Non-Domestic Rating Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

3rd reading
Monday 16th October 2023 Lords Chamber

[Lord Shipley (LD)]

My Lords, I thank the Minister very much for her conclusion to this Bill. I extend our thanks also to the noble Baroness, Lady Scott of Bybrook. As she said, the Bill has broad support in your Lordships’ Chamber. I am grateful for the Minister’s assertion that we have introduced a pragmatic approach to the content of the Bill, for I think it is true—we have done just that. I was particularly pleased to hear the Minister say that the Government have a commitment to monitor what actually happens. I know that, on all sides of the House, that will be very gratefully received.

The Bill has a number of very welcome changes: in particular, more regular revaluations, which will be a big help. However, problems remain. Crucially, the level of business rates is too high. Business rates used to be around half the rental level of a property; they are now almost equal. This financial burden is putting a huge pressure on many businesses, not least in the retail sector. I said on Report and at other stages of the Bill that small business rate relief should be further extended, particularly to assist the high street. I also think the Government should not be increasing the level of business rates next year by the rate of inflation.

I hope the Government will take on board comments made on all sides of the House about the need to review the non-domestic rates valuation process itself for its accuracy, its communications and its explanations to business rate payers. The noble Earl, Lord Lytton, has been particularly concerned about the issue of material change of circumstance. There is a new definition and there is a view that I share with the noble Earl, Lord Lytton, that it is too narrow. I am reconciled to what the Minister has said, which is that they will keep it under review.

Thirdly, the Government need to keep a close eye on the level of payments made by warehouses when those warehouses have a retail purpose.

In conclusion, I think that the NDR system is broken. This Bill is a welcome improvement, but it is not a solution. Business rates cannot just be a means of revenue raising by the Treasury. I hope that this Government, and any future Government, will simply bear in mind that we need a major reform of the business rates system.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for her opening remarks. I also thank the noble Baroness, Lady Scott, for all her work on the Bill; I wish her well from our Benches and we look forward to seeing her back in her place very shortly.

As others have done, I thank all noble Lords who took part in the debates on the Bill. It is a short Bill, but it is quite complex in areas, so it has been incredibly helpful to have real expertise and insight from noble Lords—such as the noble Lord, Lord Thurlow, and the noble Earl, Lord Lytton, who have been mentioned—not only for Government Ministers but for those of us leading on the Opposition Benches. It was good to be able to understand the implications of the Bill through the expertise noble Lords brought to the House. I agree with the noble Lord, Lord Shipley, that, having had that, the Bill is now in a better place than it was when it began in this House. It is an important Bill, and it is important that we improve the situation of business rates from how they currently stand. However, I also agree with the noble Lord, Lord Shipley, that there are still a few outstanding issues; that is why it is important that the Government keep their commitment to monitoring the outcomes of the Bill, particularly on the timescales of revaluation. As we discussed in Committee, some of us would have liked to see revaluation done more regularly, so it is important that we keep an eye on that.

As we discussed in the debates on the Levelling-up and Regeneration Bill, as well as on this Bill, there are a lot of concerns about our high streets and our small businesses on them—and business rates are a critical part of how they are supported. So, as we are also coming to the end of the Levelling-up and Regeneration Bill, I hope that, going forward, the Government will still consider different ways in which we can continue to support our high streets and small businesses. Having said that, we were pleased to support the Bill and we welcome it moving forward.

Non-Domestic Rating Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

Report stage
Tuesday 19th September 2023 Lords Chamber

[Lord Shipley (LD)]

My Lords, I move Amendment 5 in my name, and will speak also to Amendments 6 and 7, which would, in effect, do the same thing. My name also appears on Amendment 15, which is in the name of the noble Baroness, Lady Hayman of Ullock. I will leave her to speak mostly to that amendment. It is about review and the point I made a moment ago—that we have to keep reviewing business rates and how they operate because of the challenges currently faced.

I have tabled these amendments so that we can hear again from the Government the justification for a three-year review, as opposed to the two-year review which I would prefer. I prefer two years because it has many advantages. It would be more efficient and reflect changes in valuations more quickly. It could reduce work and it would be really good if it could be done.

I understand that there is already a reduction to three years and to reduce it further would be pretty hard to do as quickly as it would have to be done. Therefore, I would probably accept the Government’s advice that they are mindful of the need to move to two years, that there are major advantages to it and that that is the sense of the journey they are following. It would be very helpful. I have tabled Amendments 5, 6 and 7 so that the Minister can respond and confirm again that it is the intention to get towards a system that does a business rates review every two years. I beg to move.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Shipley, for his amendments. This group is all about revaluations and reviews of rates. The first three amendments, which the noble Lord, Lord Shipley, has introduced, would change the timeframe for compiling non-domestic rating lists. I thank the noble Lord, Lord Thurlow, for his support and encouragement for my Amendment 15, and I support his Amendment 19. Those amendments are looking for broader reviews of the business rates policy. The intention is to look at how frequently we should review our business rates.

One reason we have concerns about the current system—and it is good that the Government have looked at this and reduced it to a certain extent—is that if reviews are done only over a certain period, the rest of the system needs to be fit for purpose. We are concerned that the current system makes it extremely hard for businesses to appeal their assessments. If you have an assessment that is high, it is difficult to appeal and to manage that, which creates difficulties, particularly for small businesses. The whole system needs to be much more fit for purpose if it is to work for businesses and for local authorities.

The Labour Party’s policy is to scrap business rates altogether and to replace the current system with one which works to incentivise investment. We think there should be more frequent revaluations. If property values drop for particular reasons outside a business’s control, there should be the ability to do more frequent revaluations. Where businesses are caught out in this way, bills should be reduced. There should be incentives and rewards for businesses which, for example, move into and invest in empty properties. It is about encouragement. Earlier, we talked about green improvements and energy efficiency and how you encourage businesses to invest in this way. The whole system needs to be a bit more nimble and more effective in supporting small businesses. The Government need to work with businesses, people working for those businesses and public bodies in order to get a system that is genuinely fit for purpose and supports local businesses and local authorities in the way it needs to.

