English Devolution and Community Empowerment Bill

Baroness Taylor of Stevenage Excerpts

Tuesday 27th January 2026 Grand Committee

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

I thank noble Lords for their scrutiny of the first clauses of the Bill last week. I have replied in writing to some of the questions noble Lords asked me last week, and I hope they have received those replies. I look forward to further scrutiny today.

I thank the noble Baroness, Lady Scott, and the noble Lord, Lord Lansley, for their amendments to Clause 6, on decision-making arrangements. The amendment tabled by the noble Baroness, Lady Scott, probes whether Clause 6 is required. Clause 6 is central to the Bill’s core ambition of moving from devolution by deals to devolution by default. It creates a clear and consistent decision-making framework for combined authorities and combined county authorities. Current decision-making arrangements in combined authorities and combined county authorities are complex and vary widely, as noble Lords who have spoken have referred to. This confuses the public and makes accountability harder. For example, mayors are often seen by the public as the accountable person for their authority, but the Mayor of the West of England and the Mayor of the West Midlands are not allowed to vote on their combined authority’s budget.

Clause 6 introduces a simple majority voting system which makes decisions more transparent, creates a level playing field and provides more clarity for the public. For mayoral strategic authorities, the mayor must be in the majority for a vote to pass. This reflects their direct democratic mandate across the entire area. When he was referring to Cambridgeshire, the noble Lord, Lord Lansley, spoke about the consequences if that is not in place. I think it is an important move. Collaboration remains important, and we are clear that we want to see mayors build a consensus, but one member should not be able to block decisions for an entire region. Removing Clause 6 would keep the current patchwork of governance rules, which slows decision-making down and can undermine accountability to the public, so we believe the clause is essential for strong, transparent governance and should remain in the Bill.

Amendments 41 and 43, also tabled by the noble Baroness, Lady Scott, seek to understand the justification for providing the mayor with a veto over decisions and why decisions must require the agreement of the mayor. The Government recognise the importance of strong collaboration with strategic authorities. That is exactly why the Bill requires both the mayor and the constituent members to work together. The standard voting arrangement in the Bill requires that a majority of members support a decision. We believe the provisions in the Bill strike the right balance between collective decision-making and clear leadership. Directly elected mayors have a unique democratic mandate. They are elected by the public to provide leadership and direction for their whole area. Requiring mayoral agreement on key decisions helps ensure clarity over who is accountable for outcomes. Without that clarity, responsibility risks becoming blurred. Removing the requirement for mayoral agreement would weaken the leadership model that underpins effective devolution. It would lead to slower decision-making, less coherent strategies and reduced accountability to the public.

Amendments 42 and 44 in the name of the noble Lord, Lord Lansley, seek to provide that secondary legislation can be used to set voting arrangements for combined authorities and combined county authorities that differ from the standard arrangements set out in Clause 6. The Government agree that simple majority voting would not be appropriate for all situations. That is why Clause 6 already provides that voting arrangements set out in other enactments continue to apply. Therefore, these amendments are not necessary. For example, in non-mayoral areas the local transport plan must instead have the consent of all constituent councils in order to be adopted. In mayoral areas, the local transport plan remains a mayoral function, but it must be approved by a simple majority vote of the strategic authority. The existing powers for the Government to provide place-specific voting arrangements in secondary legislation, to which the amendments refer, will also apply.

Turning to the comments of the noble Lord, Lord Lansley, and the noble Baroness, Lady Scott, about the Levelling-up and Regeneration Act, the Local Democracy, Economic Development and Construction Act—that is a snappy title—and Clause 6, the Bill does not disapply or override those Acts. Their relevant provisions continue to apply where appropriate, so restating them here does not add any new legal protection. Including additional statutory references risks creating confusion about which provisions apply in different circumstances and undermines the clarity of the governance framework the Bill is trying to apply.

We recognise that some parts of the country have unique technical circumstances that require small changes to this consistent approach, such as to reflect arrangements relating to the management of trams or local bus companies. We have undertaken extensive engagement with existing combined authorities and combined county authorities over the past 12 months on this issue to agree a limited set of bespoke voting arrangements that met this high bar. Should any future strategic authority seek bespoke arrangements, the Government would need to consider them on a case-by-case basis. However, we are clear that any changes to the standard voting arrangements would be by exception and subject to a very high bar.

The Government will maintain some of the place-specific voting arrangements. For example, Lancashire combined authority has bespoke voting arrangements in relation to its budget, which reflects its governance structure. In response to the question from the noble Lord, Lord Lansley, about weighted voting, the existing powers for the Government to provide place-specific voting arrangements will continue to apply, so that will be for Suffolk and Norfolk to determine as we go forward. For the reasons that I have set out, I ask that the amendment be withdrawn.

[Baroness Scott of Bybrook (Con)]

I am grateful to the Minister and to all noble Lords who have taken part in this debate. As I said, the issues raised today go to the heart of how we structure local democracy and ensure that the voices of all our communities are fairly and effectively represented. That is why we brought forward these probing amendments.

A consistent concern has emerged that the balance of power proposed in the Bill risks concentrating authority in the hands of the one single officeholder rather than empowering the broad and diverse range of locally elected councillors who best understand the communities that they serve. I have not heard a lot today that puts my mind at rest, but I will read Hansard tomorrow and look further at it. I was pleased that the Minister said that places such as Norfolk and Suffolk, quite close to my heart now, will have that flexibility to deal with local problems—but I have to say that they might argue about it. Who knows? Let us hope that there are two single authorities and we do not have any problems.

We all agree that effective local leadership is vital, but leadership does not mean overriding democratic deliberations; it means working with those local representatives, ensuring accountability and respecting the mandate of those who have been elected by their communities. When decision-making structures are distorted in favour of one individual, however capable, they operate not as a system of local democracy but, as I said, as a presidential model, which sits uneasily with the traditions of government in this country.

My noble friend Lord Lansley’s amendment rightly seeks to bring the Bill back into alignment with those frameworks established in previous legislation. I will read this back, but it sounds as if that is happening, although I am not quite sure how. If there are any further questions, I am sure that we will talk to the Minister about them. I am happy with that.

In relation to Clause 6, we have urged the Government to reconsider whether rewriting the constitutional arrangements of the Act was necessary or justified. It looks to me as if we are perhaps not rewriting as much as we feared was being rewritten—but, as I said, we will look at that in detail when Hansard comes out.

We still believe that, if the Government truly wish to empower our local authorities, they must demonstrate it by upholding democratic balance, trusting councillors and ensuring that all voices, not just one, carry the appropriate weight in the decisions that shape our counties and regions. But at this time, I am happy to withdraw my amendment.

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[Lord Jamieson (Con)]

My Lords, I thank my noble friend Lord Lansley for his amendments. I think that there has been consensus among noble Lords contributing on this group that this is something that should be explored and looked at further. Amendment 45 rightly links local growth plans to spatial development strategies, ensuring that they are not formed in isolation and do not contradict each other. When a local growth plan is drafted, it should take account of the implications for spatial development. We welcome this amendment and support a more integrated and coherent approach.

