Housing and Planning Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Lord McKenzie of Luton (Lab)
My Lords, like other noble Lords, I welcome the movement that has been made in this policy area, although, also like other noble Lords, I believe that it has all the hallmarks of an administrative nightmare. I ask the Minister to clarify one thing. In introducing these items she referred to the fact that people on housing benefit would be outwith the policy. I ask again a point I raised on Third Reading. I can see that somebody currently on housing benefit before the application of the policy is easy to spot and would not be assessed, but what is the position with somebody who is brought into the housing benefit regime because of the higher rents that could flow from this policy? Will they be out as well? That would be incredibly convoluted to deal with.
Housing and Planning Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Hollis of Heigham
Will the Minister confirm, or say that she still does not know, whether the final net money going to the Treasury after increased rents, the taper, fiscal drag—possibly modified by CPI—and the effect of local authority administrative costs will be nearer to £100 million a year as a contribution to reducing the deficit? Is it, frankly, worth it?
Baroness Williams of Trafford
The noble Baroness might find it helpful to watch this afternoon’s proceedings. She put a set of figures to me which mixed up hundreds of thousands with hundreds of millions and it was quite difficult to follow where she was coming from. I do not want it now, but could she reiterate what she asked in writing? I am not trying to be difficult, but I found it quite hard to follow some of the mixing up of hundreds of thousands with hundreds of millions—and, indeed, fractions of billions. So if she would not mind, perhaps she could write to me.
The noble Lord, Lord McKenzie, asked me questions which are quite detailed and technical in parts. He asked me about preceding years—in fact, I will let him intervene, because he probably needs to repeat the question to me.
Lord Elton (Con)
My Lords, the Companion, at paragraph 8.137, sets down the Standing Orders for how we conduct these debates. We are on Report, not in Committee.
Baroness Williams of Trafford
I thank my noble friend, but I was very clear that the noble Lord was asking a question of clarification.
Lord McKenzie of Luton
I am grateful to the Minister, and I do not want to prolong our proceedings; we have much to get through. The issue was that if it is based on taxable income, does that not inevitably mean that it will have to be based on a preceding year’s income, because you cannot for the year for which you are setting rents possibly know the outcome of people’s taxable circumstances in all respects?
Baroness Williams of Trafford
The noble Lord raises a reasonable point, and it is clear across a number of policy areas that it is not always possible to be absolutely accurate on either anticipated income or income in retrospect—but I will write to the noble Lord to clarify exactly what the framework for the policy will look like.
Housing and Planning Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford(8 years, 9 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, like the noble Lord, Lord Greaves, we have concerns with the amendment. The Countryside and Rights of Way Act 2000 was one of the most successful and supported pieces of legislation in this area of policy—although not always in your Lordships’ House. It strengthened and consolidated the aims of Labour’s original National Parks and Access to the Countryside Act 1949. Since then, the most recent Labour Government introduced the Marine and Coastal Access Act 2009, extending the right further.
We on these Benches are concerned that the amendment would unpick the agreement of the Natural England stakeholder working group which, as we have heard, brings together users, landowners, local authorities, ramblers and the Country Land and Business Association. I urge the noble Lord, if he wants further proposals to be brought forward, to work with the stakeholder working group to deliver a consensus on them.
I might also ask why the noble Lord feels the measure necessary when, as I understand it, there are already powers that permit landowners to apply to a local authority to make changes to such footpaths. A presumption in favour of a diversion would take power away from local authorities and reduce the ability of communities to have a say. I am not sure that that is in accordance with the Government’s localism agenda, although that is a bit thin these days. Local communities, through their local councils, should be able to shape their local area. We should support the rights of all to access the countryside and maintain existing rights of way, especially as the local countryside offers our citizens benefits in terms of health, exercise and mental well-being.
Baroness Williams of Trafford
I applaud my noble friend Lord Skelmersdale’s efforts to help those who face problems with a public right of way that passes through their farm or garden. He will know through his contact with Ministers in Defra that the Government have considerable sympathy for those people who face these issues and who may feel that the system has let them down. Where these cases occur, people may experience acute problems: my noble friend has cited some examples, and I can think of others. Although the numbers are comparatively few, and we should ensure that any changes we make to legislation are proportionate to the extent of the problem, nevertheless, the Government are determined to help by putting in place a remedy.
Noble Lords may recall the passage of a suite of measures in the Deregulation Act 2015 which aimed to reform the system of recording and diverting public rights of way, to which my noble friend referred. The Government are now in the process of implementing these measures, which will come into effect later this year. We believe that the combined effect of these measures, which received cross-party support in both Houses, will make a significant difference, and that we should not legislate further before seeing how they work out in practice. A package of measures such as that, which is being implemented through agreement among stakeholders, is far more likely to prove successful in practice.
There is clear agreement among the stakeholders on the working group that developed the package of reform that the major difficulty for landowners is in getting local authorities to make a diversion or extinguishment order in the first place. Our plans to implement the right to apply for such orders will overcome this. The right to apply will enable a landowner to make a formal application for the diversion or extinguishment of a public right of way. With that will come the right to appeal to the Secretary of State if the authority rejects the application or fails to act on it. Therefore, local authorities will no longer be able to ignore requests or dismiss them out of hand. They will be obliged either to make an order or to be prepared to justify their reasons for not doing so on appeal to the Secretary of State.
The provisions in the Deregulation Act allow the right to apply to be extended to land-use types other than agriculture, forestry and the keeping of horses— for example, private residential gardens. The right to apply will be supplemented by guidance that will effectively act as a presumption to divert or extinguish public rights of way that pass through the gardens of family homes, working farmyards or commercial premises where privacy, safety or security are a problem.
The noble Lord references guidance and I will come back to that in a moment. A further hurdle is to get an order confirmed. However, according to the Ramblers, which keeps accurate records of these matters, of the 1,257 diversion orders which have reached a conclusion in the past three years, 94% did not attract any objections. Of the 6% that did, less than 1% were not confirmed following submission to the Secretary of State. The guidance will give authorities more scope to confirm orders made in the interests of the landowner in circumstances where a right of way may cause hardship because it goes through the garden of a family home, a working farmyard or other commercial premises.
There is no intention to water down the guidance, which was deposited in the House Library during the passage of the Deregulation Act. Defra officials continue to work with the stakeholder working group and the Intrusive Footpaths Campaign to finalise the drafting. We believe that the combined effect of the right to apply and the guidance will have the desired effect and we should not rush to legislate further before seeing how these measures work in practice. Moreover, under the right-to-apply provisions, the Defra Secretary of State will be the confirming authority for all disputed orders.
I am happy to reaffirm the commitment made by the previous Government that we will review, within two years of implementation of the reforms package, how effective the right-to-apply provisions and the accompanying guidance have proved to be. The review will send a message to authorities that the Government are determined that the new policy should work and that if guidance does not bring about sufficient changes, we will consider the introduction of further measures.
The amendment, which was also spoken to by my noble friend Lady Byford, is also concerned with public rights of way. However, she refers to urban routes in current use which are not recorded on the legal record of public rights of way, the definitive map and statement. The amendment would reduce the work of local authorities by removing a whole class of routes from the work to update the record.
I referred earlier to the package of measures in the Deregulation Act 2015 concerned with improving the processes for diverting, extinguishing and recording public rights of way. I also mentioned that the Government are working closely with the stakeholder working group which developed the original package of measures.
The secondary legislation will include regulations made under Section 54(1) of the Countryside and Rights of Way Act 2000—mentioned by the noble Lord, Lord McKenzie—which allows the Secretary of State to specify descriptions of unrecorded routes which will not be extinguished in 2026. The working group and the Government are mindful of the need to consider urban as well as rural. We think that no further primary provisions are required to achieve the outcome sought by my noble friend. With these assurances, I hope that my noble friend will be persuaded to withdraw the amendment.
Housing and Planning Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
The noble Baroness is absolutely right that the archaeological aspect of a site could be mitigated. Perhaps we will move on to that issue later, but I thought I would mention it, given that she is sitting in front of me. It might be a good example.
A few noble Lords talked about local development orders. We will get on to those in a later group, but I want to make the point at this juncture that local development orders are quite different from permission in principle, because they are tools that local authorities use to grant detailed planning permission for a specific development within a defined area, such as unlocking problematic sites and playing a vital role in regeneration. I thought I would make the point, because it has been mentioned.
Amendments 89N and 92D, tabled by the noble Lord, Lord Greaves, and the noble Baroness, Lady Featherstone, seek to place in the Bill an exclusion on certain sites from benefiting from a grant of permission in principle. Let me simply reaffirm the following truth: the Bill enables permission in principle to be granted for development on sites chosen by local authorities and neighbourhood forums. If a local authority considers that a site is suitable for housing-led development in line with local and national policy, it will be able to use permission in principle to help to ensure that such sites are delivered.
Lord McKenzie of Luton (Lab)
Perhaps I may ask the Minister about a point that has been puzzling me. Does the duty to co-operate between local authorities remain as it is under their current system?
Baroness Williams of Trafford
Yes, my Lords. Indeed, I would reinforce the point that the duty to co-operate, particularly on larger sites, is even more important, given the buy-in by local communities of two different local authorities. Does that answer the noble Lord’s question?
Baroness Williams of Trafford
Perhaps I may reaffirm that if a local authority considers that a site is suitable for housing-led development in line with local and national policy, it will be able to use the permission in principle to help to ensure that the site gets delivered. The NPPF already provides strong protections for the type of sites listed in these amendments, including the green belt, the historic and the natural environment. At its heart, the framework is clear that local authorities should plan positively to meet each of the economic, social and environmental dimensions of sustainable development. For example, paragraph 157 sets out that plans should identify land where development would be inappropriate and contain a clear strategy for enhancing the natural built and historic environment. Permission in principle does not change any of these existing protections. Local and national policy has always driven how local decisions are made, and the addition of a new route to obtaining planning permission does not change that. I suggest that setting out centrally what type of land may or may not be granted permission in principle would set an unwelcome precedent.
Noble Lords have tabled a number of amendments to Clause 136 that seek to restrict permission in principle to be granted for housing development only. Amendment 90, tabled by the noble Lord, Lord Beecham, is part of the group. Although I understand the desire to add more detail to the legislation at this stage, there are important reasons why it would be unwise to restrict the granting of permission in principle to housing development in the Bill. First, and most importantly, if we restrict permission in principle to housing only, we lose the crucial ability to facilitate mixed-use development. We are currently consulting on an approach that would enable permission in principle to be granted for housing-led development to allow for the possibility of mixed uses that are compatible with a residential environment. This means that as long as a site allocation is housing-led, local authorities will be able to grant permission in principle in line with local and national policy for other uses.
Housing and Planning Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
I will look at it again. I am assuming that the debts and liabilities are housing loans.
Lord McKenzie of Luton
There is one further point that has been troubling me. Given the hour, I was going to leave it, but I shall just raise it now. It is to do with Clause 68(3) and the provision that we discussed before lunch, and for a while after it, about treating as still owned by a housing authority property that has been sold. Is it the intent that those provisions last in perpetuity? If a local authority has been hit by a levy in respect of properties, it would have no opportunity of selling if that is what it chose to do.
Baroness Williams of Trafford
I think the answer is yes. If it had kept its stock, it would be levied, as the noble Lord points out. If, after the Bill goes through, it decided to transfer stock, it would still be levied. That is my understanding of it.
Lord McKenzie of Luton
Does that mean it would have no control over whether it could realise any of those high-value properties if they were included in the transfer?
Baroness Williams of Trafford
When I used the term surplus, I meant surplus assets that government might seek to dispose of, and I gave the example of King’s Cross. For local authorities, vacant referred very much to housing.
Lord McKenzie of Luton
Could the Minister help me with a definition? Does succession to a tenancy create a vacancy along the way? On the death of a tenant, if someone succeeds to that tenancy, does that cause a break that would bring these issues into play?
Baroness Williams of Trafford
It would depend on the context of the succession. If the successor was a spouse, there would not be a vacancy because that spouse would be immediately, automatically entitled to take on a future lifetime tenancy. If, for example, a child wanted to take over a tenancy, it would probably be short term. The only automatic right is with a spouse.
Lord McKenzie of Luton
Is this not in danger of running in conflict with another government policy—the bedroom tax? If part of the rationale is to encourage people in larger houses to downsize and give up the tenancy to do so, the local authority is then faced with having to sell the high-value property. How does that work?
Baroness Williams of Trafford
On the spare room subsidy, if someone is in a property that has more bedrooms than they need to occupy, my understanding of the mechanism is that a suitable property would then be found for them. The noble Lord is asking whether the property that has been vacated would then fall into the definition of a high-value asset. The honest answer is that I do not know but the probable answer is not necessarily at all—probably not—because we are talking about high-value assets across a number of bedrooms. So I do not think it would but I will take that away, think about it and get back to the noble Lord.
Housing and Planning Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
That is the point that I am going to take away and confirm with the noble Baroness. However, I am making the assumption that if local housing associations felt that there should be some property for social rent, they would be at liberty to provide it. I will take the point away and come back to the noble Baroness and the noble Lord.
Lord McKenzie of Luton (Lab)
Perhaps the Minister could help me out on this. Great faith is being placed in housing associations. I accept that—they have a great track record—but in reality there will not be enough housing to deal with all the need in every area of the country. How does she expect housing associations to deal with that constraint?
Baroness Williams of Trafford
The noble Lord is right: in different parts of the country, there will be entirely different needs across different types of tenures. Housing associations will make a judgment on that, probably in consultation with the council, residents and possibly the local plan. I suspect that there are a number of mechanisms through which they will consider the types of housing to provide in that area. That is how they usually operate, and I do not see this to be any different. I promised to get back to noble Lords on the point about socially rented properties.
Lord McKenzie of Luton
That is helpful, but in so far as they do not fully cover the position, the residual risk and obligation will fall on the local authority to pick up the homeless, those who are disadvantaged and those who cannot access properties via housing associations. Is that right?
Baroness Williams of Trafford
There was a Question yesterday about homelessness. There are a number of government grants, some of which are directed through councils, either to prevent homelessness or to aid those who are homeless. Various mechanisms, including grants, already provide for certain types of housing, and I assume that that will continue.
Lord McKenzie of Luton
On the basis of our discussion before the dinner break, we identified that councils were picking up the tab for this policy. It seems that they will also have to pick up the tab when it fails people who have housing need.
Baroness Williams of Trafford
I would expect councils to work with the Government, housing associations and through the planning system to identify where needs are emerging. The noble Lord is absolutely right: there will be people in crisis need who the council will deal with through the various payments that they receive, such as discretionary housing payments. I would expect all those providers to be involved in meeting the needs of those in their area.
We should not be trying to constrain the freedom of housing associations to make sound business decisions about how to deliver their part of the agreement, or judgments about what is needed in various communities. Neither should we require them to identify replacement before a property is sold, because that would slow up the process for the tenant and in many cases would be impractical at the point of sale.
The noble Baroness, Lady Pinnock, made a point about right to buy at the expense of other tenures. I have made the point that we remain committed to build more affordable housing over this Parliament than from many years, including shared ownership and other forms of affordable housing. It is really important that hard-working people can buy affordable houses and get on the housing ladder. She also made a good point about the quality of the private rented sector. As we discussed under the rogue landlords clauses, the vast majority of landlords in the private rented sector are decent, law-abiding people who want to provide decent-quality accommodation for their tenants. I have a statistic here: 84% of private renters are satisfied with their accommodation. I appreciate that that means that 16% may not be but, generally, the private rented sector provides good-quality accommodation.
Baroness Williams of Trafford
My Lords, I shall speak to what I think is the amendment of the noble Lords, Lord Beecham and Lord Kennedy, and I am sure that we will come back to it if I have not quite got that right.
We have already discussed today the grant-making powers. Clause 65 will prevent an overlap of provisions in respect of the payment of grant by the HCA to housing associations and it will prevent grants being required to be paid twice under separate provisions. The clause does not place any additional duties on the HCA and will help streamline existing legislation. Clause 66 will ensure that everyone is clear about to whom and to what the clauses in this chapter apply.
I thank the noble Lords, Lord Kennedy of Southwark and Lord Beecham, for their amendment. We understand the wider concerns about more homes being bought as buy to lets, made clear in Amendment 58. As noble Lords will know, we are addressing those concerns through the new rates of stamp duty, which will be 3% higher on the purchase of buy to lets.
For the reasons that I set out earlier, we do not think there is a case for specific restrictions to be put in place for properties sold under the voluntary right to buy. The right to buy is about giving individuals the opportunity to buy a home of their own, and tenants who do so should have the same freedoms as any other homeowner. They are not vultures or wide boys; they are decent people who have worked very hard and who aspire to own their own home, and it would be wholly unfair to housing association tenants who buy their home to be prevented from letting it out if they want to or need to for family, work or any other reason. It could restrict their mobility and we do not think that that would be reasonable.
Furthermore, with a commitment in the voluntary agreement to deliver additional homes through new supply, it is not necessary to impose controls of this sort or to restrict the use of the properties being sold. I therefore hope that the noble Lord will agree to withdraw the amendment.
Lord McKenzie of Luton
Can the Minister help me out? She said that the solution to stopping properties being turned into buy to let was the new stamp duty provisions. However, if somebody acquires a property under the right to buy and then in due course vacates it and enters into a letting agreement, where does the stamp duty bite on that?
Baroness Williams of Trafford
My Lords, I was referring to people who bought homes as second properties. In other words, I think the general market in second properties as buy to lets will be dampened somewhat by the new stamp duty rules.
Lord McKenzie of Luton
I accept that, but I thought the Minister was offering that as a solution to the problem that Amendment 58 outlines.
Baroness Williams of Trafford
I was in a round about way, but I do not think that the noble Lord accepts that. In a round about way I was talking about the whole dampening of the market.
Housing and Planning Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Lord McKenzie of Luton
I accept entirely that the recovery could be by the local authority rather than the Government.
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Kennedy and Lord Beecham, for Amendments 38 and 39, and the noble Baroness, Lady Bakewell, and the noble Lord, Lord Shipley, for Amendment 46. I will address them together.
I am very clear that starter homes are a new product. They are a manifesto commitment designed to serve a pressing new need. Clause 2 sets out the key parameters: a starter home is available to first-time buyers, under 40—the very gap that the noble Earl, Lord Lytton, referred to—at a minimum discount of 20% of market value and are subject to a price cap.
The proposed amendments would replace the minimum 20% discount on the open-market value with affordability criteria based on average local household income. Any discount would remain in perpetuity. This amendment would remove the 20% discount on local market values. I cannot support that as 20% is a minimum discount and, if they wish, councils would be free to negotiate with developers for a higher discount if that was best for the area. There is evidence that they do that at the moment for affordable housing.
Much was said at Second Reading and on Tuesday about the affordability of starter homes. Research on affordability by Shelter and Savills for the Local Government Association was based on median house prices in each region. I question whether first-time buyers access the market at average house prices, as I pointed out the other day. Starter homes will be valued to align with local house prices for first-time buyers aged under 40. We are working with the sector and professional bodies to ensure that a transparent process is agreed for valuation.
The noble Lord, Lord Kerslake, talked about the Shelter report, which is not out yet—he must be a very important person, as I have not seen it yet. I will be interested to see it when it is published but I must point out that we all agree that London is expensive. I do not think that anybody denies that. In response, I would point out that we estimate that starter homes will be accessible to those with a gross household income of £45,500 in the south-east, as I added up badly yesterday, and of £39,500 in the east of the country.
