Combined Authorities (Borrowing) and East Midlands Combined County Authority (Borrowing and Functions) (Amendment) Regulations 2025

Baroness Scott of Bybrook Excerpts

Monday 13th January 2025 Grand Committee

I give this SI my general support, with a few caveats.

[Baroness Scott of Bybrook (Con)]

My Lords, this SI is a key step in advancing the devolution agenda, continuing the work set out in the Levelling-up and Regeneration Act 2023 under the previous Conservative Government. As we have heard, it extends the borrowing power to the York and North Yorkshire Combined Authority, the North East Mayoral Combined Authority and the East Midlands Combined County Authority, empowering them to invest in critical areas, such as housing, regeneration, transport, education and health. This is part of a broader effort to decentralise power from Westminster and empower local authorities to shape their own futures, which His Majesty’s Official Opposition support.

In terms of economic development and regeneration, the regulations grant the EMCCA the general power of competence to support local businesses, tourism and other sectors. This is a notable shift, allowing the EMCCA and its constituent councils to carry out more comprehensive projects, including potentially accessing grants from central government, but we must ensure that, while these powers enable growth and development, there is robust accountability in place to ensure that resources are used effectively and in the best interests of those local communities.

A public consultation was conducted regarding the proposed changes, particularly focusing on the economic development and regeneration powers of the EMCCA. While the feedback was largely positive, with no significant objections, it is important to note that support for these new powers was not overwhelming. The absence of major concerns from stakeholders, including the House of Lords Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments, suggests broad acceptance, although this should not be construed as unanimous approval.

I have a number of questions for the Minister. While the regulations aim to empower local authorities, several questions need to be answered to ensure these powers are used effectively and responsibly. On effective devolution, the work of the Levelling-up and Regeneration Act promoted decentralisation, but how much autonomy will local authorities truly have under these regulations and at what point will central government oversight become excessive? On oversight, without a statutory review clause noted, how will the Government ensure accountability for these new borrowing powers? Are there safeguards in place to ensure that borrowing is managed prudently? Finally, on regional equity, could the new powers create disparities in regional development, potentially leaving smaller regions behind? How will the Government ensure that these powers, to be granted to certain areas, do not exclude or disproportionately benefit specific regions at the expense of others?

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank both noble Baronesses for their participation and broad support for this SI. I will address some of the questions raised. The noble Baroness, Lady Pinnock, asked about the powers of mayors; I simply point to the success of existing mayoralties, delivering real things for their communities that have made a huge difference—in transport, skills and, in some places, health economies—in the areas where people live. Of course, you can only really do that if you are part of the community that you are representing, and the Government’s push for devolution is to help those local areas with skin in the game to have the powers and funding they need to drive their areas forward, particularly for growth but also for the conditions for the people in their areas.

We now have the Council of the Nations and Regions, which is a very important body for driving forward growth in our regions and nations. It is very important that every part of the UK has a seat around that table. That was the thinking behind the English devolution White Paper—it is still out for consultation, so we will see what comes back from that.

On capital borrowing, it will be the responsibility of mayors to drive growth in their areas, but I realise that borrowing will have to be paid back. Debt caps have been agreed with the Treasury. There has been an extensive process to agree them, and it has been done on the basis of what is affordable for those areas within their current envelopes.

The noble Baroness spoke about powers in relation to housing and planning. The English devolution White Paper set out strategic and investment powers, and possibly development corporations that mayors will have powers over. Planning powers on a day-to-day basis will stay with the constituent local authorities, which is right and proper because they are the people on the ground.

The noble Baroness also spoke about local government funding. The last person in the world who would underestimate issues in local government funding is me. I lived with them on a daily basis for many years. There have been substantial steps forward in funding for local government. In spite of a very difficult financial settlement this year, our Secretary of State has achieved significant additional funding for local government. Off the top of my head, I think the figure is £3.7 billion altogether for local government, and I am sure that officials will wave at me if I am wrong. We know that will not solve all the problems. We have to increase growth in the country to improve that situation more substantially. I have just been given a great big written note which I am supposed to read, while I talk at the same time, but that is not possible, so I will answer off the top of my head and, if I do not answer all noble Lords’ questions, I will respond later in writing.

On the Levelling-up and Regeneration Act and non-constituent members, the noble Baroness is quite right that we had substantial debates about them during the passage of the Bill. For one type of authority, there are not voting rights, but for the other type of authority, there are voting rights. As we move into the full picture of devolution, there will be further consideration of that. It is right that in mayoral combined authorities the upper tiers will take the decisions. How they decide to involve their constituent members will be broadly up to them. I have heard some really creative ideas, such as having key committees chaired by the constituent councils. As we move into a picture where we have all unitary authorities, I think we will continue to look at that and review it.

I thank the noble Baroness, Lady Scott. The three of us are part of the LURB club who sat through many hours debating the Bill. I agree with her about what a key step this is and that the East Midlands Combined County Authority will need to undertake the more comprehensive projects that were set out in its devolution agreement, and it needs these powers to do that. Of course we need robust accountability for all of them.

There was some consideration of consultation, but extensive consultation had already taken place on this so, having looked extensively at what had been done before, it was felt that there was no need for further consultation. I take the noble Baroness’s point that support was not overwhelming, but there was enough support for us to feel comfortable that we could go ahead.

The question about autonomy is important. The way that we have set out the picture in the English devolution White Paper is that, the more established an authority becomes, the more autonomy it will have. It is perhaps the opposite way from what the noble Baroness suggested. Central government oversight will not overwhelm those authorities once they are established. Look at some of our more established mayoral authorities: Greater Manchester is always the standard example and it has extensive powers and funding to lead the way for growth, transport, skills and so on. We want to see that with the more established authorities. The more established they are, the more they prove themselves in terms of accountability of all kinds, especially financial, and the more powers they will get.

On accountability and safeguards for borrowing, that is why debt caps have been set with the Treasury. They have been looked at very carefully. The White Paper also sets out a wider process of accountability which may, depending on what comes back from the consultation, include something like local public accounts committees to have oversight at local level of what is going on within mayoral combined authorities.

I hope that answers all the questions but, if not, I will go through Hansard and make sure that we respond.

[Baroness Scott of Bybrook (Con)]

I asked how we would ensure regional equity.