Cities and Local Government Devolution Bill [HL]

Baroness Eaton Excerpts

Monday 8th June 2015 Lords Chamber

[Baroness Eaton (Con)]

My Lords, the Cities and Local Government Devolution Bill is a significant step towards the greater devolution that local government has long called for. I am sure that many councillors and former councillors present here will fully appreciate the importance of the changes brought about by the Bill. I commend the Government for this crucial legislation.

This Bill is of such importance to local government because it reflects the principle that decisions about communities and the services they rely on are best made in those communities. The Bill is the first step to giving cities and counties the freedom they need to join up services and infrastructure and the powers they need to compete globally. The LGA—I speak as one of its vice-presidents—has called the Cities and Local Government Devolution Bill a positive step, as it will give combined authorities the range of powers they need to,

“create jobs, build homes, strengthen healthy communities and protect the vulnerable”.

Many groupings of local authorities, such as the ones in West Yorkshire that I know best—the metropolitan district councils, referred to earlier, of Wakefield, Kirklees, Huddersfield and Bradford—have worked together closely for many more years than I can recall, in spite of political differences. They realise that expanding the functional scope of combined authorities will allow them to work together on a wider range of services in the interests of local residents and businesses, not just on economic development but on transport, skills and other vital public services.

The extension of the general power of competence to combined authorities is an important and needed change. The LGA’s recent report, English Devolution: Local Solutions for a Successful Nation, identified that devolution could bring £20.6 billion in potential savings. However, the benefits of devolution are not solely about financial savings. The social value of these devolution deals should also be fully recognised. Taking decisions closer to the people affected by them will improve the quality of public services and make them more responsive to the needs of the community.

This is true for all communities, not just great cities. In last year’s Autumn Statement, the Chancellor said that,

“my door is open to other cities who want to follow their cross-party lead”.

I am glad that the Chancellor listened to the representations of the LGA and the non-metropolitan commission and has opened the door to England’s counties as well. These areas account for half our country’s population and economic growth. Their economic contribution, and their potential growth, is as significant for the nation as that of the big cities. Even so, the language of devolution remains centred around cities. It would be helpful if the Minister would give an assurance that substantial devolution deals will be available to county areas. People in rural communities stand to benefit just as much from devolution as people in big cities. I hope that Ministers in this House and in the other place will commit to work with the LGA to explore how best devolution deals can be opened up to our great counties.

I have spoken in this Chamber before about the need for local areas to have not just greater decision-making powers but also greater financial freedom. The Independent Commission on Local Government Finance called for a number of changes to the local government finance system to ensure the sustainability of our public services. Clear multi-year settlements would allow for more effective long-term planning for local authorities. This has real potential to enable efficiencies and more strategic commissioning for everything from road maintenance to children’s services. Devolving powers to set rates and discounts for council tax and business rates would give flexibility to respond to the needs of local communities. The Independent Commission on Local Government Finance recommends going a step further, giving all councils the right to retain 100% of business rate growth. The LGA fully supports this proposal. These reforms would set councils on the path to greater self-sufficiency. They would give councils greater financial certainty in their futures and greater ability to plan for the long term.

Although the huge powers to be exercised by metro mayors worry many—a point reflected in the rejection of the mayoral model by electors in many areas—there is much to be positive about in the Bill. But one area where local government is seeking clarification is on the role of the Secretary of State. The Bill creates a number of new powers for the Secretary of State in order to grant the devolution of powers to combined authorities. Where the Bill gives the Secretary of State power to alter local structures or the delivery of public functions, the decision-making process must be transparent. We need clear criteria and a route for appeal and I would welcome the Minister’s clarification on that point.

As a principle, it is always best that these changes are made together with local government, and not done to it. By working together, we can make sure that changes are appropriate for the local area and at a pace at which they can be implemented. I am sure that the Government will ensure that the devolution deals are a collaborative process and treat local government as an equal partner.