However, we also believe that these plans must be informed by neighbourhood plans as well as neighbourhood priority statements, which have yet to be commenced under the Levelling-up and Regeneration Act. Amendment 46 seeks to ensure that spatial development strategies take into account national environmental improvement plans and the land use framework. This will help local government at least to have regard to the national Government’s environmental targets and to be aware of the environmental solutions proposed. As for the land use framework, we are still waiting for it to be published. Can the Minister confirm the timeline? As others have asked, will it be imminent?

Amendments 138, 139, 144 and 145 address the need for spatial development strategies to be aligned with infrastructure projects to identify any that are needed for growth. Again, these should be important considerations to ensure that new developments are supported with the necessary infrastructure rather than treating the two in isolation. As we said in the Planning and Infrastructure Bill debates, the consequences for development of the failure to deliver infrastructure should also be clear.

We agree with the principle behind all these amendments. It is important that combined authorities’ and councils’ various strategies are joined up, co-ordinated and coherent to ensure not only good governance and efficiency across local government but, more importantly, high-quality development. I thank my noble friend for his efforts and I look forward to hearing the Minister’s response.

[Baroness Taylor of Stevenage (Lab)]

My Lords, that was an interesting discussion. I thank the noble Lord, Lord Lansley, for his amendments and I welcome the opportunity to discuss the role of spatial development strategies in the new devolution framework.

Amendment 45 would require strategic planning authorities to identify the policies in their spatial development strategies that are of strategic importance to address the local growth priorities identified in local growth plans. I very much agree with the need for spatial development strategies properly to address the priorities identified in local growth plans where they are of strategic importance to the area, such as the issues that the noble Lord mentioned around skills and infrastructure. There is an expectation in the revised NPPF that that is exactly what will happen.

The Planning and Infrastructure Act, to which the noble Lord also referred—we recently sat through many hours of debate on it—requires strategic planning authorities to have regard to any plan or strategy they have published. This would include a local growth plan. In the draft revised NPPF, which was published just before Christmas, we set out that spatial development strategies should give spatial expression to strategic elements of local growth plans, and that would include all of the issues mentioned by the noble Lord. We also set out in the draft revised NPPF that spatial development strategies should be tested against national policy when they are examined; that will include the industrial strategy, for example, and will shine a light on whether they are meeting the expectations we have of the SDS.

A number of Peers spoke to Amendment 46. I say to my noble friend Lady Young that I found her extrapolation of this through to losing lots of elections in May and then having a whole reshuffle a bit depressing. I hope that will not happen, and I also hope that my noble friend will have a wander through one of her new forests and cheer herself up a bit. Amendment 46 would require a strategic planning authority to have regard to the Government’s environmental improvement plan and the land use framework for England while preparing a spatial development strategy.

I absolutely agree with noble Lords on the importance of these national documents relating to land use and the environment. The provisions detailing the required content of spatial development strategies and the factors to be taken into account in their preparation were introduced less than two months ago in the Planning and Infrastructure Act, following very thorough parliamentary scrutiny. I do not consider it necessary to revisit or amend these requirements before they have even had a chance to be tested in practice. The documents in question are expected to inform the drafting of national planning policies, and strategic planning authorities will be required to have regard to the need to ensure that their strategy is consistent with the current policy.

For example, if we found that the land use framework or the environmental improvement plan were being ignored in strategic development strategies, we would keep that under review. Should any gaps or misalignments emerge between strategic development strategies and these documents, we can consider future changes to the National Planning Policy Framework or planning practice guidance, or even secondary legislation to ensure that they are taken into account in preparing an SDS.

A number of noble Lords asked questions on the publication of the land use framework, which I know is eagerly awaited. The Government consulted on land use in England from January to April last year. The responses, as well as the feedback from supporting workshops that have been held since, are being analysed. The responses will inform the preparation of the land use framework. I cannot give noble Lords an exact publication date today, I am afraid, but I know that my colleagues in Defra want to publish it as quickly as possible.

On the question from the noble Lord, Lord Shipley, about regional plans, I used to be on the regional assembly, so I sat thought the entire process of the east of England regional plan; the noble Baroness, Lady Thornhill, did so as well, I believe. There were a lot of lessons to be learned from those regional plans, particularly around the co-ordination of data and so on, and I know that officials in the department have taken into consideration how that was done. We need to reflect carefully on those experiences and how they fit in with what we are about to do with strategic development strategies.

The noble Baroness, Lady O’Neill, asked about London. The London plan sits outside this Bill, I think, but there is an expectation on London boroughs that this will be done. Indeed, my own borough is quite a way outside London—well, 28 miles; we are in Hertfordshire, so not that far—and we were consulted on the London plan as part of the Ring Around London consultation.

On my noble friend Lady Young’s question about the local nature recovery strategies, it is a requirement that SDSs take account of those; indeed, the London plan has to take account of local nature recovery strategies as well.

Amendments 138, 139, 144 and 145 would require mayoral combined authorities and mayoral combined county authorities to set out in their local growth plan what is needed in spatial and infrastructure terms to realise the economic growth opportunities presented in the plan. As with Amendment 45, tabled by the noble Lord, Lord Lansley, I agree with the need to ensure that places are identifying these needs. Local growth plans will be required to set out an economic overview of their area, shared priorities agreed with the Government, and a pipeline of investment opportunities. Where infra- structure or development presents a relevant investment opportunity, we would expect it to be included in that pipeline. We are clear that local growth plans should provide an overarching framework for growth, identifying actions and investment that can drive economic growth and productivity.

But, when it comes to addressing the spatial implications of local growth plans and identifying the development and infrastructure needs for realising growth, the right vehicle is the spatial development strategy. That is why we set out that spatial development strategies should give spatial expression to strategic elements of local growth plans when we published our proposed reforms to the National Planning Policy Framework. For all those reasons, I hope that the noble Lord, Lord Lansley, will withdraw his amendment.

[The Earl of Clancarty (CB)]

My Lords, we will come to local growth plans and culture. Can the Minister confirm that the spatial development strategies will include cultural growth as something to look at?

[Baroness Taylor of Stevenage (Lab)]

Each local area will consider its local growth plan, and I hope they will all look at culture. We have carefully considered and are reflecting on the comments made on the competencies we included. This is important, and I gave some stats on the first day of Committee on the benefit to the economy of some of the culture in my own county. It is important that all areas consider this as a key part of what should be in any development strategy and local growth plan.

[Lord Lansley (Con)]

I am most grateful to the Minister for that response and to all noble Lords who spoke on this group. In particular, I give warm thanks to those who supported Amendment 46. As the noble Baroness, Lady Young of Old Scone, rightly said, we may need to think about this again on Report, just to check, for example, that the National Planning Policy Framework does what the Minister says it does. At the moment, I cannot honestly say that I am sure that it does.

