Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Shipley
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.
Lord Shipley
My Lords, from these Benches, I thank the Minister for—as the noble Lord, Lord McKenzie, said—her good humour in the passage of the Bill, despite the several defeats the Government have had. As I said, I hope that there may be an opportunity for the things on which we have a different opinion from the Government to be looked at very closely in the House of Commons, because there is a lot of merit in the amendments that your Lordships’ House has decided to pass. I also thank the noble Lord, Lord Heseltine, who the noble Lord, Lord Tyler, referred to as the godfather of the Bill. He is certainly its architect, and the vision that the noble Lord has shown over the years in driving this agenda forward has been hugely important. Finally, I thank the Members of the Labour Front Bench and the Bill team for a very happy process, which has addressed all the issues that have been of concern to us—many thanks to the Minister for that collaborative approach. I very much hope that we see many affirmative procedures as new proposals come forward in the months ahead.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Shipley
Lord McKenzie of Luton (Lab)
My Lords, I shall also speak to our other amendments in this group. A strong and adequately resourced scrutiny process is an essential ingredient in the process of devolving substantial powers to combined authorities—and, it might be thought, especially to mayoral combined authorities. The sheer quantity of amendments in this group reflects the importance that all noble Lords, including the Government, have given this issue.
Our Amendments 35 and 37 ensure that the scrutiny committees can inquire into and challenge not only actual decisions—for example, by call-in procedures—but matters under consideration prospectively, rather than just retrospectively.
Amendment 43 requires that guidance by the Secretary of State on the functions of overview and scrutiny committees should be affirmed by the affirmative procedure, in the light of the crucial role that such committees should play.
The Bill lacks an adequate procedure comparable to that of the audit committees found in local government. Amendment 36 seeks to remedy this deficiency, but we felt on reflection that it does not quite meet the case, since it delegates to the overview and scrutiny committee the task of appointing another committee, independently chaired, to carry out that audit function. Our Amendment 34A seeks to remedy the position by explicitly requiring the appointment of a separate audit committee, again independently chaired, with the responsibility for reviewing and scrutinising the authority’s financial management and affairs in the same terms as Amendment 36. Given the potentially large expenditure of the combined authorities if the promise of devolution is to be realised, this is an important role and one that is distinct from the general overview and scrutiny process.
Although they have yet to be moved, we support the Lib Dem amendments concerning political balance and the chairing of the scrutiny committee, but have some concerns about possible delays of call-in powers, which could necessitate another round of consultation.
We will listen with interest to the government amendments, particularly to Amendment 41, which requires the approach to reconsideration powers to need the consent of the combined authority. This would appear unduly restrictive. We are not quite sure why it is proposed to have an alternative to an independent chair of scrutiny, but in any event can live with what is proposed. I understand that we are not able to hear from the noble Lord, Lord Kerslake, today on his very substantial amendment about governance, which we felt was very important. As proposed, however, some of the voting thresholds may be problematic, especially the requirement for unanimity at the first meeting of the overview and scrutiny committee.
Overall, however, these amendments highlight the importance that we should place on getting oversight right in circumstances where considerable power is rightly being placed with a combined authority and possibly a mayor. This should also address in part—although, doubtless, not comprehensively enough—those who have expressed fears about a single-party state. I beg to move.
Lord Shipley (LD)
My Lords, we have a number of amendments in this group. During the debates on this Bill, we have tried from these Benches to emphasise the importance of legitimacy and accountability in this new tier of government. By legitimacy, I mean, first, a direct connection with the ballot box in the new structure and, secondly, the prevention of one-party states in which the same political party has control of the post of elected mayor, the nominated combined authority and the nominated overview and scrutiny committee. In Committee, we proposed direct election to the combined authorities, so that the mayor was not the only elected post, but this did not find favour. Now we have a group of amendments that concerns overview and scrutiny committees, which are very important—more important than they might have been, had some of the amendments that we debated in Committee been agreed.
I am pleased that, following our debate in Committee, further, more detailed proposals have come forward from the Government. Some are welcome but some do not go far enough. Let me explain what I hope the Government will do. Our amendments would require the chair of an overview and scrutiny committee to be from a different political party from the mayor; that assumes that the mayor is a member of a political party. If that is not the case, the chair could be from any political party. An independent chair could work—we said that previously—but it would be better to have an opposition councillor who has been duly elected to their post as a councillor from within the combined authority area, not least because if one appoints an independent person it immediately raises the question of who appoints that independent person. To put it another way: how is independence guaranteed? The make-up of the overview and scrutiny committee also needs to reflect the number of seats held by each party in those local authorities making up the combined authority. Later, we have proposals on the electoral system that should be used so that the first past the post system does not encourage the development of a one-party state.
Our other amendments would also allow the committee to call in decisions made by the mayor and delay them—not for long—to allow further consideration when it is felt to be necessary. To do its job properly, an overview and scrutiny committee needs the power to call for information and to receive it. It will not be enough if the overview and scrutiny committees exist but are then prevented doing their job by a combined authority that prefers to keep things out of public scrutiny.
Amendments 35 and 37, which we support, would enable the overview and scrutiny committee to examine decisions before they are taken, rather than wait for a decision to be made; that is welcome. Amendment 34A, which I signed up to, would create an audit committee with an independent chair. I welcome that proposal as well. It is essential in this case that the chair is independent and appropriately qualified to do the job. In practice, it should cover the functions of a public accounts committee, an efficiency committee and a risk committee. This matters because the savings that could be achieved by public service reform and reducing duplication at a local level have been well established, but we now need to ensure that it all happens. The audit committee would be of significant help in delivering that objective.
The noble Lord, Lord McKenzie, made mention of Amendment 41, and I will do likewise, with two questions for the Minister on that amendment. First, proposed new sub-paragraph (4A) states:
“An overview and scrutiny committee must publish details of how it proposes to exercise its powers in relation to the review and scrutiny of decisions made but not yet implemented”.
If the implementation period is very short, what power would an overview and scrutiny committee have under this measure to hold up a decision for further consideration? Secondly, and this is the point that the noble Lord, Lord McKenzie, raised when talking about proposed new sub-paragraph (4B), what is the objective in requiring an overview and scrutiny committee to,
“obtain the consent of the combined authority to the proposals and arrangements”?
I can see that there could be a situation in which the overview and scrutiny committee misses something, which would need to be put right by the combined authority. However, I certainly hope that this measure would not be used by members of a combined authority who do not wish to see the overview and scrutiny function work effectively. I look forward to hearing the Minister’s comments on that.
Finally, all our proposed amendments have a common purpose in wanting to ensure proper accountability for the devolution that is about to occur. I hope the Minister will agree that they should be included in the Bill.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Shipley
Lord McKenzie of Luton
I am grateful to my noble friend for that clarification. I will just say to the Government that where my noble friend leads, Governments eventually catch up.
