Local Government: Combined Authority Orders

Andy Sawford Excerpts

Tuesday 18th March 2014 Commons Chamber

[Andy Sawford (Corby) (Lab/Co-op)]

I welcome the opportunity to debate these important statutory instruments, which will help local authorities in key areas of the country to work together more effectively in the interests of their communities. It is good to see so many Members here to participate in the debate and to share local perspectives on how to ensure that the combined authority areas can succeed.

Labour is broadly supportive of the statutory instruments. We note that they have the support of the local authorities in the areas concerned. Indeed there is clear evidence of support from the public, businesses and other partners in the areas. The authorities concerned are overwhelmingly Labour. Along with Greater Manchester, they are giving a lead to all of local government, and we are proud of them. Thanks to their committed and innovative leadership, those authorities are making a real difference and showing the way forward through a cost of living crisis created by this Government.

[Julian Smith]

Does the hon. Gentleman think that leadership was the reason the Labour-led York council played petty politics with the York and North Yorkshire local enterprise partnership last year—petty politics that have continued into this year? Such behaviour shows that the level of leadership in the council is really pretty depressing and low.

[Andy Sawford]

Well, I know petty politics when I see it, and the hon. Gentleman’s remarks sound very much like it. His remarks were inconsistent with his earlier comments about the importance of the partnership between the authorities that surround York. I will come on to the arrangements in that area of the country: I want to raise issues about York, which may interest the hon. Gentleman. Whether or not he will agree with me on them remains to be seen.

For economic success across the country, we must make the most of the strengths of different sectors across our country, and develop new skills and industries. Clearly, greater local collaboration and co-operation can produce much better results on issues such as transport, housing, employment, skills and training than can national programmes run from Whitehall. Combined authorities have a key role to play in that, as many councils believe that to deliver the best outcomes for their communities, the time has come to take current governance models to the next level, moving from informal collaboration to joint decision making on some issues.

There is an irony in the fact that the Government now recognise the value of combined authorities, which were first introduced in the Local Democracy, Economic Development and Construction Act 2009, about which Government Members have been contemptuous both in opposition and in government. The Act made provision for the establishment of economic prosperity boards and for combined authorities. After some years of drift, during which the Government tore up the regional development agency structure in an act of economic vandalism at a time when our economy was beginning to recover from a global recession, Lord Heseltine’s much-trumpeted review in 2013 came up with the big idea of combined authorities. We welcome the Government’s conversion, however reluctant it is, but we regret the delay.

The new combined authorities will bring many benefits, including the strong and visible collective leadership of an area with democratic accountability and an influential and unified voice. That leadership will be able to have a single conversation with the Government, national agencies and business leaders and to align decision making and economic growth at a strategic level so that there is a single framework underpinned by a coherent strategy and investment programme. It will have the opportunity to draw together a range of funding sources, including EU funds—this has been a key issue in the recent interregnum, during which there has not been a clear strategy from central Government—and a devolved local growth fund. The combined authorities also create the opportunity for closer working across the public sector to integrate functions and services and provide innovative solutions to the challenges of reduced budgets, which particularly affect the authorities in the combined authority areas that have had an above-average cut in a deeply unfair funding settlement.

The Greater Manchester combined authority shows the benefit of the system: its achievements include the major refurbishment of Bolton and Rochdale railway stations; the revolving infrastructure fund, which is worth £30 million a year; permission for up to 7,000 new homes to be built by 2017; a programme of low-carbon measures; and overall savings of £11.7 million a year.

I recommend that all Members of the House read the excellent report recently published by Labour’s local government innovation taskforce, which includes many of the success stories of the Greater Manchester combined authority and local authority partnerships across the country. I firmly believe that the West Yorkshire combined authority, the South Yorkshire combined authority and the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral combined authority will succeed as Greater Manchester has. I also hope that the order will soon be tabled for the north-east combined authority.

