Baroness Stowell of Beeston
Main Page: Baroness Stowell of Beeston (Conservative - Life peer)Combined Authorities (Consequential Amendments) Order 2014
Baroness Stowell of Beeston Excerpts
Baroness Stowell of Beeston
That the Grand Committee do consider the Combined Authorities (Consequential Amendments) Order 2014.
Relevant documents: 23rd Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, I am pleased to introduce the draft Combined Authorities (Consequential Amendments) Order 2014, which was laid before this House on 10 March. In speaking to it I shall also speak to the other three orders in my name on the Order Paper relating to the three proposed combined authorities.
The orders we are considering this afternoon, if approved, will bring about the establishment of combined authorities in three major metropolitan areas: across Merseyside and Liverpool, around Sheffield and South Yorkshire and in West Yorkshire. The purpose of these combined authorities is to enable the councils and their partners in each of these areas to work together more effectively to promote economic growth, to secure more investment and to create more jobs. These combined authorities will be central to delivering the outcomes in the city deals that the Government have agreed with each of the areas. They will also provide the governance needed for any future growth deals drawing on resources of the local growth fund.
Each combined authority will be responsible for economic development, regeneration, and transport across the functional economic area. All the councils in each area have agreed that their combined authority will be able to exercise their functions on economic development and regeneration. The combined authority will also have the transport functions currently exercised by the area’s integrated transport authority. That integrated transport authority will be abolished when the combined authority is established.
The process for setting up a combined authority is set out in the Local Democracy, Economic Development and Construction Act 2009. Crucially, all the drive and initiative has to come from the places involved. It is what we call a bottom-up process. It is a process where the first steps are taken by the councils involved. The first step is for the councils to undertake a governance review in their area looking at how decisions are taken on economic development and regeneration, and on transport. This review will allow the councils to decide whether the combined authority approach is the most effective way for them to work together and with their public and private partners, particularly the local enterprise partnership for the area concerned to promote economic growth and prosperity. All the councils concerned have followed this process and concluded that a combined authority is the right way to work together and with their partners to drive growth.
This Government’s approach is one of localism, which reflects our belief that residents and their representatives are best placed to decide what happens in their area. Where councils come forward with a proposal for a combined authority—like the three before us—which commands wide local support and we consider that the statutory conditions have been met, we invite Parliament to approve a draft order to establish the proposed combined authority. If, in the future, local councils decide that changes are in the area’s best interest—perhaps another council joining, or one leaving—and statutory conditions have been met, we would bring an order back to Parliament for approval to enable the change to take place.
As the 2009 Act requires, each group of councils concerned have provided the Government with detailed information about how they wish the combined authority to operate, to take decisions and be open, transparent and accountable. The Government have consulted on each proposal, and each proposal has been considered in the light of relevant statutory conditions to make sure that the proposal: is likely to improve the exercise of statutory functions relating to transport, economic development and regeneration in the area; is likely to improve the effectiveness and efficiency of transport in the area; and is likely to improve the economic conditions in the area. In each case I can tell the Committee that the Government consider that these tests are unambiguously met. The Government have also had regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government. Furthermore, we are clear that in each of these areas the combined authority would command wide local support—from local businesses, other public bodies and from local people and their democratically elected representatives.
I turn to the draft orders themselves. Three of them provide for the establishment respectively for combined authorities across the areas of Greater Merseyside, South Yorkshire and West Yorkshire. Each of these three orders specifies the formal, legal name for the combined authority, to which all the councils concerned have consented. But—and I know that this is an important matter and one of great interest to many noble Lords in the Grand Committee today—how that authority will brand itself, including the use of any brand name, will be entirely a matter for the combined authority.
Each of these three draft orders also makes provision for the abolition of the integrated transport authority for the area, about the transport and economic functions the combined authority will have and about its membership and constitutional arrangements. A combined authority will be governed by its members and subject to scrutiny by one or more overview and scrutiny committees with a membership drawn from members of the councils concerned to hold the combined authority to account. Good governance practice will mean that such committees will be politically balanced, enabling appropriate representation of councils’ minority parties in the governance of combined authorities.