Welfare Reform and Work Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford(8 years, 11 months ago)
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The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank all noble Lords who have spoken to these amendments. I have listened with care to the comments made and thought it might benefit the Committee if I quickly set out some general comments with regard to the purpose of the 1% rent reduction.
As my noble friend set out at Second Reading, this Bill, including these measures, is part of a broader package of reforms, one of the aims of which is to put spending on welfare on a more sustainable footing, but in a way that protects the most vulnerable. I hope that answers the point made by the noble Lord, Lord Scriven, and other noble Lords who asked the same question. The housing benefit bill for the social housing sector in England has risen by nearly a quarter over the past 10 years to £13 billion, and rising rents are a key part of the equation. Average rent increases in the social sector have been more than double those in the private sector over the past five years. That is why the Government have taken the decision to reduce social rents by 1% a year for four years from 2016. That will mean that by 2020 tenants will be paying around £12 per week less than they would pay under the current policy of CPI plus 1% increases.
I listened carefully to the points made by the noble Lord, Lord Kerslake, regarding Amendments 104C and 104D. The noble Lord brings a great deal of knowledge of these issues to this House—I had not realised he had been chief executive of Sheffield—but we cannot accept these amendments, which would reduce the number of years of the rent reduction from four years to three. The noble Lord asked why we have gone back on the 10-year rent settlement of CPI plus 1%. This measure is crucial to the Government’s drive to secure housing benefit savings in order to control the welfare bill. Moreover, it will reset levels of social rents, which have got out of kilter with the private rented sector over the past few years. Around 60% of social tenants receive housing benefit, and the housing benefit bill for England in the social sector stands at £13 billion, and has risen by a quarter over the past 10 years. Social rents have risen by around 60% over that period. The average weekly rent for housing associations has gone up from £58 a week to £92 a week over the past 10 years. In contrast, in the private rented sector, it is 23%. We recognise that social housing providers will have to manage these reductions, but the Government are committed to reducing welfare spending, and everyone has a part to play. Moreover, we are confident that social housing providers will be able to adapt.
The noble Lord, Lord Beecham, asks why, if we are doing this in the social sector, we cannot do it in the private sector. We believe it is important to allow market rents in the private rented sector so that we have a diverse supply of private rental accommodation available for a variety of different needs. A fundamental move away from market rents would hold investment back when we most need to encourage it, and the resulting shortage of rented accommodation would help neither tenants nor landlords.
We also cannot accept Amendment 104E, tabled by the noble Lord, Lord Kerslake. It would require registered providers to increase rents by CPI plus 1% each year. The amendment also seeks to require the Secretary of State to review whether, given the impact of the rent reduction measure, there should be additional flexibility for registered providers to increase rents above the noble Lord’s proposal for an increase of CPI plus 1%. This is an important point that also goes to the question from the noble Lord, Lord Scriven: the Government will determine rent policy after 2020 at a future fiscal event. When taking future rent policy decisions, the Secretary of State will have to consider a range of issues, and it would not be right to prejudge now what those issues might be.
The noble Lords, Lord Kerslake and Lord Best, talked about the OBR predictions of 43% fewer properties being built by providers. The Government believe that providers will make efficiencies to continue to release resources for new development. I remind noble Lords at this point that housing associations hold £2.4 billion in surpluses, which is a very similar amount to local authorities. In the spending review we secured over £20 billion for housebuilding over this Parliament, including £8 billion for 400,000 new affordable homes over the next five years, so the Government are playing our part in the provision of housing.
Lord McKenzie of Luton
How much of that £20 billion is going to be applied for social housing for rent?
Baroness Williams of Trafford
My Lords, I was not the Minister a year ago. However, I get the noble Baroness’s drift. The point is that we now have a majority Conservative Government and this policy has come out of that. I am not saying in any way, shape or form that it is the social rented sector’s fault. I am saying that that is the position in which we find ourselves, due to many different factors. Over the past few years, inflation has been one of the factors driving it up. However, I will correct that if I am wrong, given that I am saying it from the Dispatch Box.
The noble Lord, Lord McKenzie, asked about the guidance to social providers on maintaining surpluses. We feel that it is a matter for the housing association boards to run their businesses as they see fit. It is a well-regulated sector that, to date, has managed its finances magnificently. Boards have been advised to raise any anticipated exceptional challenges with the regulator to discuss any difficulties that they might anticipate.
Lord McKenzie of Luton
Is any guidance given to local authorities on prudent reserves?
Baroness Williams of Trafford
Perhaps I may write to the noble Baroness; I understand her point. However, I also understand the point made by my noble friend Lord Horam: it is difficult to assess an impact within 12 months. It will probably take longer.
The noble Lord, Lord McKenzie, asked about the high-income social tenants’ policy and its impact on housing. It is worth noting that we will have an opportunity to scrutinise this fully during the passage of the Housing and Planning Bill, when I will probably be the Minister standing at the Dispatch Box. However, at this point I hope the noble Lord will feel able to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank all noble Lords who have participated in this short debate. The noble Earl, Lord Listowel, expressed his concerns about the impact of the policy on children; the noble Baroness, Lady Manzoor, believed that we had a straightforward, simple proposition to put to the Government; and my noble friend Lady Blackstone still awaits an answer to the fundamental question she has now raised on the last two groups of amendments. We must hope that the correspondence from the Minister will elicit a response.
I accept the point that if particular issues arise, the route of exemptions and exceptions may be brought to bear to address them, but that does not substitute for the fundamental question my noble friend is asking: what is the Government’s assessment, in introducing these policies, of the impact they will have on the provision of housing and their targets for building houses? How will it be affected by this?
The noble Lord, Lord Horam, made a reasonable point about monitoring and said that one should do that after a period of longer than 12 months. I hang on to my point that we are looking for two things here: the Government’s current assessment of the impact on housebuilding of the introduction of the policy; and then monitoring what will happen in practice.
We have given this issue a good airing. For the time being, I beg leave to withdrawn the amendment.
Baroness Williams of Trafford
My Lords, the noble Baroness has been in government and she knows the processes of government. She is right to say that I am a consensual politician, where I can be, but I will not stand at the Dispatch Box and give assurances that I cannot absolutely fulfil. I therefore have to say that I cannot do that but I will be doing all I can to make progress in this area. That is all I can say at this stage.
Lord McKenzie of Luton
My Lords, I thank the Minister as I thought that what she was beginning to say was encouraging, but can I clarify one point about the reference to specialised supported housing? This is really the nub of the issue. Is the definition which the Government are working towards the same as that exempting people from the benefit cap, or is it a different one?
Baroness Williams of Trafford
My Lords, it is different. We are looking at this whole area of provision but it is a different definition. The noble Lord asked whether we could include the exceptions on the face of the Bill. They would probably be too complex to include in the Bill, while regulations would provide more flexibility to effect better the appropriate definitions and make adjustments in due course.
Funding for supported housing is also part of the Government’s wider financial settlement to councils. This includes investing £5.3 billion in the better care fund in 2015-16 to deliver faster and deeper integration of health and social care. This will enable councils to invest in early action to help people live in their own homes for longer. It will also help prevent crises, as well as supporting councils to work more effectively together, deliver better outcomes for less money and drive integration across all local services. We are also investing in specialised housing for older people. In the spending review, we have committed £400 million of funding to deliver 8,000 specialised homes for the vulnerable, elderly and those with disabilities through the affordable homes programme, with a commitment to further funding from the DoH for specialist accommodation. We will continue to support local areas to meet their local needs by maximising funding flexibility.
I think it was the noble Lord, Lord McKenzie, who asked about the combined impact of the social rent reduction and capping the highest housing benefit awards for social renters, in line with caps applicable in the private rented sector, meaning that supported housing will be decimated. Now that I am looking at the noble Lord, I do not think it was him who asked this. But there was a noble Lord who asked that question, because I have written it down. Applying a cap on the highest social rents will mean that housing benefit will no longer subsidise families who take new tenancies in social houses that many working families cannot afford. The new cap will have effect only from 2018 for new or re-let social tenancies signed after 1 April 2016.
The noble Lord, Lord Shipley, asked whether the savings of £75 million were for supported housing. I do not know but I will write to him about it and I can come back to that question on Report, if he wishes. My noble friend Lord Young asked whether we can meet providers, as I think I have said. We have met providers and will meet them again.
Finally, I reiterate that while we expect providers to make all possible efforts to manage the rent reductions and plan on that basis, Clause 23 allows for individual providers to apply for an exemption from the rent reduction if they think that they will face severe financial difficulties.
Baroness Williams of Trafford
My Lords, providers have a very good track record both in managing their finances and in terms of the housing that they provide, and I do not expect that a housing provider will go to the Government only when it is on its knees. In well-run housing associations, I expect that forward planning would show what sort of difficulties might be coming up and that they might therefore apply for an exemption on that basis. I hope it would not be at the 11th hour, because that is not good financial planning. I hope I have provided some reassurances and that the noble Lord will feel able to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for a very comprehensive reply. There was a moment there where I thought some comfort was coming, but it disappeared relatively quickly. I thank all noble Lords who participated in this short debate—forgive me if I do not pick up on all the comments, because I believe that pretty much everyone who spoke on this issue shared the same view. I also believe that the Government did not intend this to happen. We will cling to that belief and hope that it sees us to a sensible solution at the end of the day.
There is an overwhelming recognition that supported housing of the type we have discussed is significantly needed in our country, and that if it is not provided, the cost to the rest of society will spill over and be much worse. We need to act quickly on this. The noble Lord, Lord Best, in his comprehensive argument in favour of the amendments, made the point that we need to pursue exceptions rather than exemptions. Exemptions will not be any use to those associations which embed provision within their business plans, and the uncertainty that having to seek an exemption will lead to is one that many will not be prepared to live with or cannot live with. Urgency on this is important.
I do not think we had an answer on whether the other components which are exempted from the rent standards at the moment, such as PFI schemes, temporary social housing and short-life leasing schemes for the homeless, are going to be replicated in some way. The important point is that if the definition of specialised supported housing is not going to be the broader one, then the job will not be done, and we will return to this if it is not. We look forward to continued engagement on this between now and Report, but in the mean time, I beg leave to withdraw.
Local Government Finance
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
I thank my noble friend for, as always, his very sensible words. I said in my previous answer that I wish that when I had been a local authority leader I had had some sort of certainty as we lurched from year to year with local government settlements. I thank him for making the observation that the certainty is welcome. It also encourages councils to look at their reserve position. By their nature, reserves are for one-off, planned spending and are never intended to prop up revenue spending. However, if you know what your four-year position is, you can use reserves for one-off measures.
My noble friend talked about the reduction in RSG and—I presume by inference—the changeover to business rates. The Government will be consulting widely on that. I hope to see people like my noble friend coming to discuss with my department how some of the anomalous situations that might arise, particularly with an older population, can be dealt with through this process.
I take his point about devolution, but he will not be surprised to hear that, as a former Greater Manchester councillor, I do not perhaps share so much of his pessimism about it.
Lord McKenzie of Luton (Lab)
My Lords, the Minister will be aware that in April next year we have the introduction of the single-tier state pension and with it the end of contracting out. In Budget 2013 it was recognised that, from April next year, that would garner the Government an extra £5 billion a year. It was said at that time that those funds would be used to help fund the costs of the lifetime care cap, which was to be set at £72,000 and introduced in April 2016. That of course has been deferred, so what is happening to those resources if they are not going to be applied to that?
Baroness Williams of Trafford
I always know that when the noble Lord stands up he may ask a difficult question that I may struggle to answer. Could I please return to him in writing, as I quite frequently do?
Energy Performance of Buildings (England and Wales) (Amendment) (No. 2) Regulations 2015
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
I can let the noble Baroness know that in writing because I do not know when that will be.
In acting to regulate, we have needed to respond to a tight deadline, but at the same time we have made every effort to avoid placing unnecessary burdens. This House has been greatly assisted by everything that has been said during this debate. I hope that the noble Lord, Lord McKenzie, will feel able not to press the Motion.
Lord McKenzie of Luton
My Lords, I thank all noble Lords who have contributed to this short but very well-informed debate. On the proposition that there was limited time to consult, the letter of 2014 would at least have given some fairly clear indication to the Government that something was going to have to be addressed. Even taking June 2015 as the date when that opinion came through, we believe that there was time to consult and it would have been to the Government’s advantage to have done so.
As for who these things apply to, my understanding is that it is necessary to produce energy performance certificates when all buildings are constructed, sold, or rented out, but that displaying such certificates is necessary for large public buildings. It seems to be at odds with the professionals’ view that these regulations will force them to change their priorities. Is the Minister entirely dismissive of that view? This is a profession that received praise from my noble friend Lady Crawley. It has been doing this thing for a long time; it is extremely knowledgeable. Why would it advance the proposition that this will change its priorities and what it will do if that were not the truth? Does the Minister think that they are misguided or misled? Why is that proposition rejected?
Baroness Williams of Trafford
My Lords, I would not accuse the profession in any way of being misguided. As I say, we are open to taking further representations as time goes on.
Housing: London
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Lord McKenzie of Luton (Lab)
My Lords, how do the Government view the fact that one impact of the housing shortage in London is that London boroughs are relocating families away from London and away from the communities and services they know, which puts pressure on receiving authorities in respect of their housing provision and services? I refer to places such as Stevenage, Milton Keynes and, of course, Luton.
Baroness Williams of Trafford
My Lords, the noble Lord brings up a very important point, but of course London authorities have always done that. The important thing is to make sure that fewer families have to reside in temporary accommodation, and we have made sure that that is the case.
Right to Buy: Housing Associations
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My noble friend makes a very important point, because at the heart of this policy are the tenants and their aspiration to own their own home. I will segue into the previous point made by the noble Baroness, Lady Hollis, about right-to-buy properties not keeping pace; in fact, that programme has literally just started.
Lord McKenzie of Luton (Lab)
My Lords, has the ONS confirmed that it will re-examine the classification of housing associations in the national accounts? That followed a warning from the Office for Budget Responsibility that the extended right to buy and the planned cut in housing association rents could trigger that review. Of course, reclassification would mean that income and expenditure would be part of the public finances and, most importantly, it would add something like £63 billion to the Government’s borrowing requirement. Is it not the case, and is it not part of the government rationale for the voluntary deal, that if right to buy is volunteered, not imposed, that removes one of the key reasons for the ONS review?
Baroness Williams of Trafford
My Lords, whatever the ONS chooses to do in terms of classification, we are absolutely determined to deliver 275,000 affordable homes by the end of this Parliament. Noble Lords should not forget that the 2015-18 programme is still in its initial year, as I said to the noble Baroness, Lady Hollis. We saw housing associations—the providers—maximise outputs at the end of the 2011-15 programme, which has caused an inevitable lag in starts in the current programme.
Smoke and Carbon Monoxide Alarm (England) Regulations 2015
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
I thank my noble friend and I will see what further publicity can be generated in the next few weeks.
On the timetable for the guidance, the booklet that we published on 4 September aims to aid landlords in understanding and complying with the regulations, and nothing new has been introduced. The requirements of the draft regulations are simply explained in that guidance and, as stated in the Explanatory Memorandum to the regulations, the Government did not intend to publish new guidance on this policy. Noble Lords referred to that last Monday. Instead we plan to use a variety of methods to publicise the instrument and the new duties to both local housing authorities and landlords. However, it was following a large volume of queries that we did decide to publish the explanatory booklet in order to help landlords.
The noble Lord, Lord Best, explained clearly the timeline of landlords being in breach and then issuing remedial notices. He also talked about testing on the first day of new tenancies for blocks of flats. In most cases a smoke alarm requires just a test button, but I appreciate that if new tenancies come in every day, it might be rather tiresome for the other tenants living in the block. If he does not mind, I will write to him in more detail about that.
My noble friend Lord Cathcart talked about the danger of carbon monoxide poisoning. He relayed that story to me the other day, and it is absolutely tragic. He also mentioned the point about fireplaces. They are covered under the regulations for carbon monoxide alarms. If fireplaces are clearly not being used as working fireplaces and are blocked up, they are exempt from the requirement to have a carbon monoxide alarm. He also talked about awareness among landlords, and has discussed with me the idea of a register of landlords from the council tax forms that people receive. He has now pressed me on this three times, so I will go back to the department and discuss his suggestion. He also raised access issues. He is right to say that a request must be made to the tenant to access the property. The testing could be done on the first day of the tenancy when the inventory is being taken. Landlords or their agents tend to be busy on the first day.
The noble Lord, Lord Beecham, mentioned the How to Rent guide and asked whether it would be updated. It most certainly will be, and I referred to it last Monday. He talked about the practical difficulties around testing. Again, it can be done as part of the inventory on the first day of the tenancy, through either the landlord or the letting agents. He also asked whether we could expect further regulations. They will be brought forward in 2017. He then talked about publicity for tenants. I will write to him with any further information I have other than the How to Rent guide because I do not have that answer to hand. The date of 1 October is very significant because a lot of students will be moving into the private rented sector.
The noble Lord, Lord McKenzie, asked whether the alarms would have to be hardwired. The answer is no. It is up to the landlord how he or she puts them in. He talked about new burdens on local authorities. We try to make them as light as possible. We spent the previous Parliament trying to undo new burdens. I referred to the nearly £4 million that fire authorities were given both for publicity and the purchase of new fire alarms and carbon monoxide alarms.
Lord McKenzie of Luton
Will the Minister just confirm that there will be no additional resources for local authorities undertaking compliance?
Baroness Williams of Trafford
The point I was making is that we are trying to make the burden as light as possible. I will respond to the noble Lord on that.
The noble Lord asked about the exclusions and whether they would be covered in other legislation. Care homes, hospitals and hospices will be covered under the Regulatory Reform (Fire Safety) Order 2005. Hostels, refuges and student halls will be treated exactly the same. The only sector that is not covered is social housing, but it is so good at its obligations to tenants that it was not an area that needed to be included in the regulations. He also asked what energy companies were doing. We could write to them and ask exactly how they are playing their part.
The noble Lord, Lord Hunt, mentioned that the regulations apply only to small parts of the sector. That is absolutely correct. They apply to parts of the sector that have shown the least duty of care historically to their tenants in terms of the installation of smoke and carbon monoxide alarms. He talked about no budget. Of course, a £4 million budget was given to the fire authorities, but I do not know whether he was referring to other budgets such as that referred to by the noble Lord, Lord McKenzie. The noble Lord, Lord Hunt, talked about a widespread publicity campaign that still needs to happen. I will certainly go back to the department to see what further work can be done, given some of the concerns expressed in the House.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford (Con)
My Lords, on Report, I promised to return to this issue of consent. Accordingly, this amendment will ensure that any order to provide that a function of the combined authority can be exercised only by the mayor may be made only with the consent of the combined authority and constituent councils. There are a number of situations in which an order may be made to make a function of the combined authority a function exercisable only by the mayor. Our intention is that in all circumstances the authorities involved need to give consent.