Noble Lords who are often in these planning discussions will always find it rather odd to try to work out that the Government sometimes say that we need to put something in the Bill. For example, local nature recovery strategies are prescribed to be taken into account for a spatial development strategy. Why not prescribe the land use framework? That, apparently, will be covered in the National Planning Policy Framework, which, as we know, is a document that derives statutory weight. So, if it is in there, the weight is there, and that is fine. But the point is that we are writing this legislation now, and this gives us an opportunity for Parliament to say what it thinks, because we cannot and do not debate the content of the National Planning Policy Framework in the way that we debate this legislation. So, there is a reason why we do this now, in the here and now.

There are many links to, for example, environmental well-being, local nature recovery strategies and promoting the adaptation to and mitigation of climate change in the way spatial development strategies are to be constructed. I just think we need to be absolutely certain that Ministers will make that clear in the NPPF. Indeed, they have a power under Section 12D(7) to prescribe the matters that spatial development strategies must include. We just need a bit more certainty that these things will be prescribed.

Where the relationship with the growth plan is concerned, I completely take the Minister’s point. It is just that, although growth appears to be the priority, actually the spatial development strategy says that the strategic authority should focus on the consequences of growth rather than on delivering the growth. The relationship between the local growth plan and the spatial development strategy is much more of an ex ante than post hoc set of decisions. You want to go upfront and say that we are designing the local growth plan alongside the spatial development strategy and not trying to retrofit the housing to meet the local growth requirements. I hope that that is what is going to happen; otherwise, I fear that these will be two teams in strategic authorities, with the economic development people on the one hand and the planning people on the other, when they should be one team producing one strategy. I hope that we can encourage that as much as possible through the nature of the debates we are having.

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[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank the noble Baroness, Lady Scott, and the noble Lords, Lord Jamieson and Lord Lansley, for their amendments on established mayoral strategic authorities.

Amendment 47, tabled by the noble Baroness, Lady Scott, seeks to remove the Secretary of State’s ability to designate by regulations a mayoral strategic authority as an established mayoral strategic authority. We have been clear that newer strategic authorities will need a chance to establish themselves and set up core functions properly before they exercise all the powers in the devolution framework. However, it is important that our most established strategic authorities are not held back from accessing the full suite of powers in the devolution framework.

The ability for the Secretary of State to designate established mayoral strategic authorities is crucial to ensuring that the most mature institutions have full access to all devolved powers. Amendment 47 is therefore inconsistent with the Government’s objective of devolving further powers out of Whitehall. As the noble Lord, Lord Lansley, said, established mayoral strategic authorities have access to an integrated settlement, which is a very important measure for them.

I will set out further where we have got to with this so far, as it might help noble Lords with the concept. The English Devolution White Paper confirmed that the following combined authorities have met the criteria and will be eligible to apply for the established mayoral level of devolution: Greater Manchester, Liverpool City Region, South Yorkshire, West Midlands, West Yorkshire and the North East.

Once the Bill becomes law, several other combined authorities will become eligible to apply for MSA status: Cambridgeshire and Peterborough, East Midlands, and York and North Yorkshire at that point. These prospective established mayoral authorities will need to submit formal proposals outlining how they meet the relevant criteria. Those proposals will then be considered by the Government, taking into account the combined authority’s or combined county authority’s track record of managing major programmes. The Government will engage with all remaining mayoral combined authorities when they meet the eligibility criteria to apply for established mayoral strategic authority status. I hope that that helps to clarify where we are at the moment.

In practice, the effect of this amendment would be to remove the regulation-making power when the Secretary of State designates an established mayoral strategic authority. In the absence of that regulation-making power, designation would instead rest solely on the Secretary of State. This amendment would therefore deny Parliament a say on the designation of established mayoral strategic authorities.

Amendment 49, also tabled by the noble Baroness, Lady Scott, seeks to require the Secretary of State to obtain the consent of a combined county authority before making subordinate legislation in relation to the designation of established mayoral strategic authorities. The amendment, as drafted, would require the Secretary of State to obtain the consent of a combined county authority before removing its status as an established mayoral strategic authority using secondary legislation. However, the actual effect of the amendment would be inconsequential, as Clause 8 already prohibits the Secretary of State from using secondary legislation to remove an authority’s established status. Therefore, this amendment is not necessary.

Also, if in tabling this amendment the noble Baroness was seeking reassurance that a combined county authority could not be designated as an established mayoral strategic authority using secondary legislation without the consent of the authority, then this amendment is also not necessary. Clause 8 already stipulates that the Secretary of State may designate an authority as established only if that authority itself submits a written proposal asking to be designated as an established mayoral strategic authority. Therefore, the authority’s consent is an inherent part of the process, as no authority can be designated unless it actively applies.

Amendments 48 and 50, tabled by the noble Lord, Lord Lansley, seek to introduce a new statutory requirement for the Secretary of State to consider the

“governance, accountability and specified performance metrics”

of an existing mayoral combined authority or mayoral combined county authority, before it can be designated as an established mayoral strategic authority. I accept that the noble Lord has made this amendment in good faith and wishes to ensure that only those authorities with a strong track record of delivery, and which can demonstrate exemplary stewardship of public finances, are able to access the deepest powers and functions. On this, the noble Lord, the Government and I, as the Minister, are aligned. However, the amendment is unnecessary. The Government have already published clear non-statutory criteria for accessing the established mayoral tier, as set out in the English Devolution White Paper. The reason for having this in non-statutory documents is that it may require amending from time to time, depending on our experience of taking this forward.

To answer the question about criteria from the noble Lords, Lord Jamieson and Lord Lansley, I think that the noble Lord, Lord Lansley, already set them out, but just to be clear, they include that a mayoral combined authority or mayoral combined county authority must have been in existence, with a directly elected mayor, for at least 18 months at the point of submitting the request. It must have published a local assurance framework and it must not have been subject to a best value notice, independent review, statutory inspection or intervention in the previous 18 months. Finally, it must not have been subject to any ongoing recommendations from an externally mandated independent review and there should be no material accounting concerns covering the current or previous financial year that relate to the strategic authority’s ability to manage public money.

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[Lord Lansley (Con)]

Before my noble friend responds to the debate, I want just to be sure that I am clear. On the criteria that are applied by the Secretary of State to the question of whether a strategic authority that applies to be established should be permitted to do so, so far they presently include what the devolution White Paper said. None of that has been withdrawn and nothing has been added; it is still the same. But if that were to change at some point in the future, the Government do not need a power in order to change it, because the Secretary of State will simply issue some document that says, “From now on, this is how the Secretary of State is going to look at these decisions”. It is important to get these criteria right. Unless I am misunderstanding the Minister, the intention is that this is a gateway through which you can pass in only one direction. You become an established mayoral strategic authority and you cannot come back if it is wrong, so the criteria have to be right, and the mayoral strategic authority has to be able to live permanently with that status. Am I correct about that?

