English Devolution and Community Empowerment Bill

David Simmonds Excerpts

2nd reading
Tuesday 2nd September 2025 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It has been a wide-ranging debate. I particularly thank my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) and my hon. Friends the Members for Bromley and Biggin Hill (Peter Fortune), for Isle of Wight East (Joe Robertson), for Reigate (Rebecca Paul), for Romford (Andrew Rosindell), for Bromsgrove (Bradley Thomas), for Broxbourne (Lewis Cocking), for Keighley and Ilkley (Robbie Moore) and for West Suffolk (Nick Timothy) for their contributions. The range of issues that they and other Members covered starkly highlighted the wholesale inadequacy of the Bill in relation to the scale of the challenges that our country and our communities face.

There are big issues facing local government, which deals with some of the most difficult tasks faced by any of our public services. We know that the cost of social care is rapidly growing and will consume a greater share of the available resources. Since this Government took office, there has been a collapse in the delivery of new housing. It is down 17% in the country as a whole and there has been a 66% drop by large social landlords under Mayor Khan here in London. As we have seen in the news today, the Government’s chums in the unions have voted to extend their strikes until March 2026. The people of our second city are left with their waste uncollected and populations of rats.

[Wendy Morton]

As an MP for a constituency neighbouring Birmingham, I see all too often the impact of the strikes. Does my hon. Friend agree that this issue is absolutely shocking? The one thing that residents expect from their local council is a regular collection of their household waste, and often garden waste and recycling as well. Birmingham city council is failing the residents.

[David Simmonds]

I thank my right hon. Friend for highlighting that issue; she has been a champion for the voices of those affected by it. While I understand that Ministers have come to the Dispatch Box time and again and said that they must wash their hands of it, the unions said in their statement today that there was “no point” negotiating with the council, because it lacked the authority to resolve the issue. The Government need to roll up their sleeves and get involved.

While our second city struggles with these challenges, here we have a piece of legislation about tinkering with structures. Not only that, but, as we learned just a week ago, it is an entirely uncosted plan. The Department has not undertaken any assessment of the cost-benefit of the measures contained in this legislation. That comes against the backdrop of the decisions of this Government which, as we know, are making the financial situation of our country more perilous by the day. In the first few months of this financial year alone, the Government borrowed £60 billion more than they raised in taxes. Borrowing costs have hit a 27-year high—a level seen only in the early days of the last Labour Government in 1998.

This Bill opens the door to a host of tax-raising powers. As we go through the pages and pages of new powers for Ministers and the Secretary of State to direct local authorities in one way or another and to instruct communities to accept this or that, we see the prospect of local authorities, which are already left a net £1.5 billion worse off by the Government’s rise in national insurance contributions, facing the maxing out of parking charges, huge increases in borrowing and big rises in business rates and council tax.

The £60 billion black hole that this Government have created just in this financial year will need to be bridged somehow. The Chancellor will be back to tell us how in a few weeks’ or months’ time, but I think we can see a clue already that local communities and local authorities will be the route by which those costs are raised. When we read what this Bill has to say about neighbourhood governance, the threat is very clear even at parish council level. Those parishes—the smallest unit of local government, but one with precepting powers—will be one of the local kitties that the Government expect to raid to finance the consequences of their economic mismanagement.

When we think of Sir Humphrey’s famous advice that it was always best to

“dispose of the difficult bit in the title”

of the Bill, because it did a lot less harm there than in the text, we can see that when this Bill talks about devolution, it devolves to the local level the responsibility for those tax rises and service cuts. Can the Minister tell the House how many libraries will close to pay for this Bill? How many road projects will be set aside? How many more communities, such as those referred to by the Labour leader of Shrewsbury, will lose their regular recycling and bin collections to pay for it? How high will council tax go?

What is the limit that Ministers will set on the tax rises that the Bill will drive? What is the maximum parking charge or fine that Ministers think it is reasonable for councils to have? What level of costs will local businesses have to face? When we debated the Bill on business rates that sits behind many of the financial elements of this Bill, Ministers said that they wanted to tax Amazon, but they ended up taxing our local high street stores and our pubs. On average, local pubs alone have to pay £6,500 extra a year, and that was before the £60 billion that this Government have borrowed in the last few months.

I am going to finish with a direct plea to the Minister, for whom I have a great deal of respect. He led his party in local government—he was its champion—and for many years, he was a local councillor too, earning a huge degree of respect in this House and in that wider family as a result of the work he did. At the Government’s favoured population level for new unitary authorities, this Bill abolishes 90% of all the councillors in England’s shires at the stroke of a bureaucrat’s pen. That is 90% of the voices of those local communities—people such as Chris Whitbread, who stood up for his community against this Government over the Bell Hotel in Epping. These people have been the voices of their communities on migrant hotels, on protecting their green belt and on air quality. They are the people who stood up for their local communities on issues such as the grooming gangs, which we heard so much about earlier from the Under-Secretary of State for the Home Department, the hon. Member for Birmingham Yardley (Jess Phillips).

This Bill could have been transformational—a chance to step up that voice of local communities. I am sorry that the Minister lost his battle to let those communities keep their voices, but he still has time to change course, to support our reasoned amendment, start again, and build a cross-party consensus on the future of local government. Let this not be the funeral oration for local democracy in England.

English Devolution and Community Empowerment Bill (First sitting)

David Simmonds Excerpts

Committee stage
Tuesday 16th September 2025 Public Bill Committees

[Manuela Perteghella (Stratford-on-Avon) (LD)]

I declare that I used to be a parish councillor and, until March, a district councillor for Stratford-on-Avon.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

As per my entry in the Register of Members’ Financial Interests, I am a director of Localis think-tank, which has contributed evidence. I am also a parliamentary vice-president of the Local Government Association and for London Councils, which has also submitted evidence.

[Lewis Cocking (Broxbourne) (Con)]

I am a former councillor and I know lots of the witnesses from my previous role leader of Broxbourne council.

--- Later in debate ---

[The Chair]

Would the witnesses like to say a few words about themselves?

Justin Griggs: Good morning. I am Justin Griggs, head of policy and communications at the National Association of Local Councils. We work in partnership with our 43 county associations to support, promote and improve England’s 10,000 parish councils, which are the community tier of local government in England.

Sam Chapman-Allen: My name is Councillor Sam Chapman-Allen. I am the chairman of the District Councils’ Network for England, representing 169 district and unitary councils, the single biggest arm of local government, delivering 45% of all planning permissions across the country. I am also the leader of Breckland council in Norfolk.

[David Simmonds]

Q This is a question for both of our witnesses. The title of the Bill is the English Devolution and Community Empowerment Bill. Both of you have very deep roots at community level in representing the voices of local people. Could you set out your views about how the measures in the Bill will impact on the ability of elected parish, district and borough councillors to exercise that power, control and voice on behalf of those residents and communities?

Sam Chapman-Allen: To start off, at the DCN we are absolutely in favour of devolution as long as it is meaningful for our local community. I think the threat and the concerns that we have so far with what is presented in the Bill is that district councils, which are responsible as the planning and housing authority, have no seat round the table of the new strategic authorities that are being established. If we want to work in partnership with this Government, delivering 1.5 million homes, you need those planning authorities around that table.

Beyond that, many things are missing. If we look at what is being devolved from Whitehall and those Whitehall Departments, it is very short in its forthcomings. Some of those powers are just about recentralisation. If we are going to achieve what devolution should be, which is a bottom-up approach where local residents get to shape what their local communities look like, and the centre truly devolving, you need to make sure that those constituent councils—which are the housing authority and the planning authority, and are in control of economic growth—have a seat round that table to drive that agenda forward.

Justin Griggs: At the National Association of Local Councils, we have long advocated for a shift of power out of Whitehall and into our communities, but it is important that that devolution goes beyond the regional, sub-regional and principal authority levels, and into communities themselves. That is why we welcome the ambitions, taken together, that the Government have set out in the White Paper and the Bill. They provide some helpful recognition of the important role that parish and town councils play in their communities—as local leaders, with skin in the game, who know their places best, and providing a wide and growing range of hyper-local public services, such as using neighbourhood planning to plan for housing within their areas, tackling the cost of living crisis, stepping up to support communities during the covid pandemic and working with their communities on climate change.

However, it is important that the Bill goes further and takes more steps to strengthen communities, and parish and town councils. It is helpful that there are measures in the Bill that seek to strengthen the relationship between strategic authorities, unitary authorities and parish councils. That could very much be strengthened. But there are a number of other areas that the Bill could be strengthening to support parish and town councils to do more for their areas, to work with mayors and strategic authorities, and definitely to support colleagues in principal authorities to deliver public services in what is a very challenging financial environment.