There are essentially three circumstances for this: first, where new functions are given to a new combined authority and where these are to be mayoral functions; secondly, where new functions are given to an existing authority and these are to be mayoral functions; and thirdly, where existing functions of a combined authority are being made to be mayoral functions. This amendment will ensure that in all these circumstances consent from the combined authority and constituent councils is required. I thank the noble Lords opposite for raising this issue. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, we are pleased to see this government amendment, which requires an order where functions of a mayoral combined authority are exercisable only by the mayor—subject to delegation to the deputy mayor or another member or officer of the combined authority—to obtain the consent of appropriate authorities.
So far as delegation to the deputy mayor and others is concerned, this would appear to be undertaken by arrangement with the mayor although restrictions can be put on this by the Secretary of State by order. These restrictions would preclude certain general functions being exercisable by the deputy or may specifically enable a limited list of functions. It appears to be the case that, to the extent that the Secretary of State is taking the opportunity to fetter the delegation by order, consent of the appropriate authorities would be required. However, to the extent that the mayor is allowed free rein to arrange for others to exercise his or her functions, the consent of the appropriate authorities would not appear to be required. Is that correct and is it intended?
As I hope we demonstrated throughout the passage of the Bill, there has been substantial support and agreement on these Benches but some have expressed concerns over the position and role of a directly elected mayor. That the functions to be exercisable by the mayor will now require agreement of the relevant authorities, taken together with the prospect of some control over the budget, will provide some comfort to those concerned about the potential accumulation of power in the hands of one individual. We are happy to support the amendment.
Lord McKenzie of Luton
My Lords, as we have heard, my noble friend Lady Hollis has tabled two types of amendment to enhance the flexibility of the Bill. The first type of amendment, Amendments 2 and 8, seeks to enable combined authorities or individual authorities to which functions have been transferred to pool some or all of these functions with other combined authorities or local authorities. We hope that that in particular will find favour with the Minister, who might not even need these amendments to do that.
The second type, Amendment 6, would give a wide discretion to the Secretary of State to establish combined authorities or economic prosperity boards—we have not debated them much during the course of the Bill—by combining different functions in different areas. That would require the consent of appropriate authorities, and would have to demonstrate the improvement of statutory functions. This amendment in particular would enable local authorities to be part of one combined authority for some functions and part of another combined authority for others.
My noble friend has argued a strong case about the needs of medium-sized cities, particularly those in county settings. As we know now, this is not just a theoretical issue; it has been driven by her own experience in Norwich and by her wide contacts in other areas, which she spoke about today, who have identified with her analysis. As my noble friend has said, we are grateful for the opportunity yesterday to discuss these issues, and we anticipate an encouraging response in relation to Amendments 2 and 8, even if Amendment 6, about the opportunity for someone to be part of one combined authority for some functions and another combined authority for others, may be a step too far at this stage. We look forward to the Minister’s comments on that.
This is about ensuring that all areas have the opportunity to engage effectively with devolution opportunities. I conclude with a suggestion for the Minister about possibly convening a conference for the type of authority that my noble friend has identified to flesh out some of the very important issues that she has raised.
Baroness Williams of Trafford
I thank the noble Baroness, Lady Hollis, for her comments and for what was quite a productive meeting yesterday, together with the noble Lords, Lord McKenzie and Lord Beecham. I also thank my noble and learned friend Lord Mackay for clarifying the whole situation in a few sentences although, for absolute completeness, I shall go through the whole thing.
Amendment 2 would enable combined authorities to work in partnership with other combined authorities, and Amendment 8 would enable local authorities to work in such partnerships. Amendment 6 would provide greater flexibility for the Secretary of State to establish a combined authority even if the required geographical conditions were not all met. Following our discussion yesterday, I hope that I can provide clarity and reassure the noble Baroness that the amendments are not necessary.
As my noble and learned friend Lord Mackay said, there are no impediments to local authorities and combined authorities collaborating and working in partnerships, including through establishing joint committees. A joint committee could comprise a number of local authorities, some local authorities and a combined authority, or several combined authorities with or without some local authorities. The power to form joint committees is in the Local Government Act 1972. It is exercisable simply by the authorities concerned deciding to form a joint committee. A joint committee can be responsible for exercising such functions of its members as those members decide they wish to exercise in partnership with others through that joint committee.
Baroness Williams of Trafford
My Lords, I thank all noble Lords, even the noble Lord, Lord Warner, for the part they have played during the passage of this Bill and for being so patient with me, this being my first Bill. Thank you.
Lord McKenzie of Luton
My Lords, as we have come to our “Auld Lang Syne” moment, I thank the Minister and her team for their engagement with this Bill. We should congratulate the noble Baroness; this is her first Bill and she has approached it with humour, patience and a willingness to engage. I also thank the noble Lord, Lord Shipley, as our deliberations have been particularly advantaged by him and his team; the Bill team for its willingness to engage; my Labour colleagues; my noble friend Lord Beecham and his continuing infectious humour; the noble Lord, Lord Kennedy; and the vital input from my health colleagues, my noble friends Lord Hunt, Lord Warner and Lord Bradley. I believe that we have collectively done our job in scrutinising this Bill and we wish it safe passage in another place. It is a worthy Bill which could herald great change.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, that is an interesting question. I have witnessed many a stand-off in local authorities. The combined authority is obliged through its voting arrangements, whatever they may be—they will be different in different places—to come up with a resolution. I appreciate that it might start with a stand-off but I hope that it will be resolved in accordance with the democratic arrangements within the combined authority.
The noble Lord, Lord Shipley, asked about implementation, the short period of time and the powers of call-in. I hope I have explained to him that our new amendments give the Secretary of State the power to provide, by order, for a minimum call-in period.
The noble Lord also inquired about the chair of the overview and scrutiny committee. Under the Government’s amendments, the chair of an overview and scrutiny committee can never be a member of a constituent council if he is a member of the same political party as the mayor of a combined authority.
I hope those responses are helpful and that, with them, the noble Lord will feel happy to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for her detailed response to our amendments and a raft of other amendments. I also thank the noble Lord, Lord Shipley, for his support for most of our amendments. I look forward to the Government bringing forward at Third Reading something on Amendment 34A and the audit committee. In respect of Amendments 35 and 37, I understand that the matter is already covered. I take the point on statutory guidance.
I do not 100% agree with the Government on Amendment 41 on the point that we discussed. However, it is fair to say that, together with the noble Lord, Lord Shipley, we have a substantial identity of view over a broad range of areas. We do not have an identity of view on everything, particularly around access to some of the documentation. However, for my part, I am happy to withdraw the amendment.
Lord McKenzie of Luton
I thank the Minister for her detailed exposition of the issues around these two sets of amendments. I support the noble Lord, Lord Tyler, in asking whether we can take this forward to Third Reading, if necessary. These substantial amendments herald very significant changes to what has been the process hitherto. We had the Delegated Powers Committee’s report just yesterday—for some of us who were on other duties, not until this morning—and the noble Baroness’s presentation raises issues. Rather than asking the Government to withdraw the amendments, why do they not proceed while recognising that they are if necessary open to final amendment at Third Reading, which is only a few days away? Given the range of queries now emanating from our considerations—every time we look at this it raises more issues—it seems that we should try to structure a meeting with the Minister, and colleagues if necessary, between now and then to iron out as much of this as possible.
From our point of view, as my noble friend Lord Woolmer said, if we can speed up the process we would be supportive of that in principle. We certainly support extending the arrangements to individual counties and councils. That is not an issue but some of the process stuff is. One point that bothers me still is in relation to what the Delegated Powers Committee report said on Amendment 62. In paragraph 11, the report says clearly:
“We see the scheme process, which involves local engagement and consultation, as being wholly different from the process of discussion and negotiation which takes place only between the local authorities and the Secretary of State”.
I would accept having administrative law brought into play and prayed in aid as a constraint or parameter that the Secretary of State had to comply with. But introducing that sort of concept fairly late in the day is a bit unusual, and its context needs proper consideration.
On Amendments 71 and 72, we know that the innate problem is of having a difference between those of us who believe that there should be some parameters put into the Bill, but not to stifle initiative and innovation, and the Government’s view that they will oppose that. Notwithstanding that, it would be helpful for progress today and to get the best solution possible over these amendments if the Government would recognise that, if necessary and appropriate after further discussion, this would be open for amendment at Third Reading. That would otherwise save us making more difficult choices here and now.
Baroness Williams of Trafford
My Lords, I thank all noble Lords for the comments that they have made. My noble friend Lady Eaton talked about the problems of delay, which are very real. The noble Baroness, Lady Jenkin, talked about Amendments 71 and 72 being necessary for places such as Cornwall. She is absolutely right.
My noble friend Lady Eaton asked whether an area that is not currently a combined authority can access the powers of devolution. She asked about areas without combined authorities. Again, without Amendments 71 or 72 it is not possible to confer powers on, say, Cornwall. Places such as Cornwall would be very concerned if the Bill did not have that power.
The noble Baroness, Lady Hollis, asked why you cannot be in two combined authorities. Councils can be constituent members of one combined authority and non-constituent members of another. That is quite possible. I will give the noble Baroness an example before she gets to her feet. In Greater Manchester, Cheshire East is a non-constituent member of the Great Manchester Combined Authority for the purposes of, I think, business rates.
Baroness Williams of Trafford
My Lords, as discussions on these amendments have demonstrated, the ideas for devolution in London to London councils are interesting and varied. As I have explained many times in previous debates, there is an expectation that local areas will do just that and come forward with proposals to support devolution for their areas, and of course London is no exception.
I know that London boroughs and the Greater London Authority are working on a package of reform proposals, and I was very pleased to meet the noble Lord, Lord Tope, and others—I think that it was last week; time goes very strangely in this House—and interested to hear their thinking. We expect boroughs and the GLA to come forward to us with those proposals in the coming months. I recognise that the proposals may need a strengthening of London governance arrangements, and I can see how the proposals in the amendments may provide the kind of governance arrangements that might be needed.
However, for now, I suggest to noble Lords that we continue at some later stage our discussions on what the most appropriate changes would be to provide the London governance needed for future greater devolution and how such changes might best be provided for in this Bill. Therefore, I ask that noble Lords do not press their amendments.
Lord McKenzie of Luton
My Lords, I am grateful to all noble Lords who have spoken in that brief debate. Insofar as what the Minister said, yes, of course, we will withdraw the amendment at the appropriate time, but it is good to hear that a package of proposals is being worked on which might entail strengthening of governance arrangements.
The point of having amendments now is that the Bill is just about to pass from this House. This is a legislative vehicle, which is why it is an opportunity to test the water on what might be an appropriate structure to deal with the emerging devolution proposals.
Clearly, the noble Lord, Lord True, is heavily involved in all this—it is an integral part of what he does—and I accept entirely that, as he said, there is a desire to continue with the work in progress of developing these thoughts. It is not a done deal in the sense of what he said. I accept, too, and can well imagine that devolution in London is heavily impacted by diversity and the need to build a climate of trust with government. Given the massive expansion in the population, to which the noble Lord referred, I acknowledge, too, the need to look at this on a regional basis and the need for broader discussion.
I am grateful to the noble Lord, Lord Tope, for his support for the draft amendments, on the basis that they are probing amendments to try to set down and understand some parameters. A key question that emerges from this is whether the legislative hurdles that they seek to address are real—I think that this is one of the issues that London Councils had concerns about.
I accept that this is not necessarily about locking people into particular institutions. It is an attempt to understand where these sorts of devolution arrangements that London boroughs wish to enter into can be enabled under existing legislation or whether something is needed in addition. Perhaps we could hear more specifically from the Minister. We had one discussion on that and it seemed that, in some areas, there was acceptance that additional legislation would be required. We have got the sense this evening that this is the case—this Bill will go to the other place in September and October but it will have been passed in some shape or form by the end of this year—so this is a missed opportunity if London devolution, as London wants it, needs the benefit of some tweaking or changing of legislation. Can the Minister address that point?
Baroness Williams of Trafford
I thank the noble Lord for that—it may be that some tweaking of legislation is required; we have on other parts of the Bill similarly alluded that the tweaking of other legislation might be required in order to align it with this Bill on devolution. The discussions have started well but I request that we give a bit more time to this and discuss it in due course.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Lord McKenzie of Luton
My Lords, Amendment 33 is to be welcomed as it requires a report, as we have heard, to be laid before Parliament at the same time as the statutory instrument containing an order under Clause 6. The report will cover descriptions of any consultations and representations received and evidential and background information. Amendment 70 requires a similar report in respect of regulations arising under Clause 10. We consider these to be important amendments, which we support.
However, the amendment raises one question, which I touched upon earlier in relation to Amendment 1. The devolution process under way is happening not just necessarily under an order in Clause 6 or 10. It has been an evolving process, particularly in the case of Greater Manchester. The build-up of that devolution arrangement happened under different provisions, and that could be replicated in other deals.
We are trying to understand whether this will culminate always in one order under Clause 6 or Clause 10, or whether there are bits along the way. If the latter, that would obviously have an impact on the type of information and the type of report, and on whether there are any gaps in it. How will it work in practice?
As I said earlier, the reports could be an important component of an annual report, but I would be interested in how it all works and how it culminates always in one order which then triggers the report that we are discussing.
Baroness Williams of Trafford
I thank the noble Lord, Lord Woolmer, for the two points that he raised and for his increasing confidence as the Bill goes along—it is reassuring to me if not to anyone else. He asked whether each and every deal would be brought forward in this way. The answer is yes. He also asked whether the reports would be in addition to the Explanatory Memorandum. Not only will they be in addition, but they will be full and detailed.
The noble Lord, Lord McKenzie, asked whether the report plus the Explanatory Memorandum would be part of the full deal explanation, or whether it would be done piecemeal. My view at this moment—and I will correct it if it is wrong—is that once an area is ready to go forward with a devolution deal and therefore the orders that come with it, there will be a substantial report plus Explanatory Memoranda. It may be that that is added to through a future order, but that order on its own would then come through both Houses of Parliament. That is how I see it working, and I will correct it if it is not the case.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
I thank the noble Baroness for her intervention. The process undergone by Greater Manchester, Norwich, Cornwall and other places can act as a learning tool for small seaside towns which I agree absolutely may not, in the early stages, have the capacity or capability to think about what might be appropriate. We learn from others and this is an important process.
The noble Lord, Lord Liddle, referred to our discussion on Cumbria. Either myself or my noble friend Lord Heseltine—or indeed both of us if we can manage to get our diaries free on the same day—are looking forward to meeting with Cumbrian representatives to discuss what I thought were some very constructive points raised by the noble Lord in the meeting.
The noble Lord, Lord Kerslake, talked about the four reasons why devolution is not pursued. We understand and share the noble Lord’s analysis of why devolution can be slow or non-existent, and he gave a very pertinent example which I recognise from my local government days. However, where we differ is that I doubt whether these proposals for annual reports and statements are an effective means of challenging either silo working in Whitehall or the disruption, fear of difference and nervousness at the local level. The strong drive given by the Bill, backed by the early devolution of major powers and budgets, thus creating a whole culture of devolution, is the best way forward, not annual reports which may themselves become prescriptive, or at least perceived by local areas as a direction from the Secretary of State. Given those points, I hope that the noble Lord will feel happy to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank all noble Lords who have spoken in support of the two amendments before us, with of course the exception of the Minister. We heard from the noble Lord, Lord Shipley, about the importance of not doing things piecemeal, and the pertinent point, reiterated by my noble friend Lady Hollis, that if no general principles are laid down, an annual report would at least help smaller authorities to understand what the parameters are in practice. We also heard the passionate commitment of the noble Lord, Lord Kerslake, to the Bill, but he described these amendments as practical and sensible and a powerful antidote to the prospect of government from the centre drawing back the thrust of devolution. My noble friend Lord Warner talked about help with laggards, and said that the amendments would help us to understand the pattern. My noble friend Lord Liddle does a great selling job for Cumbria, which I hope it appreciates.
I say to the Minister that none of this would stop the “come and have a conversation” approach that the Government are pursuing. If anything, it should aid that process because it would alert those who have not yet engaged to the prospects—what is actually going on around the scene. This is a very positive contribution. Of course, nothing in these amendments is in conflict with Amendments 33 and 70, which will be moved in due course. Indeed, we can see those reports as a component of the annual report, but not sufficient.
I hope I did not say that Greater Manchester would not need to rely on Clause 6 at all. My point was that not all of the deal is dependent on the use of Clause 6. If the extra reporting that the noble Baroness is talking about is tied to that Clause 6 order process, it would not necessarily embrace all of what is going on in practice.
I had hoped that we could agree on this. The amendments are genuinely meant to help the Bill but the Government have made their position clear. On the basis that Amendment 2 is consequential on Amendment 1, I certainly would like to test the opinion of the House on Amendment 1.
Baroness Williams of Trafford
The noble Baroness’s question is the subject of later amendments. Certainly, the London model is not being considered in Greater Manchester. However, during the Bill’s passage, there has been a lot of discussion on the need to strengthen scrutiny.
Lord McKenzie of Luton
Before the Minister moves on, will she clarify what is included in “major powers”? What are major powers and less than major powers or minor powers? That is the dividing line in this matter.
Baroness Williams of Trafford
As noble Lords will see, an example of major powers is devolution for Greater Manchester. That is an example of a suite of major powers.
I should like to make some progress. The noble Lord, Lord Grocott, referred to Amendment 3, which would obstruct our policy of allowing major powers to be devolved to a city because there is a necessary single point of accountability—that is, the mayor. The noble Lord also said that people should have a referendum to decide whether to have a metro mayor. We recognise that in the past some cities have rejected the opportunity to elect a mayor. This time it is an entirely different proposition. It is about putting in place a devolution deal which the democratically elected representatives of the place have agreed with government. Part of that deal is the necessity for robust local governance for the new devolved powers, and for a powerful point of accountability such as a mayor. It is for the elected representatives of an area who have a democratic mandate to decide, in discussions with government, whether they wish to introduce a mayor and benefit from major devolved powers.
Baroness Williams of Trafford
My Lords, I do not and will not have a list. As I have said repeatedly, what powers are devolved will be up to agreement between local areas and the Secretary of State.
Lord McKenzie of Luton
My Lords, this has been an extensive and good debate and the time moves on, so forgive me if I do not respond to each point that noble Lords have made, whether it was as a trip through history about what has happened to elected mayors or the stage that we have reached today. The problems with the London system, some of the time, and the difficulties that other areas have found were mentioned.
I would like to challenge the proposition that the amendments are wrecking amendments. I am bound to say to the noble Lord, Lord Heseltine, that that really is not the case. It was not the intent and is not their substance. If we look at the thrust of all the amendments that are before us today and will be on Wednesday, they are overwhelmingly about trying to improve the Bill and achieve the very thing that he wants and campaigns for. It is unhelpful to characterise these amendments as wrecking when, in total, we are trying to improve the Bill so that devolution can be delivered across the country.
The noble Lord, Lord Shipley, asked the pertinent questions about major powers—what is in and what is out—and of course we got the usual answer. I do not think that anybody sees it as a credible response to say that nothing is being imposed on people because the Bill is a framework Bill, in circumstances where the Government make it absolutely clear from the start that you can get certain powers only if you have an elected mayor. That is not a process of not imposing anything on anybody. It is making sure that the price paid is very clear up front, in some circumstances. It is very unclear in other circumstances what price will be asked, depending on what powers are available. I am bound to say that whether we are in favour of or against elected mayors instinctively, we did not see it as a ladder up which budding leaders could climb—and even less so a retirement job for ex-Cabinet Ministers. I did not think that that was the process we were involved in today.