[Baroness Taylor of Stevenage (Lab)]

Yes, the noble Lord is right, but this is quite a high level of criteria. There are some financial aspects, but the fact that the authority must not have been subject to a best value notice, an independent review, a statutory inspection or intervention in the previous 18 months covers a wide variety of activity in a strategic authority. There is a rigorous process and a very high bar for those authorities to get over. When we look at the established authorities that I mentioned in relation to the progress on where we are with these now, they have been in place for a long time. Some of them are requesting additional powers to do things that were not traditionally in the framework for mayoral authorities. It is important that that is a high bar for them to get over.

As the noble Lord rightly pointed out, having an integrated settlement is an important step forward for those authorities. We hope that this will be a transformational process and that all the combined and combined county authorities will strive to get to that process once they have a mayor in place. We do not want it to be something that slips back. Let us hope that we can set these criteria, setting the bar high, which indicates the direction of travel we have for devolution, and move forward so that our authorities have the powers to do what they need to do locally.

[Lord Lansley (Con)]

I apologise for interrupting; I promise that this will be the last time. On the question of tourism revenue, if there is a tourism tax or whatever, what do we know about the arrangements for that? Is it the case that only established mayoral strategic authorities will be able to levy any kind of tourism tax because they have the financial governance and accountability arrangements established for this purpose—forgive the use of “established”, but the noble Baroness can see what I mean—or is there an intention that this would be a wider financial offering to strategic authorities?

[Baroness Taylor of Stevenage (Lab)]

The tourism tax is an interesting step forward because, as far as I know, this is the first time a fiscal power has been devolved. The Government are keen to test out that devolution of fiscal power; I do not have the details at my fingertips so I will write to the noble Lord on the detail of how it is moving forward.

[Lord Jamieson (Con)]

My Lords, I thank my noble friend Lord Lansley for his thoughtful amendments and comments. I also thank the Minister for her feedback, which has certainly provided some more illumination on a sometimes slightly murky area of devolution.

On integrated financial settlements, I know that, when I chaired the LGA, I pushed very hard to move in this direction. I was very pleased that we managed to get a couple of them over the line with the previous Government. They are important and offer huge benefits to the areas that have them. Therefore, this idea of criteria, and being very clear on them, is important; I thank the Minister for being clear that the White Paper is where the criteria are set out.

However, I am quibbling over and slightly uncomfortable with the fact that the criteria are just guidance for the Minister and could, therefore, be changed relatively easily. When you are talking about devolution, with local councils and local government making significant changes in anticipation of something that will potentially make a significant difference to their areas, those criteria must be very clear and not changeable. Councils must know what goal they are aiming for because, as the Minister said, this is not something that happens overnight; it takes several years, potentially, and a lot of effort. I do not want the goalposts to move too much—most local authorities would not want that, I think—so I would like some assurances, though not necessarily today, on how set in stone the criteria are as people go through the process.

I am also quite curious about the “no stepping back” bit. As the Minister said, we set some very high bars. However, the day after, someone might fail those high bars—but they are still there. A little elaboration on that at some later point would be very much appreciated.

With that, I thank noble Lords for the debate and beg leave to withdraw my amendment.

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Devolution should rest on democratic legitimacy, transparency and clear lines of responsibility. Those are the principles that should guide us as we shape governance arrangements; it is against those principles that this Bill must ultimately be judged, not the creation of additional bureaucracy.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank all noble Lords for their amendments on mayoral commissioners and for the wide-ranging debate that we have had on the subject.

Before I respond to any individual amendments, I want to reiterate why the Government are introducing commissioners. I completely understand the point made by the noble Lord, Lord Jamieson, on title and definition. I must say, I asked myself the same question on the potential confusion around commissioners who are sent to do a job when an authority is failing and these types of commissioners; we have to think carefully about that.

As I have set out, the Bill will empower our mayors with wide-ranging new powers over transport planning and local growth, so they can drive growth across their region, and powers over health and public safety, so that they can deliver the public service reform that the public expect to see. These are critical functions, and it is not reasonable to expect a mayor to do all of them. That is why we have introduced commissioners—an optional appointment to whom mayors can delegate functions to support them in their work. Mayors will be able to appoint up to seven commissioners, aligned to the areas of competence and reflecting areas of responsibility. As the noble Lord, Lord Jamieson, said, mayors can also appoint members of the combined county authority or combined authority as portfolio holders, of course; they will also have officials to support their work, such as finance officials, legal officials and so on.

Let me be clear: this is not about inviting a proliferation of appointments. Rather, it is about mayors having capacity to deliver against the full range of their functions and giving them flexibility in how they deliver for their area. Local authority leaders who are on the combined authority will be able to support the mayor as portfolio holders; do not forget, though, that it is important to remember that they will have their own authorities to lead as well, so they will be working in their own authority at the same time.

On Amendments 51A and 52A, I reiterate that commissioners are an optional appointment: they are designed to increase capacity and give mayors more flexibility in how they choose to deliver for their areas. These amendments, tabled by the noble Baroness, Lady Willis, would remove that optionality, effectively introducing seven new statutory roles in the combined authority or combined county authority. We have set out the competency, for example on the environment and climate change, in the Bill itself, but mayors are best placed to determine whether they need additional support on this based on the needs of their local area.

While we have set out in the competencies what we think mayors should be doing, it cannot be right that we make the choice for them about how they do that. Therefore, it is for mayors to decide. I know this can be difficult for us in the political process when a mayor may put an emphasis on an area that would be less important to us than something else, but I am afraid that is part of the democratic process that we live with all the time; it is not that different.

[Baroness Scott of Bybrook (Con)]

I just do not understand this. If I am a leader of a local authority and I have a specific need for a competence, I employ an official or an officer. I interview a large range of them; I do not go to one of my mates and ask if they would like to be a commissioner. I do not understand why that should be any different in a mayoral office. If they are doing work that demands somebody extremely well-qualified in a specific arts project, they can employ an officer or official. It does not need to be a commissioner who has a connotation of being politically motivated, as well as being possibly qualified in that area.

[Baroness Taylor of Stevenage (Lab)]

I will come on to that in a moment, if that is okay. If I do not answer the noble Baroness’s question, I will come back to it.

Amendments 50A, 51B and 53A, tabled by my noble friend Lord Bassam, seek to remove the statutory cap on the number of commissioners that may be appointed by the mayor. It is important that mayors have the support they need from specialists to deliver for their constituents. However, we believe the Bill strikes the right balance, ensuring that mayors have the capacity to deliver without inviting a proliferation of appointments.

For this reason, I am afraid I cannot support the Amendment 196A, tabled by my noble friend Lord Bassam. This amendment would enable mayors to appoint mayoral special advisers and would include provisions regarding their appointment, function and code of conduct. It would also exempt these advisers from holding a politically restricted post under a local authority for the purposes of Part 1 of the Local Government and Housing Act 1989. I agree that mayors can benefit from advice that they trust aligns with their politics. Political advisers bring important expertise that helps mayors formulate their strategy, policy decisions and communications approach. That is why mayors can already appoint a political adviser, and our current position is to provide new mayoralties with that option too.