Levelling-up and Regeneration Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

Report stage
Thursday 13th July 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, we have one amendment in this group, on the fair funding review. The review document was first published some time ago, back in December 2017. We are concerned that virtually nothing has happened in those five, nearly six, years to bring about its implementation.

We know that local government needs its core funding to have long-term security in order to make proper budgetary decisions and to ensure that it can meet all its obligations. So, the fact that reforms to local government funding have been delayed time and again is of great concern. We are particularly concerned now—we were initially told that they were being delayed until April 2023, but they now seem to be delayed beyond the next general election. For some authorities, the delay will simply postpone an inevitable reduction in funding, which is concerning in itself, but for others it could mean waiting up to at least two more years for funding to come close to catching up with their needs.

I stress that what we are talking about here is the critical core funding; it is not related to the other different pots the Government have for councils to bid and apply for. It is the central, critical core funding that councils receive.

What is the Government’s expectation about when these funding reforms will be implemented? Is it going to be in 2026-27? Is it likely, by any chance, to come in earlier, or could it even be later? It is important that local government has some sort of clear idea about when to expect it. Is the Minister able to give any oversight on the factors likely to govern and influence the timing of implementation? What kind of package of funding reforms is currently under consideration within the fair funding review?

Given that it has been quite a long time—more than five years, coming up to six—do the Minister and his department believe that the proposals which came out then are still fit for purpose? Are they flexible enough to deal with the shifts in available data and the different council service models that have come forward as a result of Covid-19? There have been quite a number of changes and responses to the pandemic.

We tabled this amendment because we feel that the Government need to act urgently in this area and to basically just get on with it. Our amendment would ensure that within a year of the passing of this Act, the Secretary of State must publish the fair funding review, which would include setting out the baseline funding allocations for local authorities. We believe this is necessary to bring to an end so much uncertainty for local authority budgeting and to allow our councils to plan and deliver the services our communities need. I look forward to the Minister’s assurances.

[Lord Shipley (LD)]

My Lords, my Amendment 66 would repeal Section 13 of the Elections Act 2022. Its aim is to reinstate the supplementary vote system for police and crime commissioners in England and Wales, the Mayor of London, combined authority mayors and local authority mayors in England. I said earlier today that there was an excess of centralisation in this Bill and other structures that have been created around combined authorities.

Levelling-up and Regeneration Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

Report stage
Thursday 13th July 2023 Lords Chamber

[Lord Shipley (LD)]

My Lords, I have two amendments in this group. It is not my intention to speak at length about them or to test the opinion of the House.

I have a great concern about the role of audit. I do not think that the existence of Oflog is sufficient to address the problems that we have experienced recently around processes in local government being inadequate to prevent excessive expenditure—particularly capital expenditure—which has spiralled out of control. There is a big issue for local authorities and combined authorities to address in terms of their ability to undertake an audit effectively. We are aware that a number of local authorities have not had their audits signed off for some time. There seems to be a capacity problem across local government in terms of the audit function.

All that said, my amendment is not a matter on which I will divide the House. I just hope that Ministers will try to address the issue of capacity in the audit function on audit committees where they exist. There will be audit committees for a CCA. I would like to think that enough expertise will be there to do the job properly. Simply to have at least one member is not enough. I have proposed a minimum of three. This is very important. When councillors are members of an audit committee, they have many demands on their time. What is required is a more professional focus of those who are trained in the area.

The second amendment relates to the ability of an audit committee, where it exists, to publish a report. At the moment, it is required to report to the CCA. I do not know what will happen if the CCA decides that it does not like it or does not want to publish it. Does the CCA have the power to prevent publication? I hope to hear from the Minister that something can be done to reassure me that an audit committee of a CCA can publish a report, even if the CCA does not wish it to do so, where the audit committee believes it to be in the public interest.

These two amendments are as simple as that. I am very happy for the Minister to take the issue away, to see what might happen when some of these statutory instruments start to come through your Lordships’ House. I beg to move Amendment 32.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall be very brief. I want to express our support for the amendments of the noble Lord, Lord Shipley, and to reiterate our concerns around audit and Oflog and how that will operate within its responsibilities. We need to ensure that there is a sufficient set-up to deal with the huge problems facing local authorities regarding audit. We know that some authorities have not had an audit for years, so this is clearly a real problem. We thank the noble Lord for tabling the amendments and hope that the Minister and the department will look carefully at his concerns and constructive suggestions, as we really need to resolve this issue.

[Earl Howe (Con)]

My Lords, Amendments 32 and 33 in the name of the noble Lord, Lord Shipley, seek to increase the transparency of CCAs. Greater functions and funding must come with strong accountability, but that must go hand in hand with decisions being made at the most local level possible. I can deal with this quite briefly and, I hope, to the noble Lord’s satisfaction.

As the Bill is drafted, a CCA’s audit committee can appoint three independent members, should it wish to, but it should be a matter for the CCA to decide exactly how many above one. The regulations that will establish the combined county authorities will set out the audit committee arrangements. They will provide that, where practicable, the membership of the audit committee reflects the political balance of the constituent councils of the combined county authority. Membership may not include any officer from the combined county authority or the combined county authority’s constituent councils. The regulations will provide for audit committees to appoint at least one independent person.

As regards transparency, in addition, Part VA of the Local Government Act 1972 provides powers to require the publication of reports of a committee or sub-committee of a principal council, including audit committees. Schedule 4 to this Bill already includes a consequential amendment to apply Part VA to CCAs.

I hope that that is helpful. The noble Lord has already kindly said that he will not press his amendment, but I hope that what I have said will reassure him.

Non-Domestic Rating Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

Committee stage
Monday 3rd July 2023 Grand Committee

[Lord Shipley (LD)]

My name appears on three of the amendments in this group. I think that the case made by the noble Lord, Lord Thurlow, is very strong. We have to be certain. I believe a reduction from three years to two years—and, in an ideal world, to one year—would be the right thing to do.

I should state for the Committee stage, however long that lasts, that I am a vice-president of the Local Government Association.

I am convinced that currently revaluations are too infrequent. The Government have accepted that case. We are going to three years, and that is indeed better, but to reduce appeals and to ensure a fairer system requires two years or fewer. Like my noble friend Lady Pinnock, I will be very interested to know why we cannot draw on the comparator of the Netherlands since it does a revaluation every year.

