Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Woolmer of Leeds
Lord McKenzie of Luton
My Lords, it is a great pity that these proposed changes have come forward very late in the day. Certainly, for some of those not caught up in regulatory reform, we will have to unpick some of the intricacies of the Local Democracy, Economic Development and Construction Act 2009. Even with the aid of a Keeling schedule, that takes some time. I perhaps go further than the noble Lord, Lord Tyler, and say that, rather than preserve some right to have a further debate on Wednesday, we should be entitled to come back to this at Third Reading if necessary. A lot of new stuff has been introduced. I would certainly like to take the opportunity of reading what the noble Baroness has said on the record so that we can get our minds round all that. It is not absolutely clear in every respect.
As I understand it, in terms of the key provision, Amendment 62 will provide a fast track to the establishment of a combined authority. Amendments 63 and 64 concern the removal of geographical restrictions on EPBs and combined authorities, and Amendment 65 covers changes to existing economic prosperity boards. We see the benefits of being able to move more swiftly perhaps than circumstances hitherto have permitted, but we need to stand alongside that a caution about not abandoning parts of that process which have made a valuable contribution to the judgments that have been made today.
Amendment 62 would provide an override of the existing requirements of Section 109 to undertake a review and prepare and publish a scheme for combined authorities, which I think the noble Baroness confirmed. That would seem to reverse the current process so that the initiative is with the Secretary of State, who still has to make a judgment about whether a change would improve the exercise of statutory functions in the area. We have had introduced—I think for the first time in our consideration of this Bill—administrative law and what that requires in terms of consultation and other matters. I am bound to say that we need a little time to fully understand what all that entails. Even under the amendment,
“the Secretary of State must have regard to”—
perhaps the Minister can expand on that obligation—a Section 109 scheme if one has been published. If not, what is to underpin the Secretary of State’s judgments? The Minister went through a range of issues in making her presentation. We would certainly like the opportunity to study what is on the record in that respect.
There is the prospect of the Secretary of State consulting persons he considers appropriate, “if any”, and the constituent councils having to agree. But it is unclear what analysis or review the Secretary of State will look to in making that judgment. What is to stop the fast-track approach becoming the norm? Perhaps that is what is intended. Will the Minister confirm whether that is the intention in this regard and that the previous or existing process will now be replaced in total by this fast-track process? Clearly, some further information will come when we get the report of the DPC. We cannot reasonably conclude our deliberations without sight of that report and advice.
Amendment 63 deals with EPBs and Amendment 64 with combined authorities. They appear to address the same issue of geographical restrictions on what can be included in an area. For example, for combined authorities it relaxes the current requirements that the local government areas of a combined authority must be contiguous and that no area not in the combined authority can be surrounded by local authorities that are. As I think has been confirmed by the Minister, this would appear as a “doughnut” formation, or as a combined authority formed from areas that are geographically quite far apart. However, in applying the new rules, the Secretary of State must have regard to the likely effect of the new arrangements on the exercise of equivalent functions in any adjoining local government area. We have no detail on how this test is likely to be applied; perhaps the Minister will say more on that.
Generally, some flexibility on the geographical construction of the combined authority should be welcome, provided there is protection for those authorities that might be surrounded, for example. Given that we are on Report, I was about to say that this would perhaps have to be sorted out in another place, but on reflection I do not think that that is right. The noble Lord, Lord Tyler, is right that we should have a further opportunity to pick up these important issues on Report or at Third Reading. They may be fairly brief amendments, but they touch on the processes that have operated hitherto. To clarify: we are not trying to make life difficult in this respect, but we need to understand the detail of what is proposed and the safeguards that will be there to balance the speedier process that these amendments seek.
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.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Woolmer of Leeds
Lord Woolmer of Leeds (Lab)
My Lords, I am grateful to the Minister for her explanation but want to say a couple of things. First, I assume that these amendments will relate to each and every agreement that will be brought forward in due course in the House. Secondly, I was reassured that the document setting out the various details would be additional to the Explanatory Memorandum, which is notoriously modest in its explanations. It would be extremely helpful to me and to the Secondary Legislation Scrutiny Committee to have the reassurance that those reports will be thorough.
I hope that the Government are able to have all success in their ventures. As the debate has gone on over the weeks, I have become more convinced than I was early on that this could well lead to some genuine devolution initiatives. Noble Lords may think that I was rather cynical at the start, but the drive and intention behind it, not least from the noble Lord, Lord Heseltine, and the Minister, is greatly reassuring.
I hope that these reports will be full and genuinely helpful to the House, because those will be the reports that will persuade both Houses that the devolution proposals are substantial and well founded. Of course only experience will show that as the reality, but nevertheless the parliamentary process is important because that is what will carry opinion with the Government and in the local communities.
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.
Cities and Local Government Devolution Bill [HL]
Debate between Lord McKenzie of Luton and Lord Woolmer of Leeds
Lord McKenzie of Luton (Lab)
My Lords, we have Amendments 44G and 45A in this group, to which I shall speak first. Amendment 44G is an attempt to address in part the concerns expressed by the Delegated Powers and Regulatory Reform Committee at paragraph 17 of its first report this Session. Again drawing attention to the wide powers in Clause 10, the committee states:
“We are not convinced that requiring the consent of the local authorities affected is by itself a sufficient control over the very wide powers conferred by clause 10. In our view the delegation is inappropriate without the exercise of the powers being made subject to similar constraints and protections as those which apply to the establishment of a combined authority under Part 6 of the 2009 Act”.
The amendment that we are talking about requires that when exercising the power under Clause 10 the Secretary of State must,
“reflect the identities and interests of local communities and to secure effective and convenient local government”.
