Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority (Election of Mayor) Order 2016 Debate
Full Debate: Read Full DebateBaroness Williams of Trafford
Main Page: Baroness Williams of Trafford (Conservative - Life peer)Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority (Election of Mayor) Order 2016
Baroness Williams of Trafford Excerpts
Baroness Williams of Trafford
That the Grand Committee do consider the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority (Election of Mayor) Order 2016.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, this draft order was laid before this House on 8 June 2016. If approved, it will create the position of mayor for the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority—also known as the Liverpool City Region Combined Authority—with the first election to be held in May 2017, and set the first mayoral term for a duration of three years, with the next election in May 2020, with subsequent four-year terms.
The Conservative Party committed in its manifesto to,
“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors”.
To give effect to this commitment, the Government passed the Cities and Local Government Devolution Act earlier this year. As I set out to the House during the passage of that enabling legislation, the Government have introduced clauses to allow directly elected mayors for combined authorities because devolution of the ambition and scale set out in the manifesto requires strong and clear accountability and leadership. It is therefore considered necessary that where major powers and budgets are being devolved, local people know who is responsible for decisions. Mayoral governance offers a proven model for effective local leadership, which has worked around the world.
Turning to the Liverpool city region, this order is a milestone in the implementation of the two devolution deals agreed between the Government and local leaders. It follows the establishment of the combined authority on 1 April 2014, from which time it has been serving the Liverpool city region, bringing together across the area the closely interconnected issues of transport, economic development and regeneration.
On 17 November 2015 the Government and the combined authority announced a devolution agreement which provided an offer of powers and budgets from the Government on the basis that the area will deliver certain reforms and measures, including adopting a directly elected mayor covering the whole combined authority area. This agreement included that the mayor for the Liverpool city region would individually exercise some functions in relation to transport and strategic planning.
The combined authority has taken on responsibility for: devolved funding—£30 million a year over 30 years for the Liverpool city region; control of the devolved 19-plus adult skills funding by 2018-19; joint responsibility with the Government to co-design employment support for harder-to-help claimants; and a devolved approach to business support from 2017, to be developed in partnership with the Government. On 16 March this year, the combined authority and the Government additionally agreed: early adoption of the government pilot for 100% business rate retention in the combined authority’s area, starting in 2017-18; additional new powers over transport; and further commitments for the area and the Government to work together on children’s services, health, housing and justice.
In delivering the full range of commitments in the devolution deal, the Secretary of State intends, subject to statutory requirements and parliamentary approval, to make further orders to implement the deal. Subsequent orders will include the transfer of budgets and powers in planning, transport, education and skills.
On 24 June 2016, the Liverpool City Region Combined Authority published a governance review and scheme, which sets out the constitutional changes to the combined authority and the functions of the mayor as the area assumes control of additional budgets and powers from the Government. The combined authority is currently consulting local citizens and stakeholders on the contents of these documents and will issue a report on its findings to the Secretary of State later this year.
The draft order establishes a mayor for the Liverpool city region and sets the dates of elections and the first and subsequent term lengths. It is laid before Parliament following the statutory process specified in the 2009 Act, as amended by the Cities and Local Government Devolution Act. As required, all the constituent councils have consented to this order being made and the Government have laid the draft order, having had consideration of the statutory requirements. As required, we are now seeking Parliament’s approval before making the order.
The order is about delivering devolution and empowering local authorities to set their own policy agendas. The order provides enhanced local leadership in the form of a directly elected mayor with a strong democratic mandate and independence from the combined authority. The mayor will work closely with local leaders, who will sit on the combined authority board, and together they will drive forward the economic opportunities presented by devolution, with the mayor acting as chairman of the combined authority and providing a single voice for the area that can be both prominent nationally and help drive the devolution agenda.
As noble Lords may recall, during the passage of the enabling legislation there was debate on the necessity of mayors in devolving powers to local areas. The Government have made clear their stance on the necessity of mayors. However, they are not alone in this belief. Research commissioned by the Centre for Cities in May 2016 found that members of the public across five devolution deal areas supported the notion that directly elected mayors should have greater powers than council leaders.
Lord Storey (LD)
My Lords, I was interested that at the beginning we were talking about Tees Valley, but for the Liverpool city region we talk about the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority. I cast my mind back to the coalition Government, when the noble Lord, Lord Alton, and I argued for the Liverpool city region to have that title, as it wanted. The then Secretary of State was adamant that this was not going to be the case. The then Minister said, “What’s in a name? If you want to call yourself the Liverpool city region, feel free to do so, but the official title will be the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority”. Perhaps we could revisit that at some stage.
Lord Storey
Names are important to localities. Names are places.