[David Simmonds]

Q Thank you very much to both the witnesses. It has been a helpful start. Councillor Chapman-Allen, you referred to the role of your constituent authorities in the planning system. We know that a big focus of the Government is around an increase in housing. What impact will that have on the ability of the overall system to deliver the necessary number of planning permissions and the necessary strategic planning—undertaking this extensive reorganisation, which involves, essentially, the abolition of most of those planning authorities at the same time?

Sam Chapman-Allen: The reason why my members are able to successfully deliver 45% of all new homes across the country is localism. It is being close to those communities and able to work across every mile within our villages, towns, cathedral cities and coastal communities. But it is about taking our communities with us, to understand where those houses need to be built, what the challenges are and how we overcome them together. When you begin to introduce strategic authorities at a large scale, which sometimes seem very distant, you have to have that piece in between it to allow people to have a local voice and representation.

How can a mayor, sitting in a strategic position, be supposed to deliver on housing and planning, when the local authority, which is responsible for housing and planning, does not have a seat round that table? That is the challenge and the risk. This Government have a clear mandate of 1.5 million homes. To achieve that, they need all those councils round that table. We need to make sure that the public have that ability—democratic accountability at a hyper-local level—driving forward not just housing but also wider place-shaping.

[David Simmonds]

Q One of the issues that we aired in the debate when this subject first emerged on the Floor of the House was that at the Government’s chosen footprint of 500,000 minimum population, the Bill implies the abolition of 90% of the local elected representatives in each of those areas. I know the cross-party concerns about the risk of losing that community voice. With your experience at community, district and borough level, it would be helpful for you to spell out what you think is the impact of that potential democratic deficit, especially on contested issues such as planning.

Sam Chapman-Allen: You will appreciate how busy your inboxes and mailsacks are, with the casework that you receive daily from your residents. When you begin to remove councillors, that casework does not disappear; it just becomes a bigger challenge for a single councillor. The risk is as we begin to get bigger those mega-councils, and we begin to think about how to ensure that those councillors can represent their communities. Does it become a full-time job? Does it then preclude other people from being able to stand to become community champions?

The reason why local government and district councils work successfully, in the same way as London boroughs and Manchester metropolitan councils, is because they are hyper-local. There are circa 200,000 to 350,000 residents per council, and they have local councillors representing a couple of thousand people. As we move forward with mega-councils, the risk is that a single councillor will be representing some tens of thousands. The independent think-tank Localis has done some analysis of the current proposal for a 500,000 threshold. We could see 90% of councillors across shire areas removed overnight. That would be a democratic deficit and an absolute catastrophe.

If we look back through the pandemic, as Justin has alluded to, community councillors were out every single day, just as you were as MPs, supporting the most vulnerable, making sure that communities could bounce back and, more importantly, giving support to local businesses to make sure that they could bounce back as well and grow from strength to strength. My concern is that if we begin to move ourselves to a distant model, there will be a democratic deficit and unaccountability, and the ability of a councillor to know that every resident, street, business and community leader will be lost.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

Q My first question is for Councillor Chapman-Allen. First, I should put on the record that the 500,000 number that has been cited is not fixed. The Government will prioritise making sure that there are clear links and that we have that democratic basis, so that communities feel connected to their local institutions. That is a priority for us and we will proceed on that basis.

Strategic authorities are made up of constituent local authorities, and at their best, where they work, it is based on partnership. Can Councillor Chapman-Allen give the Committee examples from among his membership, where strategic authorities already operate, of that collaboration among the constituent authorities, which will always have a key role, working in tandem with the mayor to deliver for communities?

I also have a question for Mr Griggs. The role of neighbourhoods and the connection between communities and the places where elected representatives serve is fundamental to what we are trying to do with the Bill. The part of the legislation on neighbourhood governance is looking to bolster and strengthen that. What are your views on how that will create new opportunities not only for community partnership working but, critically, for community voice and power?

Sam Chapman-Allen: Thank you for your question. To start, I think the 500,000 figure as the initial threshold has caused confusion. I think that many of the submissions that will be received in the devolution priority areas next week and then in the rest of the country in November will show that many councils are submitting models of 500,000-plus. Let us put that into context: they will be some of the biggest councils in the western developed world. I think that will ensure there is a democratic deficit.

In relation to strategic authorities and constituent members, the only model where all district councils, or all principal councils, are members are in Cambridgeshire and Peterborough. If you look at what is taking place there, you will see it is a really successful model. Yes, there is a little bit of grit every now and then, but that is why scrutiny, governance and accountability are so important. We will not always agree on everything.

If we look at a model in which all principal councils are members—I cite Greater Manchester, with Andy Burnham and his 10 councils within that area—they all share responsibility together. All of them within that locality are the responsible authorities for housing and for planning, and they are working together to drive the agenda forward around the real challenges that localities face. They have had some real successes, and I do not think anybody should take that away from them. I know that you have Lord Houchen giving evidence later; he will give exactly the same example of where you have those principal councils able to pull the levers to get stuff done.

Justin Griggs: First of all—

--- Later in debate ---

[The Chair]

We will now hear evidence from Councillor Bev Craig, Labour group leader and vice-chair at the Local Government Association; Councillor Kevin Bentley, leader of Essex county council and Local Government Association senior vice-chair; and Councillor Matthew Hicks, chair of the County Councils Network. This panel will finish at 10.44 am.

[David Simmonds]

Q I have a question on accountability for all three panellists. With the proposals for the new mayoral roles and the reorganisation of local government, a key challenge will be ensuring that the mayor, on a large footprint, is accountable at a local level. There are different systems in place in London and Manchester, for example, which are probably the best-known mayoral authorities at the moment. I would be interested in your reflections on what you think works well, and on what challenges the Government might need to fix in this legislation to ensure the accountability is really effective.

Bev Craig: Good morning, I am Councillor Bev Craig. I am a Local Government Association vice-chair and leader of the Labour group. I am also the leader of Manchester city council, a city of 630,000 people. In my spare time, I am also the Greater Manchester combined authority deputy mayor for economy, business and international issues. In response to your question, the first thing to say is that, across the Local Government Association, we have been calling for devolution from Whitehall to communities for quite some time. We have spent a lot of time thinking through what accountability looks like in that context.

As we move from combined authorities to strategic authorities, it is important to make sure that the Bill reflects not only the competencies of local authorities within new strategic authorities but points of collaboration. For example, in the Greater Manchester system, each of the 10 local authority leaders holds a portfolio. That is perhaps a key difference from the London model, where deputy mayors appointed by the Mayor of London hold a portfolio.

From experience, looking across the country, we think it is really important to bind organisations that have different competencies in different areas into the same shared goal in a place. Many of our members have raised with interest what will happen in the move to majority decision making, rather than consensual decision making. From the LGA’s perspective, we have been quite keen to keep that under review. As it currently stands in Greater Manchester, it is consensual decision making that leads us into a place. A model that binds in local authorities from the beginning is really important. Let’s be honest, in my place, we are the ones building homes. My local authority and I are contributing to growing the economy, and Greater Manchester benefits when we work as one.

Kevin Bentley: I am Kevin Bentley, the senior vice-chair of the LGA and leader of Essex county council. Also, Matthew is actually the leader of Suffolk county council, not Sussex county council. There is no such authority as Sussex county council, unless something dramatic has happened overnight that we are not aware of—that would be rapid devolution.

I absolutely agree with what Bev has said, and we already have that form of scrutiny with police and crime commissioners, and it works well. That works on a model where constituent parts and people who are not necessarily in leadership roles actually have the ability to scrutinise. In the same way, we have scrutiny panels that could hold the mayor to account, which is important. Every action has a consequence, and every action should be challenged on behalf of the public. I absolutely believe there should be good scrutiny of mayors, and I think any mayor would welcome that good scrutiny.

Matthew Hicks: I am Matthew Hicks, the leader of Suffolk county council and chair of the CCN since last Wednesday. Sorry I could not be with you today—diaries are still clashing a bit.

I agree with my colleagues, as I think it is critical that we look at the mayoral commissioners and ensure they are subject to effective and proportionate scrutiny and accountability. Mayors can be voted out every four years, but genuine democratic accountability is really important. I think having structures in place on scrutiny, overview and audit will be key.

[David Simmonds]

Q Councillor Hicks, your point about audit is probably a good entry point for my follow-up question. We are aware that a very large proportion, more than half, of education authorities have a council-killing debt associated with the high needs block in their dedicated schools grant. The Committee has received many representations about the indebtedness of some authorities in areas that are proposed to be part of these mayoral combined authorities. Do you feel that sufficient attention has been given, and that there is sufficient assurance in the system that those debts and deficits will not be a financial barrier to delivering the ambitions that you all share for the new authorities? If so, could you tell us a bit about that? If not, how could that be addressed?