There are clearly advantages to more frequent revaluations. We will have fewer appeals because the valuation would be more accurate. It would be fairer to businesses and reduce complaints about the system. I read very carefully the letter the Minister wrote after Second Reading, but it is not clear to me that there are any administrative barriers to moving from three years to two years.

We support Amendments 8 and 10, which suggest that the Government introduce a change to two-year revaluation or to one-year revaluation by order, as long as the affirmative procedure is used. As I said a moment ago, I think the points made by the noble Lord, Lord Thurlow, matter. I hope the Government will pay particular attention to Amendment 12 because it would enable us to be certain that it would not be a mistake to move to two years. We are sufficiently open to say that we want to go to two years and would like to go to one year, but we are very happy to build in a timescale which enables that to happen securely.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Pinnock, for introducing this group with Amendment 7, which seeks to change the Bill so that lists must be produced every two years instead of three. Today’s discussion has demonstrated that noble Lords think that this needs to be revisited and that perhaps three years is too long.

I am quite interested in Amendment 9 in the name of the noble Earl, Lord Lytton, which would allow SIs to be introduced to change it to one or two years. Bringing in flexibility to adopt a shorter cycle without that kind of prescription is a really interesting idea and approach. In principle, we would support that; my only concern is that the SI procedure has not exactly gone entirely smoothly in recent years. To get our full support to move in that direction, we would need to ensure that SIs are managed better than they have been recently.

The noble Baroness, Lady Pinnock, made some important points about the need for business confidence regarding valuations. That is incredibly important, particularly given the uncertainty resulting from inflation, various costs—of energy, for example—going through the roof, the challenges following the pandemic, the business rate holidays that have moved or not moved, and the differences resulting from where in the country you may be. None of that helps with certainty for businesses, particularly those that have retail in different parts of the country.

Another really good point was made about the fact that a small but perfect group is taking part in these discussions. Here we have noble Lords with real and practical experience and knowledge, which I hope will be helpful as we move through Committee.

The Chartered Institute of Taxation has agreed that moving initially to three-year revaluations would provide a balance between the administrative costs and the need for regular revaluation to reflect the economic conditions of business. But it also said that, given the rapidity of changes in business and shopping practices, the Government should consider a phased approach to achieving more frequent revaluations, and that this should remain under evaluation. Given the different amendments we have today and the discussions that we have had, will the Minister consider taking back to her department the introduction of a phased approach? I know that in the letter to noble Lords following Second Reading, she said that the Government will

“carefully consider the case for even greater frequency of revaluations once the new system changes have bedded in”.

That brings us to the point made by the noble Lord, Lord Thurlow, who suggested that waiting for that three-year cycle to bed in might be very helpful. He made the point that we need to listen to the experts and advisory groups and make sure that we get this right, because anything over two years goes out of date very quickly. The Labour Party position is that we should have more frequent valuations. We have talked about them being annual, but of course this has to be right, and it has to work for business.

Finally, on Amendment 14, tabled by the noble Earl, Lord Lytton, on the abolition of downward caps, it is concerning that the downward caps can prevent savings being passed on to businesses and could mean that they unnecessarily pay more in business rates. It is an important amendment, and I would be interested to hear what reassurances the Minister can give the noble Earl.

--- Later in debate ---

[Lord Shipley (LD)]

My Lords, my name is on Amendments 28, 33 and 34 in this group. I will come to the accreditation of rating advisers in a moment.

There are a range of issues here which relate to the performance of the Valuation Office Agency. I agree entirely with all that the noble Earl, Lord Lytton, has said about the amendment to which his name is attached and with Amendment 15 in the name of the noble Lord, Lord Thurlow, which is about the proposed requirement on the Valuation Office Agency to reveal rental comparables and the evidence used in arriving at a rateable value. A lot of these issues meet the test of reasonable common sense. If I were challenging a business rates bill or valuation, I would want to be certain that it was at the correct level.

The amendments in my name relate to annual reporting and, jointly with the noble Baroness, Lady Hayman of Ullock, to whether the Valuation Office Agency has a problem with its resourcing. We need to be clear whether it has a problem and cannot do things because it does not have the resources. However, the principle that this group of amendments tries to establish is that the Valuation Office Agency should meet the same performance standards that it requires of business rate payers. It should have a duty to provide information requested, in particular comparable evidence on valuations, as I said earlier. That comment relates to Amendments 15 and 16.

It is very important that the burden of the regulatory requirements on business rate payers is re-examined to make sure that all that business rate payers are now being asked to do is valid. It is said that all the proposed increases in workload are required because of the reduction of the valuation time period from five years to three. I am unconvinced by that and I hope that the Minister might be able to explain why that statement applies. Maybe, as I said a moment ago, it relates to resources. However, the Valuation Office Agency should meet the same performance standards that it requires of business rate payers. That is a very important principle.

My Amendment 34 relates to the Secretary of State being required to consult on the benefits and practicability of a system of accreditation for rating advisers. It seeks to explore an avenue for combating the rogue and unprofessional practices of some rating advisers. It is a simple issue. The new duty to notify will give rise to demand for professional help among business rate payers and, therefore, a serious risk of there being a rise in unqualified advisers offering services, so I conclude that there should be a licensing or accreditation system. At the very least, the Government should consult on that.

The context is simple: there is to be more work for business rate payers, the system is more complex, more will seek professional help and, when they do so, they will expect expert advice. If they do not get expert advice and mistakes are made which perhaps cost the business rate payer a substantial sum as a consequence, whose fault will that be? Of course, the immediate fault will not lie with the Government or the Valuation Office Agency, but behind that failure will be the fact that the Government could have done something to ensure that those who are giving advice are competent to do so.

This is simply a proposal that the Government set up a consultation for a system of accreditation. I hope that the Minister will take it seriously; it is a big issue. The changes in the Bill are welcome in so many ways but, as the noble Earl, Lord Lytton, said a moment ago, there is a danger of unintended consequences, which will cause some to feel that they have not been properly attended to. Setting up a consultation on the issue of accreditation of advisers seems an appropriate measure that the Government could take.

