Combined Authorities (Finance) Order 2017

Lord Kennedy of Southwark Excerpts

Thursday 30th March 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I shall make two brief points. First, the powers and the checks and balances proposed in the order seem appropriate, but I note the final paragraph of the Explanatory Memorandum concerning monitoring and review, which says:

“Mayoral combined authorities will be required … to put in place an extensive programme of evaluation”.


I suggest to the Minister, not least because there are two different methods for creating the mayoral budget now—for most the precept, and for the West of England by agreement of the constituent councils—that evaluating how that works could well be something for independent review as opposed to being done by the combined authorities. I hope the Minister will pay some regard to that.

The other issue is that I did not quite understand what the Minister said about audit and, in particular, scrutiny. There is a very tight timetable between the beginning of February and the beginning of March. There is to be a budget proposed by the mayor, then to be agreed by the combined authority. The combined authority is of course scrutinising that mayoral budget, except that the combined authority itself is subject to scrutiny. My question is: at what point will the scrutiny arrangements that have already been approved by another order apply? Will there be a role for the scrutiny panel before 1 March, or will the scrutiny panel put forward its views at a date between 1 March and the date at which the constituent councils are setting their budgets, which need to come very early in March? There is a process issue about the role of scrutiny, because I think the Minister said that the combined authority has a scrutiny power over the mayoral budget, but the combined authority is actually itself subject to a formal statutory scrutiny arrangement.

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer the House to my declaration of interests and put on record that I am a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association. I have no objections to the order before us and I am very happy to agree it. There does, however, need to be a wider debate at another time about where we are going with local government in England outside London. I will leave that for another day.

The section of the order with respect to mayors’ budgets is particularly welcome. I was pleased that the Minister made reference to the fact that there is a veto provision. All mayors will be mindful of that but, equally, it is set at the high bar of a two-thirds majority, or, in the case of Tees Valley Combined Authority, of a three-fifths majority. That is an important provision that mayors should be aware of.

The noble Lord, Lord Shipley, made important points regarding auditing and scrutiny. I welcome the Minister’s response to that. I assume I am correct that if local electors have objections to the council they can make these as normal, but could the Minister confirm that as well as he can in writing?

For the record, in the previous debate when asking about mayors and their function the point I made was about selling land below market value, not at market value. Will the Minister also respond to that point in writing?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords, Lord Shipley and Lord Kennedy, for their contributions on the issue of local government finance. If I may first pick up the point from the noble Lord, Lord Kennedy, in relation to the previous debate, I will certainly take another look at that. As I indicated, I think the function will be balanced between the mayor and the combined authority. But there will of course be an overriding obligation to get best value and, if land is being sold below market value, I would anticipate that there was a danger of falling foul of that. I will cover that issue in a letter to the Minister—I mean the noble Lord; days of yore in the National Assembly for Wales are kicking in, so I apologise.

I thank the noble Lord, Lord Shipley, once again for the generous welcome he has given to this piece of secondary legislation as well as for his attention to the different interests of the mayor and the combined authority and to the important checks and balances. He asked specifically about the budget process and about scrutiny. As I think he will know, the overview and scrutiny committees can require the mayor to appear before them at any time, including in the first year of the mayor’s term, before this more detailed process kicks in. In the first year, of course, it is too late for the precepting procedure, which applies later on. The budget scrutiny requirement refers to the scrutiny of the mayor’s budget by the combined authorities, though there is a specific requirement under the order, as the noble Lord appreciates, for a mayoral fund to be set up. I will perhaps enlarge on that in a letter because it is a fairly technical area.

I thank the noble Lord, Lord Kennedy, again for his pragmatic approach and for welcoming this particular measure. He raised similar points about scrutiny in addition to the point he raised on the last order. I will of course pick those up in a detailed letter.

As I said, this issue is central to the system of mayors, which I think we all support in principle. I accept that we have different concerns but it is obviously essential that going forward we have a system for how money is to be organised. I also accept that we have bespoke deals. For example, the West of England Combined Authority did not want precepting, while Tees Valley Combined Authority wanted decisions to be made with a 60% rather than a 66% majority because it has five constituent councils—I think that is the reason for that; they would each have 20% of the vote. Accepting that there are going to be slight differences, the general approach to scrutiny and budgets is set out in this order, which I think is non-controversial. As I said, any points that have been raised and that have not been covered in my response will be picked up in a letter, in addition to the point made by the noble Lord, Lord Kennedy, in relation to the previous debate. I commend the order to the House.