Draft Transport Levying Bodies (Amendment) Regulations 2017

Andrew Jones Excerpts

Wednesday 22nd February 2017 General Committees

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

I beg to move,

That the Committee has considered the draft Transport Levying Bodies (Amendment) Regulations 2017.

The draft regulations were laid before the House on 24 January. If approved, they will enable the combined authorities for the Tees Valley and the West Midlands to collect appropriate levies from their constituent councils to meet the costs of carrying out their transport functions. They are administrative and allow the fulfilment of local governance changes.

It is worth noting that such levying regulations have not been presented in Committee before; in the past, they have been subject to the negative approval procedure and, indeed, that has happened several times. However, with the passing of the Cities and Local Government Devolution Act 2016, it was determined that such regulations made in relation to combined authorities would in the future be subject to the affirmative procedure.

The five constituent councils of the Tees Valley Combined Authority, which are Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland, and Stockton-on-Tees, and the seven constituent councils of the West Midlands Combined Authority, which are Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton, have led a local process to improve their governance arrangements. That culminated in this House and the other place agreeing orders that saw the establishment of the Tees Valley Combined Authority on 1 April 2016 and the West Midlands Combined Authority on 17 June 2016. Those orders gave effect to the desire of the local authorities in those areas to improve their joint working, including on transport matters. Orders have since been made to provide for mayors to be elected on 4 May for both the Tees Valley Combined Authority and the West Midlands Combined Authority. Once elected, the mayor will be the chair of the combined authority.

Combined authorities are designated as levying bodies under the Local Government Finance Act 1988. Under that Act, the Secretary of State can make regulations in relation to the expenses of combined authorities that are reasonably attributable to the exercise of their functions, including in relation to transport. The regulations before the Committee will amend the Transport Levying Bodies Regulations 1992 to take account of the creation of the two combined authorities in Tees Valley and the West Midlands. They have been drafted to reflect the proposed approach of the local areas and have been agreed by the two combined authorities.

The levy could fund any of the transport functions that sit with the combined authority in question. The functions of each combined authority are set out in its establishment order and any subsequent order that confers functions, and transport functions are clearly identified. The transport functions of the two combined authorities include the development of a local transport plan, a concessionary fares scheme and the provision of information on transport services in their areas. It will be for the combined authority to decide how to fund its functions, including its transport functions, in accordance with its establishment order and any subsequent orders. The constituent councils will then need to consider how they fund any levy issued by the combined authority as part of their budget process—whether by council tax, Government grant or other revenue sources. They will need to take into account the impact on council tax levels in their area, including when determining whether any council tax increase is excessive.

In the case of the West Midlands, the regulations in effect constitute a name change. The previous West Midlands integrated transport authority was dissolved as part of the move to the West Midlands Combined Authority, and the ITA’s functions were transferred to the combined authority. Like the ITA before it, the West Midlands Combined Authority will continue to levy its constituent authorities for transport purposes. It will also continue to apportion the levy by agreement, or on the basis of the population of the constituent councils.

The situation for the Tees Valley Combined Authority is different, because there was no previous integrated transport authority. For that reason, the draft regulations set out how any transport levy would be apportioned between the constituent councils if the combined authority could not secure agreement. In the event that they cannot agree, the combined authority will apportion the levy by taking into account previous levels of transport expenditure by the constituent councils.

The regulations will help to facilitate the provision of transport arrangements as part of the wider governance changes across these two areas, and I commend them to the Committee.

--- Later in debate ---

[Andrew Jones]

I can answer my hon. Friend’s question. If an authority leaves a combined authority, it will no longer be a part of it so it cannot be levied. However, it can of course voluntarily contribute if it wishes to do so.

Question put and agreed to.