[Baroness Hayman of Ullock (Lab)]

My Lords, as we have just heard, I have Amendment 28 in this group. I thank the noble Lord, Lord Shipley, for his support for my amendment. We tabled this because we are concerned that the VOA may not be sufficiently resourced, particularly as the Bill gives the agency additional responsibilities. The noble Lord, Lord Shipley, has clearly expressed many of the concerns behind the amendment.

I looked at some recent data about the number of staff employed by the agency. The latest figures that I could find showed that it has a full-time equivalent of 3,698 staff, which is not huge, to be honest, particularly as a large number of new responsibilities is being brought its way. The global property consultancy, Colliers International, has described the Government’s plan to reduce the number of VOA offices from 56 to 26 as “a shambles”, and said that it will be a

“nightmare for businesses wanting to appeal their business rates”.

That is another reason why I was concerned enough to table this amendment.

We also know that there have been problems with the VOA managing the number of appeals and the time taken for resolution. I very much support what the noble Lord, Lord Thurlow, said in his excellent introduction to this debate, about the importance of transparency. He also talked about the number of challenges—30%—resulting in reduction. Clearly, that is too high and needs to be addressed—and the VOA needs sufficient resources to be able to do so.

We also know that, often, the number of challenges and the time taken for resolution relate to the number of rogue agents, many of which want to make a fast buck out of this. That is why we support Amendment 34 in the name of the noble Lord, Lord Shipley, which looks to address this. Again, we had discussions about it at Second Reading. We support his amendment and that of the noble Baroness, Lady Pinnock, in this group. In the letter that the Minister sent to noble Lords after Second Reading, she acknowledged that rogue agents need to be looked at and that this would be part of a government consultation. I hope that the Government will take this seriously enough to consider action on this following the consultation, because it seems genuinely to be a problem.

We very much support what Amendments 15 and 17, in the name of the noble Lord, Lord Thurlow, are trying to do to increase transparency in the revaluation process. We hope that that transparency would also reduce the number of appeals, as the noble Lord so eloquently said. Amendment 16, tabled by the noble Earl, Lord Lytton, would also increase transparency, and we would be happy to support it. Clearly, increasing transparency is important, but we have to be careful that amendments we put down on transparency do not have the unintended consequence of adding to the valuation office’s workload without it having sufficient resources—this comes back full circle to what I said at the beginning.

There is also the risk of a major bottleneck in the system, through the new online portal. It would be good to have reassurances from the Minister about how that will be resourced and managed. It is human nature that a large proportion of ratepayers will put in requests for their rental evidence soon after the 1 April date, when the new rating system is published. It would be helpful if the Minister could give assurances that the VOA will be able to respond in time to allow ratepayers and their agents to construct and submit challenges by 30 September—the six-month deadline—because that six-month window for a challenge is a fundamental change to the rating system. We need greater clarity and certainty about exactly how that window will operate, particularly in relation to new tenants and the changes in the list that occur during and after the six-month window. Where is that flexibility?

The Bill states that a ratepayer must provide “annual confirmation” that they have, first, provided “all notifiable information required” or, secondly, that they are “not required to provide” any such notifiable information. Is this confirmation likely to be digital, to fit in with the online system? Will accessible formats be reduced, and will any mitigating circumstances be considered, if a person is unable to complete that confirmation?

As the noble Earl, Lord Lytton, described it, his Amendments 18 to 20 remove the requirements for the annual return. He talked about duplication and unnecessary returns, and it would be helpful if the Minister could provide clarification on that, because a number of changes to how this is done are coming in, and it is important that it works smoothly from the start.

Levelling-up and Regeneration Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

Committee stage
Monday 13th March 2023 Lords Chamber

[Lord Shipley (LD)]

I rise to speak to Amendments 155 and 156 in my name. These are probing amendments because I think it is very important that the Government explain their intentions. Amendment 155 provides that non-constituent members of the combined authority are not able to vote, given their status, and Amendment 156 provides that associate members of a combined authority are not able to vote, given their status. On a previous day in Committee we addressed this issue, in part. However, the Government need to undertake some mature reflection about what is proposed here.

Giving a vote to somebody who is not a full member of a combined authority is unwise. My amendments provide that there should be no vote for anybody who is not a full member of the authority. The principle is that full members are voting members, and voting members are full members, but you cannot have full voting members when they are not full constituent members, as opposed to associate members, of the authority.

The voting structure between counties and districts as explained in the Bill would provide a route for resolving any impasse that might arise if votes were allocated on the basis of population. Of course, a county would have exactly 50% of the votes. If all the district councils voted against the county—one hopes it does not come to that—there would have to be some kind of system for a casting vote. The mayor would seem to be the way forward.

After reflecting on what we have been saying on previous days in Committee, to me it seems that district councils, which are responsible for planning and economic development matters, ought to be full members of a CCA. That seems to me to be the principle. It should not be at the discretion of the CCA, which does not have a district council member, to simply award a vote to that district council member when other district council members may not have a vote because, as the noble Earl, Lord Howe, said on the previous day in Committee, when giving a vote to one non-constituent member or to an associate member, it does not follow that other associate or non-constituent members would have a vote.

So this is a probing amendment. It is complicated; I understand that. When in due course we reach Report, I just hope that the Government will be prepared to examine the structure they have proposed here. I have come to the conclusion that they should permit district councils within a CCA area to become full members. At that point, those full members would have a right to a full vote under their own terms of membership. I hope very much that the Minister will be able to respond to that, so that we can get a better feel of what we need to do on Report to bring in further clarification on this matter.

[Baroness Hayman of Ullock (Lab)]

My Lords, we have a couple of amendments in this group, one in my name and one in the name of my noble friend Lady Taylor of Stevenage. First, Amendment 73 in my noble friend’s name would mean that a non-constituent member ceases to be a member when they form part of a different CCA.

We are aware that the Local Government Association has expressed concerns about this amendment. It has said that local areas should be able to “look both ways”—in other words, be a non-constituent member of more than one authority—if they have close economic or cultural ties with more than one combined authority or devolution deal area. It has also expressed concerns about the fact that it would set a precedent, contrary to the current plans for the city of York, which is currently a non-constituent member of the West Yorkshire Combined Authority but would become a member of the new York and North Yorkshire mayoral combined authority.