The noble Lord, Lord Heseltine, made a powerful speech reiterating his passion for devolution and what it could lead to. We support all that but he himself said that if somebody comes up with something it will be considered, so seemingly from his point of view there is not an inevitable imposition of an elected mayor. The noble Lord may feel that something credible would not come up, and he may or may not be right. But even he seemed to recognise that there should be scope, which is effectively what Amendment 3 is seeking. It may be, in the terms used by the noble and learned Lord, Lord Mackay, that the wording is imperfect but then it is the job of government at Third Reading to tie that up.
Lord McKenzie of Luton
My Lords, the amendment requires that on page 19, line 10, we should insert:
“An order under sub-paragraph (2) must include provision for an appointment process for any other person who may exercise any PCC functions of the mayor”.
This is a straightforward issue. The amendment deals with the important role of the PCC taken on by the mayor and the extent to which its functions can be passed to others. It seeks to ensure that there is a proper appointments process to put that into effect. I beg to move.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord McKenzie, for being so brief in moving the amendment. As he said, it seeks to insert a new provision into new Schedule 5C to ensure that the Government must provide, by order, an appointment process for any other person who may exercise any of the PCC functions of the mayor.
The amendment is not necessary because the Government have already committed on the Floor of this House to apply Schedule 1 of the Police Reform and Social Responsibility Act 2011 to metro mayor areas by order where PCC functions are being transferred. Paragraphs 9 to 12 of that schedule set out an appointments process for senior posts below a PCC, including for the post of deputy PCC. This involves the scrutiny of any proposed appointment by a police and crime panel. I reiterate that we intend to apply these provisions to metro mayors by order to ensure that such appointments are properly scrutinised in the same way. The role of the dedicated police and crime panel will, of course, continue.
However, it will almost certainly be necessary to amend these provisions to some extent before they can be applied directly to a particular metro mayor area, given the different structures and posts which might exist in different areas, hence our proposal to implement this by order. I wish to be clear that we intend that there will be an appointments process for senior posts that will be based on that set out in Schedule 1 to the Police Reform and Social Responsibility Act 2011. All posts other than that of the deputy PCC mayor, and which support discharging the mayor’s PCC functions, will be subject to the standard local government requirement that appointments must be made on merit, as set out in Section 7 of the Local Government and Housing Act 1989. This requirement currently applies to all appointments made by PCCs other than the post of deputy PCC, which may be a political appointment, albeit still subject to scrutiny by the panel. Appointments to all other posts below mayor on policing matters would have to be made on merit alone, and appointments to senior posts will additionally be subject to scrutiny by a police scrutiny panel.
I hope that reassures the noble Lord and that he feels content to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I am most grateful to the noble Baroness for that much longer explanation than mine in moving the amendment. It is perfectly satisfactory and I beg leave to withdraw the amendment.
Lord Woolmer of Leeds
These proposals are enormously important. I hope very much that we will have time to consider them and to reflect, but I see them as potentially extremely helpful, certainly to Yorkshire.
I will ask for clarification on two matters, but I will study the detail more carefully over the next couple of days. First, I assume that these proposals will apply to extending a current combined authority area, as opposed to establishing a de novo combined authority. I assume that they would apply if an existing combined authority area wished to have discussions to extend its boundaries. Secondly, if I understood the Minister correctly—I apologise that I have not read the proposals in the detail I should have—they would enable an existing combined authority to extend its boundaries, either with contiguous shire districts or potentially even to an authority that does not adjoin the existing combined authority; the word “doughnut” was used. It would be helpful for me to understand whether that is the case.
These are enormously important proposals and a lot of people will be extremely interested to understand them. They could be very helpful in making combined authority areas make a lot of sense in economic terms. Some existing combined authorities, while very useful, could do with extension to a degree.
Baroness Williams of Trafford
It might be helpful to noble Lords if I say that Amendments 62 and 77 are expected to be reached on Wednesday. They are after Clause 9. Therefore, there will be an opportunity to discuss them then if noble Lords wish.
The noble Lord, Lord McKenzie, asked about fast-tracking becoming the norm. The amendments have been proposed to enable deals where constituent councils are content to approve deals that are ready, not to rush other areas that might take a bit longer. He also asked what underpins the Secretary of State’s judgment if there is no scheme. It will be the information and the evidence available in the deal. If insufficient information is available for the Secretary of State to make a judgment on whether the tests are met, then the fast-track process cannot be used.
The noble Lord, Lord Woolmer, asked two very useful questions. One was on changing an existing combined authority. The answer is yes, existing combined authorities would be able to be non-contiguous or doughnut-shaped; I am glad he will find that response helpful. He talked about non-adjoining areas. The answer is also yes, that will be possible. I hope that that assists noble Lords.
Lord McKenzie of Luton
Before the noble Baroness sits down, could she clarify this? I think she said that we would reach Amendments 62 and 77 on Wednesday. According to the groupings list, they are in the group that we have just discussed.
Baroness Williams of Trafford
My Lords, the amendments would be after Clause 9, so they can be discussed then if noble Lords wish.
Lord McKenzie of Luton
We would be very happy to have a further discussion—it is vital that we do—although we would be squeezed for time on Wednesday with lots of other big issues. I thought from what the noble Baroness said that these amendments are not included in the group that we just discussed. According to the groupings list, they should be.
Local Government Funding
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, there were a few questions in there, but I just cannot share the view that the Government are stopping local government from raising its own income. On business rates retention and the new homes bonus, local authorities have seen incomes above what was expected from these areas. On need, I will list the 10 authorities with the highest spending power per dwelling: Hackney, Newham, Tower Hamlets, Camden, Knowsley, Islington, Southwark, Brent, Lambeth and Haringey. They are all Labour authorities.
Lord McKenzie of Luton (Lab)
My Lords, can I take the Minister back to spending power—the Government’s favourite measure, as I understand it—and pick up some of the areas that she just identified? If noble Lords look at the two-year period to 2015-16, the local authority ranked first in the multiple deprivation index had a 10% cut in its support; Newham, ranked second, had an 11% cut; Knowsley, ranked 12th, had an 11% cut; Middlesbrough, ranked 27th, had a 10% cut. Yet, at the other end of the spectrum, Woking, ranked 294th, had a 2.3% increase and Wokingham, ranked 325th, had a 2.9% increase. How is this a manifestation of the fact that we are all in it together?
Baroness Williams of Trafford
My Lords, the two authorities that the noble Lord mentioned, Hackney and Newham, have spending of almost £3,000 per dwelling and £2,800 per dwelling respectively. In terms of quantum, they are doing considerably better than a lot of other local authorities.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, I am very happy to use this probing amendment to set out how I see the position in relation to London. I did indeed say at Second Reading that there was nothing to preclude London boroughs or the GLA from coming forward. Perhaps I will expand on that slightly this evening. It is for the London mayor and the boroughs to continue to work together and to agree proposals, which the noble Lord tells me are ready, for greater devolution of powers to London. These could include provision to transfer public authority functions to a joint committee of councils or the establishment of a joint board between the boroughs and the mayor. We will consider whatever the mayor and London boroughs wish to propose, and no doubt they will be making a strong case as to how any proposal they make would provide better outcomes for Londoners. As with any other area, we are ready to have conversations with them, and look forward to those proposals coming forward.
The amendment, however, would turn the process on its head, because it would be the Secretary of State who kicked things off with his report. This is not the approach that we want to follow, as I am sure noble Lords will have established by now, because we believe that such an approach is far less likely to deliver genuine and effective devolution that will improve to the greatest extent the outcomes places face and the economic performance of particular areas.
I hope that on that note the noble Lord will feel able to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Lord, Lord Tope, for his support for this amendment and to the Minister for her reply. If I understood it, I think she was saying that under what is proposed it will be perfectly feasible that the boroughs and the GLA et cetera simply need to come forward and make their case. However, is she saying that what is sought under the new arrangements does not require any change to primary legislation? That is the issue here. Perhaps she could just answer that specifically.
Baroness Williams of Trafford
My Lords, as far as I am aware, it does not. I draw noble Lords’ attention to the manifesto commitments on further devolution to the London mayor as well. I hope that that reassures noble Lords.
Lord McKenzie of Luton
I am grateful for that and think that I am reassured by it. I think that it needs a quieter reading than at this hour—perhaps in the morning on the train. If, effectively, it does not need primary legislative change, that is fine. I think that we still have scope to bring something more specific back at Report if that proves not to be the case. I know that the Minister is stacking up lots of meetings at the moment, but it would be very helpful to have a specific meeting with London Councils, to make sure that the case it is making is fully heard and that it understands the technical position that she has outlined.
Baroness Williams of Trafford
My Lords, before amendments are withdrawn et cetera, I can confirm that, and have actually already started to have a conversation with one London authority.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Lord McKenzie of Luton (Lab)
My Lords, the amendments of my noble friend Lord Berkeley reasonably probe the Government and focus on issues which should underpin a combined authority’s operations and strategies. There are issues around the health of people in the area and around sustainable development, about which my noble friend always speaks with passion. I know the Minister’s answer will be, “You can ask for all these things; you may well get these things in a deal; but you do not have to have them in the Bill”
The consultation requirements in these amendments are a little more specific than one would like, even if one were in support of putting them in the Bill. The issue here is to encourage all the deals that take place under these devolution proposals to have, as their underpinning, issues around sustainable development and the health of people in the area. I am sure the Minister will tell us there is no reason why those issues should not feature in any deal that might be entered into. If that is not the case, there is a stronger case for putting something more specific in the Bill.
As to the strategic view on transport, if there is an argument for putting measures in the Bill it might be to hold the Government to account so that we do not proceed on an assumption of a northern powerhouse, with a big debate around connectivity, and hear a few days later that the funding is not there to deliver on it. That does not help trust between government and local authorities in creating an environment where devolution can work and where issues around sustainable development and the health of people in an area are at the forefront of the strategic operations of a combined authority.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, these amendments seek to introduce into the Bill new clauses that would place on combined authorities prescriptions and requirements about how they exercise certain powers which may be conferred upon them.
Amendments 44DA and 44DB place requirements on how a combined authority which has been given the full general power of competence through the provisions of Clause 9 of the Bill is to exercise these powers. These requirements are about having regard to certain matters and having to undertake consultation with various specified authorities and other bodies. The intention of new Section 113D, which Clause 9 inserts into the Local Democracy, Economic Development and Construction Act 2009, is to allow the same power of general competence that is available to local authorities to be conferred on combined authorities. The purpose of such a general power is to give the authority concerned the same scope and freedom of action as is available to any individual, such as you or me, subject to any specific legislative restraints applying to that authority.
To seek to prescribe to combined authorities how they should exercise this power would seem to be contrary to the essence of the general power of competence. It would place combined authorities in a more restrictive regime than that which applies to local authorities generally. There are no grounds for doing this in those situations where, as part of an agreed deal, it is considered right to give a combined authority the full general power of competence.
I recognise that these amendments appear to mirror some of the provisions that apply to the Greater London Authority. In the London context, the authority has the power to do anything which it considers will further any one or more of its principal purposes. In exercising this power the authority is required to have regard, for example, to its effect on the achievement of sustainable development in the UK and on the health of persons in Greater London. However, these specific powers which are given to the Greater London Authority are of a very different nature to the general power of competence, which, as I said, is the power for an authority to do anything which an individual can do, unless it is specifically prohibited. These are particular powers about promoting economic development and wealth creation in Greater London, promoting social development in Greater London and promoting the improvement of the environment in Greater London. It may be in a particular deal that similar powers are conferred on a combined authority, using the powers in the Bill under Clause 6.
Amendment 44DC provides that in preparing or revising any transport strategy a combined authority shall have regard to the health of persons in its area, the achievement of sustainable development in the UK and certain matters relating to national policies, international obligations and the available resources for that strategy. This amendment mirrors provisions which apply to the London mayor in respect of his general duties in relation to his strategies. However, such provisions are not appropriate to be included in an enabling Bill, which does not refer to any particular powers or duties a combined authority and its mayor may have. If, as part of a particular deal, a combined authority mayor is given a power similar to the Mayor of London’s in relation to certain strategies, then it may be right that, in the case of that combined authority, matters such as sustainable development and the health of the people in the area could be relevant considerations to be taken into account by the mayor when drawing up those strategies. The orders creating such an arrangement would be able to reflect this.
Whatever the importance of particular issues, and clearly the health of people in an area is of the utmost importance, it is not for this Bill to include either references to specific powers, or provisions which can relate only to specific powers. This is an enabling Bill and in our previous debates I have made very clear that the Bill is not a vehicle for setting out lists or descriptions of powers which may or may not form part of an agreed deal with particular areas. Accordingly, I hope the noble Lord will agree to withdraw his amendment.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Lord McKenzie of Luton
I know that we deal with situations where the best can happen in the best of all possible worlds, which is where we are on the Bill. However, could the noble Baroness confirm that in a whole range of functions being devolved to a combined local authority and the budgets to go with it, the prospects of those budgets being aggregated—with freedom for the combined authority to spend as it wishes, given those particular functions, and not have to follow the Bill above those amounts—would be perfectly possible, feasible and welcomed?
Baroness Williams of Trafford
My Lords, the noble Lord gives a theoretical example, which I am not in any position to stand at the Dispatch Box and confirm. I know I have reiterated this during the course of the Bill, but it really would be for a group of local authorities to prove that whatever proposal was put forward would result in growth and be fiscally neutral.
Affordable Housing
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
I will certainly write to the noble Lord, but I am not in a position to make policy announcements at the Dispatch Box.
The noble Lord alluded to Keswick, so I will outline how we are supporting housing in Allerdale council. There have been 460 affordable homes delivered in the Allerdale local authority area between 2010 and 2015. In terms of help to buy, there have been 80 equity loan sales to March 2015, 58 mortgage guarantee loans, 158 homes supported by 20 new-buy mortgage loans and, up to 2014, the new homes bonus for Allerdale has been £791,455.
The noble Lord, Lord Best, said that the current right to buy has become more generous with increased discounts and shorter qualifying periods. The qualifying period was reduced from five years to three years under the Deregulation Act 2015, returning to the original qualifying period set in the 1980s, and the right to buy discount has increased to realistic levels after years of stagnation when the discounts became irrelevant.
A question was raised about making land available. We want to make brownfield land available because people want new homes to be built near existing residences while the green belt and the local countryside are protected. They might even want to build their own home. We will ensure that brownfield land is used as much as possible for new development. We will require local authorities to keep a register of what is available and ensure that 90% of suitable brownfield sites have planning permission for housing. I mentioned in this House the other day that we will create a brownfield fund to unlock land. There will also be a new London land commission to identify and release all surplus brownfield land owned by the public sector and fund housing zones to transform brownfield sites into new housing, creating 95,000 new homes.
The noble Lord, Lord Haskel, made the point that no one believes that one-for-one replacement will work, especially in London. There is inevitably a lag between sale and replacement in order to assemble land, get planning permission and so on. That is why in 2012 councils asked for three years to deliver the one-for-one figures that we have published today. They show that 3,053 additional homes were sold in 2012-13, and 3,337 have been started or acquired. The numbers have doubled in the last year, so councils are delivering the one-for-one replacement to date. However, we cannot expect to see the figures on that replacement immediately.
Two noble Lords talked about the definition of affordable housing. It is set out in the National Planning Policy Framework and in the Housing and Regeneration Act 2008. The definitions are as follows. The National Planning Policy Framework defines it as:
“Social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices”.
Lord McKenzie of Luton
I hope that the noble Baroness will forgive me for interrupting, but using those definitions, on the affordable programme that the noble Baroness has talked about today, of the 55,000 houses each year, how many of those are social rented homes and how many are intermediate homes?
Baroness Williams of Trafford
Perhaps I may get back to the noble Lord on that particular figure. He always asks specific and detailed questions, so I shall get back to him on that.
I shall carry on with the definition:
“Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision”.
The Housing and Regeneration Act 2008 defines social housing as,
“low cost rental accommodation and low cost home ownership accommodation”.
“Low cost rent” is simply defined in the Act as “below the market rate”, while “low cost home ownership” is defined by its availability for occupation on a shared ownership or equity percentage basis.
I note that time has run out and there is a host of questions that I have not managed to get through. I will write to noble Lords whose questions I have not addressed, and I thank all noble Lords who have taken part in the debate.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, the noble Baroness makes a very interesting point. Other points have been made at length in this House about single-party states, but in terms of election periods or cycles being out of kilter because of different types of elections, I would imagine—although I will confirm this with the noble Baroness—that they are the sorts of things that would need to be ironed out when a devolution deal was done on how that combined authority’s elections would pan out. I am thinking of the Greater Manchester situation, where we are in thirds and all synchronise nicely. But I can foresee that process.
Lord McKenzie of Luton (Lab)
My Lords, I am not sure whether I am going to be helpful to the Minister, but would it be possible that, between elections, the Secretary of State could remove all the functions from the mayor, so that they would stay with the combined authority members?
Baroness Williams of Trafford
My Lords, if that were to happen, the Secretary of State would have to disband the combined authority and something in its place would have to be set up.
Baroness Williams of Trafford
I would like to correct the comment that I have just made and come back to it in a future group, because I have clearly got it wrong.
Lord McKenzie of Luton
My Lords, before discussing Amendment 35, perhaps first I could speak briefly to Amendments 34 and 36 in the name of my noble friend Lord Smith of Leigh, who cannot speak to them himself. They are self-explanatory, in that Amendment 34 makes reference to a,
“local authority member of a combined authority”,
having,
“responsibility for finance and resource management”.
Amendment 36 calls for the Bill to specify,
“the number of local authority members within a combined authority area who can veto the draft budget”.
We would happily support each of those amendments.
The Bill enables a power of veto over the mayor’s budget, and Amendment 35 would enable the combined authority also to change that budget in circumstances that would clearly need to be spelt out in the order. That opportunity seems to be provided for in the Manchester agreement. The Bill itself makes reference to changing the budget, but it implies that that is as a result of the initial scrutiny process, not following on from the combined authority’s approval or otherwise of the draft budget. Could the Minister confirm that?
Just to recap, the Bill talks about a mayor preparing a budget; a draft to be scrutinised by other members of the combined authority and the committee, dealt with in Schedule 5A; the making of changes to the draft as a result of the scrutiny—presumably with the approval of the mayor; and the approval of the draft by a combined authority, including a power to veto the draft circumstances specified in the order and the consequences of such a veto. Our amendment proposes simply that we have not only a right to veto but a right to change the budget. There would need to be a threshold of those supporting that proposition, which is again the case in Manchester. A veto is a power, and it can be quite a weak power in certain circumstances. You could simply end up with a ping-pong type arrangement between the mayor and the other members of the combined authority, which would be unfortunate and inconsistent with the effective operation of a combined authority.
We support the thrust of Amendment 33. As some noble Lords have touched on, it raises a number of issues that need clarification. In part, those of us who can remember municipal bonds support it with a sense of nostalgia. I am sorry to hear that my noble friend did not buy any Luton bonds in her previous investment, but perhaps next time. I am interested to understand quite how this will work when it will be available only to residents of an area. I think that that is easily dealt with at the point at which it is issued, but what happens thereafter? As my noble friend Lord Liddle said, whether that has an impact on marketability is an important issue.