The Association of North East Councils tells me that establishing a combined authority for the north-east, to put into legal form what the north-east leadership board has been doing by consent for some time, is widely supported. I hope that there can be progress.

[Brandon Lewis]

I can provide a piece of information to help the shadow Minister: that order was tabled on 13 March, so it will come to us for consideration shortly.

[Andy Sawford]

I thank the Minister for that clarification and we hope that the order will be before us soon. I understood that the conversation in that region between the local authorities had made substantial progress and that they were looking to move forward. The Opposition will support the establishment of the north-east combined authority when that is proposed, however it is named.

Today’s steps on combined authorities are welcome but still more can be done on additional freedoms. The Opposition are considering the case being made by organisations including the Local Government Association, the special interest group of municipal authorities, ANEC and other bodies for additional powers. We agree with them that there is a need for a clearer plan for sub-national government that, crucially, works for all areas of the country. There is a need for further consideration of what arrangements will work best in two-tier areas, for example. There needs to be further devolution of funding streams. The Opposition are committed to significant reform in that area: for example, we will give local authorities a strong role in co-commissioning the Work programme.

The new combined authorities are keen to have a dialogue with the Minister, as he is no doubt aware, about “earn back” schemes for their areas. Such a scheme has been a feature of the Greater Manchester combined authority. It will be useful to hear the Minister’s thoughts, and to hear about any progress that has been made with the three new combined authorities.

There is also the question of legal restrictions around the combined authorities’ ability to borrow for non-transport purposes. The authorities have argued that that will remove a significant barrier to the unlocking of local resources to support infrastructure and growth. That change has been strongly advocated by Greater Manchester. What is the Government’s view on that and how do they intend to respond? Are the Government prepared to consider the request for combined authorities to be able to recover VAT, as local authorities do?

In relation to York, may we have an update from the Minister on the important matter of non-contiguous boundaries affecting authorities’ ability to combine? The Minister and I have discussed that issue informally on several occasions, and there have been exchanges in the House between us and between the Secretary of State and the shadow Secretary of State on the matter. Although those exchanges have been encouraging, there is frustration in some parts of the country about the delay. The Minister may be aware that Portsmouth and Southampton councils, for example, are keen to work more closely together but feel that they are being prevented from doing so by Hampshire county council, which does not wish to be involved in such joint arrangements. We urge the Government to consider how that issue can be dealt with in all parts of the country, but the Government may choose to make specific arrangements in individual cases.

As the Minister knows, my right hon. Friend the Member for Leeds Central (Hilary Benn) has made the case for the City of York, which wishes to join the Leeds city region. The Secretary of State has agreed that that makes sense. He told my right hon. Friend on 28 October 2013:

“I am confident we can have a resolution before Christmas.”—[Official Report, 28 October 2013; Vol. 569, c. 690.]

However, in a written answer in February the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), who is in his place, said that

“we are now considering consulting before the summer on a Legislative Reform Order”—[Official Report, 24 February 2014; Vol. 576, c. 120W.]

That may be the order to which he referred earlier, which the Government hope to bring forward before the purdah period.

My right hon. Friend raised the delay at Communities and Local Government questions on 3 March. The Secretary of State said:

“I did not specify which Christmas I meant. However, I gave the right hon. Gentleman an undertaking, and it was a proper undertaking. Various legal obstacles were put in our way, but we intend to consult, and, subject to the position being legally satisfactory, there will be a resolution. Given that I gave an undertaking from the Dispatch Box to resolve the matter, I will not lightly do otherwise.”—[Official Report, 3 March 2014; Vol. 576, c. 621.]

We welcome that assurance. We have appreciated the constructive dialogue that has taken place between the Opposition and the Government. We accept that the Secretary of State’s undertaking was given in good faith, but I am sure the Minister understands that there is some disappointment that the matter is dragging on.

[Julian Smith]

Will the hon. Gentleman clarify to the House why he is so eager for York to get into bed with the West Yorkshire combined authority? Will he come clean with the House and with voters in York and north Yorkshire? Why is he pushing this hobby horse?