I want to explain the thinking behind why we tabled this amendment, which is, of course, a probing amendment. It is of course understandable that local authority non-constituent members may wish to be part of more than one CCA. However, we believe, first, that district councils should be constituent, not non-constituent, members of a CCA, to ensure that they can play a full part in decision-making for their area—as other noble Lords have just said—and that this would include any budgetary and spatial development issues, and, secondly, that therefore they could then be a non-constituent member only in a CCA that was not their primary CCA.

We believe it must surely be the case that membership of a CCA is implicitly determined by the geography of an area. If it is the intention of the Secretary of State to have a pattern of overlapping CCAs across the country, will this not complicate the structure of local government rather than simplify and declutter the picture, which the Government have said they want to achieve?

Further to this, if we then have overlapping areas that are both combined mayoral authorities, to which mayor do the people of an area represented on more than one CCA relate? Can the Minister in his response clarify whether the population of that area get a vote in both mayoral elections, which of the mayors is responsible for delivering the economic development and/or regeneration of their area, and who is accountable?

This clause is predicated on the assumption that district council members are simply co-opted, junior partners in CCAs with no voting rights and only a passing interest in sitting in on meetings that they are not actively participating in. As has been said in debates on earlier amendments, we feel that this is, frankly, an insult to district councils.

As I said, my noble friend’s amendment is intended to probe why the Government appear to have set their face so firmly against the inclusion of district councils. Instead, we believe they should be at the heart of decision-making in CCAs since, as the noble Lord, Lord Shipley, said, they have powers over planning and economic development, not to mention that they are the councils with the highest percentage of public support. We strongly believe that they should be able to be full members.

Levelling-up and Regeneration Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

Committee stage
Monday 27th February 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, in moving Amendment 66 I will speak also to a number of amendments in this group in my name and that of my noble friend Lady Taylor of Stevenage.

Amendment 66 would require an environmental impact assessment to be published following the establishment of a CCA. We have heard in previous debates that the Bill will create a new model of combined authority through county deals, which will provide local leaders with powers to enhance local accountability, join up services and provide transparent decision-making to rejuvenate their communities. Although this is clearly an excellent ambition, previous debates have also demonstrated that there are many unknowns about how things are going to happen, particularly in a practical way, and what the impacts will be.

An environmental impact assessment would ensure that the likely environmental effects of any decisions are fully understood and then properly considered. An EIA would assess the direct and indirect impact based on a wide range of environmental factors—and it is a wide range, which is why an EIA must be considered and published. It could cover population and human health, biodiversity, land and soil, water, air, climate, landscape, material assets and cultural heritage. There is a lot here to be thought about. It is important, particularly given that we do not believe, as others have said in the previous debates around emissions, that the environment has been properly considered as one of the missions; it is not properly built upon throughout the Bill.

Amendment 74, tabled by my noble friend Lady Taylor of Stevenage, asks the Government to define and clarify the purpose of non-constituent members under Clauses 9 and 10, which relate to the appointment of the non-constituent and associate members of a CCA respectively. Our concern is that it is not clear whether there is to be any further guidance on whether certain types of non-constituent or associate members will be prescribed by the Secretary of State or recommended in further guidance, or whether it is entirely for the CCA to determine this class of membership according to what it believes local needs to be; for example, whether an ICS or a hospital trust is invited—because a major priority is to tackle health inequalities—or whether it is felt to be important locally that the local enterprise partnership be a non-constituent member to make a link with economic growth. Clarification on that from the Minister would be very helpful.

We have concerns that Clauses 9 and 10 appear to be qualified by Clause 11, which gives significant powers to the Secretary of State to make regulations in relation to non-constituent members. These include the number of non-constituent members; the appointment, disqualification and resignation, or even removal, of non-constituent members; the appointment of a substitute member to act in place of a constituent member; the maximum number of non-constituent members; and the things that may or may not be done by a non-constituent member. There are also equivalent Secretary of State powers relating to associate members. A circumstance could be imagined where, if the Secretary of State took such powers, the outcomes could end up being the exact opposite of the localism and devolution that the Bill purports to enshrine.

That is our big concern with these clauses, and why the amendment seeks clarification and further definition relating to the role of non-constituent and associate constituent members of the CCA. It is important to understand this properly. We do not want any part of the Bill to start pulling powers back centrally when the Government appear to want the exact opposite.

Amendment 76 in my name carries on from this. It would mean that a CCA could request that regulations are introduced in relation to it. Again, it is about the control that the CCA itself has when looking at regulations and at how it needs to operate and behave effectively for its local community, rather than everything being driven centrally by the Secretary of State.

Amendment 86, from my noble friend Lady Taylor, means that an annual statement must be published to show how much funding is given to each CCA. This should include a cost-benefit analysis. We have talked a lot about funding today and last week. It is a critical central part of achieving success from these clauses and the proposed devolution for England.

Clause 14 specifies the process by which the Secretary of State may draw up regulations for the funding and costs of a CCA to be met by its constituent councils, and how that amount payable will then be determined. While the clause specifies that this has to be done with the consent of constituent councils and the CCA, it does not tell us how any additional funding that may be provided by the Secretary of State, for example through the different competitive bidding pots that exist or any grants that may be given, will be included in the accountability process for the CCA. Clarification around that would be very helpful.

We also cannot ascertain from the clause how the overview and scrutiny committee—or the general public, for that matter—would be able to determine by cost-benefit analysis just how effective, with the funding being contributed to it, the CCA is at then delivering against its objectives for the area. We believe that our amendment provides a simple, straightforward way to provide that accountability through an annually published statement.

Amendment 100 in Clause 23, in the name of my noble friend Lady Taylor, would require the Secretary of State to explain how a local government area will, in future, have access to the powers that it has lost through removal from a CCA. My noble friend referred to this earlier. If the Secretary of State exercises the powers set out in Clause 23 to change the boundary of a CCA and remove a local government area from the existing area of the CCA, they can either transfer those functions to another public authority or remove a particular function of the CCA altogether for that area. While there is provision that the relevant councils must consent to this removal, there is nothing in the Bill as it stands that requires the Secretary of State to specify how any powers or functions will be delivered in future once that membership of the CCA has been terminated. So, again, it would be very helpful if the Minister were able to explain how that would move forward.

