Greater Manchester Combined Authority (Amendment) Order 2015

Lord McKenzie of Luton Excerpts

Monday 23rd March 2015 Grand Committee

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

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

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

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

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

In short, making these changes is likely to improve: first, the exercise of statutory functions relating to transport in the area; secondly, the effectiveness and efficiency of transport in the area; thirdly, the exercise of statutory functions relating to economic development and regeneration in the area; and fourthly, the economic conditions in the area. The Government have also had regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government.

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

[Lord McKenzie of Luton (Lab)]

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

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

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

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

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

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

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

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

[Lord Bradley (Lab)]

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