It is difficult to see why the Government should object to any of that. Since then, and only today, just before the Committee met, we had the opportunity to see the Government’s reply to the committee’s deliberations, in which the Minister says that these regulations are not of themselves establishing new structures or governance arrangements but modifying where all the councils concerned consent to processes for merging authorities, creating unitary authorities and reducing the number of councillors to fast-track these processes. This is not a sufficient distinction to say that we should eschew the recognition that these processes should reflect the identities and interests of local government.
Amendment 45A is also addressed by the DPRR report and would remove the subsection that removes the denial of the hybrid procedure. We know that this is not unusual in legislation. Indeed, in the case of Ebbsfleet, for a limited period, with our reluctant agreement, it was instigated, but there is normally, surely, an alternative mandatory consultation process that is laid down as a substitute. That is what happened in the case of Ebbsfleet. Where is the process in that situation? On what basis is the hybrid instrument process, if applicable, to be denied if there is no alternative procedure on offer?
Amendment 44F, in the name of the noble Lord, Lord Shipley, seems entirely reasonable to us, and the Minister may say whether it is necessary to provide specifically for this in legislation. Are not associate membership arrangements already in operation in certain circumstances?
Amendment 46A, in the name of the noble Lord, Lord Shipley, in part mirrors an early amendment that we tabled. We have no great objection to the establishment of an independent commission to review and advise on the progress of devolution, but we need to be mindful of not creating another tier of bureaucracy and a process that might drive uniformity on these matters. My noble friend Lady Royall is right to focus on how devolution is working for communities and individuals. Putting decision-making and policy formation closer to communities and individuals and getting their engagement is one of the fundamental reasons for embarking on this process, or should be. Of course, it will be an evolving process and nowhere near complete in six months, although we need to give it impetus from the beginning.
As for the issues raised by my noble friend Lord Liddle, I fully understand the desire to have a single-tier or unitary authority. I know that in our own local case in Luton it has transformed the opportunity to deliver and join up services in the town. The difficulty that we face, whether it is a county council seeking unitary status or the reverse, is that just one council holding out and not agreeing negates the opportunity of Clause 10, but I say to my noble friend that it operates in two directions. If our noble friend Lady Hollis were here she would say in no uncertain terms that having the need for unanimity has destroyed the opportunity for Norwich to get unitary status.
I think I may have a way through this, and perhaps the Minister might comment. I am not sure that the provisions are still in operation, but about six years ago there were successful attempts to get unitary status for Exeter and Norwich. The enlightened Government of the day supported it, but unfortunately it was judicially reviewed, and when the coalition Government—the coalition of Liberal Democrats and Conservatives—came in they overturned the decision. There is a serious point here: there are big towns and significant cities, such as Cambridge, Norwich and Exeter, that believe that any decent economic analysis shows that they can deliver more effectively for their communities if they are part of a unitary authority. In a sense, my noble friend’s amendment to deny the need for unanimity would have its problem in one direction or the other.
I entirely accept the point that we would not want to leave it up to the Secretary of State in any unfettered way, but should we not be thinking perhaps of establishing some criteria such as those that were certainly applicable at that time, as I recall: an assessment of whether the cities involved could benefit from unitary status and whether it added value to their communities? Certainly, that was the initial assessment in the case of Norwich and Exeter. Perhaps revisiting some such criteria, if those procedures are not still around, might be worth while. I accept entirely that devolution to county regions is party policy, and heaven forfend that I should not support party policy. We can see the benefit of unitary status for counties, but it is a two-way street and it can have an impact in the other direction.
My noble friend referred to “tiny district councils” being largely powerless, but they are seemingly not so powerless when they can stop a unitary authority. However, we are not talking about tiny district councils; we are talking about significant district councils that are being denied the opportunity of unitary status and all that that could bring, just as it could to a unitary county council in Cumbria.
Lord Woolmer of Leeds (Lab)
My Lords, I will address this issue in relation to combined authorities and take up the points raised by my noble friend Lady Royall. In relation to combined authorities, in reality a lot of the deals are being done in discussions between leaders of authorities, the department and the Treasury. There is a danger of a democratic deficit: that is, the deals that are being done are not necessarily devolution with the wholesale endorsement and support of the wider population. They are being done behind closed doors, with detailed and close negotiations, and afterwards people are being invited to accept that—indeed, not only to accept that but to accept an elected mayor, which in some cases fairly recently they have rejected.
So there is a problem: in order to make haste with the underlying drive of this legislation, there is a strong temptation to consult and persuade people after the event rather than beforehand. That is probably inevitable. However, I say to my colleagues, certainly in my part of the world, that ensuring that people accept this, agree with it and are enthusiastic about it will be an enormous job. They will be faced by what is pretty well a take it or leave it situation. They will not have played a great part in this. Of course, their elected representatives will have done—that is, indirect democracy—but that does not necessarily mean that people at large will have done. I said earlier that I am very enthusiastic about a combined authority for the whole of Yorkshire, which has 5 million people. However, it is enormously difficult to involve 5 million people beforehand and to find out whether they agree. Indeed, there will always be people who strongly disagree.
Therefore, there is a problem here that not merely the leaders of authorities but government Ministers have to deal with. To say to people, “We’ve done a deal behind closed doors and this is what the devolution package looks like”, is hardly taking people with us. I say to my colleagues around Yorkshire—we have the former leader of Sheffield here—that there will be a big job to do in making the move from doing a deal with the Government to forming a large combined authority and it being something that people are enthusiastic about. I hope that in the fullness of time this will have the enthusiastic endorsement of the wider electorate and that they will be given an opportunity to express their opinion at the ballot box. There is no suggestion that there should be a referendum on a large combined authority or on a mayor, so there will be, in my terms, a democratic deficit. People will have to work hard to ensure that there is gradual and significant support for the driving aim of this legislation in the large metropolitan areas.