Kevin Bentley: It is a constant conversation. With the high needs block, you are talking about a system that needs to be changed rather than just an issue at the money end—that is perhaps another conversation for another panel. It needs to be addressed soon for the sake of society.

The debt question is a live one. The LGA and constituent councils within the DPP are talking to the Government about debt. Of course, there is good debt and bad debt. Asset debt means that a council is doing things, which is very good, and there are other debts that are not good. We are aware of the councils in that situation. It is a constant conversation. My view has always been that we cannot allow any new authority to start with a major deficit that it cannot cover. We must have that serious conversation with the Government, and we are having those conversations. Has enough attention been given to it? I would like to see more.

Bev Craig: That is a fairly consistent point across Local Government Association members. A significant underfunding of local government has built up over the last 14 to 15 years. There is a big job in taking local authorities back from the brink, which is a conversation for another panel. It is one of the reasons why we will continue to make the point that a well-resourced, well-run local authority can transform and change communities, so they need to be resourced in a way that they can do so.

Matthew Hicks: I echo that. From the CCN’s perspective, SEND is one of the biggest issues, and the growing DSG debt is a huge issue. The Government have said they are going to look at that imminently, and we would absolutely welcome positive changes. That debt is growing, and it is almost unspoken. It is critical that we understand that debt, but also understand the impact if we were to have fewer unitaries. That debt would be transferred to those new unitaries. How would very small unitaries cope with that?

[The Chair]

I understand that Councillor Craig has to go fairly soon.

Bev Craig: As long as we finish on time, I can make a quick exit.

--- Later in debate ---

[The Chair]

We will now hear evidence from Catriona Riddell, the director of Catriona Riddell & Associates Ltd, and Ion Fletcher, the director of policy for finance and regulation at the British Property Federation. We will end this panel at 11.14 am.

[David Simmonds]

Q This question is to both witnesses. There are a number of different elements in the Bill on which you have relevant expertise, but can you give the Committee your view on the impact of the envisaged reorganisation on the planning system? What impact will the measures in the Bill about upward-only rent reviews have?

Ion Fletcher: Good morning, everyone. My name is Ion Fletcher. I am the director of finance policy at the British Property Federation. Our members own, develop and invest in both commercial and residential property across the UK.

In high-level terms, our members have had a good experience with devolution so far. Having combined authorities with responsibility for planning, transport and place making, and strong convening powers, means that our members are able to invest with confidence, knowing the strategic aims for that area. We hope to see that replicated with strategic authorities. We can get into more detail—Cat is better placed to comment on the reorganisation and the impact on planning.

We feel that the way that upward-only rent reviews were introduced into legislation without any meaningful consultation is not good policymaking. We feel that it will not do much to help the high street and it could have a negative impact on new investment and development.

Catriona Riddell: Hello, I am Catriona Riddell, a strategic planning specialist. There are two components to this. First, it is about the fact that fewer than 30% of local plans are up to date. That is partly because all the decisions and all the financial, technical and political risk sit with individual local planning authorities. It is right that there is a separation of decision making in the way that we had before 2010 for 40 years.

If that decision making is now through the new strategic authorities, that is probably the right place for it in terms of the new spatial development strategy, which I know sits with the Planning and Infrastructure Bill. However, there is no point in strategic authorities having the responsibility to prepare those strategies if they do not also have some responsibility to deliver them. The range of delivery mechanisms set out in the Bill will help that.

For example, in the last few weeks, the Mayor of the North East combined authority announced a massive housing development in Newcastle on a site that has been derelict and unviable for many years. She has used her convening and financial powers to bring together Homes England, local authorities and others to bring forward development on that site. On the delivery side, the powers and funding that the mayors will have to make sure that spatial development strategies and local plans are implemented will be really important

In terms of local government restructuring, it is fair to say, as everybody has already this morning, that resources are thin on the ground. They are getting thinner the longer this goes on. People want a resolution. They want to move to the new local government structure as soon as possible to make sure that the resources within the local government family remain.

But, again, before 2010, for 40 years planning resources were done in two ways. The strategic level is where all the specialist skills sat, and then the planners and others were within the local authorities. They worked as two parts of the same team. We do not have the specialist skills in local authorities anymore; they have to pay to bring that back. A lot of specialist skills are rare anyway, so they are difficult to get. Having some teams and general support at the strategic scale will be invaluable to local authorities going forward.

[Miatta Fahnbulleh]

Q I have a question for Mr Fletcher and then a question for both witnesses. You have expressed some reservations and concerns about the upward rent review. Is it fair to say that the position among your members is not unanimous? Mark Allan of Landsec, who I think was the previous president of the organisation, has said that he thinks the changes are favourable, and that the status quo is complex and suboptimal. It would be good to clarify that there is not a single position that thinks this is averse.

Northern Ireland went through a very similar reform about a decade and a half ago. I am interested in your assessment, because most people would look at that property market and think it works well. There was a transition, and it has ended up in a position that, most people would argue, is not just benign and effective but consistent with what we see in other countries. I am interested in your views, and then I will have a question for both of you.

Ion Fletcher: I think that Mark would also say that the way it was announced was not great; it should have been done with prior consultation. One of our main concerns is about how one of our members was recently in Malaysia and Singapore, and his investors were asking him questions about it: “Where did it come from? Why was there no consultation?” It has been noticed overseas, and by people who are deploying capital into our towns and cities. It was not something that was trailed, either in the Labour manifesto or in any of the discussions about devolution. In fact, it is a bit odd to find commercial leasing provisions in a Bill that is mainly about local government reorganisation and strategic authority powers.

There is also the focus on the high street. Upward-only rent reviews are not what is keeping shops empty at the moment. That is more to do with business rates and a lack of demand for space. Most high street shops are on leases of five years or less, so upward-only rent reviews are not going to be an issue; they do not have those clauses in them.

The real value of upward-only rent reviews to investors and developers is that they provide predictability of income. If you are thinking about undertaking a new development project or refurbishing an existing commercial building, having the confidence about the level of income that you are going to get gives you much more security, and it de-risks the project. It makes it more likely to happen. At the moment, there is a shortage of development going on—there is a bit of a development viability crisis across both residential and commercial property—so adding more uncertainty in the form of unexpected policy changes does not help.

In relation to your point about international comparators, yes, Ireland went through this, as did Australia about 20 years ago. There is a transition period. The industry can and would find ways to adapt, but the point is: what problem is it really trying to solve? Is the disruption that it is going to cause in the meantime—the transitional costs, for example—worth the candle?

English Devolution and Community Empowerment Bill (Second sitting)

David Simmonds Excerpts

Committee stage
Tuesday 16th September 2025 Public Bill Committees

[The Chair]

We will now hear oral evidence from Tracy Brabin, chair of UK Mayors and Mayor of West Yorkshire; Lord Houchen, Metro Mayor of the Tees Valley; and Donna Jones, Hampshire police and crime commissioner and mayoral candidate. We have until 2.40 pm for this panel.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

Q37 Welcome to our witnesses—all of you are known to most Members here. From your experience running devolved authorities, what are the potential benefits and challenges of the Bill?

Tracy Brabin: Thank you very much for inviting me to give evidence. It is a real pleasure to be here. I am very excited about the way that mayors can help you as you take the Bill through Parliament. When I was a Member of Parliament, I sat on Bill Committees going through Bills line by line, as you are. It is great that we can have our voices heard.

The opportunities for the Bill are exceptional. It gives us a statutory footing for mayoral strategic authorities and clarity around the framework for devolution. We have seen from the leadership of the Government that devolution by default is the theme. One challenge when we have not had clarity is that some Departments have bought into that memo and some have not. The Bill gives us the statutory framework so that mayors who are new and are coming on to devolution understand the three tiers.

The Bill gives us that great opportunity for clarity, but also elements such as the right to request. You will know that a number of established mayors and mayoral strategic authorities across the country are further along than newer mayoral strategic authorities, have certain powers and are already delivering faster growth than the rest of the country. The Bill gives them the opportunity to request further powers, freedoms and flexibilities. For example, as UK Mayors, we have a consensus on 16-to-19 skills, on careers, and on a visitor levy that would give us the opportunity to have an income stream—£20 million for London and potentially £1 million to £2 million for my own region—that we could reinvest in our regions.

The challenges are always about potentially not being brave enough and pulling back from devolution. We have a country that is so centralised. If we continue to do what we have always done we will get the same results. I think this is a revolution of devolution, and I am really pleased to see the enthusiasm and determination of so many Ministers and Members of Parliament to get it over the line.

We are also here to help you go further. This is only part of the process. As we say among the mayors, this Bill is the floor, not the ceiling; it will be iterative as we go forward over the years. We are here to support your thinking and help with understanding.

Donna Jones: Thank you very much for the question. I have only got positive things to say. This was started by the previous Government and has been continued with gusto by the Labour Government, and I am very grateful for it and welcome it. When the new mayoral combined authority in my area, Hampshire and the Isle of Wight—two counties; 2.2 million people—is created in May next year, it will be one of the largest in the country straightaway.