Lord Shipley (LD)
My Lords, I do not wish to repeat anything that has been said on Amendments 31 and 32, because I am very happy with the debate we have had so far. I will draw the Minister’s attention to the very helpful words of the noble Lord, Lord Low, on Amendment 67, and will then take that and compare it to Amendment 34 and the list of public functions, which the Labour Party has identified as needed, and which I support. It starts to matter. We had a brief discussion in Committee around careers services and their role as regards the devolution of skills budgeting—what the exact responsibility of combined authorities would be as regards careers services. All that matters because it is not clear to all the organisations outside your Lordships’ House exactly what is in scope. Therefore the production of that list called for by Amendment 34 seems very important, because the points made by the noble Lord, Lord Low, were extremely important and appropriate.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Shipley
Lord Shipley (LD)
My Lords, Amendment 42A concerns media and public access to meetings, addressing issues around the right of the press and the public to have access to the meetings of combined authorities. Existing statutory requirements enable the press, the media generally and the general public to attend, view or listen to council meetings, council committee meetings and council sub-committee meetings. These regulations are well understood in terms of their requirements and their spirit. Alongside the right to attend meetings, there are rights to receive advance notice of meetings, to see agendas in advance and to inspect relevant documents.
This amendment seeks to ensure that those rights of access cannot be diminished in the case of combined authorities. It requires reasonable access to be ensured and, in subsection (2), acknowledges the need to ensure that commercial confidentiality is protected and for officials to feel able to give essential advice to those who are charged with making decisions. Both criteria are, of course, within the existing regulations for local government.
Why, therefore, does the Bill fail to make any mention of an obligation on the mayoral authorities which it creates to meet in public? Members of the public and the media currently have a general right to attend council meetings, including those of the local authority executive or the cabinet and their committees. They also have the right to film, audio record, tweet or blog from those meetings. These rights are primarily set out in the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 and the Openness of Local Government Bodies Regulations 2014. Given the freedom that the Secretary of State will have to set up the new authorities by ministerial order, there is great potential for them to be watered down unless the rights of the public and the press are protected by being placed firmly in the Bill.
Given the importance of overview and scrutiny committees, will the Minister tell us the intention behind Schedule 3, which contains an enabling power allowing the Secretary of State to block disclosure of information to an overview and scrutiny committee and to determine what material it, in turn, can put into the public domain? This amendment seeks to address these concerns. I look forward to the Minister’s confirmation that there will be no diminution of the right of the press, the media generally and the public to attend meetings of combined authorities as they currently do within local government.
Lord McKenzie of Luton (Lab)
My Lords, we are fully committed to openness and transparency in the proceedings of local government and have already moved amendments to that effect. However, as the noble Lord, Lord Shipley, said, we need to be sure that nothing in or arising from the Bill could dilute or disapply existing public rights of access to meetings, records and related documents. The noble Lord has also posed a pertinent question on Schedule 3.
There may be a lack of clarity over the precise circumstances envisaged in subsection (1)(b) of Amendment 42A concerning,
“leaders of a combined authority”.
Presumably, the provision applies when they are meeting as members of that combined authority rather than otherwise. Perhaps that needs clarification. We have generally argued for dealing with matters on the face of the Bill, so we look forward to assurances from the Minister that the issues raised here are already covered. To the extent that they are not, we will work with the noble Lord, Lord Shipley, to fill any gaps on Report.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Shipley
Lord McKenzie of Luton
My Lords, I shall speak also to Amendment 36F. Let me say at the outset that the amendments are to an extent prescriptive. Amendment 36C would require the Secretary of State to publish a list of public authority functions which may be the subject of a transfer under the provisions of this Act. Amendment 36F goes further and would require the Secretary of State to consult combined authorities with a view to devolving certain functions and funding in certain areas. These are employment support, transport, housing, skills and business rates. We should be clear that the published list does not require any of the functions to be transferred in any particular situation; that will remain subject to whatever agreement, if any, is entered into in practice.
The amendment has been prompted in part by the first report of the Session of the Delegated Powers and Regulatory Reform Committee, which refers to the wide powers that new Section 105A would confer. It states at paragraph 10:
“But it says nothing about how in practice these powers might be used, or why it is not appropriate or practicable to include a description of the types of function covered by the power on the face of the Bill”.
We agree. If there are concerns about government at the centre trying to pull back the devolutionary process, putting down some markers must surely act as a counterweight. It might even help encourage and embolden some of those authorities that are not yet members of a combined authority and are not fully in the know.
Amendment 36F requires government to be proactive in the cause of devolution. In Committee on Monday, we got the line that the Government would wait to hear who comes knocking and then respond and engage in some fashion. The amendment requires the Government to themselves initiate consultation with combined authorities over areas of,
“employment support … transport … housing … skills … and … business rates”,
as matters that are important for driving growth and prosperity. It does not preclude consultation over other matters, and we have a separate amendment covering strategic planning.
It may well be that consultations are already going on in a number of areas with a number of combined authorities—indeed, we know that there are. That is fine, but adopting the requirements of the amendment would ensure that opportunities are being opened up for all combined authorities. From our debates in Committee on Monday, there was no indication from the Minister that there were any capacity constraints as far as the Government were concerned on moving forward on a wide front. This would force the pace of devolution—and on a broad front. I beg to move.
Lord Shipley
My Lords, I am pleased in principle to support Amendments 36C and 36F. However, in Amendment 36C, on publishing a list of public authority functions, why do we need to wait to within one month of the enacting of the Bill? Surely it is known now what the functions might be. Should the House not be informed what they are before the passing of the Bill? I would be grateful if the Minister could specifically explain why it is not possible to list the public authority functions before the Bill passes rather than afterwards.
Amendment 36F is fine as far as it goes—and of course we will have the opportunity in Amendment 36G to discuss strategic planning issues, as the noble Lord, Lord McKenzie of Luton, explained. But I have two points to make in relation to this amendment. First, this is not necessarily an exclusive list; other powers and funding could be thought about. One is careers advice. It may be seen to lie within the skills head, but probably it could be treated separately. There may well be others. We should have a discussion about whether there are other areas to add to the list of matters that the combined authorities should be consulted on.
My second point relates to the use of the word “powers”. At some point we need to think more in terms of responsibilities. Powers and funding are one thing, but what you do with them is another. There is now the prospect of a very large number of functions, powers and responsibilities coming into the remit of combined authorities. I am starting to get very worried about the capacity of the combined authorities to manage all of the things that they may be asked to undertake. As part of the consultation that is asked for in Amendment 36F, I hope that the issue of capacity and resources is also addressed.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Shipley
Lord Shipley
My Lords, I am grateful to all those who have taken part in this debate. In one sense, we have had something akin to a Second Reading debate—it has lasted just on two hours. On the other hand, it has proved extremely helpful in identifying what some of the issues are. I concluded from it that many issues will have to be resolved between now and Report. So much is in the phrasing—the words that are used.
