Cities and Local Government Devolution Bill [HL]

Baroness Williams of Trafford Excerpts

Monday 8th June 2015 Lords Chamber

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[Baroness Williams of Trafford]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)]

My Lords, it is a pleasure to introduce the first Bill to receive its Second Reading in this House under this Parliament. It implements our manifesto commitments to allow cities and areas outside London to reach their economic potential. This Bill helps us to deliver on the promises we made that, if we were returned to government, there would be a clear economic plan and a brighter, more secure future for the whole country. Last week, we had an excellent and lively debate on the measures contained in the gracious Speech, including those in the Cities and Local Government Devolution Bill.

When speaking on the steps of Downing Street on the Friday after the election, the Prime Minister referred to closing the decades-old economic gap between north and south. For many years, under Governments of all political colours, our economy has become imbalanced and London has come to dominate more and more. In 2010, through our programme of decentralisation, we began to address this issue. We supported the development of local enterprise partnerships, concluded city deals with 27 cities, and took £12 billion out of Whitehall and put it in the hands of local people through growth deals, giving local areas more control to drive their own growth. In particular, in November 2014, the Government agreed a devolution deal with Greater Manchester, which will give local people greater control over their economy and powers over transport, housing, planning and policing. Greater Manchester will also gain new powers to support business growth and skills, and to help join up health and social care budgets.

In the last five years, we have been working with many partners—in business, across the political spectrum, and up and down the country—to move towards a more balanced economy. Two hundred years ago, when the country was at the height of the Industrial Revolution, Manchester was “Cottonopolis”, Liverpool’s ports welcomed ships from around the world and Birmingham was at the forefront of creative endeavour, registering three times as many patents as any other British town or city. But that economic diversity and strength was undermined by more than a century’s worth of power and decision-making being centralised in London. For decades, central government has made the rest of the country conform to a Whitehall template. The Bill calls time on that. Here, I pay tribute to three noble Lords in particular, although there are many others besides, from all political parties: the noble Lords, Lord Shipley and Lord Adonis, and my noble friend Lord Heseltine. They have been working hard on this agenda over the last decade, and, in the case of my noble friend Lord Heseltine, for three decades.

This is a devolutionary Bill that puts in place a legal framework enabling us to decentralise powers to our cities and counties, and across the country. The framework will allow us to ramp up what we started in the last Government, reversing 150 years of centralisation whereby powers were relentlessly drawn into Whitehall and London became ever more dominant. The framework will enable us to implement the Greater Manchester city deal and similar bespoke deals in other cities.

Decentralisation is the key to achieving economic growth and unlocking the potential for economic success in our cities. It enables places to take greater control over and responsibility for the key things that make it work. Any one-size-fits-all model is destined for failure. Every city and council is different. Through the decentralisation that the Bill will enable, each city will be empowered to forge its own path, to play to its own strengths and to find its own creative solutions to the particular challenges that they face. The power of decentralisation is to bring about change—to be the foundation of securing long-term sustainable growth, applying equally to towns and counties.

To be successful, decentralisation must involve not only devolving powers and budgets but having in each place the necessary leadership, governance and accountability so that powers are exercised properly and effectively, for the benefit of all. Where major powers are devolved, the Government are clear that there needs to be a single point of accountability. People need to know who is taking the decisions and whom to turn to if things go wrong.

Mayoral governance is an internationally proven model of governance for cities. Hence, as the Chancellor has made clear, where a significant suite of powers is being devolved to areas, metro mayors must be elected by the people. We will hand powers from the centre to those cities that choose to have a metro mayor, giving greater control over such things as transport, housing, skills and healthcare. A metro mayor may also, on a case-by-case basis, as in Greater Manchester, be given the powers of a police and crime commissioner. Cities will have the levers needed to grow their local economy and to make sure that the people in the city can keep the rewards.

Our Bill therefore puts in place not only the legal framework for devolving powers, but the framework to ensure that the strong and accountable governance necessary for devolution is in place. The Bill enables a mayoral combined authority to be a precepting body, and for a precept to be set to fund mayoral functions. Requirements relating to the setting of mayoral budgets may be specified by order. A combined authority’s other costs—those not incurred by the metro mayor—will be met from the budgets of the local authorities in its area. The Bill will also allow a combined authority to be given powers and to borrow money for particular purposes, if all the local authorities in its area agree.

The Bill allows, by more straightforward processes, the local governance of a place to be simplified. For example, where powers are devolved to one or more counties, putting in place the necessary governance may include making council mergers, moves to unitary structures, or simplifying the democratic representation with fewer councillors. This will be the case whether or not there is an elected metro mayor for the area.

The crucial point is that all the Bill’s provisions are to be used in the context of deals between government and places. Nothing is being imposed. Where there is a request for an ambitious devolution of a suite of powers to a combined authority, there must be a metro mayor, but no city will be forced to have a mayor and the powers that come with it. No county will be forced to make any changes of governance and to have the powers that can come with such governance changes.

I, like many noble Lords, started my political life in local government. I want to improve my local area and to see it develop and grow. The council that I sat on for 13 years will be part of the trailblazer devolution deal, reclaiming the power to decide its future. I hope that it will be the first of many, and that the Bill enables that to happen. With the Cities and Local Government Devolution Bill we will implement the manifesto commitments to,

“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors”,

and to,

“deliver the historic deal for Greater Manchester”.

I beg to move.