Combined Authorities (Borrowing) Regulations 2018

Baroness Pinnock Excerpts

Tuesday 1st May 2018 Lords Chamber

[Lord Jones (Lab)]

My Lords, I thank the Minister for his exposition. He knows far more than I could ever know about these matters, even though long ago I served in three Administrations. Can he look at the helpful Explanatory Memorandum, at paragraph 3.3:

“The instrument does not give rise to minor or consequential effects outside England”?


I cannot cavil at that—surely it is exact. However, the Minister will know, because of his distinguished service in the National Assembly for Wales, that there are sub-regional economies that cross borders. I refer to my entry in the register of interests, and I instance the Mersey Dee Alliance in north-east Wales, Wirral, Cheshire and Ellesmere Port. It is a unique set-up, which seeks to advance the only cross-border economy in Britain. It is a successful economy, and those local authorities in north-east Wales and greater Chester want to advance matters.

I have a question for the Minister, who was a leader in the National Assembly for Wales over many years. Can he explain—if he can, after my tangential reference —why these measures are not appearing in Wales? Is he able to mention one equivalent in Wales of, say, the Mayor of Liverpool or the Mayor of Manchester?

[Baroness Pinnock (LD)]

My Lords, I draw Members’ attention to my interests in the register as a councillor in the borough of Kirklees in West Yorkshire and as a vice-president of the Local Government Association.

The regulation is a natural extension of the powers of the mayoral combined authorities, and in that light it is to be welcomed. The functions that will benefit from investment where the authorities choose to use the additional borrowing powers are significant and of strategic importance to the development of those combined authority areas.

I say all that because I am not criticising the fundamental issue of the borrowing powers. However, I am concerned that additional borrowing by the mayoral combined authorities will result in additional costs being passed to the constituent local authority. So will the prudential borrowing code of the constituent authorities be affected by the additional borrowing permitted under these regulations?

The direct accountability between the spending body, which is the combined authority, and the tax-raising bodies, which are the constituent local authorities, will be fairly obtuse. If these powers are extended in this way, how will local council tax payers and businesses have a clear and transparent explanation of the use of the revenues of local authorities by the combined authorities if, for instance, there is no direct benefit for that particular part of the combined authority area?

The Minister mentioned Sheffield City Region, which will be in the fortunate or unfortunate position on Friday morning of having elected a mayor who will have no powers and no resources because that agreement has yet to come to Parliament and before your Lordships’ House. It will be an interesting conundrum for the Minister and his department as to what the newly elected mayor of the Sheffield City Region—he or she—will do.

I have a final comment for the Minister. The extension of powers to the mayoral combined authorities in this way is positive, with the addendums that I have already referenced, but it begs the question as to the continuing divergence of the powers of local authorities that do not have these additional powers because they do not have combined authorities and metro mayors. That is beginning to grow. The differences are beginning to be obvious and there will be an issue that will have to be addressed by the Government in one form or another. Has the Minister any thoughts to share on that issue?

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I have no issue with the regulations before the House this afternoon and I draw the attention of the House to my relevant interests as a councillor and as a vice-president of the Local Government Association.

As we have heard, these regulations in effect implement agreements between the Government and the combined authorities referred to in this order to increase their borrowing powers for various functions as listed in the Explanatory Notes. The lists of additional borrowing approvals are different, as each deal is bespoke. I know that the Government like this bespoke deal arrangement, but I am of the opinion that the jury is still out on that way of working, as one person’s bespoke deal is another person’s confused muddle, with no one knowing or being clear why one authority has certain powers and another does not.

I also noted in the consultation, as referenced in the Explanatory Notes in paragraphs 8.1 to 8.26, that there are still very small numbers of people coming forward to give their views on these consultations. It might be that the numbers compare favourably with other consultations that the department has undertaken, but, if we are to give proper weight to the views of local people—and these areas have millions of people living in them—some of the numbers are derisory. We need to look at other ways of consulting people to get their views on the proposals coming forward. Having said that, I am happy to approve the regulations tonight.