I am very grateful to the noble Lord, Lord Campbell-Savours, for twice reminding us that Amendment 3 is a clarifying amendment. It simply asks the Secretary of State to ensure that certain criteria are in place before making a decision. I had not thought when I drafted the amendment that this would prove quite so controversial and lengthy a debate. However, there we are.
I am grateful for the contribution of the noble Lord, Lord Heseltine. He was very critical of local government, relating largely to the 1980s, about which there was a great deal of truth. I pay tribute to his work with the Urban Development Corporations which revived so many of the cities in England. The difference here is that I am trying to talk about legitimacy and accountability. Indeed, in her reply, the Minister talked broadly in the same field. For me, this is about making the proposal in this Bill sounder in terms of public acceptability and legitimacy and in terms of making accountable those who are in positions to spend very large sums of public money.
Both the noble Lord, Lord Woolmer of Leeds, and the Minister talked about us trying to create a new layer of local government, but that is not the case. The Bill itself reinforces the combined authority layer of government and provides for a mayor and deputy. That is a function of the Bill, not of our amendments. The question is whether areas outside London should have unaccountable mayors while London benefits from a proper system of scrutiny by directly elected representatives. We will have a discussion about this when we read the relevant amendment. The assemblies that we propose would not have many members, but they would play a vital role in speaking up for citizens and communities against a potentially very powerful mayor who must be subject to scrutiny. That takes me to my next point.
Lord McKenzie of Luton
The noble Lord said that what he proposed would not have many members, but it would work out at something like 50 members for Greater Manchester—five per area—which is double the number of the London Assembly.
Lord Shipley
Indeed, it is 50. Of course, there are a number of issues around the selection of those numbers. We have identified in that amendment—we will have the opportunity to examine this in greater detail when we reach the amendment—that there are different populations in the authorities. It may be that some other number is more suitable. We would be perfectly happy to discuss that. But the question comes back to what the noble Lord, Lord Smith of Leigh, said a little while ago. The Minister thanked him for his hard work in producing the current position in Greater Manchester. I pay tribute to our members in Stockport for their involvement in helping to bring Greater Manchester together. The noble Lord, Lord Smith of Leigh, said that somebody has to bring it all together, if I recall his words correctly. But I would be happier if it was not somebody but some body. The question at the heart of this is whether one single person is the right answer or whether a body of elected people is the right answer. We will have to discuss that further when we reach that point in the amendments.
The noble Lord, Lord McKenzie, was correct in his comments about Clause 1, given the report that we have considered today. That will certainly need to be revisited. But in addition to that, it is my intention, with the leave of the House, to recast that amendment for Report stage. If in so doing we are able to have the usual discussions around how it might be helpful to the Government in terms of its phrasing, we would be happy to enter discussions on that. With that, I beg leave to withdraw the amendment.
Combined Authorities (Consequential Amendments) Order 2014
Debate between Lord McKenzie of Luton and Lord Shipley
Lord Shipley (LD)
My Lords, I strongly welcome these draft orders, and the fact that the north-east draft order is on its way, making four orders in total, with the potential for more to come in the months ahead. As we have heard, combined authorities are important on the grounds of geography and scale because they reflect natural regions and travel-to-work areas. In terms of scale, so many councils are comparatively small that investment and risk management are much more difficult for them, so pooling with neighbours is a much better way in which to proceed.
I noted that the leader of Manchester City Council has said that this Government have devolved more in three years than the previous Government did in 13 years. He is right. The importance of this devolution is that it is essential to help to drive growth outside London and the south-east effectively. Combined authorities, working closely with their LEPs, will be responsible for regeneration and economic development, and for strategic transport investment and management, as the Minister confirmed. That is a hugely welcome change. I have been involved in the first and second waves of city deals, which have been very important in increasing the understanding that councils have with their LEPs in terms of their leadership role in promoting economic development. I have no doubt at all that the creation of combined authorities will help enormously with that process.
I would like to raise one important issue of principle with the Minister, which concerns the membership of the combined authority. I listened carefully to what the Minister had to say earlier. I understand that the overview and scrutiny committees will be politically balanced so that minority parties in councils will have representation in the governance of the combined authority. Can the Minister say, either now or at a later date in writing, a little more about how proportionality will work, whether an opposition member will be required to chair them and how agendas will be constructed to ensure that debate is not stifled by individual party political interest? That is a very important issue and there have been a lot of discussions around it.
There is a strong case for saying that minority parties should have access to the main deliberations of the combined authorities. However, it would help significantly to know now that the Government understand the issue and are prepared to ensure that the rights of minority parties are guaranteed in the orders when they are finalised, either now or at a later date. In terms of principle, it is important, as my noble friend Lord Storey said, that the public have confidence that this is not to be the creation of a one-party state.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for introducing these important orders in a clear and comprehensive way. As the noble Lords, Lord Shipley, Lord Alton and Lord Storey, said, and as would have been clear from the debate in the House of Commons, we thoroughly support these orders. Indeed, why would we not, given that the authorities involved are largely Labour and that the primary legislation from which they spring—the Local Democracy, Economic Development and Construction Act—was legislation of the previous Government? We acknowledge that the work of the noble Lord, Lord Heseltine, has spurred the coalition Government to take the opportunities that that legislation offers, and we acknowledge the Government’s current commitment to localism. I am bound to say that those of us who spent many hours ploughing through the Localism Bill and its detail will recall that it seemed to us then to be as much about power for the Secretary of State as about freedoms for local government, but it would be wrong to be too churlish on this occasion.
As for growth, of course we welcome the improvement in the economy. We will have to see how sustainable it is and how much of it genuinely comes from a rebalancing of the economy, a point touched upon by the noble Lord, Lord Alton. We agree that local authorities working together in the interests of their communities can be a real engine for growth, particularly outside London. As my honourable friend Andy Sawford put it when this matter was debated in the Commons:
“The new combined authorities will bring many benefits, including the strong and visible collective leadership of an area with democratic accountability and an influential and unified voice. That leadership will be able to have a single conversation with the Government, national agencies and business leaders and to align decision making and economic growth at a strategic level”.—[Official Report, Commons, 18/03/14; col. 707.]
As the noble Lord, Lord Shipley, said, combined authorities should enable more effective engagement with LEPs and facilitate delivery of city deals.
The issue that York is currently a non-constituent council in the West Yorkshire Combined Authority was the subject of some discussion in the other place, particularly following an earlier intervention from my right honourable friend Hilary Benn. We took it from the Minister’s reply in another place that the current problem is that combined authorities require whole local authority areas that share the same boundaries. The Minister undertook to consult in the next few weeks about how the legislation could be changed to address that problem. Perhaps the Minister could add a little more about the propositions that are being developed in that regard.