Combined authorities are also subject to the same transparency and audit requirements as local authorities, so they will be audited by an external independent auditor. Meetings of the combined authority are open to the public in the same way as local authority meetings, and in future people will have the right to film and use social media to report on council meetings. This applies equally to meetings of combined authorities.
Finally, the fourth draft order simply makes amendments to transport legislation which are applicable to all combined authorities.
In conclusion, these draft orders will enable the councils concerned and their partners to work together more effectively to deliver economic growth across their areas. Establishing these combined authorities is what the councils and their partners in these areas want. They want this because they believe it is the most effective way for them to promote economic growth. In creating their combined authority, they are putting the promotion of economic growth at the heart of all that they do. This is a priority for them. It is a priority for the Government. I commend the draft orders to the Committee and beg to move.
Baroness Stowell of Beeston
My Lords, I am very grateful to all noble Lords for their strong words of welcome in support of these orders. I shall start by acknowledging a point made by the noble Lord, Lord Alton. He quoted a report stressing that a combined authority is not a merger. I agree with that. These combined authorities open the way for more effective collaboration between the councils and their partners to promote economic growth and secure investment for their area. This is about collaboration. It is most definitely not a merger.
My noble friend Lord Storey again flagged the question of the naming of these combined authorities. The noble Lord, Lord Alton, went into greater detail about his concerns and said that the statutory names on the orders do not trip off the tongue. The most important thing for me to do is to be absolutely clear in restating what I have said and to answer directly the noble Lord, Lord Alton, that the decision about what a combined authority might want to call itself will be a matter for that combined authority. The names on the orders are the legal names, but we feel that it is right for these combined authorities to decide the best way to—I know the noble Lord did not like the word “brand”—present themselves and their local people to the rest of the country and indeed the world. As the noble Lord said, there is widespread awareness of Liverpool around the world. On that, I can be absolutely clear, and I hope I have reassured noble Lords on that point.
My noble friend Lord Storey asked for some assurances around accountability and transparency. I am happy to confirm that these orders and other existing legislation place robust requirements on the combined authorities. To the point made both by him and by my noble friend Lord Shipley, I can say that the combined authority will be governed by its members and subject to scrutiny by one or more overview and scrutiny committee, with membership drawn from members of the councils concerned, to hold the combined authority to account. Good governance practice will mean that such committees will be politically balanced, enabling appropriate representation of councils’ minority parties in the governance of combined authorities.
My noble friend Lord Shipley asked some specific questions around how proportionality will work, who would choose the chairman of the committee and how agendas would be decided. I understand why he raises these questions and certainly acknowledge to him the importance of these points. However, what he has outlined is what I would describe as, and what would be commonly described as, good practice. What we are clear about is that it is for the individual councils and the combined authority itself to decide how they will put in place their arrangements. I urge them to take the good practice approach that we would all expect and want them to follow, not least because of the strong welcome that we all have for this new governance structure.
Lord Alton of Liverpool
Can the Minister clarify further how it will be possible to see minority representation when in a combined authority there is only single-party representation—and, therefore, only leaders of that party are part of the combined authority? Is it not therefore particularly important that there should be some specificity when it comes down to the openness of meetings, and some requirement that meetings should be able to be accessible by the public and the media?
Baroness Stowell of Beeston
The noble Lord raises a couple of points there. The point that I am getting to with the overview and scrutiny committee is that it would be made up of representation from the various authorities that make up membership of the combined authority. The scrutiny committee that will hold the combined authority to account will be made up not of the chairman or the leaders of the different local authorities but of people from the different parties represented in that local authority. So there will be a variety of political parties represented on the scrutiny committee that holds the combined authority to account.
As to access to meetings of the combined authority, I was going to come on to that, because it was a point that my noble friend Lord Storey also raised. They will be subject to exactly the same transparency requirements as local authorities. So, yes, the meetings of combined authorities will be open to the public; this is a statutory requirement. Their minutes will be published in exactly the same way as local authority minutes will be published—and, indeed, they will be subject to the requirements of the Freedom of Information Act in exactly the same way as local authority meetings are at this time. I hope that before I sit down I will be able to confirm that the scrutiny committees will also be open to scrutiny in the same way.