As I understand the Bill as it stands, the Secretary of State can by order enable an authority to borrow for specified functions, provided that it has the consent of the constituent councils, but I do not think that that extends to mayoral functions. That could be changed, but we would like better to understand how this all fits together and how the total funding and borrowing opportunities of the combined authority sit with the existing position of those separate authorities. How does that impact on prudential borrowing and, therefore, the scope for the type of bond the Minister is talking about?
We can certainly see the benefit of raising funds for specific projects but, even if you can borrow for mayoral functions within a combined authority, it seems to me that you do not want that borrowing power to drive the functions the mayor gets; that is the wrong way round. You have to see what functions the mayor would have under these arrangements and see how they should be financed.
My understanding is that if there were associated costs—if my noble friend is right and this measure did not wash its face in all circumstances, particularly on infrastructure projects where there can be long lead times and not necessarily early returns—those would be picked up and met by a precept, not a levy, on the constituent authorities. Given the constraints that central government have hitherto imposed on increases in precepts, it could unwittingly impact on all that.
This measure needs to be unpicked so that we can better understand it. It seems to be a very helpful suggestion, and you can see the benefits that could flow from it, but it would need to sit together with the intended funding arrangements or the likely opportunities for the combined authority as a whole, quite apart from the wider issue of fiscal devolution, which we will come to in subsequent amendments, probably on Monday. We are on the side of those who would like to make this work, but it needs to fit with what we have before us.
Baroness Williams of Trafford
My Lords, it is refreshing to hear innovative ideas coming from your Lordships’ House. I commend my noble friends Lady Wheatcroft and Lord Moynihan on some of the suggestions that they have put forward. Amendment 33 seeks to amend new Section 107F of the 2009 Act to allow the Secretary of State by order to enable the mayor to raise funds for the carrying out of specified development projects, by the issue of bonds to be made available only to those residents within the combined authority area. I was interested to hear about the experiences of the noble Baroness, Lady Janke, in Bristol. As I have said, the intentions behind the amendment are to be commended. The Secretary of State can by order confer a power on a mayoral combined authority to borrow. The mayor individually cannot borrow because, as the noble Lord, Lord McKenzie, said, he or she is not a corporate body. Borrowing by a combined authority where it is given the powers to borrow is secured on the revenue that that authority will receive, as the noble Lord, Lord Woolmer, pointed out. Accordingly, any borrowing by a combined authority will be under the same prudential borrowing regime that applies to local authorities. This means that the level of borrowing must reflect the level of its likely reserves.
The noble Baroness, Lady Hollis, asked what could be funded by bonds. In any case it would be a matter for the discussions leading to the bespoke devolution deal as to what might, in the art of the possible, be borrowed. As I have said, any borrowing must conform to the principles of prudential borrowing, which apply to all borrowing by local authorities.
My noble friend Lord Moynihan asked about the functions to benefit by municipal bonds. The functions that might be supported by investment and funded by prudential borrowing, which could be in the form of bonds, are a matter for the conversations with that area which lead to its bespoke devolution deal. As my noble friend Lady Wheatcroft said, this is an enabling Bill. Clause 8(3) allows the Secretary of State to specify which functions of a combined authority may come within the scope of borrowing powers given by the Local Government Act 2003. The sources of borrowing available to combined authorities include issuing bonds as well as taking out loans. The devolution deal will determine which functions the combined authority can borrow for. Decisions over whom an authority obtains their financing from are a matter for the authority.
Amendments 34 to 36 seek to alter the powers of the Secretary of State to provide for scrutiny of the mayor’s draft budget. Amendment 34 would insert a new Section 107F(3)(c), which would allow the Secretary of State by order to make provision to appoint a local authority member of a combined authority to have responsibility for finance and resource management. In effect, were such provision made, it would prescribe that there must be a member of the mayoral combined authority who had finance responsibilities, and that the member with these responsibilities would be a councillor from one of the constituent councils. It is rightly the mayor who should decide to whom he or she wishes to delegate his or her responsibilities, and this includes responsibilities for finance. To return to a point that I made earlier, it is consistent with local authorities operating their cabinet arrangements at present, with the mayor deciding which member of his cabinet should hold certain portfolios with certain responsibilities. We are clear that this should also be the case for metro mayors. For mayoral governance to be effective, the mayor must have discretion to assign portfolios and delegate responsibilities to enable the effective delivery of their promises to their electorate.
I understand that the intention of this amendment may be to place checks and balances on the mayor’s powers. There is of course a chief finance officer for the combined authority, also known as a Section 151 officer, whose role is to ensure compliance with all statutory requirements for accounting and internal audit and to manage the authority’s resources. The chief finance officer is under a duty to make a public report if they consider that there is, or is likely to be, any item of unlawful expenditure. An additional proscription on the creation and assigning of member portfolios is an unnecessary check or balance, and risks frustrating the exercise of the mayor’s functions.
Amendments 35 and 36 seek to provide additional checks and balances on the approval of the mayor’s draft budget. Amendment 36 would insert a power for the Secretary of State to provide for a specific number of local authority members within a combined authority area to be able to veto the mayor’s draft budget. The Bill as it stands allows for the Secretary of State by order to make provision about the preparation of the mayor’s annual budget which, in particular, may provide for the constituent council members of the combined authority to scrutinise the draft budget, to make changes to it and to have a power of veto. The circumstances in which a veto may be used, and the consequences of any such veto, would be proposed locally and provided for in the order creating the mayoral combined authority. The Bill also allows for the overview and scrutiny committee, a politically balanced committee made up of councillors from the constituent authorities, to scrutinise the draft budget and recommend changes to it.
Lord McKenzie of Luton
My Lords, this is a small and narrow amendment. In fact, I contemplated whether I should move it at all, but as I have written it I might as well. It is intended as a probing amendment to understand the circumstances in which the schemes for transfer of property et cetera provided for in the Bill are contemplated and whether any are on the cards in the discussions that are taking place.
I was particularly prompted to think about this because of debates we had on the Localism Bill when some of its provisions were put in place, particularly Section 17, which is referred to and imported, in part, into the provisions of this Bill. Can the Minister tell us anything about experience to date on the operation of those provisions, which very much mirror what is in this Bill? There is a particular issue around the operation of the intent to comply with TUPE arrangements. Some of the provisions in Clause 17 touch upon this and refer to the fact that the order in relation to schemes can include circumstances where the same or similar effect as the TUPE regulations so far as those regulations do not apply in relation to the transfer are taken up. As a general point, is it the Government’s intention, in so far as they are a participant in this, that where TUPE regulations for some reason do not apply, they would seek to ensure that provisions with the same or similar effect as those regulations would be imported into any scheme of which they would be a party?
As an aside, when the Child Support Agency was being restructured, a key issue was not so much to do with entitlement to pensions, because there was access, but to do with loss of Civil Service status when somebody was going to go into an NDPB. That is an issue. I do not propose an amendment in relation to the Bill, but it was probably the big issue when we were talking about restructuring the Child Support Agency and it could rear its head in these circumstances. I beg to move.
Baroness Williams of Trafford
My Lords, Amendments 36ZA and 36ZB seek to amend the provisions in the Bill that relate to the making of a scheme to transfer property, rights and liabilities from public authorities to combined authorities. The Bill specifies that where a function of a public authority is to be a function of a combined authority, the property, rights and liabilities of the public authority can be transferred to the combined authority. These amendments seek to change this by removing from the Bill the provisions that allow for the transfer of public authority liabilities.
These amendments would prevent liabilities from being transferred from a public authority to a combined authority. Clause 6 enables the Secretary of State, by order, to confer on a combined authority powers exercised by a public authority. If functions are transferred, there may be some instances where assets, property, rights and liabilities should also be transferred to the combined authority in order for it to be able to exercise these functions.
As we have discussed, the whole Bill is enabling legislation. No combined authority will be forced to take on powers it does not wish to have, nor will a combined authority be forced to take on a public authority’s property, rights or liabilities. An existing combined authority must consent before such transfer can take place, and in the case of a new combined authority, the appropriate local authorities seeking to take on public body functions must have consented to the transfer of the property, rights and liabilities of the public authority. However, there may be times where such a transfer is necessary to give full effect to devolution deals.
Similar transfers of property, rights and liabilities from a local authority to a combined authority are already possible under Section 115 of the Local Democracy, Economic Development and Construction Act 2009. Such transfers have already happened when establishing combined authorities; for example, when the West Yorkshire combined authority was established the integrated transport authority and the passenger transport executive were both closed, and their functions, assets, liabilities et cetera transferred to the combined authority. This provision purely mirrors the existing provisions by applying the same principles to transfers from public authorities.
The noble Lord asked about TUPE. The tradition and past practice is that when transferring functions within the public sector, TUPE applies, and it always has up to now. I hope that with this explanation the noble Lord will feel able to withdraw his amendment.
Lord McKenzie of Luton
I am grateful to the Minister for that explanation. As I explained, the technical wording was simply to get a debate on this issue. I am grateful for that response, and I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, we have considerable sympathy with the thinking behind both amendments from the noble Earl, Lord Listowel. They touch upon one of the most serious issues that confront our society—our housing crisis— which must engage the action of central government and local authorities. It is also prescient, given concerns expressed in the press this morning about the figures for child poverty rising for the first time in a decade. We know that the lack of affordable housing is a key driver of homelessness and that homelessness inevitably sits at the centre of disadvantage and deprivation. The major influences on a child’s life—family income, effective parenting and a secure environment—are all directly or indirectly influenced by a family’s housing conditions.
The question posed by these two amendments is what the role of a combined authority should be in addressing our housing crisis and reducing homelessness. There certainly could and should be a role, and the Greater Manchester Combined Authority has shown the way. In its case, the elected mayor has control of a £300 million housing investment fund and powers over strategic planning, including the power to create a statutory spatial strategy for the CA area. There are somewhat convoluted arrangements for administration of the housing investment fund, but it has the prospect of delivering 10,000 to 15,000 homes over the period—a real contribution. Powers to create a spatial strategy for the area are particularly useful, given the demise, as my noble friend Lord Beecham said, of the former regional spatial strategies and the weakness of the duty to co-operate.
There are two issues, however, with the noble Earl’s amendments. Indeed, all noble Lords who have spoken today have, in one way or another, touched upon those issues. We should be mindful of the current requirement for local authorities to ensure that local plans meet the assessed needs for both affordable and market housing and that neighbourhood plans can supplement this. Further, important legislation is already in force that places a general duty on housing authorities to tackle homelessness, however difficult that is in the current circumstances. We would not wish to undermine these important responsibilities and local priorities, but it might well be appropriate to build on these requirements at an overarching strategic level. One way or another, those points were made by the noble Lord, Lord Shipley, and my noble friends Lord Beecham and Lady Hollis.
Certainly the prospect of a combined authority having spatial planning powers across an area could be a considerable advantage in creating a coherent housing framework. However—I am sure that the Minister will make this point—the approach suggested is prescriptive. Doubtless it will be said that there is nothing to prevent a combined authority seeking these powers by agreement, and I hope that the Minister will confirm that the Government would not be shy of agreeing such arrangements.
Baroness Williams of Trafford
My Lords, Amendments 36A and 36B would insert two new clauses into the Bill that place statutory duties on the Secretary of State to undertake reviews of the advantages and disadvantages of placing a duty on combined authorities to reduce the numbers of homeless children and families in housing need, and give combined authorities responsibility for affordable housing in their area and associated borrowing powers. These amendments would also require the Secretary of State to lay the report of these reviews under the clauses before both Houses of Parliament.
At the outset, I must say that housing is a priority for this Government. In our manifesto, we committed to building 200,000 starter homes and more affordable housing. We are putting in place £38 billion of public and private sector investment to help ensure that 275,000 new affordable homes are provided between 2015 and 2020. This means that we will build more new affordable homes than during any equivalent period in the last twenty years.
A couple of noble Lords asked about the definition of “affordable”. The detail is set out in the national policy planning framework, and it is, broadly:
“social rented … and intermediate housing, provided to eligible households whose needs are not met by the market”.
However, within that, there is broad scope around what affordability means in different places to different people.
Baroness Williams of Trafford
My Lords, these amendments seek in one way or another to provide that in advance of the devolutions being implemented, some form of statement should be published by the Secretary of State or put in the Bill about the range of powers which might be devolved to areas. These are examples of the quite centralist and prescriptive approach so beloved of Governments over the last 150 years, and that is what this Bill precisely seeks to reverse. There will be no prescribed list for local authorities or combined authorities to follow. We want to hear from them; we do not want to tell them what they want or what their plans for growth are. Our approach has been to start a conversation with the areas if they want to talk to us about their aspirations and the powers and budgets they want to have devolved to them to improve their area’s economy, deliver better local public services and build sustainable prosperity.
We want areas to be as ambitious as possible and we want to hear what they want, not what they think we are looking for. That is the whole point of the Bill. We do not have some preordained list of powers which we might devolve, and we do not wish to have in advance any conversations that would set limits or parameters about what may or may not be devolved or what might be an initial priority for devolution.
Noble Lords will be aware of the Manchester deal, and we have talked at length about some of the powers that Manchester wishes to see devolved. Perhaps that provides ideas for other authorities to move forward and the plans might offer them some inspiration, but we do not wish to impose the Manchester plan for growth on the Cornwall plan for growth or, indeed, the one for Norwich. We are very clear about that.
I am afraid that these amendments are simply out of step with the whole approach that this Bill is designed to deliver: agreeing bespoke devolution deals which enable individual areas to realise their potential and make the greatest possible contribution to the success of the UK as it responds to global economic opportunities and the challenges we all face.
I want to make two points. The noble Lord, Lord Woolmer, or the noble Lord, Lord Warner, made a point about local authorities being frightened that services they deliver as local authorities could be taken away—the difference between the strategic direction and the local direction of a council. That is a very important point to make because when combined authorities are thinking about their ambitions and plans, they must be focused on the big strategic issues that will benefit from the opportunity of scale across a number of local authorities.
The other point I want to deal with is that of capacity, alluded to by the noble Lord, Lord Shipley, and by the noble Earl, Lord Listowel. In a sense we are already dealing with combined authorities because we are having conversations, and obviously the Greater Manchester devolution deal took place last November, so we will continue with that. But when consulting the combined authorities on powers, their capacity to take on functions will also need to be addressed. A critical issue in the conversation with combined authorities will be to ensure that they have the capacity to deal with the matters that they wish to take on. If they are ambitious for powers to be devolved to them, they will need to be clear in the proposal they bring to us on the governance arrangements for managing and handling the power they want and how they will have the capacity to do so. With that, I ask the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank all noble Lords who have spoken in this short debate. Every noble Lord has supported these amendments with the exception, unsurprisingly, of the Minister. I should say to the noble Lord, Lord Shipley, that there is no fix on the timing of Amendment 36C if there are benefits in being flexible, or indeed on expanding the list. I would be happy to talk about that when we return to this matter, as we certainly will.
My noble friend Lord Warner made an important point about engaging health economies where they are holding back at the moment—being proactive and prodding them into focusing and engaging. The amendments have had the strong support of my noble friend Lord Woolmer, who stressed the importance of skills and the need to be strategic in these things.
I should say to the Minister that I am not surprised at the response because it is what we have been given throughout our consideration of the Bill: “This is a broad framework and we are not going to tell anyone to do anything; we are happy to sit back and have conversations”. In a sense that is government by vacuum, with no lists, preconceptions or limits being set. That cannot be good enough. If the Government are not themselves now planning how to deal with the consequences of what might happen after devolution, it would seem that they are being derelict. None of this forces anyone to do any particular thing, apart from the Government saying, “Actually, get off your backsides and make this work. Do something proactive to engage with combined authorities so that they know what is on offer and encourage them into deals”. Otherwise, there will simply be cosy conversations on an unplanned basis, and a favoured few authorities may well get the nod of approval from the Government. But the general thrust of our position is that we want devolution to work across the board in England on a proactive basis. That is what our amendments are designed to help achieve.
I will withdraw the amendments today, but I have absolutely no doubt that we are going to return to this issue in one form or another because it is at the heart of whether we believe that devolution should work across the board and we should want it to happen, or whether we think that it is a question of waiting to see what washes over us in due course. I beg leave to withdraw the amendment.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Lord McKenzie of Luton (Lab)
My Lords, this has been an interesting short debate. Our starting point is to favour the amendment moved by my noble friend Lord Smith of Leigh for there to be an independent panel. I accept that there are issues. The noble Lords, Lord Shipley and Lord Heseltine, made points about making sure that it is truly independent, and there is no reason why that independence could not take account of international experience as well. A potential issue about the linkage is that the role of the mayor will not necessarily be constant and homogenous between different authorities. Sometimes the function of the mayor might be the full Monty, as it were, but sometimes it might be much less so. Therefore, we are going to have to have some form of assessment if we are going to do that fairly. It is reasonable for there to be further thinking around this.
Linking pay to the pay of the highest-paid leader of a constituent council could be a route, although in a sense what this amendment says is, “The Secretary of State decides but it must be no larger than”. That seems to put the onus back on the Secretary of State, so the principle we would support is some independent assessment, taking account of the real value of the job. I entirely accept that this would be a very powerful and important job.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I appreciate the intentions behind these amendments, and noble Lords have made very valid points. I have just asked for some comparator salaries for city or conurbation mayors. The London mayor earns nearly £144,000 a year, and the Bristol mayor earns nearly £66,000.
There are already statutes in place regarding independent remuneration panels and the remuneration of elected members. A combined authority’s constituent councils are required by the Local Government and Housing Act 1989 to establish and maintain independent remuneration panels which make recommendations to local authorities regarding the remuneration of elected members to which local authorities have to have regard. To take my noble friend Lord Heseltine’s point, there is nothing to stop them making international comparisons.
It would seem that to make provisions for a combined authority to establish its own independent remuneration committee merely to determine the remuneration of the elected mayor would be introducing an unnecessary layer of bureaucracy and would take away some of the flexibility that this Bill offers to those areas that seek to establish a combined authority. Further legislation, the Local Transport Act 2008, enables the Secretary of State to make provisions about the remuneration of, and pensions or allowances payable to or in respect of, any member of the combined authority. That includes making provision about the remuneration—that is, the allowances—of a metro mayor, including the part to be played in setting those allowances by independent remuneration panels in the combined authority’s area. As this power already exists, we consider it unnecessary to make further regulations in connection with the remuneration of elected members. With those explanations, I hope that the noble Lord feels able to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I am grateful to my noble friends Lord Woolmer and Lord Smith for basically setting out our position on these amendments. We do not believe they are appropriate. It seems to me the key point that has been made is that you cannot draw a parallel between the London model and where we are with these combined authorities because you have members of the combined authorities—not via this election process but directly representing the constituency authorities—who are involved in holding an elected mayor to account, if there is one, through the two-thirds rule on the budget et cetera, but who collectively, as my noble friend said, have functions for which they are responsible. If you go down the route of adding to those elected members, what precisely is the role of those members in comparison with the members who are already there by virtue of the indirect arrangement? Therefore, I do not think that the model fits and it is unhelpful to try to make it fit.