We welcome the commitment to see the combined authorities brought within the VAT refund scheme, which is another matter that was discussed in the other place.
Local Audit and Accountability Bill [HL]
Debate between Lord McKenzie of Luton and Lord Shipley(10 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text
Lord Shipley (LD)
My Lords, I shall speak specifically to Amendment 18. I refer to the Explanatory Notes on the Commons amendments that have been published, and in particular to that on Amendment 18 in relation to health service bodies, which says that,
“an auditor will have to provide an opinion on value for money only if the auditor is not satisfied in respect of that matter”.
I want to raise the issue of health and well-being boards, which are shared across the health service and local authorities, in terms of identifying how they can work more closely together and how best value can be achieved.
My question is: who audits the health and well-being boards? They have a clear role in driving improved health outcomes. I realise that different bodies are spending money, and are therefore audited for that role, but there is a broader question about how those boards steer policy and make good decisions that reflect acknowledged best practice, and achievements in other areas by other health and well-being boards. I would like to think that an auditor has a clear role in identifying whether value for money is being achieved by individual boards—I suspect that this will become important over the next two to three years, as the success of those boards is assessed—and whether, indeed, the health service investment and the sum of money available to local authorities are adequate for purpose.
To this end, I suggest to my noble friend the Minister that one of the National Audit Office’s thematic studies that are promised as part of the Bill could look at the joining point between local authorities and the health service, specifically in relation to adult social care but more generally in terms of improving health, preventing a decline in health and to reduce inequalities in health outcomes. I think that there is a role for an auditor in that area. An auditor would have to provide only an opinion on value for money if he or she is not satisfied in respect of a specific matter. I think that the issue goes a little further than this. I would like to think that some strongly proactive work would be undertaken by the National Audit Office and auditors who are looking at the role of health service bodies and local authorities’ work in the health field.
Lord McKenzie of Luton
My Lords, I thank the Minister for her detailed explanation of the amendments in this group. Our discussion on them has been widened by a very pertinent inquiry from the noble Lord, Lord Shipley. We have generally seen these amendments as tidying up and consequential measures. We have issues around: the duty of auditors of health bodies to prepare a report; the provision of sequencing of electors’ rights concerning unlawful items of accounts; the procedures for auditors to be able to recover costs when there is no formal action they can take; copies of recommendations or public interest reports of functional bodies of the GLA to be sent to the GLA; and the drafting changes arising from the fact that the Mayor’s Office for Policing and Crime will cease to be a connected entity of the GLA. We have gone through these measures and are content with them.
Lord Shipley (LD)
My Lords, could I make a brief point about Amendment 27 and the group as a whole? It relates to the issue of principle, which it is important that we restate. I do not like centrally imposed targets for increases in local taxation. The reason is simply this: there is a principle that localism means local decision-making, and those who are elected at local elections should make those decisions. We have various definitions now of what is seen to be relevant expenditure. Is it spending power? If you compare spending power to the amount of government grant, or to the amount of money paid on average by council tax payers or at band D by council tax payers, you get very different sums. In the end, we are reliant on the ballot box in each council area to decide who represents a ward, who then come together and make decisions about how that council is to be run. In my view, that includes the level of council tax.
I understand that we have debated that before and that debate has no doubt been held in the other place. I hope that somebody will decide to hold a referendum on the issue of council tax and the proposal that there should be a higher increase than the amount that the Secretary of State would prefer.
Therefore, this remains an issue of principle: local authorities are the people who should decide the level of council tax and they should be responsible to their electors, on the principle of localism. They will stand or fall at their ballot boxes by the decisions that they themselves take.
Lord McKenzie of Luton
My Lords, this amendment takes us back to the thorny issue of council tax at referendums. We have just heard from the noble Lord, Lord Shipley, about his opposition to centrally imposed targets; he has been very consistent on that issue. The fundamental policy change provided for in the Bill is the inclusion of the definition of a relevant amount of council tax—certain levies. Previously, any increase in council tax resulting from an increase in levies could not have caused a determination that the level of council tax was excessive, and would not have triggered a referendum requirement.
Debates in your Lordships’ House and in the other place highlighted a number of concerns, namely that the referendum regime places the burden on major preceptors and billing authorities who have no direct ability to influence the amount of the levy or to cause a levy body to reduce its levy; that factoring in 2013-14 council tax increases into referendum criteria introduces an element of retrospection potentially penalising authorities for decisions made before the Bill was introduced; and that it would undermine certain infrastructure projects that relied on an increase in levy stream and that were negotiated as part of a city deal. The example of Leeds has been cited in this regard.
Growth and Infrastructure Bill
Debate between Lord McKenzie of Luton and Lord Shipley
Lord Shipley
My Lords, I have a question for the Minister about timing. There are three separate contributors to a policy that the amendment seeks to address. One is the report of my noble friend Lord Heseltine, to which we hope there will be a response quite soon. Separately, there is the request in this amendment that, within one year of the second round of city deals being completed, a report would be produced. That could take us through to the autumn of 2014. Then, quite separately, there was the Deputy Prime Minister’s commitment at the end of October, which I quoted in Committee, when he said of the second wave:
“while it’s too early to talk exactly about what a third Wave might look like, I very much see this as a step in a journey”.
We have all these things. It seems that there might be an opportunity for a round table discussion over the summer once some of the timing of some of these matters is a bit clearer.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. We agree with the Government about the progress of city deals thus far. However, the amendment is about completing arrangements so that councils that feel left out at the moment can be reassured that a process is under way, a requirement on the Government to report back. It does not require the Government to produce exactly the same solution for every council; it recognises that there will not necessarily be arrangements for absolutely every council in the land. We are trying to ensure that councils that at the moment feel uneasy about the concentration on urban areas, and are feeling left out, are reassured. If the Deputy Prime Minister says that that is a step along the way, that is fine, but why not accept the amendment, which imposes an extra obligation on the Government to make sure that what has happened so far is just a step along the way?
Having heard the Minister’s reply, and not wishing to divide on an issue where we have some fundamental agreement about the core cities programme, I think the Government are unwise not to accept this fairly modest request for a further obligation to look across the piece. Accordingly, I would like to test the opinion of the House.
Local Government Finance Bill
Debate between Lord McKenzie of Luton and Lord Shipley(12 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text
Lord McKenzie of Luton
My Lords, this is a partial rerun of an amendment from Committee, because a significant issue remains in our minds, which is lacking in clarity. This is the use of the central share and the principles that will determine how it is to be applied on an ongoing basis. We understand and accept that the central share for 2013-14 and 2014-15 will be used for revenue support grant and that, for the first of those two years at least, the central share is likely to be insufficient to meet the full RSG amount and that it will need to be topped up. The RSG, as I understand it, is the spending control total minus whatever the local share is. The approach to the revenue support grant is one that we would recognise, have come to love and of course completely understand. It is not only an issue of the quantum of the central share but the basis on which it is to be paid.