[Andy Sawford]

The hon. Gentleman may wish to ask the Secretary of State why he agrees with us that the proposal makes sense. [Interruption.] The hon. Gentleman pushes me to say why I am keen: I am a localist. If the City of York believes that the proposal is in the interests of the community that it serves, subject to a proper process—there will be a consultation, and there will have to be compelling evidence, as there has been in the other three areas that we are considering today, that this is the right way forward—and if it is the wish of local people, of course it should go ahead. It is undemocratic of the hon. Gentleman to seek to hold back the economic development of the City of York.

[Julian Smith]

What does the hon. Gentleman say about the commitment that York has made—half-in and half-out—to the York and North Yorkshire local enterprise partnership? Should he not be urging York council to play a much more vigorous part in that partnership and to stop thinking about getting over to where the grass is greener in the new West Yorkshire authority?

[Andy Sawford]

If the people of York and the elected local authority in York believe that it is in the interests of their community, they should have the right to make that case to the Government. If the hon. Gentleman disagrees, he can put his view forward. In the end, he will have to persuade his own side, not me. I am persuaded that if that is what the City of York wants, of course it should go forward. However, the hon. Gentleman does have an important point about the relationship between the combined authorities and the local enterprise partnerships. I shall refer to that.

We accept that the Secretary of State gave the undertaking in good faith. He said that there are legal obstacles. Is it possible to address the specific issue of the City of York and address those legal obstacles separately, or are they in effect bound up together? Perhaps the Minister could comment on that. In view of the constructive dialogue that has taken place, it would be helpful for us to have a greater understanding of the legal dimension that the Government are grappling with.

There is a wider issue about how the geography of the country and the structure of local government mean that establishing combined authorities is much more difficult in many areas of the country. The hon. Gentleman alluded to that in relation to arrangements in Yorkshire. The arrangements for LEPs around the country vary hugely, and they already reflect the complex geography. There are issues regarding LEPs that need further consideration, especially around how coherently they operate with the boundaries of combined authorities. For example, the Sheffield city region LEP includes a number of Nottinghamshire and Derbyshire districts. However, given that the two county councils will not be members of the combined authority, non-South Yorkshire districts cannot be constituent members of the authority, and South Yorkshire members must always hold a majority of the vote.

If LEPs are to co-exist with combined authorities and strategic counties, they cannot merely operate in the same space. There needs to be a clear distinction of roles and responsibilities. The critical point is that while LEPs can provide private sector input and insight, which is to be welcomed, they are neither statutory nor democratically accountable bodies, and in their current form they should not hold resources themselves. The Minister will no doubt fondly recall the extensive debate on the accountability of LEPs during the passage of the Local Audit and Accountability Act 2014, and I hope that it is something he will consider further in light of the development of combined authority arrangements. The Opposition will work closely with local authorities and talk with LEPs throughout the country about their future role, particularly through the review being undertaken by Lord Adonis.

Before I conclude, I want to comment on Total Place, which the Government have rather reluctantly taken forward in their limited approach to community budgets, whereas the Opposition see much more potential and believe that combined authorities will take a lead. As well as investing more in prevention and early intervention, it is crucial that we support councils to deliver economic growth in all areas of the country. To do that, we will extend the model of city deals throughout local government, devolving power over housing and planning, and jobs and skills, but councils and communities must come together to decide how best to use the powers, and develop arrangements that suit local needs. That is what my right hon. Friend the Member for Leeds Central (Hilary Benn) calls “the English deal”.

Despite the Government promising to push power down, it has taken four years for the orders to come forward. It will be left to the next Labour Government radically to reconfigure the way in which services are designed and delivered. By devolving ineffective national programmes to local areas we will give local people more power to create services that are more responsive to local conditions, build in people’s involvement in decisions more closely, and power our economies forward throughout the country in a way that is fair.