We should have had a devolution deal 10 years ago. I remember negotiating, when I was the leader of a city council, with Greg Clark, the then Secretary of State. We had the deal on the table from the Treasury and it covered about 50% of the geographical area that I currently represent as police and crime commissioner. We lost out. The Secretary of State was shuffled into another Department and it fell by the wayside. That was a great pity, particularly for the health inequalities that we have across my sub-region of the country, and for the businesses that I believe have lost out on inward investment and opportunity—the opportunity cost really is the biggest thing. When you look at the most recent pot of money that the Government announced, in March this year, the roads infrastructure fund— £15.7 billion—I have calculated that my area probably would have got over £2 billion of that money for roads, and we desperately need that.

We need a seat around the table that Tracy is chairing and at the Council of Nations and Regions meeting as well. We need a mayor to be championing and spearheading my sub-region. The final positive thing for me is the opportunity in Hampshire and the Isle of Wight, two of the largest parts of the south-east of England. Over the last decade, on average, our gross value added has been about £800 per head under that of the rest of the south-east. We have opportunity, but we do need some investment and we need someone to be spearheading.

I do not really want to be negative, but I am going to identify one challenge. I think it will dissipate over time, but to start with, for whoever becomes the mayor of Hampshire and the Solent, it is going to be a bit of a sales job, because the public are saying, “It’s another layer of government.” On the whole, there is a lot of misunderstanding around the opportunity that is coming. However, over time, when you are able to demonstrate the programmes you have delivered, the investment you can secure and the positive things that can come out of working closer with the Government, I think the public will very quickly come around to the fact that they really do desperately need a mayor for Hampshire and the Solent.

Ben Houchen: I will pick out a few points. First, to directly answer the question, I think the planning powers coming through the Bill are going to be hugely helpful. Giving mayors a strategic role in that, including in setting the spatial framework—I appreciate that we used to have spatial frameworks and we are coming full circle back to them—and having democratic oversight invested in a single individual, or what people see as a single individual, anyway, is really important. Obviously, we will have to get the permission of the majority of the councils within the combined authority area, but having that focal point is really important.

The drawback of the planning powers is that they are going to be very slow to arrive. The current indication from the Department is that by the time the legislation has passed and all of statutory instruments have gone through, we will not get the powers until maybe July, potentially September, next year. That is a long time to wait for powers that I think we can all agree are going to help with our growth and progress as a country.

The other thing that is still to be clarified is how we will be able to exercise those powers. There is still some grey around what types of planning permissions we will be able to instigate ourselves, through mayoral development orders, and what we will be able to do to call in. In effect, we are getting similar powers to the Mayor of London, but at what threshold? In my area, Teesside, being able to call in maybe 10, 20 or 30 houses would be significant to drive through development and growth, but we are not sure whether the threshold is going to be set at 20 or 30 houses or at 100, 200 or 300 houses. Some clarity on that is going to be really helpful. The reason we need the clarity is that we are all in the process of having to set up the teams within the organisations, and recruit the planners and the experts. That really needs to start now, and without that clarity it is quite difficult to take that step forward. But planning is substantially the best power within the Bill to date.

I personally think—as a mayor, I would say this; I am sure Tracy would agree with me—that more mayoral powers give us directly elected mayors more democratic oversight and accountability with the public. The other side of that coin is that there is a rebalancing of powers at the combined authority, slightly away from the collective of the councils that we have in our combined authority cabinet, and towards investing direct powers in mayors. I absolutely do come down on that side, not just because I am mayor, but because there is a way in which you can make quicker progress by investing more mayoral powers, whether in the establishment of development corporations, in some of the planning powers or in various other things in the Bill. We saw it a little bit at the end of the previous Government, but we are seeing with this Government an acceleration of those powers. Again, it really depends which side of the fence you sit on whether that is a positive or a negative.

Single pot has been parroted as a huge success. I think it is a good success and a good step forward, but I am mindful that we should not over-celebrate something that is not the success that it is sometimes portrayed to be. There are still a lot of restrictions on how you can move the money around. Sometimes it is communicated as, “We’ll have a pot of money and it will be for us to decide how to move those pots of money around.” Actually, within the rules, there is a percentage of money that can be moved from one pot to another. Even within that, sometimes, there are so-called retained projects; in particular, for example, with transport money, the Department for Transport keeps its claws in by saying, “Okay, it’s your money, but we’re going to keep oversight of this project,” and if it is not happy, in effect it has a veto on taking it to the next stage.

It is a good step, but it feels, throughout the Bill, that we have taken half a step from where we want to be. That is not a criticism—the Government have done really well in getting the Bill to where it is. This goes to the point about the right to request. Nobody wants to have taken the strategic decision about what devolution should be, so the Bill is a bit of a halfway house to move devolution on a bit. I think we need, as a collective, and as a UK Government, to decide on the future destination of devolution. The Government have only been allowed to get to where they are because that question has not been answered and, to be frank, it was not answered for three or four years under the previous Government either.

The Bill is a good step forward, but there are lots of things to be cautious about. I make those points because if we want to go as quickly as the Government have said—and I completely agree with their rhetoric around growth—it could have gone a little bit further, a little bit more quickly.

Tracy Brabin: Not every mayor has the potential for the integrated settlement at the speed at which they feel they are ready. That is a challenge. For Members’ understanding, the organisation is funded from top-slicing of projects, so there is a real desire from mayors to have dedicated funding to run the organisation—for example, your legal or HR departments. Everything is top-sliced from projects. That is not necessarily the most sustainable or strategic way to fund an organisation.

[David Simmonds]

Q A fairly straightforward question: what is your view on whether mayoral precepts should be limited? Should there be any constraints on their use to cover some of the debts currently held by some of the authorities that may be merged into what eventually emerge from this process as mayoral combined authorities?

[The Chair]

Pithy answers, please.

Tracy Brabin: The mayoral precept is democratically held by the mayor for the public. It would be for transport projects; it would be allocated to something specific. For example, the Mayor of Greater Manchester, Andy Burnham, uses it for young people’s travel. The Bill widens the opportunity to use the precept, but none of the public would be happy if you were paying off debts. It is fundamentally for betterment of and investment in communities, in the way that the police and crime commissioner precept is held to deliver better outcomes, whether that is more police community support officers on the street or initiatives around violence against women and girls. It is democratically held by the mayor. We have not introduced it as yet in West Yorkshire, but others have.

Donna Jones: I will be very brief because I am conscious that there are lots of Members on the Committee. The referendum limit is the prohibitor. Essentially, a mayor, like a police and crime commissioner and a council, can precept to the level that they want, but you have to have a referendum if you are going over that limit. Although the Government are right to want some checks and balances, so that you do not get areas that are really out of kilter with others, a referendum is prohibitive: it becomes very political, and it is very costly to do. Therefore, I think there should be a simpler mechanism if a mayor wants to precept above the Secretary of State’s agreed level. Perhaps that could be with written consent from the Secretary of State, as opposed to a referendum.

Ben Houchen: I am not a fan of mayoral precepts generally. I have not raised one, and have promised ever since I was elected not to raise one. Some transparency could be brought to the legislation. You have mayoral precepts, you have transport levies, and there is lobbying from a number of mayors around tourism taxes and so on. From a constituent point of view, forgetting the rights and wrongs of it, all that could be consolidated into a single precept, rather than having a separate transport levy, which can be quite opaque, particularly where you have new combined authorities. Some of those taxations are merged into combined authorities, and who has actually raised the levy can be quite lost. It ultimately all comes into the combined authority once it is established, but the Committee could take away the question of how that could be consolidated to streamline the precept. From the public’s point of view, the mayor has the ability to raise a mayoral precept; there is no reason to have a transport levy as well. For transparency’s sake, that should be clarified as a single levy, if you are going to have one.

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[Miatta Fahnbulleh]

Q To follow up on the point that you made around local growth, which is a big driver of everything that we are doing, what things should we think about in the context of local government and powers and resources in order to deal with the huge challenge that we have around reviving our high streets?

Andrew Goodacre: We touched on good examples, and we should look to learn from them. On local engagement, you need local leadership, but they need help sometimes. That help could be internally from the next level of authority up, or it could be from an external body. One body that I thought was beneficial to high street regeneration at a local authority level was the high streets taskforce that was set up as part of the Institute of Place Management for Manchester Metropolitan University. It has now ended as a body, although in name it carries on because stakeholders—we were one of those stakeholders—would meet on a quarterly basis to discuss opportunities, challenges, good news and bad news on high streets and high street regeneration. We would share those ideas and share them back with the high streets taskforce, and they would help that local decision making.