Given that the revenue support grant becomes discretionary under the scheme, there would appear to be no criteria governing the distribution of the central share and nothing to say that it has to reflect the needs and resources of local authorities, which is what this amendment requires. The statement of intent issued in June this year by the Government makes clear that the central share will be used by central government, in its entirety, to fund the local government sector. Presumably that means that amounts currently met from any departmental dell can be met from the central share; for example, the dedicated schools grant. Is that the case and is that the intent? It is not a question of new money going to local government from the central share, which itself is money that is raised by local government.
We are close to signing off this legislation, which is why we seek as much information as possible at this stage on this issue in particular. This is particularly because of the Government’s stated intent that they do not wish to see a resetting of the system, at least until 2020, subject to the debate that we have just had. That is notwithstanding of course that we remain in the dark about how the central share is to be used other than that it is to be used for the purposes of local government in England. The fear is that, with further cuts in the offing, the revenue support grant will be diminished, so that the balance of the central share will increasingly be deployed on some other basis, whatever it is called. In particular, the concern is that the revenues raised by local government will increasingly be used to displace spending that is, and has previously been, met directly by central government. Although some of the funding from the central share, at least in the early years when payable by revenue support grant, will reflect the relative needs and resources of local authorities, there is no assurance that this will continue to be the position in the future, except to the extent of tariffs and top-ups going forward.
This amendment simply lays down the requirement that the use of the central share must be on a basis that reflects the needs and resources of local government. It is an opportunity for the Government to let us know now the basis and principles that they wish to see govern the application of this amount—what will determine which elements of government spending will be diverted through the central share, and presumably the local government finance report process, and what will be dealt with as now. I beg to move.
Lord Shipley
My Lords, I feel that this amendment is actually extremely important. I draw the Minister’s attention to a report by the Institute for Fiscal Studies, which has confirmed that councils in the north of England are having to cut spending at almost three times the rate of councils in the south. In absolute terms of course, many councils in the north receive more revenue support per head than councils in the south, and will go on doing so, but then their needs in many places are also greater. The principles of resource equalisation continue to matter greatly, if we are to meet need fairly across the country.
This problem of deeper cuts in the north would have occurred had a Labour Government been elected in 2010, not least because Labour had plans to dismantle working neighbourhoods funding, worth several million pounds a year to many councils. However, I support the aim behind Amendment 7, because it maintains the principle of allocating spending against need and against the availability of resources, which I fear is increasingly in danger of being lost sight of, given recent settlements.
I hope that the Minister will be able to accept the amendment, or at least indicate agreement to its spirit: to ensure that resource distribution reflects the principles of need and equalisation. If the Government do not give that commitment, it implies that they are no longer in favour of resource equalisation.
Baroness Hanham
My Lords, I thank both noble Lords for their contributions. I appreciate that the use of the central share is of concern and interest, particularly once we get through the next couple of years. Amendment 7 would ensure that the central share money would always be distributed on the basis of need. We have said that the central share money will always be returned to local government. The basis of the central share going to the Government is that it will then be used for local government. The question of need and special grants will be covered by the central share. That is basically what the central share will do. I cannot at the moment give the absolutely unqualified assurance that both noble Lords, Lord Shipley and Lord McKenzie, asked for on resource need equalisation. I am pretty sure that that is correct, but I will come back to them if there is any change to that.
I also confirm that the amount of revenue support grant in the system will reflect future spending reviews, so the Government’s view of the funding will be available to local government in advance. I hope that with that rather short explanation the noble Lord will withdraw his amendment.
Neighbourhood Planning (Referendums) Regulations 2012
Debate between Lord McKenzie of Luton and Lord Shipley
Lord Shipley
My Lords, I shall say a word or two about legitimacy and the ballot box. Development plans and orders and community right to build orders are extremely important matters, and decisions made on each of them have to be legitimate and to be seen to be so. I understand my noble friend Lady Eaton’s position and indeed, as one of its vice-presidents, that of the Local Government Association, and I understand that some think that the proposed process is expensive and bureaucratic. However, I have concluded that there has to be a link between the ballot box and approved neighbourhood development plans and orders and community right to build orders.
Parish councils are elected and have a clear mandate for the decisions that they make. Neighbourhood forums, however, are designated—they are not formally elected through the ballot box—and it is not clear that they have the same degree of democratic mandate. It is possible anyway that the parish council, when elected, may have a split vote in adopting a plan or an order. For that reason, I have concluded that the regulations before us are correct in principle; that localism cannot just be about the rights of principal councils; that localism is about neighbourhoods, parishes and the rights and responsibilities of the people who make up those neighbourhoods; and that, if we are serious about trusting the people, the only way in terms of neighbourhood planning is to be certain what people think. That implies a referendum and the use of a secret ballot through the ballot box.
Lord McKenzie of Luton
My Lords, I thank the Minister for introducing these regulations. I am not sure whether they are meant to provide us with some light relief from the Local Government Finance Bill but they certainly offer almost as many pages as the council tax support default scheme, so the DCLG is keeping us busy. I shall pick up the theme of the LGA and the contribution from the noble Baroness, Lady Eaton.
The LGA points out that 122 pages of prescription are added to the 38 pages of detail in the Act regarding neighbourhood planning. The briefing that we have received from the LGA took us back to some of our debates on the Localism Act. Its view at the time, with which we have some sympathy, was that to insist on a referendum in all cases could bring about unnecessary bureaucracy and, as the noble Baroness has pointed out, could be expensive and indeed divisive.
On the matter of expense, the LGA estimates that a neighbourhood plan referendum could cost in the region of £5,000. Could we be clear that in relation to the costs, whatever they are, the Government see these as new burdens that would be funded centrally in respect of not only the cost of the referendums but all the other aspects of neighbourhood planning that require the local planning authority to support and, if necessary, offer finance to local regions?
There is the question of why we should incur these costs when there is clear support for a proposition that can be evidenced in a number of ways. I understand the point made by the noble Lord, Lord Shipley, that if there is a local development plan from the local planning authority, councillors are elected on that, as indeed they are on the parish council. However, there will be occasions when it is abundantly clear from local ward meetings or from local councillors for a particular ward that something is overwhelmingly supported, and that to force a referendum on that seems unnecessarily bureaucratic. Still, we are where we are on that.
The question asked in the regulations is very stark and demands a yes or no response to a particular proposition. Is not planning often more nuanced than that? By focusing always on the referendum with its stark yes or no choice, we will miss an opportunity where there is still room for a bit of exploration into the final shape of the plan. However, we are where we are, with a central diktat over every dot and comma.