Clause 23(8) refers to consent being required from only the county council and not from any district councils that may be constituent members. My noble friend spoke earlier about the important role that district councils should play. They should not be seen just as a stakeholder, a secondary authority that does not have a say in such matters. This would mean that, in effect, an area could be removed from the CCA with the consent of only the county council but not of the constituent district councils that make up the area of the CCA being removed from its boundary. Surely they should have some kind of say in this. Is this what the Bill is intending or is this an oversight? If it is what the Bill is intended to do, would the consent vote required in Clause 23(9) specifically exclude the votes of district council members of the CCA? This is a really important area that we need to clarify.

Amendment 129, again in the name of my noble friend Lady Taylor of Stevenage, would require the Secretary of State to produce guidance on the establishment and operation of CCAs within six months of the Bill receiving Royal Assent. The current clause simply states that the Secretary of State,

“may give guidance about anything that could be done”

in relation to this chapter. Well, in view of the fundamental changes to the structure of local government that this chapter on CCAs is introducing, we believe that that is far too vague, and very likely to leave local government with a cloud of uncertainty hanging over it. In view of the fact that there have already been many iterations of the devolution agenda in recent years, we do not believe that it is unreasonable to expect that the Government will work with the sector in order to have, very quickly, clear and detailed guidance in relation to the establishment and the operation of CCAs as soon as possible after Royal Assent. That is why we have asked for this to happen within six months.

I turn finally to Amendment 130, which aims to probe whether the public will be informed of their CCA’s functions. With this amendment, we want to determine whether the Secretary of State will be responsible for setting out the purpose and aims of the CCAs, and how they are to be established and operated; or whether that responsibility will fall to local government. If the latter is the case, will there be new burdens that will require funding in relation to the communications aspects of informing the public about the functions of a CCA? Will any such new burdens extend to any public consultation funding? This may well be required when an area decides to proceed with the establishment of a CCA. We discussed consultation a lot in the last group but one, and the Minister seemed to believe that there was going to be support for any new burdens—so, again, clarification on that would be very welcome. With that, I beg to move.

[Lord Shipley (LD)]

My Lords, I want to give very substantial support to what the noble Baroness, Lady Hayman of Ullock, has said. She has made several very powerful points. I hope that the Minister will be able to respond to those, because I am as concerned as the noble Baronesses, Lady Hayman and Lady Taylor, are about some of these issues. Some of what I want to say I will cover in the next group, so I will try to avoid getting on to the issue of voting powers.

It really is very telling. Amendment 74, in the name of the noble Baroness, Lady Taylor of Stevenage, says:

“Within 30 days of this Act receiving Royal Assent, a Minister of the Crown must publish a statement including a definition of ‘non-constituent member’ and a description of their purpose”.


If I may be so bold, I think that is really late. I had expected that we would have this before Report. With the concept of an associate member and the concept of a non-constituent member, I really think that, before this Bill gets any further, we have to understand what the Government are thinking of with those definitions. We can all hazard a guess. I can hazard a guess. Some things have been said and occasionally written, but we have to do better than this.

On page 10 of the Bill, in Clause 11, the Secretary of State is going to make provision by regulations for a whole set of matters about membership. Then, as the noble Baroness, Lady Hayman of Ullock, rightly identified, it is almost a whole side of the Bill which includes provisions on just about anything you could think of. I am at a loss to understand why these matters are not public at this stage in the consideration of a Bill.

Clause 11(4), “Regulations about members”, says:

“In this section ‘constituent member’, in relation to a CCA, means a member of the CCA (other than any mayor for the area of the CCA) appointed by a constituent council.”


I am sure that is correct, but that is the only definition we have. We have no definition of an associate member or a non-constituent member. Yet, as we will discover in the debate on the next set of amendments, the CCA will have discretion to give those people full votes. There is a big issue here, and I intend to take it further when we get to Report.

All I am trying to do is to support the noble Baroness, Lady Hayman of Ullock, and say to the Government: here we have a number of very serious proposals that, as they stand, are unacceptable.

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

My Lords, I am going to lose my voice at this rate. I will introduce my amendments in this group and briefly comment on those in the names of other noble Lords.

My Amendment 67 to Clause 8 means that regulations can relate only to the initial constitutional arrangements, and my Amendment 68 means that the regulations relating to the constitutional arrangements of a CCA can be made only after consultation with the CCA. Clause 8 allows the Secretary of State to establish constitutional arrangements, and we do not have a problem with that at all. These are defined as

“membership ... voting powers ... executive arrangements”

and

“functions of any executive body”.

The executive arrangements include government appointments, the functions by which the executive operates, the functions of the executive that might be delegated to the committee, the “review and scrutiny” of the executive, “access to information” about the executive and the disapplication of Section 15 of the Local Government and Housing Act 1989—plus the keeping of records. These are important aspects of establishing who will be on a CCA, where decisions will be made and what will and will not be in the public domain.

We believe that, once the Secretary of State sets up the bodies, they really ought to be allowed to get on with the job without undue interference. We believe that we should be able to trust them to exercise the significant power and money functions that will be devolved to them from the centre by this clause. So, if we trust them to do that, we should also trust them to be able to operate their own constitutional arrangements.

My Amendment 67 would insert the word “initial” to demonstrate that the Secretary of State may make provisions about the first set of constitutional arrangements only, and then the CCAs can carry on and do it themselves. Amendment 68 would further ensure that CCAs are consulted on any further regulations that would relate to their constitutional arrangements.

I will speak briefly to my Amendment 88 to Clause 16, which would mean that the

“regulations can only be made with a majority of members of the constituent councils”.

If all the constituent councils are going to feel on a level footing, as it were, with the rest, it is important that they all have that say and that things can change only once there is a majority who actually wants to make that change. It is then more likely to be accepted and moved forward in a constructive manner.

I will comment on a few other amendments. The deletion of the paragraph that the noble Lord, Lord Shipley, has asked for in his Amendment 69

“would reduce the risk of single party control of the executive of a CCA or its committees”.

