Cities and Local Government Devolution Bill [HL]

Baroness Henig Excerpts

Monday 8th June 2015 Lords Chamber

[Baroness Henig (Lab)]

I want to draw the attention of noble Lords at the outset to the fact that I served as a Lancashire county councillor for more than 20 years, alongside the aunt of the noble Lord, Lord Horam—the redoubtable Aunt Marjorie. She was a wonderful advertisement for the power of local government in those distant days. I should also say that my son is currently the leader of a very large northern combined authority, and he was most anxious for me to point out to your Lordships that any views I express on this Bill are my own personal views, which I am happy to do.

I start by welcoming the Government’s professed aspirations in introducing this Bill. As we have heard, it aims to decentralise power in England, to contribute to advanced economic recovery, and to enable cities particularly in the north to work together more closely and compete more effectively with London. Who could argue with those aims? Moreover, one can only admire the marketing genius who dreamt up the strapline, the “Northern Powerhouse”. It conjures up a strong image of a northern renaissance, but it is only an image; it is a marketing ploy. I have to say to noble Lords that the current realities are very different. Both in terms of economic power and political decision-making, as many noble Lords have already pointed out, London is the pre-eminent centre of the country.

The gap between London and the rest of the country, even the 10 biggest cities, is huge and has been growing even since 2010. That gap is much greater than the comparable situation in any advanced or developing country. London is the third-fastest growing city in the world and now accounts for nearly 22% of our total economic output. Therefore, the effort required to achieve any meaningful dispersal of economic power and activity away from London is enormous. While I share absolutely the desire of the noble Lord, Lord Heseltine, to bring about this historic shift, it will take a prodigious effort to do that, given the situation as it exists. I fear that the measures outlined in this Bill will go nowhere near to closing the economic gap between London and the rest of the country, which is increasing even as we debate here today.

At the same time, in terms of political governance, England is about the most centralised state in Europe, if not in the developed world. All political power flows from Whitehall, and all major policy decisions are taken there. As we have already heard, in the past 30 years there has been a one-way transfer of powers and responsibilities from local to national government. When I started in local government in the early 1980s, the county council together with district councils oversaw schools, further education colleges, council house building, policing and much more. It enjoyed considerable flexibility in setting levels of business and domestic rates.

Year on year, under all Governments, local councils have lost a range of powers and responsibilities, and continue to do so. Even as we are considering this Bill today, another swathe of schools is being earmarked for academy status and therefore will move from local authority supervision. As we know, local authorities face further cuts in funding, with formulae which seem to aid and abet the transfer of resources from the north to the south. It is notable to me that successful administrators move from local government to government departments—some even come to this House—but no one moves in the other direction. For a civil servant or a special adviser, being sent out of London is even worse than being exiled to Siberia, but there is little prospect of a return.

However, in recent years, the devolution of powers to Scotland and Wales has transformed Edinburgh and Cardiff into growing and increasingly powerful regional centres. The reason, of course, is that they house the Scottish Government and the Welsh Assembly. Therefore, they are developing as political, administrative and economic hubs. In England, although we have regions, we do not have regional government or, any longer, regional development agencies. That is now a problem because, if the Government want to devolve power, it is by no means an easy or straightforward process because of that lack of a clear, regional tier of administration.

For starters—it is not covered in this Bill—there surely has to be much greater investment in regional infrastructure, particularly transport, as some noble Lords have already pointed out. I am not thinking so much about high-speed rail links or accessible and efficient airports, important though they are to the development of the local economy. Your Lordships have only to compare the frequency and diversity of local transport and its availability to people who live in and near London with the situation in most of the rest of the country to see the size of the problem. While local authorities are fully aware of the pressing need for better local transport, all they can do, as I am sure noble Lords will know, is to bid every year for resources from central government to improve their services, but they have no certainty of success. Providing more resources to enable people in the regions to move about on public transport more flexibly and easily must be high on the Government’s priority list if they are serious about delivering on the devolution agenda.

How will this Bill help to deliver the Government’s professed aim of decentralisation of power to cities and to local government? It is, we know, an enabling Bill. My problem is that I cannot see how the provisions within it do much more than pay lip service to the Government’s stated aspirations. Here, I have to say that I share the scepticism of my noble friend Lord Woolmer. The combined authority is to have a directly elected mayor. That assumes that all constituent elements support this in principle and co-operate with the successful leader, once elected. Both assumptions seem to me to be questionable, especially bearing in mind what the noble Lord, Lord Goddard, told us so frankly earlier.

Even if the metro mayor has full support from across the area, what resources will she be able to deploy? What levers will she be able to pull to generate economic growth and sustainable development? I see no measures to bring about meaningful devolution of finance, no proposals to allow the mayor to raise finance locally or no suggestion that the iron grip of the Treasury over public spending is going to be relaxed in any way. It is all very well exhorting cities in the north to work together more closely on housing, strategic planning, health, social care and skills training to compete more effectively with London. I would argue that in many parts of the north, there is already much greater collaboration between councils than there is in Whitehall. I thought that the noble Lord, Lord Heseltine, made the point extremely effectively that if a businessperson wants to deal with Whitehall, there is no obvious place for them to go. Whitehall is nowhere near as joined up as many of the local authorities we are talking about. It is important to bear that in mind. The reality is that without access to sufficient, regular and reliable funding, combined and metro authorities will face an uphill struggle to catch up with London, and it is almost certainly doomed to failure.

The measures outlined in the Bill may be helpful for some areas. Clearly they will not work everywhere, as we have already heard. The cynic in me says, “Perhaps that’s the point of this Bill. Perhaps the only real aim is to provide the vehicle for doing deals between the Government and Manchester, and maybe the Government and one or two other northern cities”. Perhaps that is what it is all about. I sincerely hope that that is not the case and that the Government have wider aspirations. If so, it is important for this Bill to provide a permissive legislative framework, as my noble friend Lady Donaghy, said, and not be prescriptive. For me, there is an even more important word beginning with P: a meaningful partnership. There has to be a partnership in play between central government and local authorities, not the sort of hierarchical relationship—I am sure that the noble Baroness, Lady Eaton, remembers it as well as I do—whereby local government leaders are summoned to London to be issued with the Government’s latest proposals, and instructed to adhere to them and do as they are told, or else. The noble Lord, Lord Heseltine, candidly admitted that there was an element of that in decades gone by.

It is abundantly clear that over the past 30 years, central government has not trusted or respected local councillors or their capacity to make decisions on behalf of their local communities. If this Bill is a signal of intent that the new Government want to work more co-operatively with some of the major elements of local government, such as combined city and county authorities, obviously we all welcome that. It is just that part of me still remains to be convinced. I would like to see more tangible proof of that resolve, which is why there are so many detailed questions to be asked about what impact the measures in this Bill will have; whether, and if so what, new clauses need to be added; and how the Bill can be tailored to deliver powers more effectively for a wide range of county, district and combined authorities, not just for a handful of northern cities. I look forward to participating further in Committee to turn what is at the moment quite a sketchy enabling Bill into something more meaningful for local government.