However, these advisers will be subject to political restrictions in the same way existing advisers are. Accountability in public office is of paramount importance, which is why we have existing guardrails in place. The cap ensures that spending remains proportionate to the institution and prevents a proliferation of political appointments. On my noble friend Lord Bassam’s point on the code of conduct, mayors’ special advisers, where appointed, are employees of the strategic authority, and therefore they would be covered by the strategic authority’s code of conduct.

Amendments 54, 55, 58, 59, 57 and 61, tabled by my noble friend Lord Bach, seek to enable commissioners’ work or the delegation of function to relate to more than one area of competence. The amendments also seek to allow two or more commissioners to relate to the same area of competence. I thank my noble friend for these amendments, and I reassure him that the mayor will already have the flexibility to consider local circumstances when considering a commissioner’s exact brief and any delegated functions relating to the area of competence.

The Bill states that a commissioner’s work or functions can relate to other areas of competence and matters outside of them where it is incidental to the work in their special area of competence. For example, a commissioner focused on economic development and regeneration could lead on a growth strategy that included elements related to housing, skills and transport.

Amendment 171, also in the name of my noble friend Lord Bach, seeks to ensure that, where a mayor is responsible for more than one police force, they would have the flexibility to appoint a single deputy mayor or separate deputy mayors for each police force. As I have set out, the Bill already ensures that the mayor has support in exercising police governance functions in each of the police forces for which they have responsibility, and it recognises that these forces remain distinct and separate entities. The provisions in the Bill will prevent the same person from being appointed to more than one deputy mayor for police and crime positions, ensuring that there is a dedicated lead for the day-to-day oversight of policing in each force area.

My noble friend will know that I worked in policing for many years, and I am very aware of the different policing challenges that can occur even in neighbouring forces: the balance of different types of crime—rural and urban—and some of the more internal issues around different IT systems, and so on. That seems appropriate at the moment. Our right honourable friend the Home Secretary spoke very powerfully about her view that there needs to be further reorganisation of policing, and we should of course work across government as we move forward with the Bill to work with her to identify her ideas and how that might be implemented in this. But I appreciate that she was talking about some of this being implemented some way off, as the noble Lord, Lord Bach, said.

For the moment, this amendment would impact the direct line of accountability the mayor is able to provide to voters regarding the police forces which they are required to hold to account. I will reflect on his call for flexibility around this, and I think we need to have further discussions with the Home Office about how this will work moving forward.

Amendment 221, tabled by my noble friend Lady Griffin of Princethorpe, would enable a mayor of a combined authority to appoint any councillor of a constituent council in a combined authority area as deputy mayor. I want to clarify with her that I have understood her amendment properly, because I think she said something slightly different from what is in the amendment itself. The mayor can appoint members of the constituent authorities who sit on the combined authority in portfolio holder roles, but they cannot appoint any member of the constituent authority. I just clarify that.

The position of deputy mayor is a significant responsibility, which could involve stepping in to chair the authority and undertaking mayoral functions. That is why, currently, only those constituent councillors who have been appointed as a member of the combined authority may be appointed as a deputy mayor. These members have been appointed by the council to the authority in the knowledge that this may involve taking on the deputy mayor role, so they have the legitimacy to perform it if called upon. It is important that we keep measures in place to ensure that a deputy mayor is a legitimate appointment, best prepared for the demands they will face should they have to step in as mayor. Because this amendment applies only to combined authorities, technically it would create a divergence between the requirements imposed on them, versus combined county authorities.

The remaining amendments in this group, tabled by the noble Baroness, Lady Scott, seek to remove Clause 9 and Schedule 3. This would eliminate the role of commissioners from the Bill, preventing their appointment by mayors. As I have stated, commissioners are intended to increase mayors capacity and give them more flexibility in how they deliver for their area. These authorities will have critical new functions to undertake, requiring representation on national bodies, joint working with partners and access to the expertise they need. It is simply not realistic to expect a mayor to do all this on their own. These appointments will be a local decision, and no additional funding will be provided.

I will now cover some of the questions that have been asked by noble Lords, including the noble Baroness, Lady Scott, the noble Lords, Lord Jamieson and Lord Shipley, the noble Viscount, Lord Trenchard, and others. Starting with the question about commissioners being simply devolution to unelected officials, commissioners are optional and can be appointed only by the mayor, who determines their terms and conditions. They will work in lockstep with the mayor to drive forward the policy agenda for a specific function, such as transport or public health. This will be particularly effective where a commissioner has specialist knowledge and expertise that can help deliver the mayor’s vision for local people. There is a real difference here between employed officials of a local council, for example, and what these commissioners will do. The best example I can give is the way that these positions work in London, where the mayor has a number of deputy mayors, as they are called, who act for the mayor in certain policy areas.

The mayor, the combined county authority and the overview and scrutiny committee will each play a role in the commissioner’s appointment and/or the termination of their appointment. We will set out guidance, following Royal Assent, on recruitment and job descriptions. Responding to the noble Lord, Lord Shipley, I say that these commissioners will be subject to the Nolan principles, as employees of strategic authorities. Commissioners will also fall under the strengthened accountability system for devolution, which will confirm further details in due course; we are likely to have further discussions about that later this evening.

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[Lord Jamieson (Con)]

With voting, the figure required can be either two-thirds or 50:50. Can the Minister clarify what figure is required to remove a commissioner?

[Baroness Taylor of Stevenage (Lab)]

For the overview and scrutiny committee, I believe it is a simple majority vote, but I will clarify that in writing for the noble Lord.

We expect that commissioners will have detailed knowledge and expertise in their assigned area of competence and will be appointed on this basis. Constituent members will not necessarily be experienced in their portfolio subject area. There are also circumstances where it would not be appropriate for a portfolio lead to represent both the borough and the region; there may be perceived conflicts of interest. As I said earlier, the local authority leaders who sit on the combined authority will also be running their councils on a day-to-day basis.

Commissioners will be able to represent the mayor’s authority and policy positions in a given area, including by speaking to the media. They could help make day-to-day decisions that are delegated by a mayor and provide strategic insight and advice for their area of expertise. We also expect commissioners to play a leading role in stakeholder engagement and partnership working, across geographies and organisations, as appropriate. This would include working closely with local councillors, business leaders and public sector institutions, using their advocacy and influence to deliver the mayor’s agenda.

I hope that that has helped clarify some of the points raised by noble Lords and that, with the assurances I have given, they will not press their amendments.

[Lord Shipley (LD)]

If there are any matters raised by me or other noble Lords that the Minister did not cover, could she send a letter to cover them? I do not think I heard confirmation about the Nolan principles, for example. If there is anything else, I hope that officials might draft something for her to send.

[Baroness Taylor of Stevenage (Lab)]

I did confirm that the commissioners will be subject to the Nolan principles. I will go back over Hansard—I always do after these debates—and if I have missed anything, I will certainly write to the noble Lord.