We strongly agree with the noble Lord on that. It is an important amendment, because the Secretary of State should not be able to make regulations which disapply the political proportionality rules for an executive or committee of a CCA; we believe that that is for the electorate to decide.

We also agree completely with the noble Lord, Lord Foster of Bath, in his Amendment 71, which means that a constituent council can include

“a district council in a two-tier county council for an area within the CCA’s area or proposed area”.

We believe that this is one of a number of places in the Bill where district councils must be allowed to be included as constituent councils in two-tier areas.

The noble Lord, Lord Shipley, has also tabled Amendments 72 and 75, which, again, reduce the risk of one-party dominance. I absolutely understand his point: if you allow voting members to resolve that non-constituent members can vote on a CCA, you could end up with the situation where this class of member is appointed specifically to boost the voting majority of one party. This comes back to us saying earlier that, if you are not careful, you could end up with a situation where things could be manipulated, even if that is not the Government’s intention. We have to be very careful about that, so we strongly support those amendments.

The amendment to Clause 26 in the name of the noble Baroness, Lady Bennett, would require a referendum. I see that she is very keen on referendums today. I am not sure whether this is subject to prior legislation, but I am sure that she can enlighten me. The consultation to which we referred in our amendment in relation to setting up the CCA could carry a requirement that it also determines the nature of that CCA: for example, whether it is to be mayoral-led or indirectly elected, appointed by the CCA. In any case, it is probably good practice to consider a referendum on whether there should be a mayor and whether a CCA is indirectly elected. However, the one concern we have—I am sure that the Minister will refer to this—is the considerable cost of running any referendum; that is the sticking point for us.

Amendment 114, in the name of the noble Lord, Lord Shipley, ensures that appointments cannot be imposed without scrutiny and without the CCA’s agreement. Again, this is around the appointment of a deputy mayor, in particular. If we assume the current system will continue as it is—that is, where deputy mayors are appointed—I would certainly agree with the noble Lord that this should not be without the scrutiny and agreement of the CCA. The question here is whether a powerful position such as that of deputy mayor should even be appointed in the first place, or whether we should undertake some kind of democratic process for these powerful positions.

Amendment 116A in the name of the noble Lord, Lord Stunell, seeks to probe the circumstances in which political balance might be inappropriate. This is a very helpful amendment where the noble Lord, Lord Stunell, is seeking to explore the nature of political balance in bodies that exercise joint functions. In effect, these have usually worked without political proportionality being applied, but it would be interesting to hear the Minister’s view on how this might operate going forward.

Finally, the noble Lord, Lord Shipley, has another two amendments. Amendment 120

“would ensure that the CCA is confident that powers being delegated by the deputy mayor are appropriate.”

Sensibly, it seeks to add an extra protection, which we would support—we would not want to see any deputy mayors going rogue, for example. Amendment 122

“would ensure that the views of a majority of the CCA are fully considered”.

Again, we think this is absolutely appropriate. There are important matters that this could cover—for example, the transfer of fire and rescue powers to the chief constable, which is of course a possibility. With that, I beg to move.

[Lord Shipley (LD)]

My Lords, I would like first to welcome the offer from the noble Earl, Lord Howe, of a meeting. I suggest that plenty of time be allowed for us to discuss some of the issues that we have been trying to get to the bottom of in our debates so far.

I have six amendments in my name, and they all derive from a first reading of the Bill and the Explanatory Notes. Going back and reading it all again, you realise you actually need to place amendments on these matters. In this group, there are Amendments 69, 72, 75, 114, 120 and 122, and they all have a common theme, which is the centralisation of power and the need for checks and balances in the decision-making process.

Amendment 69 would delete Clause 8(3)(f), which says that

“section 15 of the Local Government and Housing Act 1989 (duty to allocate seats to political groups) in relation to an executive of the CCA or a committee of such an executive”

is disapplied. Therefore, it will not any longer be in place. That says to me that the deletion seems to encourage single-party control of a committee structure of a CCA. I just ask the Minister whether that is wise. It seems to centralise a power to an inner group of the CCA.

There has been a lot of discussion in the last group and then this one about district councils and their rights—clearly the meeting we are going to have will address some of those issues. Amendment 72 is a probing amendment and would prevent non-constituent members of the CCA voting. I say that to draw an explanation of why a non-constituent member of a CCA should have a vote. Why should the non-constituent members of the CCA become voting members? Will they all have a vote, or will it be only some non-constituent members? There is a big issue of principle here. Is it not enough for a non-council-nominating member to be in attendance? It is a simple issue. If you are a full member, you have a vote, and if you have a vote, you must be a full member. In other words, we have to have a discussion about the rights of district councils to be full members and have full votes.

Amendment 75 then addresses the issue of associate members of a CCA having a vote at the discretion of the CCA. I would like the Minister just to explain in what circumstances an associate member would qualify for a full vote. Again, the process could encourage one-party domination, by giving a majority party the right to give a vote to an associate member of their choice—or do I misunderstand? I am very happy to have misunderstood, but I am probing to know what the intention actually is.

Building Safety Bill

Debate between Lord Shipley and Baroness Hayman of Ullock

Committee stage
Monday 21st February 2022 Grand Committee

[Lord Shipley (LD)]

My Lords, I will speak to Amendment 135 in my name, which was referred to a moment ago by my noble friend Lord Stunell, and which I intend as a probing amendment. I should say that I am a vice-president of the Local Government Association.

I raised this issue at Second Reading, as the Minister will recall, and the question of whether permitted development rights would continue as now when this Bill is enacted, in respect of the conversion of office blocks to residential accommodation of any height. Amendment 135 seeks to clarify the matter. It says that

“Nothing in the Town and Country Planning (General Permitted Development) (England) Order 2015 … permits development which would convert offices to residential accommodation if such development is contrary to the provisions of this Act.”


I am grateful to the Public Bill Office for the help in drafting those words.

I simply say to the Minister that I hope he will clarify that this is government policy. If it is, that fact should be in the Bill to avoid any doubt. I look forward to the Minister’s assurance, because it would be inappropriate—as my noble friend Lord Stunell said—if a different set of rules were to apply to a conversion from office to residential than would apply to a residential block always designated as that. This amendment aims to clarify that the permitted development route cannot be used where it would be contrary to the provisions of this Act. I hope the Minister will agree that this is a very important issue.