Quite often what you find is that people know what they want to do. They just do not quite always know how to do it. A think-tank independently managed and run could help them with that “how” and the implementation of their ideas. If you do not bring it back as it was, something similar would really help that local decision making, because sometimes the pride is there, the passion is there; they just do not always have the nous to make it work in the way they hoped for.

With regard to high streets, I see it from a retail point of view, but I recognise the fact that high streets are increasingly dominated by experiential elements—cultural, leisure, more hospitality driven—and I have no issue with that. It does mean that we need better change of use of some of the retail sites that become empty. I know planning is part of this whole issue, so speeding up the planning process is important.

Ideally, I would like to bring homes back into high streets where the possibility exists. There are some large, empty buildings. I live quite near Stratford-upon-Avon and I still go past a VHS store that closed in 2016. It is still empty. I find it remarkable that a landlord can let a big place like that stay empty for so long. We have not looked at the opportunity of what more we could do with that, or what we could do differently with that. If we can bring homes and people back into high streets as places where people want to live, preferably with affordable properties for younger people, I think you would start to create local economies that would drive some of those high streets as well.

Allen Simpson: The question is what level you devolve at. Clearly, we are all nimbys. Nimby is an irregular verb—you are a nimby; I am concerned about my local environment. There are circumstances in which we need to find ways of treating high streets like strategic infrastructure. There will be asymmetric benefits and costs if you live close to a high street or, as people used to, above shops—that is less common than it was—versus being in the surrounding community. Sometimes local politicians do need help. We have seen an approach to that in London that the Committee will have views on.

I am very much in favour of hospitality zones, which have specific licensing approaches, where there is some form of recognition that you get to a “yes” more quickly. There is a specific question around Andrew’s point about bringing people back into former high street or commercial areas, in the City of London or elsewhere, around agents of change. I am very in favour of placing a burden on developers to fit the development around hospitality, rather than buying a flat next door to a pub and then being annoyed that there is a beer garden, for which I have zero sympathy.

[David Simmonds]

Q At what level, or by what mechanism, do you think the views of local businesses, particularly smaller businesses, should be captured and used to influence the decision making of the new authorities that will come into being? I was very conscious listening to your descriptions that you very ably depicted some issues that those businesses might face. How do you make sure that the mayors, and the decision makers feeding into those mayors understand what the impact of those decisions will be, and take those views into account?

Andrew Goodacre: That is a good question. What works well at the moment is the business improvement district model. Where it falls down slightly again depends on the people involved. A good BID represents the voice of local businesses, which are paying through business rates, because the levy is on the business rate, as we know. What I saw in Enniskillen at that time was a BID that really listened to its stakeholders, shared ideas with them and took back the feedback. One of the things introduced there was an Enniskillen gift card that could be used in any shop in that area—ideal for the tourist market that it is trying to appeal to.

We should establish BIDs; the problem with them is that they can be very indifferent, in terms of their make-up and the quality of them. Again, the funding often becomes a point of contention because you are adding to business rates, which is already a massive point of contention for most business owners. In a way, I would like to see BIDs funded in different ways, through the devolution White Paper. Their performance would therefore be a bit more targeted. Part of their performance metrics should be the ability for them to show that they have engaged, understood and taken forward what local business people want, in my case, within their high street.

Allen Simpson: An observation: if you are looking to drive growth, by definition you are looking to bring in businesses that are not there or do not exist, so to some extent your problem is how you consult businesses that do not currently exist. To some degree, it is less about having consultation with specific businesses and more about having an approach that is pro the foundation of businesses in a given area. Clearly, there will be examples where licensing rules could be better consulted on so that existing businesses can expand, but I wonder whether it is less about consultation and more about taking a proactive approach to growth.

[Maya Ellis (Ribble Valley) (Lab)]

Q Both the industries that you represent rely on tourism. One of the things that has come up in discussions that I have had about local government reorganisation is the branding of an area. I just wondered about your thoughts—you have touched on bids and hospitality zones. By way of an example, my area of Ribble Valley is known for food and drink and for weddings. Ribble Valley borough council will disappear in local government reorganisation. One of the biggest fears about that seems to be about the branding of it. We have looked at things such as the English riviera in Torquay, and how they have created a bid to brand that. What are your thoughts on that? Do we have enough mechanisms to protect those brands within the UK, which may disappear as borough council areas, but your industries will still need?

Andrew Goodacre: I think it would be a shame if we lost some of those brands that people have worked hard to create. I think the visitor economy is so important. The most successful independent retailers are in those visitor economies, because people often visit looking for something different that you do not see in a chain store of a large retailer. Creating that identity is something that I hear all the time from successful places. They feel as if they are part of an identity—they have something around them that says, “Yes, we can buy into this.” The riviera example is a good one. It would be a shame if that local effort—that local sense—was lost. I think Falmouth is another good example. Falmouth has created its own essence of Cornwall within that place. You should not lose that. They are so important. It seems counterintuitive that a push for devolution to create more power at a local level means that you would lose local identities. That would be counterintuitive, so we need to make sure that does not happen. Actually, those should be reinforced with better funding.

Allen Simpson: I ran Visit London for five years, so I worked on this a lot. My observation is that the money is not there. Unless you are London, Edinburgh or, to a certain degree, Manchester, which has a very high-quality marketing agency of its own, the money just is not there to do it. Visit Kent has just gone bust. The ability to market a region—sometimes, we devolve the responsibility but not the money with it, and I think that is an example. Equally, not everywhere can be branded. I am not going to pick on anywhere in particular or have one of my regular digs at Essex, but where there is a solid local brand, at the moment, we do not have sensible ways of doing that—just mechanisms to do it. Visit Britain works quite hard internationally to disperse people’s awareness of the UK outside of Edinburgh, York, Lincoln and London, but towards a domestic market, which I think is largely what you are talking about, the exam question is, “What is the pot of money handed down to local communities to do it?” because it is incredibly expensive doing marketing.

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[Miatta Fahnbulleh]

Q Thank you, Mr Davies and Mr Butler, for setting out the gravity of the situation, the urgency and need to reform, and how the Local Audit Office is an important step. You both candidly made the point that it is necessary, but not sufficient. I am interested in what key building blocks are needed in addition. Obviously, we need to deal with the backlog—that is a given—but, alongside creating this institution, what are the top three things that the Committee should have in mind in order to deal with the problem we have today?

Gareth Davies: The first would be skills and capacity. This sector has suffered from a loss of skilled expertise. Public audit is not interchangeable with company audit; it is a specialist field—you are auditing political institutions and reporting in the public interest. It is a different skillset, with some common areas with the rest of the auditing profession, and it attracts people who are interested in how public bodies become successful and how they achieve value for money, and so on. The pool of experts in that area has reduced sharply, so the system faces the challenge of building up that body of expertise and skills.

It is not just the auditors. In the past, the auditors did a lot of the training, and people then went on to careers in local government, the rest of the public sector and other sectors. It was a breeding ground for the finance function of local authorities. Individual local authorities cannot typically sustain large training programmes of accountants on their own, so having a regime that supports the development of that skillset is vital.

The other essential is getting hold of local government financial reporting and radically simplifying it, streamlining it in a way that can still be incorporated into the whole of Government accounts. That is always the caveat, and the reason for some of the complexity, but I do not believe that it is an impossible task. At the moment, the accounts are too easily dismissed as only of interest to the auditor because they are long, complex and quite difficult to follow in many places. There is no reason why we should put up with that. I know the Chartered Institute of Public Finance and Accountancy and the wider profession have started work on what professionals think would represent a high-quality, meaningful financial statement that would clearly explain to taxpayers how we have used their resources.

There is a danger that everyone focuses only on the council budget and ignores the accounts. That is dangerous, because the balance sheet matters as well as annual expenditure.

Bill Butler: I can save quite a lot of time by saying that I agree with all of that. This may happen on a number of occasions, and we have not shared briefs. If you start with those who prepare the accounts, that needs to be revitalised. It is moribund, and people are looking at the scale of this task and finding it difficult. Some of this can be the support that Members and Ministers can bring to bear in terms of its importance, because—again, echoing Gareth—it is not considered to be interesting and it is too easily put aside, but that is not going to get any better. There is a real risk that it will get worse unless preparers are properly supported, and unless it is clear what revisions are possible to make the accounts simpler and deliverable.

There are issues around how we encourage colleagues who work in the audit firms. That is a broader issue, because they are bound by the technical standards imposed across the firms by their relationship with the Financial Reporting Council. However, at the moment, that seems occasionally to act as a block to overcoming that risk. We need to be honest about the fact that that risk assessment is there and about what we can do around it.

As Gareth said, we have been looking, with CIPFA, at reforming local government accounts for some considerable time. The clock has now ticked down, I think. One of the things I hope for is that the commitment shown to reform so far carries on across these broader areas, not of all of which are susceptible to legislation, but all of which would be, I hope, susceptible to encouragement.