I want to pick up on the point made by my noble friend Lord Shipley. I am sure the Minister is familiar with the Public Accounts Committee’s Cities and Local Growth report. As the noble Lord, Lord Alton, rightly said, it is really important that we get accountability and scrutiny right. To reiterate the points that have been made, because I think they need underlining, the report says about the current arrangements with the combined authorities:
“We are not confident that existing arrangements for the scrutiny at local level of devolved functions are either robust enough or well supported. Robust and independent scrutiny of the value for money of devolved activities is essential”.
The report also says, on local scrutiny:
“Where powers, responsibilities and funding are devolved from the centre, it is vital that there is adequate local scrutiny of these devolved activities”.
I know that there will be independent scrutiny of the metro mayor, but I cast my mind back to when Liverpool decided to go for an elected mayor. Does the Minister know that the Mayor of Liverpool decided to abolish scrutiny and that, at a stroke, scrutiny was abolished? Before that, scrutiny was carried out by a councillor from a minority party who was on the payroll. Presumably, that member might have been looking over their shoulder and thinking, “Well, I’m on the payroll. If my scrutiny offends, will I still be on it?”.
It is vital that any scrutiny is completely separate and independent: it should not be the preserve or appointment of the metro mayor, and the person doing it should be independently appointed according to the Nolan principles so that they have the freedom to act and to scrutinise. I hope that the Minister will confirm that scrutiny arrangements will be robust. Indeed, this important report says the very same thing about the support needed for scrutiny.
The Minister referred to consultation with residents. Can she tell us how the city region is carrying out such consultation? I am a Liverpool resident and have not at any stage been consulted. I have not seen a website, a leaflet or an advertisement in the local newspapers. I would be interested to know how consultation is taking place.
My party and I have always been in favour of elected mayors, not for districts but for conurbations. The name is not important—what is in a name? It is not about whether it is a leader or a mayor. As the noble Lord, Lord Alton, rightly said, it is about the responsibilities that such a person has; it is about their functions; and it is about the finance and the funding that are made available. I hope that we might also look back at the situation we are now left with on Merseyside. In Liverpool, we could have a Lord Mayor of Liverpool, a Mayor of Liverpool and a metro mayor of the city region, which is a bit confusing. Would it not be a good idea to have leaders for all the districts and a metro mayor in their own right?
Lord Beecham
My Lords, we are in the slightly unusual position of having no fewer than seven former council leaders gathered together here, including the noble Baroness the Minister. I do not know what the collective noun for such a group would be. Perhaps I may suggest a redundancy of council leaders, because—let us face it—most of us, or most of our successors, are finding their position extremely limited these days.
We are engaged in something of an experiment. It is an interesting experiment, as most of us have acknowledged, with considerable potential but with certain concerns which have already been voiced both in this debate and on previous occasions. The issues are very broad, but they cannot be addressed simply by the imposition of a mayoral system. Many of us feel that there should have been a local decision to adopt that system. The noble Lord, Lord Shipley, and I were on opposite sides of a referendum in Newcastle for having an elected mayor for the city. His successor was the Liberal Group Leader on Newcastle City Council who I formed an unlikely coalition with and which turned out to be successful in securing a no vote. But we now have a situation where Newcastle, if the North East Combined Authority goes ahead, will have an elected mayor imposed and in the Tees Valley area we already have an elected mayor in Middlesbrough. However, we have an authority which, having had an elected mayor, then decided to get rid of him and the position in Hartlepool, and yet they are going to be faced with that requirement. It is interesting that the Secondary Legislation Scrutiny Committee asked the Government what consultation had been carried out about these proposals and the Government replied that Ministers had indicated that the:
“Passage of legislation, is founded on the longstanding tradition of representative democracy in this country. The matters covered in these Orders have been consented to by the democratically elected representatives of the people of Liverpool City Region, and of the Tees Valley”.
Accordingly they said:
“Those giving consent will have done so in the knowledge that they are democratically accountable through the ballot box to the people of Liverpool City Region and of Tees Valley, and we can be confident that they will have engaged with their constituents in such ways as they consider appropriate”.
That is a very high-sounding affirmation of the belief in local democracy. Oddly enough, the principle does not seem to extend to the decisions which councils can take about the services they deliver. They are being constantly eroded. We are now seeing further moves to distance local authorities from the provision of education and we have seen similar moves elsewhere. More particularly, of course, we have the financial position of local authorities, which are rigorously and vigorously constrained in the exercise of their functions. For example, the vaunted democracy about which the Government boast did not extend to allowing councils to increase council tax by more than 2% without a referendum. That was not a decision they were deemed competent to make. We have of course seen similar erosions of responsibility in other areas.