[Lord Bassam of Brighton (Lab)]

My Lords, this has been an absolutely fascinating debate. It has made me think a lot about the history of local government and how it has changed over 150 or 160 years. There was a time when we had aldermen, but they were abolished. We have had two-tier government, county boroughs and so on, but things have changed there too. The introduction of commissioners is a very progressive move, so I cannot agree with the noble Lords, Lord Shipley and Lord Jamieson, on that point. I can see that the accountability framework for commissioners is very important; they will have a powerful job.

If we think about it, some of those combined mayoral authorities will cover large geographical areas. My own likely combined mayoral authority involves East and West Sussex, which is about 100 miles from one end to the other and about 50 miles wide—and East Anglia covers a similarly large geographical area. It is right that we have these commissioners appointed and can hold them to account, because they will have a very important job to do. That is one reason why I thought that introducing some flexibility in terms of the patch or territory they cover, or the policies, was so important. However, I have heard what the Minister has said about that, and I hope we can reflect on some of those issues before Report.

On the points I made about political advisers and special advisers, I simply say this: again, it relates to the size of the task in front of mayors and commissioners. The salary is some £45,000 a year, which is generous but not pitched at a level one would necessarily expect to attract the very best. We need to have good quality political advisers involved in these strategic mayoral authorities. In my time as a local government leader, I did not see fit to have a political adviser—I got more than enough political advice from the Labour group, daily, and sometimes beyond that. But political advisers and special advisers are of immense value. When I first became a Minister back in 1999, what the civil servants used to say to me that was of value was that they had access to a special adviser who understood the thinking of the Secretary of State and their Ministers. That is really important, and that is why I thought it worth having a discussion about introducing special advisers into these very large strategic mayoral authorities. However, I have heard what the Minister said about that, and I shall reflect on it some more. I beg leave to withdraw the amendment.

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These arguments feed directly into Amendment 196B, tabled by the noble Lord, Lord Bassam, which seeks for the designation of local accounting officers to strengthen accountability for public spending. This is of a piece with the wider debate that we are having today. It reflects the same underlying concerns that as power and funding move closer to communities, accountability must follow just as clearly, visibly and robustly. This is not a debate about structures for its own sake. It is about whether the Government have a credible, coherent plan to ensure that trust, accountability and value for money keep pace with devolution.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank my noble friend Lord Bassam and the noble Lord, Lord Bichard, for their amendments relating to accountability and scrutiny, and I hope that the noble Baroness, Lady Pinnock, is recovering.

Starting with Amendment 191, tabled by the noble Lord, Lord Bichard, there is already an existing system of scrutiny that provides accountability to the public and local checks and balances and accountability to government, including a requirement for combined authorities and combined county authorities to establish an overview and scrutiny committee and an audit committee. In addition, the English devolution accountability framework and the scrutiny protocol set out the processes and principles that mayoral strategic authorities are expected to follow. Both documents are being reviewed to reflect the changes introduced through the integrated settlement and through this Bill. Where the most established mayoral strategic authorities benefit from integrated settlement, assurance is provided via an outcomes framework which interacts with the wider government system of accountability.

However, we recognise that there is scope to strengthen further the system of accountability and scrutiny for mayoral strategic authorities. That is why the Government committed in the English devolution White Paper to exploring a local public accounts committee model. Listening to the noble Lord made me reflect on some work that I did in 2015 with Sir Richard Leese, who was then the leader of Manchester City Council, and Jules Pipe, who was then mayor of Hackney. That work was focused on devolution and turning the dial from acute responses to prevention.

We recommended that if there was more widespread devolution, there was a need to think about local public accounts committees. Although that feels like six months ago, it was 10 years ago. Maybe every idea has its time. Therefore, I accept the principle behind this amendment and assure the noble Lord that we intend to hold mayoral strategic authorities to a very high standard.

The noble Baroness, Lady Thornhill, was reflecting on the scrutiny of integrated settlements, for example, and allowing those who have the local knowledge of how things are working is crucial. When we were thinking about the possibility of a local public accounts committee, we saw it as being as powerful as the Public Accounts Committee here, being able to call witnesses from various bodies that are impacted on by the services and projects that are being delivered so that it can gain a much fuller picture of what is going on. This is a very different type of scrutiny—fundamentally different, as the noble Baroness said, to audit, which is a financial function. It is really important that we consider this fully. However, I ask that the Government are given time to complete the engagement that we need to do with the sector to design such a new approach, because it is important that we talk to the sector about this.

I hear the point that the noble Lord, Lord Fuller, made about the scrutiny of all levels of local government. He is of course right that both budgets and precept levels in town and parish councils are not insignificant in many areas, so we have to think about that. It is essential that any new accountability and scrutiny regime complements the existing system and the reformed audit framework in the future. Above all, it must be proportionate and supported by clear guidance and support for the sector, to make sure that we get these reforms right. With that assurance, I hope the noble Lord will feel able not to move his amendment.

Amendment 196B relates to local accounting officers. I thank my noble friend Lord Bassam for this proposed new clause that would require established mayoral strategic authorities to create local accounting officers. His amendment would designate the head of paid service as the accountable officer responsible for local spending, value for money and scrutiny. Although I agree with the importance of strong accountability and value for money, all mayoral strategic authorities already operate within an existing system of accountability, and that accountability is split between the “golden triangle” of statutory officers: the chief executive, chief finance officer and monitoring officer. These officers are accountable to their board and required to comply with the best value duty.

Strengthened systems are already in place for areas that have integrated settlements. This includes the mayoral strategic authority chief executive being responsible for core accountability processes within their authority, including responsibility for local outcome delivery and value for money. However, we are continuing to explore the local accounting officer model. We recognise that accountability to Parliament for the use of taxpayer money, which the accounting officer system provides, is a fundamental principle and not something to be altered lightly.

As part of our work on testing a strengthened accounting officer model, the Government are engaging with mayoral strategic authorities and other government departments. It would not be appropriate to pre-empt the outcome of that work with a primary legislative change to introduce local accounting officers at this point. For these reasons, I hope my noble friend will feel able not to move his amendment.

On Amendment 53, tabled by the noble Baroness, Lady Pinnock, this proposed new clause would place a duty on the mayor of a combined county authority to establish a separate scrutiny committee for each commissioner they have appointed. As I have set out, mayoral strategic authorities are expected to follow the existing principles and processes described in the English devolution framework. This includes requirements that all combined authorities, and combined county authorities, must establish an overview and scrutiny committee, which provides local checks and balances. The noble Lord, Lord Shipley, raised a very important issue about being able to undertake pre-scrutiny. Overview and scrutiny committees are very capable of putting in place pre-decision scrutiny if they wish to do so. Some local authorities have that already, so it is not prohibited.

Further, the Bill ensures that the overview and scrutiny committee will have the power to recommend termination of a commissioner’s appointment. I can respond properly now to the question from the noble Lord, Lord Jamieson, about the voting majority. To correct what I said earlier, a two-thirds majority of non-mayoral members of the combined authority or the combined county authority is required to accept the recommendation. Commissioners are also accountable to the mayor, who can terminate their appointment.