Gareth Davies: I would like to add one other thing, because an important bit of the full picture is governance arrangements in local authorities. I know that the Bill includes provisions on audit committees, but it is important that local authorities have robust audit committee-type arrangements. I am not prescriptive about exactly what form they should take, but meaningful engagement with internal and external audit and a connection to the governance of the authority as a whole through its political leadership are essential to good governance. That means having somewhere where difficult questions can be asked and answers gained.

In quite a few of the disasters we have seen in local government finance in recent years, it is the governance arrangements that are primarily at fault in not picking up on excessive risk-taking and lack of understanding of the nature of the risk being taken on, and so on. It is another example of where a more robust audit system will not, on its own, solve everything—although it will definitely help, because it will bring those questions to the audit committee table—but the audit committee itself needs to be a functioning, robust and effective part of the governance of the authority.

Bill Butler: If I may say so, these are not things that can wait for the Local Audit Office, which has a massive task to perform anyway. If we wait, these problems become intractable, and the organisation’s chances of succeeding, if it has any at all, are very low,. They are issues that need to be addressed now, while we have the opportunity and—I hope everybody agrees—a pressing need.

[David Simmonds]

Q I would like to ask you some questions about the risks you outlined in broad terms, and how they play out in the context of the devolution and reorganisation envisaged in the Bill. For the record, I was involved in launching public sector audit appointments some years ago.

In a local authority, there is the collection fund, which essentially covers all the income that it is due to collect, then there are pension schemes, the dedicated schools grant, the housing revenue account and the parking revenue account, where there are slightly variable legal ringfences. All of those pose risks and many of them are impacted by elements of the devolution proposals affecting who will be responsible for decision making and what that revenue might underpin in terms of borrowing or day-to-day expenditure. Will you give us a sense, from your experience, of what the risks are, what the potential opportunities are and where changes are needed to, for example, the ringfences, and your views on the inclusion of the dedicated schools grant in the annual, legal council tax-fixing process, which might help or hinder the proper management of some of those financial risks.

Gareth Davies: Do you want to go first, Bill?

Bill Butler: Yes, then you can agree with me.

[The Chair]

We heard that!

Bill Butler: I think the nature of those statutory balances is actually one of the significant things in how we handle the disclaimers, because they are a part of the mechanism that is different from a balance sheet outside of local government. Of course, because they are statutory, that does mean that they are amenable to change.

On how they will affect the broader issues, it depends on where you are, because there are still quite a lot of places where there are no problems and where you can deal with it. The problem arises, as I alluded to earlier, when there is a bad apple in the barrel. We have seen in previous reorganisations that bringing on board a set of accounts and an organisation that is not on top of those things—where there is no assurance about where those boundaries have been set—poisons the water across the whole thing.

If you have one district coming into a newly constituted authority or organisation, the whole of the account will cause problems. That problem tends to be long standing in nature; the people who might have been able to help you resolve it have gone, and the attention is focused elsewhere. It is impossible to say, other than on a case-by-case basis, how that would impact things, but my view—our view, I think—would be that if those issues can be addressed and clarified now, that will lead to a better situation. If you have places with four years’ worth of disclaimers, finding a way through the statutory balances is will be fundamental to avoiding problems down the line.

Gareth Davies: All I would add is that, in a way, that is a good example of the accreted layers of complexity that now represent local government accounts. There was a strong argument for each ringfence when it was created, but when you stand back, the total picture is now very messy and complex. This is an opportunity to take stock and say, “Which bits of this actually serve our purpose now? Is there an opportunity here for simplification?”

As Bill says, some of these are statutory balances, which can be determined by Government, and that may be one way of accelerating the restoration of proper audit opinions, for example. Rather than the auditor agonising over questions like, “Where do I get the assurance over this statutory balance? It’s not been signed off for many years,” using the statutory process for determination of the balances might be part of the solution. Of course, there are all sorts of downsides with that kind of thing, but it is important that we are clear about how long it will take to get to a properly constituted set of accounts for a new organisation.

Bill Butler: Striving for something that is good, rather than pursuing excellence and achieving nothing, is fundamentally important.

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[David Simmonds]

Q I have two questions that follow from that. On that last point, I know that CIPFA has argued that a much higher degree of consistency is needed in the way statutory balances are accounted for, and I am conscious that that can make millions of pounds of difference at an individual local authority level. I am interested in your views about how the new arrangement should or should not seek to constrain decision making in order to improve consistency.

Secondly, in respect of specific funds, in debates around devolution, it is often argued that, for example, there should be freedom to spend the proceeds of the parking revenue account beyond the current constraints—that the revenue, for example, should be used to prop up social care, or whatever it may be, in a way that it simply cannot within the current legal framework. Do you have any views about decisions or tweaks that the Bill should make to those arrangements, based on the risk and assurance issues you have outlined?

Bill Butler: Not from where I sit. It is a policy area that I would avoid, although I understand why you would ask the question.

Gareth Davies: Yes, I am required to avoid it. The reason I am here today is to discuss public audits, essentially, rather than policy decisions on those kinds of financial matters. Clearly, there is a point at which the two things meet, which is really where we are talking now, but it is not for me to give a view on what should or should not be in a ringfence.

[David Simmonds]

Q What about the CIPFA guidance point? Can you address that?

Bill Butler: There is a standard basis for it standardisation and simplification so that you can move between sets of accounts. It seems hugely sensible. Interestingly, I can remember having similar discussions in the early 1980s, when I first qualified, with the then Department of the Environment’s technical advisers. We have made some progress. Yes, the inconsistency is odd. As Gareth said, it causes problems for auditors as well, because they move between places. It does not help the underlying problem that we have been discussing.

[Vikki Slade]

Q You have talked about policy issues, the lack of trust and the suspicion around transparency. I am sure we have all heard assumptions that things are going on in councils. What is your assessment of the possibly complementary role of local public accounts committees sitting alongside the Local Audit Office? Fundamentally, councils, health authorities and education are all intermingled—they are all spending public money. Do you have a view on whether this might be the time to go for that?

Gareth Davies: I work with the current Public Accounts Committee in Parliament. In that set-up, it is an essential part of the effectiveness of the accountability system. I have seen how the Committee works, and it works extremely well on a non-partisan basis. It has a hugely dedicated membership pursuing accountability across government, so it is a very effective model in the House of Commons. Such a body is normally positive in local government in the context of combined authorities—that is where I have seen it mentioned most. As I said earlier, having an audit committee in every local authority is an essential part of good governance. Questions like, “Are we managing the risks to the organisation effectively? Are the controls that we think we have in place operating as intended?” are the meat and drink of an audit committee agenda.

Where a local public accounts committee might have an effect would be in looking across the public service landscape—say, at a combined authority or sub-regional scale, in Greater Manchester, in the west midlands or wherever. I think there is a gap there at the moment. One of my last roles before I stopped auditing local government was auditing the Greater Manchester combined authority; it was ramping up in scale at the time, and it was getting to be very significant, including some health spending and so on. As we know, it is the most developed of the devolved set-ups at the moment. I can see how, in that arena, a local public accounts committee would add real value by looking beyond the institution, which an individual audit committee cannot do, and by looking at value for money in the sub-region. If that is what we are talking about, it would be a body that we in the National Audit Office could engage with in order to follow the public pound from national policy making, through to sub-regional infrastructure and so on, and through to council delivery. All parts of that are important, including right at the individual local authority level.

Bill Butler: I have nothing to add.

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[Miatta Fahnbulleh]

Q I have a final question, if I may, Chair. We heard very clearly from the last panel that the reforms that were put in place are necessary but not sufficient, and that we need to think about how we build on things such as skills and capacity. From the perspective of someone at the coalface, what are the things that we need to get right? What should we reflect on as we take through these reforms in the Bill?

Mark Stocks: It is still fragile. I thought Gareth and Bill were accurate in what they said. We need to have more capacity so that we are not reliant on just a few suppliers. For that, there has to be consistency in terms of message. We need to get to grips with local authority accounts. If I went and did a set of NHS accounts, they are perhaps 100 pages long. The average local government accounts are 200 to 250 pages long, so the work involved is immense. That is why it takes longer, so we have to get that right.

We need to start to deal with some of the risks in local government, to be candid. It is quite difficult to deal with the breadth of what local government does. If you add on top of that the financial issues that they face and the issues that are asked of them in terms of policy, that layers on quite a scope for auditors, which means that we have to bring in specialists to do some of the work. I do not think that will get any easier under the current landscape.