On the financial side in particular there is significant loss of resources to authorities involved in the devolution process. The National Audit Office report sets this out very clearly. We hear much about the additional funding, which in the case of a number of areas will amount to £30 million a year over 30 years, or £900 million, which sounds like a great deal of money. That sum will be paid into the Liverpool City region. A smaller amount, because it is a smaller area, of £15 million a year and therefore £450 million will go into the Tees Valley area. It sounds impressive, but then we must look at what is currently being spent. Total capital spending—this is what the money will be for—in the Liverpool City region now is £312 million a year. In addition, £44 million under the annual local growth fund is payable to the LEP, which is obviously also concerned with that infrastructure. Therefore the total amount in the Liverpool area is something over £350 million, so £30 million distributed between all those authorities amounts to something like 8% of what is currently being spent on capital programmes. The position is similar in Tees Valley where the total capital spend of local authorities and the LEP is just under £190 million. It will get £15 million, which obviously is something like 7.5% of what is currently being spent. The financial investment that is being made and boasted about in connection with this project is minimal.
On business rates, I think the Government are still consulting on what needs to happen with them. It is all very well to say that local authorities will be able to keep business rates, but in both Merseyside and Tees Valley areas—I suspect particularly in those areas—the business rate income will be pretty minimal relative to the population and in comparison with other authorities. Presumably there has to be some kind of mechanism for redistribution. I do not know whether the Minister will be able to indicate how far the talks have progressed, and she may not wish to tell us or not be able to tell us what the outcome will be. However, where are we as regards the timetable for coming out with a clear position on how the business rates will be redistributed, if there is a need for, as surely there has to be, an element of redistribution? As it happens, it appears that in some areas we will go into this new system and committing to it without even knowing what the timetable is for when the business rate agenda will be addressed. Surely that is extremely unsatisfactory.
The issue raised by the noble Lord, Lord Shipley, about scrutiny is valid. There has to be local scrutiny and it ought to be built into local arrangements. We provided according to my suggestion for an audit committee under the legislation which would give some measure of independent scrutiny, and those who have been calling both today and hitherto for an effective scrutiny process are obviously right to do so.
But of course there is then the question, given that business rates will be the only locally raised revenue, of what happens to the services not merely of the combined authority but also of the constituent local authorities since revenue support grant will no longer be paid. Surely the two things have to be aligned if local services and the devolved functions are to be delivered adequately. I refer again without making any apologies for doing so to the regret that I and others have voiced about the abolition in the early days of the coalition Government of regional offices of government, never mind the regional development agencies. As the noble Baroness will recall, the abolition of regional government offices changed a system which had worked well in providing a close working relationship between Government departments and local authorities. In each region virtually all the Government departments were represented, engaging with local authorities and operating as a conduit between Whitehall and those areas. Now that we are creating these potentially powerful mayoral authorities, it seems to be even more important that there should be a local dialogue which can facilitate a closer working relationship between central and local government.
I have a final question to raise about the position of police and crime commissioners. The understanding is that it will be possible—indeed, Manchester has already opted for this—to have the police and crime commissioner position combined with that of the elected mayor. The next Prime Minister in her current position, which will last for another 24 hours or thereabouts, was keen to promote the notion that fire authorities should go down the same route as police and crime commissioners. Does the noble Baroness have any thoughts or information about how that process might develop and whether the Government are currently working on proposals which would add fire authorities to the police service? Perhaps we will have to wait to hear what the new Prime Minister says, but is it the Government’s expectation, and possibly their political direction, that the new mayors will have as a matter of course that combined power or even just the police and crime commissioner power? That raises in my mind and I suspect in those of others both here and elsewhere some really strong concerns about the concentration of power in such sensitive areas in what will be effectively a single pair of hands, something that many would consider to be undesirable.
Clearly we want to see the new system being given a chance to work and we want local decision-making to be effective at addressing the different situations that face each group of local authorities, but that cannot happen in my submission without adequate financial resources and without the Government preparing not simply to offload these responsibilities, but actually engaging with what will in effect be two levels of local government to secure the improvements that they talk about wanting to see and which are desperately needed in so many parts of the country.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have made a variety of points on the order. Perhaps I may apologise to noble Lords for being late. I was happily having a cup of tea with the noble Baroness, Lady Hollis, and I did not hear my phone ringing to say that our business had started. I apologise to noble Lords for being a little late.
I shall start with the question from the noble Lord, Lord Shipley. He asked if I could confirm the election of a mayor in 2017. Once the order is made, a mayoral election will be held on 4 May 2017 and if further orders are not agreed, the mayor will be elected and he or she will chair the combined authority, but will have no powers to exercise individually. The combined authority will have only its existing functions; that will be the situation if further orders are not agreed from now on in.