The LGA reminded us that the Minister at Third Reading pointed out that the use of existing mechanisms for the creation of local government plan documents was an alternative route for a neighbourhood forum to go down—one which would avoid a referendum. Has this route been adopted in any of the front-runner pilots that are under way?
Local Government Finance Bill
Debate between Lord McKenzie of Luton and Lord Shipley(12 years, 4 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McKenzie of Luton
My Lords, this is an intriguing series of amendments, and we have a degree of sympathy with them. The amendments would include parish and town councils within the scope of those for whom billing authorities must share their portion of the business rates. I suspect that the difficulty with this is that other parts of the components of the scheme for business rate retention would have to be applied as well. You could not just make the payment without the other bits and apply it potentially to many thousands of authorities.
Under the current local government arrangements business rates are paid to central government and come back via the formula grant, not, I understand it, to local precepting authorities but to billing major precepting authorities. However, this does not work under the business rate retention scheme. The retained business rates have to be allocated between authorities and the proposed basis is that, with two-tier arrangements, 80% of the business rate would be allocated to district authorities and 20% to major precepting authorities—police and fire and rescue included. As I understand it, the rationale for the 80/20 split is that lower-tier authorities are typically responsible for planning and more able to influence economic development.
The noble Earl might well argue—he touched on this—that the new regime for neighbourhood planning opens up that opportunity more to parish and town councils. Some are already very much involved in a drive to improve the economy of their areas. However, if such councils are not to be encompassed within the tariff top-up arrangements for billing authorities, it would seem to follow that they should have their own calculation. It might not be difficult to establish the business rate base but to derive a funding amount would presumably require some breaking out of the formula grant, and I am not sure how easy that would be to do.
In passing, we should note that there will be a requirement for billing authorities to work with local precepting authorities to address the council tax support funding. If I have read the documentation correctly, it is envisaged that this could well involve a payment from such authorities to town and parish councils.
While I understand where the noble Earl is coming from on this, the practicalities make the amendment difficult to accept. However, I will be interested to hear the Minister’s response. There is the germ of an idea here that needs support.
Lord Shipley
My Lords, I think I agree with the comments of the noble Lord. There is an issue here that relates to the deletion of “major”. Will the Minister respond on the content of the Localism Act? On the rights and powers of precepting authorities, my memory is that some crucial amendments were made to the Bill on Report, which enabled the protection of the rights of parish councils and neighbourhood planning councils. Is the Localism Act sufficient to deliver the resources that should lie within the money, particularly that raised through the community infrastructure levy, to very small neighbourhood areas? I would appreciate the Minister’s guidance on that point.
Lord McKenzie of Luton
My Lords, I shall speak also to Amendments 32 and 40 in this group. Amendment 19 relates to the determination of the central and local shares and requires them to be set after full consultation with local government. It is accepted that this determination must currently be specified in a local government finance report and thus be subject to a parliamentary process, but that is not a substitute for engagement with local government.
We accept that there has been extensive engagement in relation to the Bill but what does the Minister see as the regular process going forward in this regard? Perhaps she could outline for us an anticipated timeline of events in future years after the introduction of the business rate retention scheme, although I hesitate to call it a steady state.
Amendment 32 relates to tariffs and top-ups. The local government finance report will spell out the basis of the calculation of these payments, but before it is laid, the Secretary of State must notify such local government representatives as he sees fit. The amendment requires there to be a consultation rather than local government just being notified. Amendment 40 is a parallel amendment related to the process for amending reports.
I will just touch on the amendments in the name of my noble friend Lord Smith, who is unable to be here today. Amendment 20 mirrors our Amendment 19 and is identical. Amendment 23 causes the finance report to give details of the consultation; a proposition which we support. Amendment 25 requires the report that should be sent to local authorities to be there by the end of November, for obvious reasons. Amendment 33 mirrors our Amendment 32 and is a duplicate. Amendment 34 requires that the Secretary of State must consult on the detail and not just on the general nature of the proposals, which is the requirement at the moment. These amendments are all about proper engagement with the local government sector. Perhaps the Minister will let us know the Government's intention. I beg to move.
Lord Shipley
My Lords, I first declare my interest as a vice-president of the Local Government Association, which is the first of the afternoon. I apologise for missing Tuesday's Committee when large numbers of noble Lords were making a similar declaration.
Lord Shipley
That would actually be a quicker way of proceeding.
I agree with the amendment moved by the noble Lord. The Localism Act was about devolving power and decentralising decision-making. This set of amendments makes it clear that there should be full consultation with local government before decisions are made. When decisions are made, that cannot just be about notifying those decisions but should clearly explain through consultation first but secondly explanation of the decision that has been made, particularly in a matter as complex as tariffs and top-ups. Thirdly, there has to be consultation on the detail not just on the general nature of things.
I hope that the Minister will take on board that feeling because the Localism Act has changed the balance of responsibility between central and local government. It would help enormously if it were not just left for the Secretary of State to have a set of powers whereby things can be announced but not actually explained.
Lord McKenzie of Luton
My Lords, in moving Amendment 37, I shall speak also to Amendment 38. We are still with tariffs and top-ups, which are important because, apart from levies and safety nets, they are the route to seek to address matters of needs and resources. Some local authorities collect more business rates than they currently receive in formula grant, while business rates collected by others are lower than their current funding levels. Hence, there is a need to rebalance resources, a process that we support. However, this requires establishing a business rates baseline for each authority and a baseline funding level. Amendment 37 sets down a general test for this, which requires that the basis for calculation that must be set out in the local government finance report should specifically have regard to an assessment of need. This amendment particularises that local authorities should be resourced to be able to comply with their equality duties, their obligations under the Child Poverty Act and homelessness provisions. The noble Baroness will note that these are the very same issues that central government has pressed on local government, reminding it of its responsibilities in relation to council tax support schemes.
Amendment 38 requires the local government finance report to set out details of the calculation of the baseline position. Establishing the baseline requires establishing the business rate that each billing authority collects and how this is shared between billing and non-billing authorities. The Government have proposed that this is determined by averaging business rates income, although the number of years over which it is averaged has not yet, apparently, been agreed. The amendment requires this to be made explicit in the finance report, but perhaps the Minister can in any case give us an update on this as well as set out the criteria that will determine the final basis of determination. Reverting to our previous discussion, how would this work in relation to a revaluation if the basis of the business rate baseline was an historic average? It would be difficult to do that at the point at which you had a revaluation because you would be averaging on the old basis. There is a difficulty there, but that is an aside.
Establishing the baseline also involves determining an income or funding level, and it is proposed that it is based on the 2012-13 formula grant, subject to some adjustments. It is these adjustments that the amendment also requires to be spelt out. In this regard, we support the decision to update population data, as these are a key driver of the cost of services.