There are other issues as well, perhaps of less consequence, but the proposal is for an assembly only for mayoral combined authorities. What about other combined authorities if there are no mayoral functions? They would still possibly have the same range of functions but this solution is not offered here. The assembly seems to be offered whatever level of devolution is given to the mayor. In some cases there may be full-blown powers for the mayor, including in PCC matters; in others that is not so, so to have the same arrangement in each case—or to propose it—does not seem to make sense either. However, that is not the substantive point. I think the substantive point is that made by my noble friends.
In terms of the numbers, as we heard, in Manchester’s case we could go from 11 members at the moment, including the mayor, up to 61, whereas London, as we know, has only 25. I appreciate that those figures could be adjusted but it is still a big increase. What is the role of those members who are going to come through the system on this basis? Are they just there to scrutinise? How does their role differ from that of the other combined authority members?
If you look at the number of combined authorities which may be created—some are already under way—there is Greater Manchester, West Yorkshire, Merseyside, Tyne and Wear, and South Yorkshire, and there are prospects for east Midlands, south Hampshire, Bristol and Leicester. Who else might follow? How many assemblies are we seeking to assemble here? As I said earlier, we have a proliferation of voting systems: first past the post for the council elections; a single transferable vote proposed for the assembly; and the supplementary vote for mayors. I am sure the electorate will be able to cope with that over time but it does not seem to me a great example of clarity and linking with the electorate.
Others have already mentioned the fact that there is an overview and scrutiny committee but that is not the only way that scrutiny is exercised. As we know—the Manchester agreement sets this out very clearly—combined authority members have a role of potentially restraining the mayor.
I wish to make a broad point. I can understand Liberal Democrats having a particular view on the voting system. They may think that it is unfair and that it does not produce a proportional outcome. I make no particular comment on that. However, it seems to me wrong to potentially fetter the situation that we are talking about here with a proposal just to balance up for doing something which in their eyes may seem to be a deficit in the arrangements that would otherwise be in place. It seems to me wrong to use this process for those purposes. So, for a variety of reasons, I do not think this is the right way to go and we certainly will not support it.
Baroness Williams of Trafford
My Lords, I thank noble Lords for some very measured and sensible comments on these amendments. First, I turn to the points made by the noble Lord, Lord Tyler, on the DPRR committee. As I indicated earlier, we will respond before the end of the Committee stage, which is next Monday. The committee has recommended that the LRO be subject to the super-affirmative resolution procedure. With this procedure, the expectation must be that the LRO will not come into force, if Parliament approves it, until late 2015. However, as I have already indicated, we are now seriously recommending including the LRO provision in the Bill—so I hope that that helps him—and it will overcome the difficulties identified by the Delegated Powers Committee.
Amendment 14 provides that an elected assembly must form part of a combined authority. It seeks to insert into the Bill new Schedule 5BA, which provides that the functions and procedure of the elected assembly are the same as those for the London Assembly. I understand the intention behind the amendment. First and foremost, I understand that those who are proposing this amendment want a bigger role for the ballot box. They see that this is provided in the London mayoral model, where there is an assembly that holds the mayor to account.
However, London is unique. Greater Manchester is unique. Greater Manchester is not London and London is not Greater Manchester. This is not in the civil servants’ notes. All of us from Greater Manchester are very clear about that point and clear that we do not want additional tiers of government. I am confident that other local areas probably feel the same. We do not want to create additional bureaucracy, which would cost the taxpayer money. The devolution of powers to areas will instead create efficiencies and allow each area to find its own creative solutions to the particular challenges it faces in securing long-term sustainable growth.
In order to hold the mayor and combined authority to account for their decisions and actions, the Bill provides that all combined authorities must have one or more overview and scrutiny committee drawn from the members of the constituent councils. Like the London Assembly, these overview and scrutiny committees can require the mayor, officers and members to attend their meetings and answer questions. I am sure that we will discuss the role of scrutiny more fully when we examine the later clauses of the Bill. We are determined to ensure that scrutiny is as strong and robust as it can be. That scrutiny provides the real protection against the fears of a one-party state, and must be seen to be effective, transparent and independent so as to maintain public confidence in the institutions and governance arrangements to which we will be devolving wide-ranging powers. I reiterate my earlier offer—because the noble Lord, Lord Shipley, was on his way out of the door when I was making it—about any suggestions that noble Lords might wish to make on how we ensure that scrutiny is as robust as possible.
However, we do not want, and I am convinced that few in our cities and counties will want, a new tier of government—a new tier of politicians. The experience of the metropolitan county councils, which my noble friend Lord Heseltine abolished through the legislation he introduced, shows the problems and weaknesses of having inevitably competing tiers of politicians. That said, I believe that with the right legislative framework for allowing areas to draw together scrutiny committees with a broad membership and strong powers, the future governance arrangements can indeed fulfil the aims of those proposing these amendments that public confidence will be maintained and, more importantly, that devolution will work, benefiting the local communities that it serves.
Amendment 17 sets out the electoral arrangements for an elected assembly, using a single transferable vote model. This is a complex electoral system that would be costly and time-consuming to implement. As noble Lords have pointed out, we would have a very confusing array of arrangements for local elections. Introducing STV for all local elections would require significant changes to existing electoral boundaries and could not be introduced, even if it were desirable, within any short timescale.
Amendments 25 and 26 would require the assembly to resolve, by a simple majority,
“for the relevant combined authority to enable the mayor to take on the functions of a police and crime commissioner for that area”.
Notwithstanding the explanations I have already given as to why we would not want there to be an elected assembly for a mayoral combined authority, we consider that there is no need to require any additional body to approve the transfer of police functions to the mayor. The transfer of police and crime commissioner functions to the mayor forms part of the devolution deal and is actually analogous to the situation in London. The Bill requires that all the appropriate authorities in an area would have to give consent before an order to transfer police and crime commissioner functions could be made. Hence we are clear that the transfer of PCC functions will be a matter on which the combined authority and/or its constituent councils must agree.
I can also reassure noble Lords that in order for the mayor of a combined authority area to take on PCC functions, the Secretary of State will be required to lay an order setting out the detail of how PCC functions will be transferred to the mayor, and Parliament will have the opportunity to fully consider this. With these explanations, I hope that the noble Lord will feel happy to withdraw his amendment.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, it would be entirely between the Secretary of State and those local authorities. I am sure that he would have in mind precisely what powers they wanted devolved and the level of accountability that that would require. I hope that answers the noble Lord’s question.
Lord McKenzie of Luton
Can I come back on the question posed by my noble friend Lady Hollis? It seems to me that the opportunity for the Secretary of State to provide for there to be a mayor relates to a combined authority, and the authority for that comes in Clause 1 of the Bill. The arrangements that my noble friend may have been talking about would not necessarily have involved a combined authority—it might be some other configuration of councils—and I do not think that the power to cause there to be an elected mayor rests in Clause 10.
Baroness Williams of Trafford
My Lords, the Government would not seek to impose a metro mayor, as I have repeated several times. That combined authority would have a discussion about what powers it sought to be devolved and what form of governance it wished to introduce. It would have a metro mayor only if there were agreement between that local group of authorities and the Secretary of State. Nothing would be imposed.
Lord McKenzie of Luton
I am sorry to come back on this but it is an important issue that we need to get clear. Let me go back to what the Minister James Wharton said in the Westminster Hall debate:
“If they want the Manchester model—the exciting package of powers that we are already delivering to the Greater Manchester area—a mayor will be a requirement of it. We in the Government believe that that needs to happen, and we will insist on it”.—[Official Report, Commons, 9/6/15; col. 79WH.]
I accept that, if the alternative is no deal at all, it could be argued that there is not an insistence. However, it seems to me that it is very clear from the position of the Minister at the other end that the Government will insist on it in certain circumstances. We are still trying to fathom what “less” will be required for that insistence not to take place. Surely it is clear that there is an insistence if an area wants a deal.
Baroness Williams of Trafford
My Lords, the Government certainly would want it, but with the agreement of those local authorities. Greater Manchester has not had a mayor imposed upon it; it has agreed that a metro mayor will be the accountable person.
Baroness Williams of Trafford
My Lords, Amendments 4 to 7 address the role of a mayor in the combined authority and I shall take each amendment in turn. Amendment 4 sets out on the face of the Bill that the introduction of a mayor for a combined authority area would not be a precondition for the transfer of functions to combined authorities. The Government’s policy is to devolve far-reaching powers to local areas and is clear that, if areas are to have such powers, they must adopt strong governance and accountability arrangements. We want to hear from areas what their proposals are, what powers and budgets they want devolved to them and what governance arrangements they think are needed to support those powers and budgets.
My right honourable friend the Chancellor of the Exchequer made clear in his speech in Greater Manchester on 14 May that:
“We will transfer major powers only to those cities who choose to have a directly elected metro-wide mayor”.
This amendment would frustrate the Government’s announced policy. My noble friend Lord Heseltine has made the point well with examples from other cities around the world. Where such powers are conferred on an area, there needs to be a single point of accountability. People need to be clear about who is responsible for decisions affecting their day-to-day lives, whom to look to when actions are needed and who is to address things that have gone wrong. That we have this offer most certainly does not preclude us from engaging with all areas to consider their proposals for devolution. We are happy to have conversations with any area. The Bill does not limit in any way the devolution proposals that areas can make and the Government will consider any and all proposals from cities, counties and towns for greater local powers.
Amendment 5 seeks to clarify that the mayor, who will be the chair of the combined authority, would not have the automatic right to a casting vote in the process of decision-making in the combined authority. I agree with noble Lords that it is not for the Government to prescribe whether a metro mayor would or would not have a casting vote or second vote. This Bill is an enabling Bill. It does not set out the detailed constitutional arrangements for the mayoral combined authority. It is for areas to decide what voting arrangements would be most appropriate to provide strong, accountable and transparent governance. While the mayor will be the directly elected figurehead for the area and will chair the combined authority, it does not follow that they should necessarily have a casting vote within the combined authority. Indeed, none of the current combined authorities, when they were formed by order, decided to give the chair or vice-chair a casting vote in decision-making. In summary, the Bill as it stands does not give the mayor or the chair of a combined authority the right to a casting vote.
Amendments 6 and 7 seek to amend Section 107A(7) of the 2009 Act to allow the Secretary of State to make a further order under that section to revoke the post of mayor for a combined authority, following a request by the combined authority. As the Bill stands, the office of mayor can be revoked only if an order is made to abolish the combined authority itself under the existing powers in the 2009 Act. This is to ensure that where a devolution deal including a mayor is made with the agreement of the authorities involved, and major powers are devolved, a mayor will be present to provide the powerful point of accountability. It ensures that these governance arrangements cannot then be removed, leaving the area with the powers but without sufficient and robust accountability. Should an area wish to tear up its deal—we would hope that no area would ever wish to do so, given that it would be detrimental to the people and businesses of the area—this Bill allows for the mayor, the combined authority and the deal to be abolished. I cannot envisage that this situation would ever arise or that local leadership would allow it to happen.
With those assurances, I hope that noble Lords will agree that these amendments are not necessary.
Lord McKenzie of Luton
My Lords, I thank the Minister for her response to the debate and other noble Lords who have participated. I think that we have probably given this issue airing enough for tonight, although no doubt we will return to at least part of it. In the mean time, I beg leave to withdraw the amendment.
Greater Manchester: New Deal
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
I thank my noble friend for his kind words. Like him, I canvassed and campaigned up and down the country. It was good to see the real world of the north of England. I take his point about our counties and what they have to offer. Each county is different, and each group of counties will be different, and the Government are certainly open to listening to any suggestions that they bring forward.
Lord McKenzie of Luton (Lab)
My Lords, we support the Greater Manchester devolution deal. In a recent speech, the Chancellor of the Exchequer talked about conversations of a serious nature for the devolution of powers and budgets for any city that wants an elected mayor. Are there any other conversations about serious devolution going on at the moment with those who do not want an elected mayor?
Baroness Williams of Trafford
My Lords, there are certainly lots of conversations going on at the moment. There is no one common deal to suit everyone. The Government are very keen to hear from cities, counties and rural areas and any combination of the above.
Housing: Brownfield Sites
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, I certainly appreciate the issues in the north-west of England. I am sure that the noble Lord would join me in welcoming the initiative by the previous leader of Pendle Council, Councillor Joe Cooney, to have a £1.5 million brownfield investment fund to address some of those issues around clearing sites in order to build housing.
Lord McKenzie of Luton (Lab)
My Lords, the Minister referred to the brownfield regeneration fund, which of course is to be funded by requiring local authorities to sell their most expensive council houses as they become vacant. The proceeds of these sales are also earmarked for the right-to-buy discounts for housing associations and to replace the houses that are sold. It is understood that “expensive” properties for this purpose are to be the most expensive one-third of properties with the same number of bedrooms. Will this be determined on a national, regional or more local basis, and will it require the sale of council houses in rural areas?
Baroness Williams of Trafford
My Lords, I am sure that all noble Lords agree with me that councils have an obligation to manage their assets, and divesting themselves of some of their most expensive assets obviously allows them to invest in housing to that end. I will get back to the noble Lord on his point about rural housing.
Devolution: England
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, that is what this Government are working towards in terms of fair funding across the country and ensuring growth in those regions that have not previously had as much growth as we would wish.
Lord McKenzie of Luton (Lab)
My Lords, the Minister talks about empowering northern cities in particular and devolving responsibilities, but is it not the case that the Government have consistently hit areas such as Liverpool and Manchester, some of the most deprived parts of the country, with the largest cuts in funding? What is empowering about taking with one hand and giving back far less with the other?
Baroness Williams of Trafford
My Lords, after talking to local government leaders in both Liverpool and Manchester I know they are very pleased with what this Government have given them. If we just look back over the last 30 years we see that it was a Conservative Minister in the form of the then Michael Heseltine who did so much work in Liverpool. It was a Conservative Minister in the form of the then Michael Heseltine who led the regeneration of Hulme, who brought the Metrolink to Manchester and, indeed, who started the regeneration of Manchester after the bomb. I do not accept the noble Lord’s point.
Community Life
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, my noble friend has a point about social capital, which has been in decline since the war, but this Government have been successful in many of their efforts to encourage people to engage in community life and indeed to combat the loneliness that afflicts so many people, particularly our elderly.
On planning and engaging with local government, communities are now far more involved in the destiny of neighbourhood planning. One hundred and thirty thousand young people are delivering community projects through the National Citizen Service, and this has resulted in 3 million volunteering hours. The Centre for Social Action has invested £40 million and has leveraged £27 million into 215 social action projects.
Lord McKenzie of Luton (Lab)
My Lords, I should like to ask about neighbourhood planning, but before I do that perhaps I may take the opportunity, on behalf of the Labour group, to pay tribute to the noble Lord, Lord Phillips of Sudbury, for his substantial input into our deliberations over a number of years. We wish him a long and happy retirement, doubtless in the company of some of his friends from the other end.
The noble Baroness referred to the new neighbourhood planning regime brought in by the Localism Act 2011. As regards the coverage of those neighbourhood plans, it is understood that three-quarters of them are concentrated in the south of England and only a third in urban areas. Little has been done to widen the remit of the plans and to encourage uptake in disadvantaged communities. What more do the Government propose to do to help disadvantaged communities to have their opportunities in this regard?
Baroness Williams of Trafford
My Lords, 1,400 communities have been involved in neighbourhood planning, but I am afraid that I will have to get back to the noble Lord on where those communities lie. There is no doubt that for community cohesion, when neighbourhoods are involved in their own destiny, for example in planning, it leads to happier communities.
Deregulation Bill
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford(9 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Williams of Trafford (Con)
My Lords, as regards the use of CCTV generally in parking enforcement, it is clear that the operational guidance on parking issued by the previous Government in 2004—that is, that CCTV should be used only where parking warden enforcement is impractical—has been largely ignored. It is now used on an industrial scale. For people such as my noble friend Lady Oppenheim-Barnes to be issued with a penalty charge way after the event is simply unfair. Independent parking adjudicators have also agreed that it is unfair. Such practices also undermine the revitalisation of high streets and shops and cross the line of public acceptability. If parking is too expensive or prohibitive, shoppers will drive to out-of-town supermarkets or simply shop online, leading to ghost-town high streets.
The point was raised about exempting the zig-zag lines on a pedestrian crossing as opposed to those outside a school. High streets, where pedestrian crossings are generally situated, are well patrolled by both police and enforcement officers. In any event, parking on a zig-zag line is not just a breach of parking regulations but incurs three points on your licence. That is why, in terms of differentiating between schools and high streets, the safety issue outside schools led the Government to think that the latter case was a suitable exception.
The first amendment in this group concerns the serving of parking tickets. There may be occasions where it is impossible for a civil enforcement officer to physically stick a ticket on to a vehicle or serve a notice at the scene of the incident. The Government are aware of this and have made provision in draft regulations to ensure that service by post is possible in such circumstances. On that basis, I hope that the noble Lord is content to withdraw that amendment.
Noble Lords are also seeking to increase the number of areas where local authorities can continue to use CCTV to enable the issuing of tickets by post. I have given a couple of examples of where the Government have made exemptions, or indeed where they have not. I think that noble Lords and all interested parties will have their own views on where CCTV should or should not be used. The Government accept that sole reliance on CCTV evidence to enforce on-street parking regulations is suitable in certain circumstances. However, if we accepted every argument for increasing the exemptions, we would be back where we started. We have given careful consideration to the list of exemptions and based our decisions on the views of those who responded to the consultation, one being on the issue of the safety of children outside schools.
The noble Lord also offers a new definition of the term “around schools”. This definition would be neither appropriate nor practical. The 100 metres specified in the amendment, or any specified distance, would be arbitrary. Within that distance, it is likely that roads will bend or side roads will branch off the school road. It is unclear how this will be dealt with. Any definition needs to be practical as well as reflect policy concerns.
Amendment 56 would make these powers subject to impact assessments before they were brought into force, which is both unnecessary and undesirable. The Government are proud of the stance they have taken to reduce the impact of rules and regulations on businesses and policymakers. Government guidance published in 2013 clearly states that impact assessments are required only for measures that regulate or deregulate business or concern the regulation of business. This clause applies only to local authorities that carry out parking enforcement, and no impact assessments are therefore required.
This whole issue is a matter of principle for the Government, not of balancing impacts. Drivers often receive a parking ticket through the post several weeks after the alleged contravention. They are given no opportunity to examine the parking location at the time the incident is alleged to have taken place, thereby making it difficult to challenge the alleged contravention. That is fundamentally unfair, and the Government strongly believe it should be remedied. I urge noble Lords to withdraw or not move their amendments.
Lord McKenzie of Luton
My Lords, I thank the Minister for that reply and thank other noble Lords who have participated in this debate. Given the hour, I shall not prolong the matter, except to say that I am still unclear as to which of proposed paragraphs (a) to (g) in Amendment 54 the Government support and which they do not. I acknowledge that my description regarding the inclusion of CCTV around schools perhaps needs to be refined, but the principle holds.