[David Simmonds]

Q The previous panel addressed some of the complexities of the local government finance landscape, with the different accounts and so on. I am interested in your perspective as someone from the audit sector that receives many of these contracts, first on the challenges involved in skilling up the sector with the necessary knowledge and training. I am also interested in your perspective on the standardisation question. I think we all understand that audit is sometimes more of an art than a science—sometimes the other way round. How do you end up with something where everybody understands what is expected of them, in the context of a high degree of transparency that often is not really there in the commercial sector? How do decisions to deviate from that standard impact on the wider perception of the state of that organisation?

Mark Stocks: Local government accounts are complex. These are highly complex sorts of businesses, if I can use that phrase, that deal with any number of services. What we see now are local finance teams who are stretched, to be candid. There has been a lack of investment in them over the years. Gareth talked about trainees going from the Audit Commission into local government, but that does not happen now. There is a bunch of people who are around 50, who may be disappearing in the short term, so we have to sort out the strength of local government finance teams. As I said, we also need to sort out the complexity of the accounts.

In terms of the standards, all local government accounts are under international financial reporting standards, and that will not change. That is a Treasury requirement. How that is interpreted and what is important in those accounts is open to judgment. The emphasis from the LAO on whether it is more important for us to audit income or to audit property will make a difference to what local auditors do. I would always argue that it is more important to audit income.

It is very difficult to standardise anything that we do, because local government is not standardised. I can take you from a district authority that spends £60 million, most of which is housing benefit, to an authority that spends £4 billion and has significant regeneration schemes and companies. The skillsets that you need and the ability to standardise is very difficult. You have to have the right skills to do the work.

[Manuela Perteghella]

Q Do you anticipate any issues in the working relationships between the new Local Audit Office and the local authorities it will audit?

Mark Stocks: The Local Audit Office cannot look like the Audit Commission. The Audit Commission took a particular tack in terms of what it did and the level of scrutiny that it put on local government. If the Local Audit Office follows suit, which this Bill does not allow it to, I am sure there will be problems. But the way the Local Audit Office is configured in the Bill is to make local audit stronger. As long as the Local Audit Office sticks to that, I do not think there will be too much of a problem.

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[The Chair]

Could that paper be sent to the secretariat and circulated around the Committee?

Zoë Billingham: Certainly.

[David Simmonds]

Q I would like to ask you to enlarge on this subject. The point at which Professor Denham finished was a helpful starting place. I think we all share the desire to see that level of community empowerment. What is very striking, when we compare local government in all its forms in the UK with what is well established in other countries, is how little of it there is, relatively, and how few powers people in local authorities already have. One of the concerns we flagged is that the chosen footprint of half a million envisages, in shire England, the elimination of 90% of existing local councillors in one fell swoop. I am interested in how, in the context of a country that is already massively under-represented at local level, we can address that manifest democratic deficit in this process.

And to come to the point that both of you have touched on, the Bill as drafted assumes power upwards to mayors, and it introduces a raft of powers—in chapter after chapter of the Bill—whereby the Secretary of State will direct the mayor and the authority, requiring them to produce various strategies. In a country that is already very centralised anyway, how do we develop and encourage local leaders to come forward in a context where there will be significantly fewer roles for them to fulfil, and where those roles will be significantly more constrained than they have been used to?

Professor Denham: Let me break that down into a number of sections. First, on local government reorganisation and size, I will be straightforward: Sir David and I did not propose local government reorganisation. We proposed creating what would now be called strategic authorities from what we generally call upper-tier authorities—the unitaries and the counties. I am not saying that there would not have been a need down the line to do something about what will be a messy system, but in terms of getting growth plans and those things up and running—I just put that on the record, because I am not going to get too far into the issue. However, if you are where you are at the moment, I would commend the idea of community empowerment plans and a proper legal framework for devolution below those levels.

What I would say, though, is that there is a level of devolved function that needs to operate at the level of strategic authorities. If you are going to have really good local growth strategies, and if they are going to tie into a national industrial strategy, it could not be done, say, at the level of a city such as Southampton, where I was an MP for a long time. You need a bigger body. However you do it at the micro level, that strategic level must operate effectively.

To tie my threads together, if you go to other European countries with a higher level of devolution, they have an intermediate forum between the strategic body and the national, where these issues are thrashed out, best practice is worked out and, in a sense, the Secretary of State does not exercise their direction powers without discussing it with the mayoral council first. You actually say, “How is that going to work then? How is that power going to be used?” So building in that layer means the right sort of compromise between the desire of Governments to get on with things and the need to engage people at local level. That would be one way of dealing with it.

You are inviting me to say we should keep all the district councils, but I am going to pass on that one, because that was not part of our proposals.

Zoë Billingham: Let me just build on that and the question of scale. As John says, the proposed 500,000 scale of the unitaries post-reorganisation is very large compared with European counterparts, and that poses some big questions, not least whether the projected efficiency savings will be realised. However, town and parish councils still exist within the system, and we have previously done work that looks at what we call the hyper-local tier of governance. While they are imperfect bodies, there are improvements that can be built upon at that hyper-local level, in addition to having some sort of formal forum, as John says, to engage with communities.

If the neighbourhood area committee proposal continues as planned, I would really urge that to be—the majority—taken up by community leaders and young people. There are other ways that we can help to counterbalance this through democratic innovations. There was talk, for instance, about remote meetings and remote voting, which are not currently available. Especially when you speak to young people about why they do not engage with local politics, they say that meetings are at the wrong time and too far away, and if you do not have a car, you cannot get to them, especially in rural communities. So I think this could be a real opportunity to see how normal council business is done and improve on it.

Finally, to build on the point about participatory methods, it is about making sure that unitaries are committed to properly engaging with their communities on the big questions they face, and not seeing it as distancing from communities.

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[Miatta Fahnbulleh]

Q The Government will do our very best to make sure that chaos is not the thing that comes out of this set of reforms. I think most people would concede that the status quo is not optimal and therefore reform is required. The piece that I want to push back and follow up on is the need for public participation. That is the whole basis on which our planning system works, but there is something about accountability and the mandate that sits with the mayor. Ultimately, if people do not like the set of decisions that the mayor drives through a development plan, they can boot them out in an election, so there is a specific piece around the function of the mayor that means that they can hold that development plan and the public are able to hold the mayor to account.

Naomi Luhde-Thompson: I think we need to reflect on what became of the regional spatial strategies, and on whether that was an issue around social licence and public consent. Obviously, an examination was attached to them in their development, and there was accountability in different formats. If it is not clear to people that they are going to be involved, you will just get disempowerment and disenfranchisement, and then people are just going to say, “Well, it’s nothing to do with me. I haven’t been able to be involved, and I haven’t been able to have an influence.” Those routes to influence and to participate properly, which means having an impact on the outcome, need to be very clearly laid out so that people can participate. I agree with you that it is a whole discussion. Planning is the way we organise ourselves in space, in society and in places. That is what it is supposed to be, so we need to make it like that.

Your point about democratic accountability is really important. One of the things that the Better Planning Coalition has been looking at is the national scheme of delegation, which will have a huge impact on whether there is democratic accountability for planning decisions at local level. If people realise what is happening only when the bulldozer turns up at the end of the road, that is obviously a failure of the system. If they feel that a decision has not been made in a way that is accountable, if there is no one for them to go and talk to, and if they do not have public speaking rights at planning committees any more and cannot have their say on that decision, I think that will lead to a democratic deficit.

[David Simmonds]

Q To pick up on the point about a democratic deficit, one of the things that has been much debated is that the Government have embarked on two major pieces of legislation: the Planning and Infrastructure Bill, and the English Devolution and Community Empowerment Bill. Both will have a huge impact on the policy area, particularly around housing. We know that housing delivery has collapsed, and part of the solution to that in the Planning and Infrastructure Bill is to strip out a lot of the environmental protections, which you have referred to. Then the devo Bill comes along and removes much of the community voice as well—for example, by reducing the number of planning applications that may be considered by a local planning committee. Can you tell us a little bit about how, perhaps in an ideal world or a more optimal world, that community voice could be secured behind the delivery of the types and number of homes that communities want, but in a way that best reflects the needs of those local communities and those areas?

[The Chair]

Bullet points would be great.

Richard Hebditch: This is not a good way to start an answer, but it is a massive challenge, and I very much recognise that. One of the things is around democratic legitimacy. As Naomi was saying, it is not about entirely removing local planning authorities’ say in how they deal with applications. It is important to ensure there is a community voice in the development of local plans as well. There is a challenge, as previously mentioned, if local government reorganisation is going on at the same time.

It is also about having a level of democratic accountability within the strategic layer. I mentioned the lack of structures for these new strategic authorities beyond the indirectly elected constituent authorities. The previous panel was discussing ideas that might improve engagement. There are risks in relying on elections every four years as the entire democratic legitimacy, particularly in a time when you have five parties all quite close together in polling, and you are seeing that in local authority elections at the moment.