[Baroness Hayman of Ullock (Lab)]

My Lords, I will look briefly first at Amendment 3 in the name of the noble Lord, Lord Stunell. As we know, the proposed building safety regulator will be responsible for implementing and enforcing the new regime and will monitor the safety and performance of all buildings, with the aims of securing the safety of people in or about buildings and improving standards. The noble Lord, Lord Stunell, went into a lot of detail and clearly laid out all the reasons behind his amendment, so I will not go over the ground that he has covered.

I just make the point that amendments have been made to the Health and Safety at Work etc. Act to reflect this, so the amendment from the noble Lord, Lord Stunell, would also bring those necessary powers contained in the Sustainable and Secure Buildings Act into this Bill and would, as the noble Lord said, be in accordance with the recommendations of the Hackitt report. This seems a practical and sensible approach.

The noble Lord, Lord Shipley, in his Amendment 135, raises the issue of office to residential conversions, which are being actively encouraged by the Government. We need to consider any associated building safety issues with that policy. The noble Lord asked the Minister for clarification on this, and I think that this clarification is important so that we all know exactly what implications there will be. I will be interested in the Minister’s response to that.

I have a number of amendments in this group. I will first speak to Amendments 11 and 43 in my name—I thank the noble Baroness, Lady Pinnock, for her support on them. Combined, they will ensure that the more stringent building safety framework applies not just to buildings over 18 metres but to those under that, where they are multiple occupancy dwellings. We believe the Building Safety Bill, in its original draft and as amended in Committee in the other place, fails robustly to confirm whether the gateway system will apply to buildings under 18 metres where there are multiple occupancy dwellings. This will create a two-tier system where buildings below 18 metres will face less rigorous safety regulations than those over 18 metres.

Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2022

Debate between Lord Shipley and Baroness Hayman of Ullock

Tuesday 8th February 2022 Grand Committee

[Lord Shipley (LD)]

My Lords, I should first remind the Committee that I am a vice-president of the Local Government Association.

In the House of Commons, these amended regulations took just 15 minutes to be explained and approved, and that seems to be because they are appropriate in the circumstances. The revised levy rate for Greater Manchester looks right, since the pool arrangements, as the Minister said, have ceased. It is also right that the restructuring of a few local authorities has been reflected in new, updated figures.

We should support financial relief from business rates for businesses impacted by Covid being fully compensated to local authorities, in line with previous decisions earlier in the pandemic. It is, however, clearly important that the businesses rates retention scheme works as it was intended to. I think it would be wrong to give safety-net payments to some local authorities when they are already compensated by the Government directly, and the proposals on proxy figures for the limited number of 100%-retention authorities seems appropriate.

All the amendments in this statutory instrument today are technical and sensible. But the context is one of a system of business rates that is no longer fit for purpose. It does, however, generate a huge amount of income. I am left wondering what the Government are now thinking about the future of business rates—so anything the Minister can tell us on that would be most welcome.

Finally, I read the comments of the Secondary Legislation Scrutiny Committee published on 3 February, and I think the committee was right to raise the issue of whether the public are adequately protected against fraud, given public concern about false claims in other areas of Covid support payments. This is, of course, a relief scheme, and relief schemes are part of normal local authority systems and subject to normal audit systems. However, the Minister might wish to confirm that the Government feel adequately protected, given that it is their money that is helping to fund the cost.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for his introduction to this instrument, which, as we have heard, makes various changes to the business rates retention scheme. As we also heard from the Minister, each change is very technical, including amendments to levy and safety-net payments, the restructuring of certain local government areas and the payment by central government of specific grants to local authorities. I will not cover any of the technical detail: the noble Lord, Lord Shipley, amply covered that and asked the questions in these areas that needed to be asked of the Minister, so I will not repeat them.

I will briefly say that Labour supports these changes. However, in the other place when the matter was discussed, some important points were raised about business rates and our high streets. The Minister may remember that yesterday, in the Statement on levelling up, I talked of the need to completely reform and replace the current system of business rates. I appreciate that the terms of the SI before us today are very narrow and that this is not the place to debate that, but I ask the Minister to take our concerns about the current system back to his department. The Government have spoken already about the need to reform the business rates system and have conducted a review, but we have seen little progress to date beyond narrow technical legislation such as that before us today. I encourage the Minister to give his department a nudge. Having said that, we are very happy to support the regulations.

[Lord Greenhalgh (Con)]

My Lords, I thank the noble Baroness, Lady Hayman, and the noble Lord, Lord Shipley, for their contributions. I thank them both for raising similar issues. While this is a very narrow statutory instrument, it is probably worth saying, thinking about the future business rates is very much a matter for the Treasury. There is a recognition that future business rates need to be thought through. Obviously, there is a review and, self-evidently, there needs to be reform.

Equally, there is the issue alluded to by the noble Lord, Lord Shipley, on what we do about local government in the context of the income for local authorities being council tax and business rates, and business rates fundamentally needing to change to reflect the changing dynamics of our high streets. There is an intellectual debate that can be had about whether we continue to resource equalise, or whether we think about life as a race, whereby we ensure the start line is level and fair and then you get places essentially to compete and, through competition, raise the game. That is an intellectual debate that is entirely proper, not for this statutory instrument, but it one that I like engaging in with people who have a very deep knowledge of local government and care about its future. It is really hard to be fair if you have officials working formulae that only they seem to understand to determine whether a place gets x money or y money. It is job of work that, necessarily, the Secretary of State will be looking at—it is far above my pay grade—but I have been a huge advocate of ensuring that local authorities can be set free to be able to determine their own destinies, rather than being necessarily being always funded from the centre, in the relationship we have today. That is how it has always been, for over 20 years, in my time in local government—but that is not really a matter for today’s debate. I am sure that we will have many debates about this in the Chamber over the coming years.

I have something else on this as well. Local authorities are responsible for the administration of release and provide us with assurance on the use of release. These are not grants but reflect a discount on the liability of a business. Local authorities can take action against any relief that is fraudulent. Does that help the noble Lord, Lord Shipley?