The impact assessment was not the issue. It was that parking enforcement may be a responsibility of local authorities but in many instances it is contracted to the private sector—hence the list that the noble Lord, Lord Tope, referred to. I thought that the Minister said that the issue of whether there should be an equalities impact assessment was a matter of principle for the Government. I am not sure that I heard her correctly, but it would be a rather strange explanation if she did so. I remain unclear as to why an equalities impact assessment is not to be forthcoming. However, given the hour, perhaps we should read the record and follow up in correspondence. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, we must all be aware of the dangers and inconvenience of parking on pavements and the risk that this can pose for pedestrians. These risks can be especially acute for those with a sight impairment or those who have a mobility difficulty and rely on using wheelchairs or buggies. The problems are compounded, too, for those who have responsibility for children and who try to navigate the pavements with prams. The consequence is that all too often pedestrians are forced to navigate busy and dangerous roads instead. For some, of course, pavement parking can restrict their right of way completely. As the noble Lord, Lord Low, said, we need to be mindful that pavements are not generally constructed to carry the weight of heavy vehicles and pavement parking can cause the break-up of the surface, adding further hazards, even when the offending vehicles are not present. This amendment seeks to address those concerns outside London by making it an offence to park wholly or partly on a verge, footway or any other part of an urban road. But this blanket ban can be overridden by resolution of the highway authority or by the Secretary of State.
We acknowledge the weight of opinion and the power of the argument which supports this approach. We share the need to address inconsiderate and dangerous parking and to seek to restore to pedestrians their right to proceed unimpeded. But at the same time, we have to recognise that there are some streets where some pavement parking may be inevitable—to maintain the free flow of traffic, to allow loading and unloading, or to allow for vulnerable passengers to be disembarked. Moreover, the premise of the amendment is that all people who park their car on the pavement are doing the wrong thing and should be made guilty of a civil offence. We do not accept that.
If we are to redress the balance and tackle the problem of inconsiderate pavement parking, how is this best achieved? We need to work through how it can be delivered in practice. We are keen to empower councils to tackle problem parking. If there are any barriers or bureaucracy preventing this we would be keen to look at ways we can change the legislation so that that is not the case. We do not think that the blanket ban is the best way to go. We consider that individual authorities, which know their areas best, are better able to determine the extent and timing of any ban. For some, an initial blanket ban may be the immediate answer, but others may want something more selective which addresses the most urgent problems first. In some cases, there will need to be liaison between authorities so that approaches are co-ordinated. We support the thrust of what the noble Lord is seeking to achieve, but we think there is another approach so, with regret, we are not able to support him today.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have contributed to the debate on the amendment. It demonstrates that there is no perfect system to allow traffic and pedestrians to move around entirely satisfactorily.
I shall start with the points made about London. Pavement parking in London is banned but people still do it. Enforcement of properly targeted local bans outside London would be more effective than a blanket ban that does not reflect local circumstances. On the more general points, local authorities already have the power to introduce footway parking restrictions where they consider it appropriate. They are in the best position to decide on local parking restrictions and need to consider all road users when taking such decisions. A national ban of the type proposed would require local authorities to remove all existing restrictions, then renew their urban areas where footway parking should nevertheless still be permitted, consult the community and erect new signage and markings. There could be a significant burden on local government.
The amendment proposes banning footway parking but would allow authorities to permit it where it is desired by simple resolution. Circumvention of the traffic regulation order—TRO—process would take away important protection for the public. The statutory TRO process requires authorities to undertake consultation and advertise their proposals before councils take final decisions. A noble Lord made the point about the TRO process being expensive and cumbersome. It is not true to say that the process is a barrier. Some local authorities make up to 200 orders a year for a variety of traffic management purposes with an average authority making between 50 and 60 orders per year.
The Department for Transport’s guidance to local authorities makes it clear that during the appraisal of their parking policies an authority should consider whether pavement parking is problematic in any part of that area. If it is, and it is not covered by an existing traffic regulation order, the authority should consider amending the existing order or making a new one. The noble Baroness, Lady Kramer, wrote to all English traffic authorities on 27 June to remind them of their existing wide-ranging powers to prevent people parking on the pavement where it is a problem.
The noble Lord, Lord Low, made a point about damage to pavements. The Government are committed to investing in our local highways, including the footways. We are providing local authorities in England with more than £3 billion over four years from 2011-15 for the roads and footways for which they are responsible. In addition, in June 2014, the Government announced that they were committed to providing just under £6 billion for local highways maintenance over the six-year period from April 2015 to March 2021. This equates to £976 million per year to local authorities for highway maintenance.
In conclusion, the Government have concerns about the burden on local authorities of managing a change of this scale, a point to which the noble Lord, Lord McKenzie, alluded, especially when those authorities have comprehensive powers to ban footway parking. I have undertaken to have a discussion with the noble Lord, Lord Low, before Third Reading but I would at this stage ask him to withdraw his amendment.
Baroness Williams of Trafford
My Lords, I should make it clear right from the outset that the measure in this Bill is about on-street parking, which is the preserve of local authorities. The issue of ANPR is totally separate and the Government are not going to regulate companies in a Bill that seeks to deregulate.
The noble Lord’s amendment seeks to introduce a new clause which would ensure that measures in the Traffic Management Act 2004 do not prevent local authorities from using an approved device in their off-street car parks. The amendment would apply to the entire Traffic Management Act. The Traffic Management Act sets out the framework for local traffic authorities to manage all aspects of their parking policies. To disapply the entire Act in relation to car parks would create an impossible situation where the legislation that prescribes how local authorities should operate is undermined by itself.
I think that the noble Lord may in fact be concerned about the specific measures in Clause 39 and is apprehensive that these will be extended to local authority off-street car parks. I can assure him again that the measures in this Bill apply only to on-street parking. The Government are not seeking to extend these provisions to off-street parking and have no plans to do so. It would be unnecessary to set out in primary legislation policy areas that the law should not apply to.
Permitting local authorities to manage their off-street car parks with camera technology is something that I know some organisations are keen to see happen. However, the Government have not set out their position on this. We have brought forward a range of parking measures designed to help local shops, support drivers and give communities a greater say on parking policies. These proposals have been established for 18 months and have been consulted on. At no point have we indicated any intention to legislate on off-street car parks.
To bring into the Bill at this late stage measures on a different aspect of parking policy would not give sufficient opportunity for people to consider their implications or to offer an opinion. We believe that this is something on which we should consult before any changes are made to the law, and I would urge the noble Lord to withdraw his amendment.
Local Audit (Appointing Person) Regulations 2015
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord McKenzie of Luton
I think that it was the fifth firm. I cannot remember whether there were any beyond that, but there may have been changes in the interim.
What requirements, if any, will be placed upon appointed persons in this regard to seek to bring diversity of providers to the market? The regulations cover the obligation of appointing persons to oversee issues of independence. Generally, this should cover the independence of the auditor from the authority being audited as well as the independence of the auditor from the appointing person. As the Minister said, there has been extensive consultation around these proposals, but significant and authoritative concerns still appear to have been raised in some quarters. I refer first to comments made by the Audit Commission, which chime with those made by the noble Lord, Lord Palmer. How does the Minister respond to the comments made by the Audit Commission in its letter to all noble Lords written in September 2014? I refer to two paragraphs in particular. The first says:
“Currently all local authorities have their financial documents subjected to review by an external auditor. This is at no cost to most councils spending less than £25,000 a year and has a maximum cost to them of £100 a year. Under the current government’s proposals, external checks will not happen routinely for local authorities spending less than £25,000 a year. However these bodies will have to appoint an auditor for when local people wish to contact one with formal questions or objections. Additionally, these parishes and other bodies will have to publish specified information on their website or, if they don’t have one, on the website of the district council. This will inevitably cost more than the current arrangements”.
That is precisely the point the noble Lord made. The commission goes on to say:
“The regulations making provision for all procurement possibilities (exempt opted-out authorities, exempt opted-in authorities, non-exempt opted-in authorities, and non-exempt opted-out authorities) are close to impenetrable. Administering these complex new arrangements will also require any collective procurement body to hold and keep up to date large amounts of information about all 10,000 or so small bodies across the country. This will include contact details, whether they want to be part of the body or not, all the audit appointments the body has made, and all the bodies where auditors have used their statutory powers. This will add to its costs and therefore increase audit fees”.
How do the Government respond to that?
Moving on briefly to the position of the Institute of Chartered Accountants in England and Wales, I should declare my interest as a fellow of the institute, although it is a long time since I practised to earn a crust. A key part of the new arrangements will be the NAO’s proposed Code of Audit Practice. The Minister will be aware of the responses to the draft code as well as the smaller authorities regulations, in particular that of the ICAEW. Although broadly supportive of the code, the institute has expressed some reservations about smaller authority assurance arrangements. It expresses these in two paragraphs in particular, and as an aside I should say that it also refers to the issue of value for money in arrangements going forward:
“We have noted the statement in paragraph 3.6”—
of the consultation document—
“‘should evidence of poor value for money become apparent during the course of the audit, the auditor should consider the implications of this for their work.’ It would be helpful to clarify that this does not require auditors to search for evidence of poor value for money, but rather consider the underlying arrangements where a significant situation might arise which identifies that value for money is not being achieved”.
Is that right and are the Government happy that that is the position?
I now move on to small authority assurance engagements, to which the noble Lord, Lord Palmer, also referred. The institute states:
“As you know, ICAEW has had significant concerns about the government’s proposals in relation to smaller authority assurance engagements. In particular, our concerns have centred around the mis- understanding of the difference between ‘audit’ and ‘assurance’ engagements”.
It goes on to say:
“ICAEW would not be supportive of a change to the definition of audit as suggested by DCLG and we would strongly urge the NAO to also reject moves to create such confusion and to create a new definition. Indeed, as indicated in our response to government on the smaller bodies’ regulations … we would not recommend that any ICAEW member firm take this work on if significant changes to the regulations are not made and that the definitions of audit and limited assurance continue to be mis-interpreted”.
That is pretty strong language, and stronger than I have read in any representations that it has made before. The Minister said that the Government are still in discussion about that, but can she say something more about whether there is any movement or convergence of views on that with the institute? If the institute is advising its members not to engage, that is a very serious blow indeed. If these issues with the ICAEW have not been resolved, and the institute maintains its stance on discouraging member firms from taking on assignments, there is a major problem. Obviously, there is a little time before we get to 2017, but it would be good to know that there was some progress on that matter.
I have one or two further minor points for the Minister. An opted-in authority will not be required to have an auditor panel, but if it does, that panel must not be consulted on opted-in matters related to the audit or the auditor appointment. Why is that provision there? It is not apparent to me as it stands. For smaller authorities, the exercise of the public right to question and object must in future take place within the 30-day inspection period rather than in the period after it. What is the purpose of that change?
I have one final point. Under the transparency code for smaller authorities, there has to be an explanation of any differences between balances carried forward and total cash and short-term investments. How is that supposed to help? As it stands, it could be interpreted in myriad different ways. These regulations are exceptionally complex. We would not seek to stand in their way, and guidance will obviously help, but we hope that the complexity will not defer the opportunity to use this approach, which is an important strand of our discussions on the Bill.
Baroness Williams of Trafford
I thank all noble Lords who have contributed to this debate. Like them, I declare an interest in local government, but I do not declare an interest as an accountant—although I declare an interest as being married to one.
The noble Lord, Lord McKenzie, is quite correct that this is a complex area. The more we look into it, the more we realise how complex it is. I will go through the various points that noble Lords made.
I wonder whether my noble friend Lord Palmer is the same Lord Palmer who was on Barnet Council.
Allotments
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
There is no reason why they should not, my Lords. In fact, the National Trust has supported Defra’s recent pollination strategy, which is so important in protecting insects such as bees, which have been short in number in recent years.
Lord McKenzie of Luton (Lab)
My Lords, I understand that land purchased or appropriated by local authorities to use as allotments must not be sold without ministerial consent. Have any ministerial consents been granted during this Government?
Baroness Williams of Trafford
My Lords, the noble Lord is absolutely right, and I understand that consents have been granted. I will provide him with the exact figure, however.
Business Improvement Districts (Property Owners) (England) Regulations 2014
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford(10 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Williams of Trafford (Con)
My Lords, noble Lords will know that business improvement districts provide a mechanism for the local business community to come together and agree to fund improvements to its local trading environment.
Introduced in 2004, business improvement districts have proved to be a popular tool, with more than 180 now in operation across England, many of which are now in their second or third term. However, only the occupiers of property—the business ratepayers—currently can vote in a ballot to establish a business improvement district levy to determine what improvements will be made and agree the funding arrangements. Property owners can contribute but only on a voluntary basis and only after the business improvement district has been established. Not only does this mean that property owners do not get an opportunity to influence the activities or services provided by the business improvement district, but the arrangements are arguably inequitable, because all property owners benefit from the business improvement district’s activities but only some contribute financially
Through these regulations, therefore, we are proposing to give property owners the opportunity to promote their own business improvement districts, where primary legislation allows. I say “where primary legislation allows” because noble Lords should note at this point that property owner business improvement districts can currently exist only where there is a ratepayer business improvement district in operation and where a business rate supplement is being levied. This is because the enabling powers are contained within the Business Rate Supplements Act 2009. As the only business rates supplement currently in operation is in London, to fund the delivery of Crossrail, a property owner business improvement district could be established for the time being only in London. We will, of course, certainly consider rolling out the powers more widely once we have had the chance to review the first schemes.
The case for property owner business improvement districts was recognised during Mary Portas’s 2012 review of the future of the high street. This highlighted the role of property owners in the regeneration of town centres, and she recommended that the Government should legislate to allow landlords to become high-street investors by contributing to their business improvement district. The Government accepted this recommendation and in 2013 consulted on the introduction of property owner business improvement districts. Consultation responses supported the principle of establishing property owner business improvement districts and the detailed approach the Government proposed. That approach was that the rules and procedures for property owner business improvement districts should, as far as possible, mirror that of the successful model adopted for ratepayer business improvement districts. These regulations enshrine that approach.
As with ratepayer business improvement districts, these regulations give a large degree of discretion to the business improvement district proposer. The size and location of a BID, the identification of those liable for the levy—and therefore eligible to vote in the ballot—the amount of levy and the activities or services to provided within the BID are all matters to be determined locally and must be clearly set out in a proposal document. Importantly, it is also for the proposer to set out the type of owner who should be liable for the proposed levy. So, for example, that may be the freeholder or long leaseholder, as the proposer sees fit, taking account of local circumstances. The proposal document should also identify the ballot date, the commencement date, a statement of any existing baseline services in the area and a map and description of the geographical area of the business improvement district. The ballot will be organised and run by the ballot holder, who will be the returning officer for elections for the relevant local authority. The ballot holder will be responsible for issuing the ballot papers and announcing the outcome of the ballot. In doing this, the ballot holder is required to state the total number of votes cast, the aggregate rateable value of each property class identified as being eligible to vote, the total number of votes cast in favour of the question on the ballot paper and the aggregate rateable value of each property class cast in favour of the question on the ballot paper
A business improvement district can be established only if the outcome of the ballot confirms that a majority of both the number of persons voting and the aggregate rateable value have voted in favour of the proposals. This mechanism provides protection against the setting of excessive levies. Once a property owner business improvement district has been established, the relevant billing authority will be responsible for issuing bills and collecting the levy, thereby maintaining consistency with the existing ratepayer business improvement district and business rate supplement. The authority will also be required to hold a separate business improvement district revenue account. The billing authority can also veto the establishment of a business improvement district where they feel the activities of the business improvement district conflicts with any of their policies or where they consider that there is a significant and inequitable financial burden on a particular class of property owner.
Noble Lords may also wish to note that there is a right of appeal against the ballot where a material irregularity appears to have occurred. A request to the Secretary of State to declare the ballot void must be made within 28 days of the notification of the outcome of the ballot and can be made by the billing authority, the business improvement district proposer or a person representing at least 5% of those eligible to vote. These regulations allow for the creation of property owner business improvement districts, which I believe will offer a welcome addition to tools this Government have provided to regenerate the high street and help businesses to grow, and will do so via a set of rules and safeguards built on tried and tested ratepayer business improvement district regulations. I commend this order to the House.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for introducing these regulations. I should make it clear that we support the proposition of property owners, the business community and local authorities working together to improve the local trading environment. BIDs themselves have a cross-party pedigree in that it was the Conservative Government who commissioned research in 1997 to assess how they might be established and it was the former Labour Government who legislated for their introduction. I was going to ask the Minister how many BIDs are currently in existence, but the noble Baroness answered that question. I think there are more than 180, with some in their second and third term.
BIDs were driven by a ballot of all non-domestic ratepayers in a proposed area. The idea of a property owner BID is driven, as the name suggests, by the ownership of property rather than its occupation, although a person could qualify under both. Property owner BIDs have developed from the Portas review of high streets. It is understood that the legislation will allow a property owner BID only for areas where there is both a ratepayer BID in place and a business rate supplement being levied. The noble Baroness confirmed that in introducing these regulations. A business rate supplement can be levied by upper-tier authorities in order to fund economic development projects. The Explanatory Note and the Minister today remind us that a business rate supplement is being levied at present only by authorities in London for Crossrail, so it would be possible to have a property owner BID only in London at the current time. Can the Minister say more about why the BRS is seen as a prerequisite for a property owner BID? What does she see as the timing of looking at developing this so that other areas of the country have an opportunity to undertake the same sort of investments? Are there any proposals for the BRS to be levied elsewhere? If not, it would seem that the rest of England is missing out. Perhaps the noble Baroness can tell us what the position in Scotland, Northern Ireland and Wales is in this regard.
I have a number of other questions. Where the property ownership involves a freeholder or a leaseholder, or possibly a sub-lessee, as well as a tenant, who will have the right to vote in a ballot for a property BID? As I understand it, the noble Baroness suggested that it would be for the proposer of the property owner BID to decide who should be on the electoral roll for these purposes and subject to the levy, but it would be helpful to have some clarification of that. Would it always have to be the same type of ownership? Would it be possible for a proposer of a BID to say that it would be freeholders in some instances and long-leaseholders in other instances who would be involved in these arrangements?
Baroness Williams of Trafford
I thank the noble Lord, Lord McKenzie, for his constructive comments and questions and for the interesting history that has led to this on a cross-party basis, which is always good. The noble Lord’s first question was why BRS was a prerequisite. It is because that was how the legislation was framed back in 2009. He also asked whether it would be possible for the proposer to decide to levy only on leaseholders or freeholders. The answer is yes: it is at the discretion of the BID proposer to decide who should be levied.
Lord McKenzie of Luton
Could I clarify that with the Minister? Can the promoter of the property-related BID choose that it is a freeholder in one case, long leaseholders in another and a sub-lessee in another? What sort of information is expected and on what basis will those judgments be made?
Baroness Williams of Trafford
I will get the answer to that in a second. I am guessing that it would not be possible for him to discriminate against somebody because they were a freeholder and that it would be in relation to the types of property that were in the BID.
The noble Lord’s other question was what would happen if there were outstanding contracts when the five years were up. The BID body is expected to manage its business while recognising the potentially limited timeframe in which the BID will exist. It is a short timeframe but it can be renewed. The noble Lord also asked about conflict.
Baroness Williams of Trafford
My Lords, the answer to the question of whether the proposer can differentiate between leaseholder and freeholder is yes, but he has to give a reason why in the proposal. I am sorry, I have completely lost my stride, but I am sure the noble Lord will tell me if I have missed any questions out.
There was also a question on multiple ownership and what would happen if more than one person was levied and voted in the ballot—that is, a leaseholder and a freeholder both have an interest in the property. There could be more than one property owner in respect of the same hereditament. The legislation provides that in those instances the rateable value is divided between the owners for the purposes of calculating the result of the ballot.