As Clause 9 allows for the appointment of up to seven commissioners, this amendment would risk institutions having to establish as many as seven scrutiny committees in addition to the existing overview and scrutiny committee that is already accountable. This would create significant additional labour and cost pressures for combined county authorities. There is a technical difficulty in that it would also apply a lopsided accountability system, as the amendment makes no reference to these seven committees applying to combined, as opposed to combined county, authorities. While we recognise that there is scope further to strengthen the system of accountability and scrutiny for mayoral strategic authorities, we believe that this amendment would create unnecessary pressures on the existing system, and I therefore ask that it is not moved.

[Lord Shipley (LD)]

I am grateful to the Minister for a comprehensive reply to a comprehensive set of issues. It gives us pause for thought. I am glad that the Minister recognises the importance of pre-scrutiny. That is a fundamental issue, so if it can be better built into the Bill before it becomes an Act, that will be very helpful. I beg leave to withdraw the amendment.

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[Lord Shipley (LD)]

My Lords, I have just one thing to add to what the noble Baroness, Lady Scott of Bybrook, said. Last week, I mentioned the importance of guidance being published in advance of Report; it is absolutely fundamental to our understanding of the Bill, given that so much is missing from it. I therefore repeat my support for the point made by the noble Baroness, Lady Scott, that it would help us to have a better understanding of some of the detail that the Government are going to put into guidance before we get to the point of debating and voting on it on Report.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank the noble Baroness, Lady Scott, for her amendments relating to providing allowances for combined county authority members with special responsibilities.

Amendments 62 and 236 would make it mandatory for the Secretary of State to issue guidance before Clause 10 comes into effect, and would require a combined county authority to publish an annual report on its webpage outlining the allowances that have been paid to members with special responsibilities. I welcome the commitment from the noble Baroness to ensuring transparency in local government—a matter of paramount importance to this Government.

As a former council leader, the noble Baroness, Lady Scott, will know, as I do, that allowances probably attract more debate and discussion, from both Members and the public, than much of the other policy that we debate. That is why we will issue statutory guidance on complying with the duty under Clause 10 to produce and publish reports. The guidance will allow the Secretary of State to set clear expectations—for example, regarding the frequency of such reports and where they are published—to support combined authorities and combined county authorities in this area. In the event that further clarification is needed, the power to issue guidance provides flexibility for the Government to update their position.

I would also add that, because this amendment applies to combined county authorities only, it would create a divergence in law between the requirements imposed on them versus combined authorities. That would be inconsistent; it would not be right to treat the two types of authority differently on that basis. My understanding is that this statutory guidance will be published on Royal Assent. I ask the noble Baroness to withdraw her amendment.

[Baroness Scott of Bybrook (Con)]

I thank the Minister but we are back where we started, really, in that we would like to see the guidance before Report so that we can see whether the guidance is correct or whether it could include something else. I currently do not know this, and we will not know. So I thank the Minister for her answers, but we should try to get the guidance before Report; if we do not, we are going to be asking more and more questions on this in Committee.

I accept what the Minister says about combined authorities and county combined authorities. I will look at that again and, if we do not get this guidance, I will retable it on Report. At this point, I say to the Minister that this is an important issue, and it would be better if we could scrutinise it properly, at least on Report, but at this point I withdraw my amendment.

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[Baroness Scott of Bybrook (Con)]

My Lords, Amendments 63 and 64 in my name and that of the noble Lord, Lord Jamieson, both relate to Clause 11 and the proposed changes to the mayoral precept arrangements. They are intended to elicit from the Government a clearer explanation of both the necessity and the principle behind the changes proposed in this clause. We want to see the prevention of uncontrolled mayoral precepts, the avoidance of tax rises through the backdoor and fiscal parity with existing local authorities. That is more important now, having heard some of the debates today.

Amendment 63 seeks to probe why the Government believe it necessary to revisit the precept arrangements that were set out only recently in the Levelling-up and Regeneration Act 2023. They were presented as part of a carefully planned settlement between central government, local authorities and the public, particularly in relation to accountability and transparency around local taxation. Those arrangements were debated at length in this House by noble Lords on all Benches, as the Minister and I know only too well, given the many hours we spent debating it.

Against that background, it is not immediately clear why the Government now feel the need to depart from that framework so soon after it was enacted. What has changed and what problems have arisen that they are now seeking to address? I would therefore be grateful if the Minister could first explain what evidence the Government have had that existing arrangements are no longer fit for purpose; secondly, whether local councils or mayoral combined authorities have themselves asked for these changes; and thirdly, what outcomes for precepts they are expecting or seeking to facilitate through these changes. It is right to be cautious about reopening settlements that have barely had time to bed in, and I hope the Minister can reassure us that this is not just change for change’s sake.

Amendment 64 addresses a related but distinct, significant concern: why mayors should be treated differently from other local authorities when it comes to limits on precept increases. As things stand, other types of local authority are subject to clear principles set out annually by the Secretary of State, which limit the extent to which they may increase their council tax without triggering additional scrutiny or consent. The amendment simply proposes that mayoral combined authorities and mayoral combined county authorities should operate within the same principles. Therefore, my question for the Government is very simple: what is the justification for the differential treatments?

Mayors exercise significant powers and command substantial budgets with high public profile. It is only right that those powers come with the same fiscal discipline and protections for taxpayers that apply to other tiers of local government. Without parity, there is a risk that mayoral precepts become a means of raising revenue, perhaps even for vanity projects or unfunded responsibilities, without the safeguards that residents elsewhere quite rightly expect.

This leads me to a broader concern that underpins both of the amendments in this group. Too often, we see responsibilities devolved without sufficient or sustainable funding attached. While devolution can and should empower local decision-making, it should not become a mechanism by which central government passes financial pressures down the line and leaves local leaders, and therefore local taxpayers, to pick up the bill.

If mayors are given additional duties without adequate funding, the inevitable consequence is pressure to raise their precept. From a Government who have sought to raise punitive taxes at every opportunity, this sounds very much like another tax rise through the back door. I do not believe that is what the public would understand as devolution or community empowerment. It is not consistent with the principles of transparency and accountability that we all should stand for.

The last two questions I have for the Minister are: for what reason do precept arrangements in the LURA need to be reopened, and why should mayors not be subject to the same precept arrangements as other local authorities? I hope the Minister will be able to reassure me on both points, and I beg to move.

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Baroness, Lady Scott, for her amendments on precepts.

Amendment 63 probes why the Government are changing precept arrangements, and I completely understand why she would do that. The changes to existing powers will allow mayors to precept for all an authority’s functions, giving mayors more flexibility about how they fund mayoral priorities.