Baroness Williams of Trafford
Yes. We can argue about more so, but I do not think it is one or the other. We must have both. Practically all noble Lords made the point about overview and scrutiny arrangements. The noble Lord, Lord Storey, asked whether the mayor could possibly abolish them. All combined authorities, including mayoral combined authorities, must have one or more overview and scrutiny committees and an audit committee to hold both the mayor and the authority to account. We will be bringing forward an order for Parliament to consider regarding overview and scrutiny arrangements for combined authorities.
I will outline what the obligations are under the combined authorities. They must establish at least one overview and scrutiny committee. This will be chaired by an independent person or a member of a constituent council who is not of the political party of the constituent councils. Their role will be to review and scrutinise decisions made and action taken by the mayor and the combined authority. An overview and scrutiny committee may require the mayor, the members and officers of the authority to attend and answer questions before it. This requirement must be complied with. They can call in decisions and recommend that they are reconsidered or reviewed, during which time a decision cannot be implemented. Further provisions to strengthen the role of overview and scrutiny committees will be made through secondary legislation and the orders giving effect to devolution deals.
I turn to the audit committee: we have spent quite a lot of time discussing both types of committee during the passage of the Bill. The combined authorities must also establish an audit committee, which must include at least one independent member. It can make reports and recommendations to the combined authority on financial affairs, risk management, internal control, corporate governance arrangements, and the economy, efficiency and effectiveness of the use of resources. Further provisions to strengthen the roles of audit committees will be made by order.
Lord Storey
Who will appoint the independent chair from the minor party or parties?
Baroness Williams of Trafford
It says that the chair could be an independent person or a member of a constituent council who is not of the political party of the mayor.
Baroness Williams of Trafford
I am making the assumption that they will be appointed in the usual way that public appointments are made in local authorities, in accordance with Nolan principles.
Lord Storey
Could the Minister write to me about that, and the funding issue?
Lord Shipley
It is a very important issue, because there is a danger that the majority party will, in reality, be responsible for the appointment of the independent chair. We are seeking reassurance that, if the Nolan procedures are to be followed, they require an open procedure, not simply a council or the leaders in a combined authority making a decision on which member of the minority parties is to be appointed as independent chair.
Baroness Williams of Trafford
We did discuss this and agreed that that should be the case. It would make a mockery of the process if there was any appearance or evidence of bias of that kind. If it would be helpful, I will write to noble Lords from the Committee to outline the process and will place a copy in the Library.
The noble Lord, Lord Storey, asked me how Liverpool is conducting its consultation. It is on the regional combined authority website and is being promoted locally. It started on 24 June this year and the closing date is 5 August, so the noble Lord has time to respond.
The noble Lord, Lord Beecham, asked for examples of resources being made available, in this case to Tees Valley. I understand that Tees Valley Combined Authority’s single pot provides an assurance framework for £226 million of flexible Section 31 grant funding with a confirmed five-year profile. He made the point—as he often does—about local authorities having to make ever more efficiency savings and asked how they would have enough capacity to deliver some of the things being devolved down. It is envisaged that local growth will in many ways—particularly if you look at things like the devolution of health and social care—be a big saving to the public purse and ultimately help in local authorities’ budgets. However, these are all things that are being devolved down that local authorities would not have had previously. So I am very confident that local authorities will see themselves in a better, not a worse, position. He also asked about business rates and he is right: we are currently consulting on the future of business rates and we have made it clear that there will continue to be some form of top-up and tariff. However, I think that a date for decision is yet to be determined, but I shall let him know when it is. I am assuming that it will be by the end of this year.
The noble Lord, Lord Watts, asked what the Government are doing to ensure that the mayoral system is not open to corruption, which I think is a very good question in the context of some of the things that we have seen previously in local authorities. Not only will there be rigorous scrutiny arrangements—which never existed in the 1980s—as provided by the Cities and Local Government Devolution Act, but there will be requirements for transparency; that is, meetings in public, which again did not exist back in the 1980s and were not introduced in local authorities until relatively recently. Moreover, conduct requirements, which we did not have back in the day—things like declarations of interest—will apply to combined authorities. I hope that gives the noble Lord some comfort.
The noble Lord, Lord Beecham, asked about the PCC and fire functions. It is for local areas to propose where they think it would be efficient and effective for the mayor to take on PCC and fire functions. In terms of the new Prime Minister and her previous keenness for fire functions, I really do not know. I have been asked a lot about what the new Prime Minister thinks and I really do not know. I am sure all will be revealed in the next few days.