So far as relative needs formulae are concerned, the Government maintain that they have increased the proportion of formula grant distribution going to relative needs at the expense of the central allocation, as this would support the most dependent authorities. For the purpose of the tariff/top-up calculation, the higher the formula, the lower the tariff or the higher the top-up will be. Can the Minister update us on what is happening on these adjustments and tell us the current thinking because the outcome of these deliberations is locked in until a reset and it can be significant? If the proposal is to set the formula grant for the current year, the Government switched data to help the disadvantaged authorities by the central and relative needs shares. If they are thinking of putting that into reverse for the purpose of this calculation, then presumably the risk is that those disadvantaged authorities will not have the benefit that the formula for the current year has given them. I should be very grateful if the Minister could deal with that.
Paragraph 2.47 of the resource review consultation document states:
“In the current settlement we increased the proportion of formula grant distribution going to relative needs at the expense of the central allocation to support the most dependent authorities but made no change to relative resources”.
On the consultation, it states:
“Responses were mixed on this point and we have decided to look again at this issue prior to further consultation, when we will take a decision on whether, or not, to consult on any proposals”.
So the question is: are the Government going to consult and what are those proposals? I beg to move.
Lord Shipley
Perhaps I may intervene for a moment in relation to Amendment 37 to probe the meaning of the word “need”. I should like to raise an issue concerning exempt student households. It is becoming an increasingly serious matter on which I would appreciate the Minister’s guidance.
Student households are exempt from council tax. They are also exempt from business rates where it is a house in multiple occupation but owned by a landlord. The principle has been that councils get reimbursed from the national pot. In the past couple of years, that has not been happening as it should, and in some cases there is around a 25% deficit so that only around three-quarters of the income that would be expected is being received, yet local services are being provided without all the income that is necessary to pay for them.
I understand that the consultation that is taking place over the summer with local authorities will look at this issue, but I am seeking an assurance from the Minister that the matter will be taken very seriously. In the past, need has been taken to include full reimbursement of the loss because student housing is exempt.
Localism Bill
Debate between Lord McKenzie of Luton and Lord Shipley(13 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Shipley
My Lords, I agree with my noble friend Lord Jenkin on the need to be clearer on the gain to neighbourhoods and parishes from the community infrastructure levy. Whether that is done in the Bill, through guidance or by other means, it will be extremely important that local people in neighbourhood areas where development is taking place understand what the community gain might be as a consequence of that development.
My point is a parallel issue which relates to the duty to co-operate. It is implicit in the Bill that there is a duty to co-operate between councils on the community infrastructure levy. However, I am not certain that it is sufficiently explicit and in urban areas where there are boundaries between different local authorities, a development that could take place wholly in one council area might well impact upon the infrastructure and the well-being of one or more neighbouring council areas. To what extent should we make it explicit that there should be a duty to co-operate between local authorities on the community infrastructure levy where a development is taking place very close to a boundary? That will need to be clear, certainly by Third Reading, otherwise there could be a great deal of strain between local authorities over what a duty to co-operate over sustainable development actually means and how it is delivered on the ground.
Lord McKenzie of Luton
My Lords, we share some of the concerns expressed by the noble Lord, Lord Jenkin, and have some sympathy with his amendments. When we discussed this issue at Committee I thought we had established that, as previously structured, CIL gave quite a lot of scope for supporting local communities beyond what one might think of as the very strict interpretation of infrastructure, but this seems to be taking us a step further. The letter that I had from the noble Baroness was, I think, generally circulated and says:
“We are proposing amendments that would allow local authorities and parish and community councils to use this proportion of the funds to support development by providing infrastructure or addressing any other matter necessary to address the demands that new development places on the local area”.
This is potentially a very wide extension of what it was anticipated that CIL would be used for.
The noble Lord, Lord Shipley, raises a different point about what happens with adjoining authorities and how that fits together with the duty to co-operate. We also need to consider how this sort of formulation fits together with Clause 130, which we are going to discuss in due course. The noble Lord, Lord Jenkin, said that he would not go so far as to call this a bribe, but it is potentially a substantial inducement to an area to accept development and we need to reflect on that as well. Having expressed concerns about the possible dilution of funding for infrastructure, which is needed up and down our country, I pose the question that we raised when we covered it in Committee—my apologies to the Minister if he covered it—about the prospect of CIL being used for affordable housing. I am not sure where that discussion has gone, but there have been some real questions asked about the extension of CIL which takes it beyond its original intent. The new intent is not necessarily bad, as the noble Lord, Lord Jenkin, said, but we need to reflect on what it means for the funding that is available for infrastructure in an area.
Localism Bill
Debate between Lord McKenzie of Luton and Lord Shipley(13 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Shipley
My Lords, I will speak to this clause on behalf of the noble Lord, Lord Tope, and will address some of the principles that stand behind it. In practice, the clause continues a capping regime. Councils will not want to risk losing a referendum because there will be a significant rebilling cost. Clause 59, and Schedules 5 and 6, create a duty for a billing authority to determine, in line with principles set out by the Secretary of State, whether a proposed council tax increase is excessive. Authorities will be required to hold a local referendum on the proposed rise if it is deemed to be excessive.
The difficulty is that it should be for local people to determine whether they find a proposed council tax increase excessive rather than for the Secretary of State to decide what constitutes excessive. Local people should trigger the referendum, not the Secretary of State. Therefore, there is a strong case for saying that amendments to the Bill should be introduced that would limit the Secretary of State's power to determine what constitutes an excessive rate of council tax and would give that power instead to local people under proposals elsewhere in the Bill for holding local referendums so that they can decide what constitutes an excessive rate of council tax.
Secondly, councils, rather than the Secretary of State, ought to be able to decide when a referendum will be held and to decide the arrangements for it. We should also delete powers for the Secretary of State to make non-specific regulations on matters such as the question to be asked in the referendum, the allowable publicity accompanying that referendum and how votes are to be counted. We have already discussed the percentage levels required to trigger a referendum and it seems to me that this is an example of where we do not need to have the Secretary of State interfering with what local people could perfectly well handle for themselves.
There are two issues that I feel concerned about and I have raised them at previous stages of the Bill. When a billing authority is determining whether a council tax proposal is excessive it might be appropriate for a referendum to be held on whether the council tax level and increase proposed is deemed by some to be too small. True localism should mean that local people have the right to hold a referendum on whether the council tax might be raised higher than the level that the Secretary of State deems to be excessive. I do not propose that one should have a higher rate—simply that if you really want to implement localism it should lie within the power of local people to make that decision.