On the question of what happens if a BID conflicts with an existing ratepayer BID, the only conflict that could occur would be around what each BID is doing. In practice, we would not expect this to happen and would expect proposers of a property owner BID to be talking to an existing BID company about the value that they could add.
The noble Lord asked whether there are plans to levy business rate supplements elsewhere. Not that we are aware of. We have addressed the question of outstanding contracts and when the five years are up. I think that I have answered all the questions but I am very happy for the noble Lord to intervene if I have not.
Lord McKenzie of Luton
I am grateful to the Minister for a good set of replies. Can I come back on the issue of multiple ownership? Let us assume that there was a person who owned two freeholds and each was occupied directly so the divvying up of rateable values was not an issue. When it comes to a vote, you look at the numbers of voters and the aggregate rateable value. If someone owns two properties, are they counted twice for those purposes or only once?
Lord McKenzie of Luton
I want to make one final point on the issue of terminating arrangements. Say you had a property owners’ BID—which might be expected to last for three years if there are two years gone of the other one—but the ratepayers’ BID was terminated early for some reason, that would automatically bring to an end the property owners’ BID. Obviously, if that was prior to its expected end, there could be contractual issues. How might that be resolved? Have those situations arisen under ratepayers’ BIDs?
Baroness Williams of Trafford
I am guessing that they would follow the same legal arrangements as any contractual arrangements and be dealt with in the proper legal way—breach of contract, for example.
Baroness Williams of Trafford
With that, I commend the regulations to the Committee.
Local Authorities: Funding
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford
Baroness Williams of Trafford
My Lords, zero-hours contracts are not always a bad thing and they suit certain people, but, certainly, anybody who is working for a local authority needs to be on the minimum wage.
Lord McKenzie of Luton (Lab)
My Lords, there is a clear pattern here: just yesterday, we had a report from the LSE and the ISER looking at the effects of direct tax benefits and pension changes introduced under this Government. Surprise, surprise: it concluded that the poorest half of the income distribution lost out and the top half gained, and that these changes were regressive. To add to that, the Government have not only imposed the biggest funding reductions in the public sector on local councils—with funding cut by 40% over this Parliament —but they have ensured that those areas with the greatest need are shouldering the largest burdens. The noble Baroness cited some figures, but if one looks at what has happened throughout this Parliament, one sees that spending power—the Government’s favourite measure—has been cut for Liverpool by 27%, for Hackney by 27%, for Manchester by 26% and for Birmingham by 23%. However, lo and behold, for Waverley Borough Council and Wokingham Borough Council it has increased by 1%. If that is fair, what definition of fairness is the Minister using?
Baroness Williams of Trafford
My Lords, I take the noble Lord’s point about ring-fenced grants to councils such as Liverpool and Manchester, which lost a lot of theirs. Councils such as Trafford never actually had many ring-fenced grants so they had little to lose in that way. However, that effect has been dampened over the years so that it is not a cliff-like reduction. This Government have a different approach, which tries to rebalance the economy and puts growth at the heart of everything they do, including funding for local areas.
Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) (No. 2) Regulations 2014
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford(10 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Williams of Trafford (Con)
My Lords, these regulations amend the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations 2012. The regulations have been approved in the other place and, if approved by the House, would come into effect at the end of this month. The regulations introduce a new level of fees payable for prior approval applications for permitted development for change of use and associated physical works.
The coalition Government are committed to reducing planning regulation and ensuring that the system for securing planning permission is proportionate to the potential impact of any development. We want to ensure that the best use can be made of existing buildings and that we deliver the homes we need without unnecessary regulation. To support these key aims, we are increasing national permitted development rights so that appropriate development can take place more quickly.
In the Budget document, we set out the three-tier planning system. A full planning application is appropriate for larger-scale developments with the greatest impact on neighbours, the wider community or the environment. Permitted development rights, on the other hand, remove the need for a planning application. They are appropriate for small-scale changes and some strategic development where the impact is less. Permitted development rights with prior approval provide an intermediary role between permitted development and a full planning application. This is a simpler and cheaper process where the principle of the development has been established but certain specific issues still require local consideration.
In April, an order came into force introducing further flexibility for owners to make better use of existing buildings and to help increase housing supply. These new permitted development rights include enabling shops and agricultural buildings to change use to homes. For the first time, they also allow the limited building works necessary to deliver the new homes.
These permitted development rights are subject to prior approval, providing applicants with a less complex and less costly process than a full planning application. Prior approval for change of use normally requires the local planning authority to consider matters such as the impact on transport and highways and contamination and flood risks. By allowing some physical works, as well as the change of use, the local planning authority will also have to consider the proposed design and external appearance of the building. For example, an existing shop front with a large plate glass window is unlikely to be appropriate for a home without some alterations. However, it is important that any resulting frontage is still in keeping with the area. It may be adjacent to other shops, and the local planning authority will have to ensure that the design does not have a detrimental impact on an area.
Prior approval for change of use requires the local planning authority to consider specific issues, and we introduced a fee of £80 last year for these applications. These regulations now provide that a fee of £172 is payable for prior applications where the local planning authority considers not only the specific impact of the change of use but the design and appearance of building works associated with that change of use. This recognises that these applications involve some additional work for the local planning authority compared to a straightforward change of use.
These regulations will apply to the flexibilities introduced in April allowing change of use from shops to homes and from agricultural buildings to homes together with associated building works. The fee of £172 for prior approval is a considerable saving to the applicant. If we had not introduced these permitted development rights, a farmer making a planning application to convert a barn to three new homes would have faced a fee of £1,155, which is calculated as three times the planning application for a dwelling-house. When we consulted on the package of increased flexibilities for change of use last summer, we set out our intention to introduce a £172 fee for prior approval applications where some physical works are also permitted.
It is important that we continue to take steps to simplify the planning system and make the application process proportionate to the impact of development. This modest fee for a prior approval application for both change of use and some building works is a saving for developers trying to make better use of their existing buildings and will help planning authorities in meeting the costs of these applications.
I commend the regulations to the Committee.
Lord McKenzie of Luton (Lab)
My Lords, I again thank the Minister for explaining the regulations. As we have heard, they are focused on the very narrow point of the level of fee applicable to permitted development rights for change of use where prior approval is necessary and where limited building works are associated with the change of use. The fee is to be £172.
The Minister will be aware from the debate in another place on these regulations that we are not in agreement with the underlying policy involving this particular use of permitted development rights. As my honourable friend the shadow Planning Minister Roberta Blackman-Woods put it,
“we are not against allowing change of use, but we believe that it is best achieved through adherence to local plans”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 8/7/14; col. 5]
The Government’s Greater Flexibilities for Change of Use consultation proposed five different circumstances but, as I understand it, only two are the subject of this order. The fee levels apply where the change of use can involve some building work: one is where the change of use is from shops or financial and professional services buildings to a dwelling-house, and connected building work is involved; the other is when existing buildings currently used for agricultural purposes are to be used as a dwelling-house, and building work connected with the change of use is involved. In each case, certain building work is permitted. Can the Minister say something about the parameters under which that is considered? When is it connected to the relevant provision and when does it go beyond that? There are obviously plenty of opportunities for abuse of these provisions. I would like to understand how that matter is to be approached. In the case of change of use of shops, it appears that prior approval will be required to cover design, transport and risks of flooding, as the Minister explained. For agricultural buildings, prior approval will focus on siting and design. As I understand it, the prior approval is not necessarily looking at the same thing in each case. It has to look at specific things. That, presumably, is tucked away somewhere in regulations. I hope that the Minister will enlighten me on that.
One of the other flexibilities not covered by this fee proposal relates to the change in building use from buildings for agricultural purposes to new state-funded schools. How many times has this flexibility been used to date? Has it been used to facilitate free schools? I reiterate that we have difficulties with the underlying policy but, subject to the points I have made, we will not oppose these regulations.
Baroness Williams of Trafford
I again thank the noble Lord for taking part in this two-way debate. Our objective is basically to simplify the planning process, thereby making it easier and cheaper for developers who want to carry out small-scale works with a limited impact.
I was asked about the scope of a development. I understand it to be within the permitted development rights of the said dwelling. If it is anything other than that, I will let the noble Lord know. I hope I have responded to the point that he made but I take it to be within permitted development rights, which will, of course, be different for each dwelling.
Permitted development with prior approval provides developers with a less complex and less costly process than a full planning application. These regulations support that approach. As regards what building works would be allowed under this provision and what would not, work which is required to deliver a new use would be allowed and, I think, probably nothing beyond that. Therefore, in the case of a shop front, a smaller window as opposed to a large frontage would be allowed. If it was a barn, I am guessing that a suitable front door might be allowed but nothing beyond what would be required to change from the old use to the new use of dwelling. I think that addresses the point about not going beyond the original intention of the regulations.
I will have to write to the noble Lord about the point he made on schools. I have some experience of this issue in terms of free schools. I know that if local authorities have land or existing schools available, negotiations can be entered into but, as schools are not dwellings, I will have to write to him on that. Does that address the issue?
Lord McKenzie of Luton
I am grateful to the noble Baroness. Her response touched on the key points. As regards the point about whether the provision is connected with the building works, change of use from, say, an office to a dwelling is one thing, but I guess that what would be permitted to facilitate the change of use of agricultural buildings could be more contentious. Did the noble Baroness say that these provisions were set down in detail in the regulations or in the permitted development rights themselves?
Baroness Williams of Trafford
I understand that it is within the permitted development rights of those buildings, whatever those permitted development rights are. If that is not the case, I will write to the noble Lord. However, I will let him know whether or not the provisions are set down in the regulations.
Lord McKenzie of Luton
I am grateful. Perhaps the noble Baroness can write to me on the issue of schools. I was prompted to inquire because the terminology now used is “new state funded schools”. I have a feeling that we had a bit of run around this because we originally saw a specific reference to free schools, so I was interested in finding out what the current situation was on that. I have, however, no further queries and I am grateful for the response.
Baroness Williams of Trafford
I should clarify this because there is something in the recesses of my mind. Where local authorities have suitable buildings, and free schools are being set up, they should try to assist in making those public buildings available, but I will clarify that in a note.
Local Audit (Delegation of Functions) and Statutory Audit (Delegation of Functions) Order 2014
Debate between Lord McKenzie of Luton and Baroness Williams of Trafford(10 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Williams of Trafford (Con)
My Lords, this order is one of a number of statutory instruments that will put in place new arrangements for the audit of relevant authorities as set out in the Local Audit and Accountability Act 2014. I do not wish to take up your Lordships’ valuable time by repeating in this debate the arguments that were put forward during the passage of the 2014 Act supporting the abolition of the Audit Commission. However, it remains the view of the Government that the arrangements that we are putting in place, including this order, will create a more efficient audit system, giving greater responsibility to local bodies whilst providing greater opportunities for local people to hold those bodies to account. They will also save £730 million over the five years between 2012 and 2017 and an estimated £1.2 billion over 10 years.
On the specifics of the instrument being considered here today, the order delegates certain of the Secretary of State’s powers in relation to the eligibility and regulation of local auditors to the Financial Reporting Council, which is the independent regulator responsible for the oversight and development of corporate governance standards. Let me provide a little context on its background. The Financial Reporting Council is a company limited by guarantee that is partly funded by the Government. You might also wish to know that its board of directors is appointed by the Secretary of State for Business, Innovation and Skills, and it already carries out delegated functions, similar to those that I will shortly outline, for statutory—that is, company—audits. The functions that this order delegates to the Financial Reporting Council include: authorising professional accountancy bodies to act as recognised supervisory bodies for local audit; authorising professional accountancy bodies to offer a local audit qualification; undertaking significant public interest disciplinary cases and, where appropriate, imposing a range of sanctions on those auditors found to have committed misconduct; carrying out an additional level of oversight and monitoring of audits of significant local public bodies, defined by regulations as “major local audits”; and reporting to Parliament annually in relation to inspections. The order closely follows the existing delegation order for statutory—that is, company—audit approved by Parliament in 2012 and, in article 10, makes a small amendment to that order to ensure that the same minimum consultation period applies to Financial Reporting Council consultations whether the consultation relates to company audit or local audit.
How does the order fit into the new audit framework? These arrangements will simplify the rules that currently apply to auditors by removing unnecessary duplication from the system. At present, audit firms have to work under two regulatory systems—one set by the Audit Commission and the other by the Companies Act 2006. The new audit framework largely replicates the Companies Act regulatory regime, with which auditors are already familiar, to cover local audit. That is not to say that we are removing necessary safeguards or compromising the quality of local audit; the work of the auditors will not change. The National Audit Office will set out what auditors should do to fulfil their statutory duties and, as set out in this order, where appropriate the Financial Reporting Council and professional accountancy bodies will monitor the quality of audit, as they already do for the private sector.
Through this order, the Financial Reporting Council will take on the responsibility for authorising professional accountancy bodies to act as recognised supervisory bodies. These bodies will, in turn, have responsibility for deciding which firms are eligible to undertake local public audit and for monitoring compliance with the rules and practices that they have established, and also with auditing standards. The Financial Reporting Council will also have responsibility for the recognition and supervision of audit qualifications that are not recognised by the Companies Act 2006. In approving an additional qualification, the Financial Reporting Council will need to assess whether it meets the minimum requirements as set out in the Local Audit (Professional Qualifications and Major Local Audit) Regulations 2014—SI 2014/1627—which were laid on 27 June and are subject to the negative procedure.
The monitoring of major local audits will be covered by the Financial Reporting Council. The Secretary of State has specified in the regulations that I have just mentioned which relevant authorities will have their audits defined as major local audits. Briefly, the conditions are that an audit of relevant authorities with either total income or total expenditure above £500 million, or an audit of relevant authorities with local government pension funds with assets in excess of £1 billion or more than 20,000 members, will be considered to be a major local audit. The Financial Reporting Council will also, subject to consultation, be able to give a direction to a relevant authority specifying that its audit will be a major audit.
Why do we need this order? Without the order, the Secretary of State would retain oversight of the whole regulatory framework for local auditors, thus continuing an anomalous position and a dual regulatory regime. As I said earlier, the powers being delegated to the Financial Reporting Council here largely mirror those delegated by the Secretary of State for the Department for Business, Innovation and Skills to the Financial Reporting Council for oversight of the regulation of statutory—that is, company—audit.
Before the introduction into Parliament of the measures included in the 2014 Act, we consulted widely both on the broad policy approach and also in more depth on the proposed framework, through the publication of a draft Bill. Noble Lords may also recall that a parliamentary pre-legislative scrutiny committee provided detailed scrutiny of what is now the Act while it was in draft form. During the Bill’s passage through Parliament, we also provided draft regulations on several of its key provisions to the parliamentary Bill Committee, and last autumn we undertook an interactive public consultation exercise. Over 130 replies to the consultation were received in total, of which 62 commented on the regulatory framework, including the main audit firms which currently carry out local audits and which have been engaged throughout this process.
Nearly 80% of the relevant replies were in favour of the approach proposed for the regulatory framework. This reflects the work that we undertook before consulting, in having regard to the existing statutory framework and engaging with key stakeholders through a working group to make sure the proposals reflect their views. It was found that 71% viewed the Local Audit (Professional Qualifications and Major Local Audit) Regulations as providing an appropriate framework to allow a body to develop a suitable qualification for local audit, and 63% agreed that the proposed thresholds were appropriate to capture the audits of significant local bodies.
Following comments made during the consultation about the role of the Financial Reporting Council, we made minor changes to the order being discussed here today. It now includes a requirement that the Financial Reporting Council consults any bodies whose audits it decides should be subject to additional monitoring by being treated as a major local audit, even though it would fall outside the conditions described as defining a major local audit in the regulations I have just mentioned.
I commend the order to the Committee.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for her very full introduction to this order. As has been explained, it puts in place elements of the regulatory framework for the local audit regime. This involves delegating certain of the Secretary of State’s powers to the Financial Reporting Council. As would have been apparent from the debate in another place, we do not oppose this order. As has been said, it is about removing duplication and an attempt to replicate the Companies Act regime for local audit. However, I have one or two questions.
The Audit Commission is to be abolished in 2015. What arrangements are in hand for the management of the audit contracts that were outsourced and are not due to come to an end, I think, until 2017? Has a decision been taken on whether or not they are to be extended? I think there was the option of extending them for a further three years. Paragraph 7.1 of the Explanatory Memorandum makes reference to an “open and competitive market”. Could we therefore have an update on how many different firms are currently undertaking local audit work and how many were eligible to bid under the Audit Commission’s final transfer? Perhaps we could also have an update on the ultimate disposition of those audit contracts—I think some of them were bundled on a regional basis—and how they were transferred, and whether any of those arrangements have had to be unpicked and retendered for one reason or another.
As the noble Baroness explained, the FRC will have responsibility for monitoring “major local audits”. This term has been defined in the recent set of negative regulations, which have been referred to. Can we be told how many major local audits there are expected to be? Reference has been made to the consultation exercise from last autumn and comments received from the LGA about the Financial Reporting Council being involved in local authority audit policy. Would the Minister care to comment on that?
On the Government’s suggested savings, can we be told how much will be saved as a result of the audit arrangements already contracted out by the Audit Commission? I think that was a bone of contention when we debated the Bill.
Subject to the answers to those questions, as I said, we have no difficulty with this order and I am happy to support it.
Baroness Williams of Trafford
I thank the noble Lord for being the only person present for the beginning of the debate, and for the points he has raised.
He asked how many local bodies will be undertaking major local audits. We estimate that there will be around 100 to 150. He also asked whether there would be an extension to the existing audit contracts that are in place, to allow for the transition phase. We have asked the LGA to set up a company which will manage existing audit contracts, running to 2017, so I hope he is satisfied by that. We will make a decision on whether or not to extend those contracts in due course.
I think I have answered both his questions. Was there another one?
Lord McKenzie of Luton
I think there were one or two. There was one about the savings. I think the figure of £730 million was referred to. I was trying to understand how much of that, if any, relates to the work that was already done by the Audit Commission outsourcing its contracts in 2013 and perhaps 2014 as well. I was also interested in getting an update on how those contracts were actually dealt with when the Audit Commission contracted them out. I do not think they were all done in one contract; I think they were done in a series of regional contracts but I do not have in my mind the totality of how that all worked. Have any of those contractual arrangements had to be unpicked? I think the arrangement was that they were contracts between the audit companies and the Audit Commission.
I am certainly grateful for the update about the LGA being the entity that will monitor and manage those outstanding contracts, and that there is not yet a decision on whether or not they will be extended. If the Minister were able to pick up some of those other points, that would be helpful.
Baroness Williams of Trafford
I apologise to the noble Lord. On the £730 million-worth of savings that we have estimated over the next five years and the point that the noble Lord raised about the previous period, we estimate that there were about £200 million-worth of savings. I will write to the noble Lord with an update on who has the contracts and how they are located.
I have a correction. The LGA will set up a separate company, and we are working together for it to do so.
Lord McKenzie of Luton
To be clear, is that separate company going to manage the existing contracts as well as possibly looking to amalgamate or centralise contracted audits in the future, or is it just one of those functions?
Baroness Williams of Trafford
I understand that a transitional body will be in place to run the contracts at this stage. If the noble Lord is not entirely satisfied with those slightly hurried answers, I am happy to write to him.