37, Schedule 18, Clause 38, Schedule 19, Clause 39, Schedule 20, Clauses 40 to 43, Schedule 21, Clauses 44 to 46, Schedule 22, Clause 47, Schedule 23, Clauses 48 to 50, Schedule 24, Clauses 51 and 52, Schedule 25, Clauses 53 to 57, Schedule 26, Clauses 58 and 59, Schedule 27, Clauses 60 and 61, Schedule 28, Clauses 62 and 63, Schedule 29, Clauses 64 to 73, Schedule 30, Clause 74, Schedule 31, Clause 75, Schedule 32, Clauses 76 to 84, Schedule 33, Clause 85, Schedule 34, Clauses 86 to 93, Title.