There is a further complication to this. Under the Bill, referendums can be held within electoral areas within a council area. It is inevitable that referendums will be held on issues that might require additional expenditure to be made within that area. It might be unreasonable to expect the whole of the council area to fund the additional increase. The increase could be for a specific local facility that might otherwise close down, such as a swimming pool that people would like to preserve that requires additional cash. At the moment parish councils have certain powers to raise additional money. We could see referendums being held to save local facilities such as the swimming pool where local people might be willing to pay for the facility and would wish a referendum to be held on generating the necessary resource.
This seems to strike at the very heart of localism. Ultimately, if we permit referendums to be held within one or more electoral areas of a council, logically those people should be allowed, as those who have a parish council are allowed, to vote to spend additional money. I speak from my perspective as a member of Newcastle City Council. Half of my ward has a parish council, which has the power to raise additional money, and the other half does not and is not able to raise additional money. That is a complication that will become very important.
The broader issue in terms of Clause 59 is whether it is for the Secretary of State to decide to hold a referendum or whether it is for local people to use the facilities that exist to generate that referendum.
Lord McKenzie of Luton
My Lords, we should thank the noble Lord, Lord Shipley, for introducing this clause stand part debate and for his very clear exposition of localism and what it means in terms of council tax. I agree with him that the provisions in the Bill amount to a capping regime. I am sure the Government will argue that local people do determine what is excessive if they support a referendum. That is a very narrow interpretation of the Bill. This is capping by another name.
We also have to acknowledge that successive Governments have reserved the right to limit increases in domestic taxation when they have been judged to be excessive. We certainly did as a Government, and I believe that the Conservative Government did. I am not sure whether the noble Lord, Lord Jenkin, is culpable as well. There are arguments about whether that is important for the overall management of the economy.
When the noble Lord, Lord Greaves, introduced his first amendment in our proceedings, he talked about localism being decisions being taken at the lowest possible level, but he acknowledged that there is a wider dimension that has to be taken into account in some instances. The impact assessment for the Bill—
Localism Bill
Debate between Lord McKenzie of Luton and Lord Shipley
Lord McKenzie of Luton
Amendment 32 introduces a new clause related to integrated transport authorities and passenger transport executives. The form of the clause should come as no surprise, as it was moved in exactly this form in Committee in the other place. Indeed, if we took it forward at Report, it would need some updating—for example, to touch on some of the issues we discussed earlier on Clause 5, and so on. In that debate, the Minister, Andrew Stunell, said:
“Integrated transport authorities and passenger transport executives are the responsibility of the Secretary of State for Transport. I am sure that he will be interested in the points that have been made, so I will ensure that the relevant parts of Hansard are drawn to his attention. I am sure that the appropriateness of the available powers is something that he will want to consider in light of the views of the sector and, more widely, of the local government community”.—[Official Report, Commons, Public Bill Committee on the Localism Bill, 10/3/11; col. 961.]
The purpose of retabling the amendment is to give the Minister the opportunity to give us an update.
Noble Lords will probably be pleased to know that I do not propose to go through the amendment line by line, but perhaps I could spend a few moments to explain what it would do and why for those who have not joined our debate before. The new clause would give the six integrated passenger transport authorities a general power in recognition that integrated transport authorities are single purpose authorities. The provisions have been drafted using the same structure as those setting up the general powers for fire and rescue authorities, but with changes to reflect the differences between integrated transport authorities and fire and rescue authorities. The six integrated transport authorities and their passenger transport executives represent the six largest city regions outside London, which are home to 11 million people. The integrated transport authorities and passenger transport executives are the strategic bodies that plan, promote, procure and provide the public transport networks on which those conurbations rely to keep them moving, and which are vital for their development.
The impact assessment on the general power of competence for fire and rescue authorities states:
“Stand-alone fire and rescue authorities will need a similar power”—
to that of local authorities—
“to address the lack of sufficient freedoms and flexibilities to do things that they might properly wish to do which could benefit or contribute to their purposes. Freeing up fire and rescue authorities by providing general powers in the same vein as for local authorities, will therefore … promote the radical devolution of power away from Westminster and Whitehall”.
It would therefore seem perverse, having discussed those powers, if integrated transport authorities were not seen to need similar powers to address the lack of freedoms and flexibilities that may affect what they may properly wish to do.
The major reason why integrated transport authorities require a general power is the straightforward fact that they want to deliver better services more efficiently through collaborative working, which will become increasingly important in current times. It is considered that, without a general power, the integrated transport authorities and their passenger transport executives will not have the legal compass that local authorities will enjoy. Services in the public sector are being challenged to do more with fewer resources and to work in different ways to deliver services. Transport authorities should be able to support growth through local enterprise partnerships, so their ability to work collaboratively across partners will be increasingly important as the new structures develop.
A functional general power would facilitate such working much more readily. It would put beyond doubt the legal uncertainty that might hold back innovative initiatives in metropolitan areas. In non-metropolitan areas, the transport function sits with the local authority, which will have the general power of competence, so there starts to be a divide between transport authorities that have a general power and those that do not.
A general power for the integrated transport authorities and their passenger transport executives would assist them in joint procurement, partnership work and innovative service provision. For example, the Government have said that they want the majority of public transport journeys to be made using smart ticketing by 2014, and they have provided passenger transport executives and Bristol, Nottingham and Leicester local authorities with funding to achieve that. The PTEs are working with Bristol, Nottingham and Leicester authorities on issues such as systems testing, data analysis and ticketing equipment to ensure that that government objective is met in a timely and cost-effective way. However, without any change to the general power of competence, local authorities in those three areas will have that power to engage in joint enterprises and deliver such programmes, but passenger transport executives will not. There are other similar reasons that could be advanced for why these general powers are needed.
My question to the Minister is: please can we have an update on whether the Government will support this general power for integrated transport executives? If the Government do not feel able to support that currently, perhaps the Minister can spell out why she believes that the powers of those transport authorities are sufficient as they stand. The detail of the clause would need some tidying up if we returned to it on Report, but I hope that we could do that with the assistance of the Government. I beg to move.
Lord Shipley
My Lords, I support the amendment. It is important that we understand the important role that ITAs and PTEs have in those metropolitan areas. I come from one of those areas. We have always had joint board arrangements, of which fire and rescue has been one, and there have been others. The ITA, and the PTE as part of the ITA, needs to have similar powers at least to fire and rescue authorities, although it is better to have a complete power of general competence. Perhaps I may give an example. The Government are keen to have smart-card operations across the country by 2014. That is being led by PTEs in the areas where PTEs have been directly financed. However, three councils—Nottingham, Leicester and Bristol—do not have PTEs, although they are financed for smart-card ticketing and supported by the PTEs from those other urban areas. Unless the Bill is amended those PTEs will not have a power of general competence, whereas the other areas will, as will those three councils. I think that there will be some complications in procurement policy unless that issue is addressed. It will be interesting to hear the Minister’s views on the situation because, as things stand, there appears to be an anomaly.