Tees Valley Combined Authority: Best Value Notice

Baroness Swinburne Excerpts

Thursday 2nd May 2024 Lords Chamber

[Lord Scriven]

To ask His Majesty’s Government what consideration they have given to issuing a Best Value Notice to the Tees Valley Combined Authority, given the scale of the legal costs that its subsidiary the South Tees Development Corporation is likely to incur after losing a court case that it brought against PD Teesport.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Swinburne) (Con)]

All local authorities must comply with the best value duty to make arrangements to secure continuous improvement in the way in which their functions are exercised, having regard to a combination of economy, efficiency and effectiveness. Best value notices provide for early engagement with an authority that may be exhibiting indicators of potential best value failure. However, incurring legal costs alone is unlikely to trigger the issue of a best value notice.

[Lord Scriven (LD)]

My Lords, it is not just the case which is referred to on the Order Paper. The 26 recommendations of the Tees Valley Review relating to Tees Valley Combined Authority are not legally binding or enforceable. Last week, the current mayor cast doubt on his commitment to implement recommendation 22, which is to renegotiate the appalling 90:10 profit deal that favours the private sector after half a billion pounds of public sector money had been invested, when he said that it was a “great deal” and that he would do it again. Is it not time to stop relying on voluntary agreements, regardless of who the mayor is, and for the Government to issue an enforceable best value notice to protect the interests of local taxpayers?

[Baroness Swinburne (Con)]

The Secretary of State has requested a report on the progress with the action plan in six months, including encouragement to work with the Local Government Association and the Centre for Governance and Scrutiny. We have been encouraged by the mayor’s response that he will quickly implement all the recommendations. It is only fair and consistent that the mayor and the combined authority have the time needed to develop and implement action plans to respond to the recommendations in the review.

[Lord Watts (Lab)]

My Lords, if I had acted in the same way when I was a local authority leader, I would have been surcharged. Is it not about time that the mayor had the same sort of qualification, that he has to deal with his public money in the same way as his own money, and he should have fiduciary duty like local authority leaders have?

[Baroness Swinburne (Con)]

There is a strengthened governance code for all the combined mayoral authorities and all these types of devolved government. I am sure that, as we progress with this, we will see those governance systems start to work more efficiently and effectively.

[Lord Shipley (LD)]

My Lords, on 5 March 2024, the Government issued a best value notice to the West of England Combined Authority. On 24 January 2023, it issued a best value notice to Cambridgeshire and Peterborough Combined Authority, and it renewed that on 30 January 2024. Why are the Government refusing to implement an enforceable best value notice on Tees Valley Combined Authority when it imposes them on other combined authorities?

[Baroness Swinburne (Con)]

To assist the House, let me say that best value notices are similar to the Department for Education improvement notices, which are issued following an Ofsted inspection and are a step before statutory intervention. A best value notice is issued to a local authority exhibiting indications of future best value failure. The notice is posted on GOV.UK and outlines the Government’s concerns with the authority and the clear expectations of the actions needed to ensure continuous improvement. The examples given are a clear way in which those non-statutory instruments can be used. With regards to Tees Valley, it has just undergone a major independent review with 28 recommendations; we will see in six months’ time if it has been conformed to.

[Baroness Taylor of Stevenage (Lab)]

My Lords, the Minister has just said that not only will the Government not ask the NAO to come in to do the review, but the mayor is not doing what the review indicated. The Minister has responded to previous questions about requesting that the National Audit Office carry out a detailed forensic review of deals that have been done there by saying that it is not appropriate. Can I therefore ask her what outstanding questions she believes there are in relation to value for money for the people of Teesside? If we are not going to have a best value notice or a National Audit Office review, what steps will the Government take to examine the ongoing questions?

[Baroness Swinburne (Con)]

As the noble Baroness and others in this House will know, whether people are doing what they say they are doing and whether we are achieving best value for money is under constant and ongoing review. The role of the National Audit Office is not to audit or examine individual local authorities, and its power would not normally be used for that purpose. We have already an independent review, and people have accepted its findings; we need to ensure that all 28 of those recommendations are implemented and delivered.

[Lord Blunkett (Lab)]

My Lords, this is a very serious issue. I met someone yesterday who told me that their father, who lives in the Tees Valley mayoral area, had decided they were going to vote for the incumbent candidate because he was a really good Liberal Democrat.

[Baroness Swinburne (Con)]

I am sure he is therefore voting for the person who is delivering for him and his local community, regardless of political affiliation.

[Lord Scriven (LD)]

My Lords, the Minister’s answer does not make sense. The Tees Valley Review concluded that, because of the poor governance, the lack of transparency and the deals that were done in the way they were done, value for money for the taxpayers of Tees Valley could not be guaranteed or ascertained—that is fact within the review. The mayor last week changed his commitment to implement the 26 recommendations, and he specifically said on recommendation 22 that he would do it again. Can I ask why the Minister feels it is not worth revisiting potentially looking at a best value notice in light of current events?

[Baroness Swinburne (Con)]

Given, as I have outlined, that there are already initiatives under way to implement all 28 recommendations, I do not feel that a non-statutory best value duty notice would achieve anything other than duplicate what is already under way.