The noble Lord, Lord McKenzie, referred to West Yorkshire and York in particular. He acknowledged there that we are seeking what we describe as a legislative reform order to amend primary legislation on combined authorities to enable a council that is not contiguous with other members of the combined authority but which is in the same functional economic area to become a constituent council of that combined authority if it wishes. As a first step, we will be consulting on proposals for such a legislative reform order, which will be an opportunity for those with views on this to put them to government.
The noble Lord, Lord McKenzie, also referred, I think, to the combined authorities’ ability to reclaim VAT. I confirm that they will not be disadvantaged by VAT legislation. Last week, the Government launched a consultation on the proposal to add Greater Manchester and these proposed combined authorities to the existing VAT refund scheme for local authorities, which can be achieved through secondary legislation. The consultation closes on 18 April and, following that, if the Government decide to proceed, parliamentary approval will be sought to give effect to this and to enable established combined authorities to recover VAT, just as the constituent local councils can.
The noble Lord, Lord McKenzie, also sought confirmation that local authorities and the ITAs that will be abolished would not be subjected to any disadvantage around tax arrangements. I will see whether the answer to that emerges, but if it does not, I will write to the noble Lord. I can confirm that there will be no disadvantage. I am nearly at the point where I might be able to avoid a letter, which would be great.
Going back to the point that I was talking about previously, I confirm to the noble Lord, Lord Alton, and all noble Lords, that the scrutiny committee will be open to the public, as will be the combined authority meetings.
Several noble Lords mentioned devolution and localism more generally. The Localism Act 2011 devolved powers not only to local authorities but to local communities. We are interested in discussing with local authorities what more can be done to empower them to deliver economic growth and take their communities forward. We certainly hope that more of the combined authorities will come forward. As my noble friend Lord Shipley said, the combined authority covering local authorities in the north-east will be with us very shortly. I hope that I have been able to address all the key issues that have been raised.
Lord McKenzie of Luton
I may be able to avoid the Minister having to write. I am not sure that she dealt with the point about funding and whether the opportunity runs beyond the existing opportunities in relation to transport funding. In particular, given what is effectively a recent change, as levying bodies, presumably these are the very sorts of levies that have to be taken into account by individual local authorities in judging whether or not their council tax increases are excessive. Within the overall constraints—whether we agree with them or not—that the Government have imposed, there is an effective cap, subject to referendums, on what the combined authorities would charge in their constituent authorities. Should that not be an argument for perhaps some relaxation in relation to prudential borrowing for so long as it could be funded through the levy mechanism?
Baroness Stowell of Beeston
The noble Lord is right to say that I had omitted to respond to him on that important point. We are absolutely clear that levies should be included in the regime for the consideration of council tax levels. Levies will therefore be caught by the council tax referendum policy. We are absolutely clear that local people should be able to have their say on any proposed excessive increase in council tax, whether caused through a levy on the council or by any other reason. Certainly in Leeds, where this has been a particular debate, we are confident that the measures proposed in that area would be possible without an increase above 2%. If a combined authority wanted to propose an increase above 2%, it would be open to it to conduct a referendum.
Lord Shipley
Will the Minister give further guidance on the overview and scrutiny structure? She referred to good practice. Will she write to the councils that form combined authorities about what that good practice might entail? In particular, will she advise that having an opposition chair of scrutiny, which anyway is common practice in many councils for the overview and scrutiny process, might be recommended by the department? Will she also advise on whether all members who are appointed to serve on an overview and scrutiny panel are able to place items on the agenda? I am seeking to avoid a situation in which the majority party on the combined authority chairs the overview and scrutiny panel and then controls the items placed on the agenda. Good practice is what I would expect to happen, and I am sure that in the case of the combined authorities orders we have today, and get in the future, that would be deemed to be good practice, but it might help if the Minister defined clearly what good practice actually means so that everybody can be aware of it, including those authorities that are yet to put in their proposals.
Baroness Stowell of Beeston
My noble friend raises some very important points. As a point of principle, I or one of my ministerial colleagues would be happy to write to the combined authorities, and I will discuss with them the precise detail to put in such a letter.
Lord McKenzie of Luton
The exchange has prompted a thought. Presumably the combined authority will have to have an audit panel, subject to the constraints or requirements of the recent Act.
Baroness Stowell of Beeston
Yes, it will. I commend these orders to the Grand Committee.