I remind noble Lords that the ability to issue a mayoral precept has existed in law since 2017, but it remains at the discretion of mayors how to use it. However, as it stands, mayors who choose to use the precept can spend it only on mayoral functions rather than on all the authority’s functions. This limitation is arbitrary and unnecessary. It could mean, for example, permitting spending on transport but not on health.

We want to give mayors the tools to tackle the obstacles to growth and improve the lives of people in their area, and to do this effectively, mayors must be able to spend across all an authority’s functions.

Amendment 64 would impose council tax principles automatically on strategic authorities. The Secretary of State can already set referendum principles on strategic authorities should they choose to do so. However, where used, mayoral precept rates are proportionately a small amount. Imposing a limit on how much they can rise in line with councils would mean that, in almost all areas, the value would remain insignificant and be ineffective for investing in local priorities.

The Government have made it clear that any increases to the mayoral precept should be fair and proportionate, but aligning maximum mayoral precept rate rises with other council tax rises reduces local agency, which runs contrary to the spirit of the Bill and of devolution. We want to see mayors who are empowered to invest in their communities, creating better public services and driving economic growth.

I took a quick look at some of the rates of mayoral precepts that are levied. It was interesting for me to see that in Liverpool in 2025-26, residents of band D properties were charged £24 extra for the mayoral precept per year. In Cambridgeshire and Peterborough, the figure was £36. It is a bit unfair to compare some of the other authorities because they deliver police services and they precept for those as well. But then I looked at some of the town and parish council figures, and the average parish band D precept is £92.22, which was a percentage change of 9.4% in the last year. So, the mayoral precept feels proportionate to me.

The Government consult on the local government finance settlement each year. That is the established and appropriate way of considering what is best for authorities and taxpayers each year, and we will continue to do so. I therefore ask the noble Baroness, Lady Scott, to withdraw her amendment.

[Baroness Scott of Bybrook (Con)]

I am grateful to the Minister for her responses and for trying to assure me about those amendments. However, she will understand that concerns raised in the short debate between us are not about opposing devolution nor about questioning the role of mayors but about ensuring that changes to local taxation powers are justified and consistent.

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[Lord Shipley (LD)]

I am grateful to the noble Lord, Lord Jamieson, for raising some very crucial issues on the levels of borrowing powers. I add to that my concern—made even more so by the fact that constituent councils will not be able to scrutinise the work of the mayor or commissioners.

In that situation, I hope the Government will not be anticipating that local councils will then be responsible for any overspending by mayors and the combined authorities because, otherwise, there will be a demand on the council tax payer. So can the Minister confirm that overspends caused by poor-quality work by mayoral authorities will not end up with the council tax payer having to bail them out?

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank the noble Baroness, Lady Scott, for her Clause 12 stand part notice, ably spoken to by the noble Lord, Lord Jamieson.

All existing mayoral combined and combined county authorities have the power to borrow for all their functions. Unlike local authorities, the current process requires making a bespoke statutory instrument after an institution has been established. This process is highly inefficient. The Bill streamlines the process by giving the power to borrow to mayoral combined authorities and mayoral combined county authorities for purposes relevant to their functions. The power to borrow is still subject to safeguards. Clause 12 requires authorities to obtain the Secretary of State’s consent before they exercise the power for the first time in respect of functions other than transport, policing, and fire and rescue.

I will cover some of the points that the noble Lord, Lord Jamieson, asked me about. First, in relation to agreeing a debt cap, in general the exercise of power will remain subject to consent from the Secretary of State for the Ministry of Housing, Communities and Local Government, before it can be used for the first time, as I said. That would follow any internal processes, such as a debt cap agreement. The only exception will be where the new mayoral combined authorities and combined county authorities inherit fire, police or transport functions. In this instance, the power to borrow can be exercised immediately for these functions to ensure that ongoing financial arrangements are not disrupted.

In terms of how borrowing is agreed, any borrowing by a mayoral strategic authority is agreed through the annual budget-setting process and is subject to approval by the combined and combined county authority, operating within existing legislative, financial and prudential controls. While the mayor proposes the budget, borrowing cannot be undertaken unilaterally. Under the Bill, most budgets will be approved by a simple majority, which must include the mayor.

In response to the noble Lord, Lord Shipley, the budget, like all other matters, will be subject to the overview and scrutiny process, so there can be scrutiny of the budget in the same way that you would expect in a local authority.

The noble Lord, Lord Jamieson, asked about underwriting. Like the rest of local government, strategic authorities must also operate within the prudential framework. This framework comprises statutory duties and codes intended to ensure that all borrowing and investment is prudent, affordable and sustainable. It provides robust mechanisms for oversight and accountability. For those reasons, I ask that the noble Lord does not press his clause stand part notice.

[Lord Jamieson (Con)]

I thank the Minister for her response. If I may, I will delve a little deeper into some of her comments. She said that the first time an authority borrows, it will have to get consent from the Secretary of State, with an implication that, at that time, guidelines or parameters would be set up. I think that is what I heard. I want to make sure it is not the case that, the first time you borrow, the Secretary of State says it is fine, and then thereafter there are no guidelines, or whatever. I appreciate the Minister may not be able to clarify that today, but if she could write to us, that would be much appreciated.

The authority can already borrow for fire and police. The Minister mentioned one other: transport. For those, there would not be any such guidelines, as I understand it from the Minister’s comments. Again, it would be helpful if the Minister could come back to confirm whether that is the case or whether they would be subject to whatever guidelines may be given by the Secretary of State. That would be much appreciated.

We talked about budget controls. I am curious about that because it raises the point that the budget in effect has to be agreed by the mayor. I am intrigued as to what happens when the mayor and the combined authority are slightly at odds. What then happens in that process?

The Minister did not mention, as far as I am aware, the key question that I asked and that the noble Lord, Lord Shipley, was also concerned about: who in effect is the guarantor in the event that the combined authority cannot pay back its borrowing? I would be grateful if the Minister could come back with a response to that. Anticipating those answers, I will not press my opposition to Clause 12 standing part of the Bill.

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Moved by

[Baroness Taylor of Stevenage]

65: Clause 13, page 17, line 8, leave out “this section” and insert “subsections (2) to (7)”
Member's explanatory statement
This would be consequential on the amendment of clause 13 which provides for the amendment of section 143 of LGFA 1988 and section 106A of LDEDCA 2009.

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[Baroness Taylor of Stevenage (Lab)]

My Lords, Clause 13 will allow combined authorities and combined county authorities to make a transport levy on their constituent councils to cover any transport costs not met by grants or other revenue streams. Previously, the powers to charge a transport levy have been provided through varied and disparate regulations and orders. The Bill standardises and makes consistent the ability for combined authorities and combined county authorities to charge a transport levy. These minor and technical amendments correct new sections and amend cross references to protect the regulation-making powers for levies. I beg to move.

[Baroness Scott of Bybrook (Con)]

My Lords, as the Minister said, these are technical and consequential amendments to the levies section of the Bill. It has been a long enough day, and I have already made my position on mayoral precepts and council tax very clear in the previous two groups, so I will not repeat myself.