There are risks in relying on that to justify your decisions without necessarily having a structure for what happens in the gap between those four years to ensure democratic voice and community engagement. It is not necessarily for the Bill, but maybe there is something around ensuring that there are adequate reviews of how this will operate, drawing on the ideas that the previous panel was discussing. We also now have the national covenant between civil society and national Government, so it is about whether we can look at similar things at a strategic layer and at a local layer.

Naomi Luhde-Thompson: Let me add just one example. I do not know whether anyone knows about the Salt Cross area action plan. It is West Oxfordshire district council: 2,000 homes on a greenfield site, and they want it to be zero carbon. It is going to have business on it and affordable housing. The community is really supportive, because that development is bringing things for them. The only problem is that those developing it want to strip out some of the things about zero carbon, for example, so there is a conflict there. I think that is all about—this is a whole different conversation—land values and land value capture, and how you get the public benefit out of development.

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[Perran Moon]

Q Meur ras—thank you, Chair. I am afraid it is Cornwall again, Minister. In 2016, commenting on the previous Government’s plans for redrawing boundaries, the Council of Europe’s advisory committee on the framework convention for the protection of national minorities said that

“Article 16 prohibits restricting the enjoyment of the rights of the Framework Convention in connection with the redrawing of borders.”

The Bill currently excludes Cornwall from accessing the highest level of devolution unless we compromise our national minority status. Is there an appetite in the Government, before we pass a Bill that breaches the framework convention, for making special provision in the Bill for Cornwall so that it can access the highest level of devolution without compromising our national minority status?

Miatta Fahnbulleh: First, let me thank you for being such a consistent, persistent and passionate advocate for Cornwall. The Government absolutely recognise Cornwall’s national minority status. We recognise the uniqueness of Cornwall and are trying to operate within that framework. Ultimately, strategic authorities, at their best, try to drive economic performance and growth, so geography matters.

The conversation that we want to have with Cornwall is: “If you want to drive growth and employment opportunities, and if you want to create jobs in your area, what is the best geography to do that in?” That is not to deny Cornwall’s uniqueness and specialness, which I think every single Committee member recognises and appreciates, but it is to say that if our objective is to make sure we are delivering for your community in Cornwall, what is the best spatial strategy to do that? That might require collaboration beyond the boundaries of Cornwall.

[David Simmonds]

Q I think we have established that the Department has not done an independent assessment of the financial impact of the reorganisation that has been described, so we do not know where we stand with that, but let me push for a little more clarity on the footprint. It is clear from the representations from local government leaders that the Government had previously given them the steer that unless their bid was for a footprint of around half a million, or had a very strong justification for why it was larger or smaller than that, the Government were unlikely to approve it. That was the evidence given to us by the previous Minister.

Clearly, a number of those authority areas are in the process of finalising their bids, and in some areas there is dispute at different levels of local authority as to what the footprint should be. Many of us will have been pleased to hear you say earlier, Minister, that that was flexible, in your view—that it was not intended to be a strong guideline, but was something where you were looking at a much greater level of latitude. So that we can have assurances in relation to the relevant groupings later in the Committee process, will you commit to all those local leaders—in particular any who have submitted a bid on the understanding that it had to be around that 500,000—that there will be the opportunity to revisit that if it was not dictated by their local circumstances and preferences but, in their minds, something required by the Government?

[The Chair]

Can you come to the question, please?

[David Simmonds]

That is the question.

Miatta Fahnbulleh: I come back to, “What is the purpose of this?” We are not doing reorganisation for the fun of it—it is not fun. We are doing it because we think it will help us to drive certain outcomes. Our assessment is that around 500,000 is the sort of scale that allows us to do certain functions. That has to be consistent and compliant with what makes sense locally. The whole purpose of localism is that you have that interaction between the two. We have therefore given a benchmark for what we think makes sense, but when we look at proposals we will, of course, take into account the specific circumstances. If an authority comes forward with 100,000 or 200,000, we are likely to say that that probably does not cut the mustard, but we want to have that conversation, because fundamentally this has to be aligned and make sense on the ground. Otherwise, none of this will play out in the way that we want it to.

[David Simmonds]

Just to check—

[The Chair]

Order. I really want to allow other Members to get in.

[David Simmonds]

Q May I put a point of clarification? If there is no independent financial assessment, on what basis do the Government have a view that 500,000 is the most efficient size?

Miatta Fahnbulleh: I come back to the fact that it is not just about savings and efficiency, but about removing fragmentation and about what makes sense in terms of the types of services that we are asking local authorities to deliver—it is a whole set of things. That is our benchmark, but ultimately the basis of localism is to say to places, “Given these parameters, what do you think makes sense?” We will use that to make decisions.

[Vikki Slade]

Q Most areas that are currently undergoing local government reorganisation seem to be moving at pace to set up town and parish councils, if they do not have them, to protect their assets, protect their identity and retain local democratic accountability, because they are nervous about decisions being taken a long way away. That demonstrates how much they are valued. Yet places are not being supported to do so. There is no duty to co-operate with, include or consult with town and parish councils in the Bill. The funding for neighbourhood planning is gone, and I have had confirmation today that it is not coming back. There is no money to support the community right to buy. I believe that the desire for devolution is genuine, and we share it, but if you want to devolve to truly local people, you have to include and value the community level. Will you be open to reviewing the role of town and parish councils and how local people can truly get involved, either through town and parish councils or through community activism, rather than it being top-down?

Miatta Fahnbulleh: The push of powers to communities is absolutely critical to us, and the duty on local authorities to think about neighbourhood governance is trying to get to the heart of that. Parish councils may be the structures and institutions that the local authority decides to build on, but it is not consistent across the country, so we have to ensure that we are finding the right governance structures for different places so that communities have a genuine voice. We have to ensure that we have diversity of representation, which we need for this to be enduring and for it to ensure that there is power and voice for communities. The commitment is there, and that is why we have it. We were very clear that this was not just about strategic authorities or local authorities, but was absolutely about the neighbourhood level. How we get that right has to be a conversation—an iterative relationship with places. That is the bit that we are absolutely committed to.

English Devolution and Community Empowerment Bill (Third sitting)

David Simmonds Excerpts

Committee stage
Tuesday 14th October 2025 Public Bill Committees

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I echo the Minister’s welcome, Sir John. It is a pleasure to serve with you in the Chair.

We will refer to a good deal of evidence on all parts of the Bill, but it is important to set out briefly—in terms equivalent to those used by the Minister—the concerns that the Opposition continue to have about the significant democratic deficit that arises from the measures in the Bill; the risk of losing the efficiency and local insight that come from many of our local government structures; and, in the context of a country that already has fewer elected representatives per voter than any other developed democracy in the world, the impact of stripping out, by some estimates, up to 90% of elected representation. I therefore echo your comments, Sir John, on the importance of scrutiny of the Bill. Local authorities are the means by which our voters, our residents, exercise control over what happens in their neighbourhoods and communities. It is critical that the legislation gets that right.

[Miatta Fahnbulleh]

We absolutely recognise the hon. Member’s point about democracy. Directly elected mayors can play a powerful strategic role. They are a key new part of the devolution architecture that we have seen work well across the country. I point to Greater Manchester, which has delivered the fastest growth of any local economy. They sit alongside strong democratic structures that we will have in local government. The Bill is complementary to that and does not cut across or undermine those structures.

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[Siân Berry]

The amendment relates to the fact that the new strategic authorities simply must be tasked with reducing inequality as well as creating growth. We know that growth for growth’s sake does not trickle down or help everyone equally. The strategic authorities must be tasked with understanding, measuring and reducing socioeconomic inequality. The socioeconomic duty in the Equality Act 2010 is not yet commenced for England, but if it were the amendment would have to be made.

The amendment would make poverty and socioeconomic inequality an area of competence for devolved authorities, ensuring they can take action to address the root causes of disadvantage in their areas. As co-chair of the all-party parliamentary group on poverty and inequality, this is an issue close to my heart. In July, the officers and I sent a letter to the Secretary of State for Education and the Minister for Women and Equalities to ask about the urgency of commencing the socioeconomic duty. We said,

“The urgent need for the duty could not be clearer. Rising child destitution, increasing reliance on foodbanks and untimely excess deaths attributable to austerity policies all highlight the imperative for a legal tool to reduce socio-economic inequalities”.

We also said,

“Activation of the Socio-Economic Duty marks an important shift from piecemeal responses to rising poverty and widening inequalities, to a proactive systemic approach, embedded across all policy areas”.

The Bill is an opportunity to embed those principles.

I do not believe that these two actions—the commencement of the duty and the writing of this Bill—are mutually exclusive in achieving these goals. I cannot see why, given the Government’s promise to enact the duty, the new bodies should not be set up with it in place and in mind. I know that organisations including many local authorities are already preparing to comply with it in England. Towards the end of last year, one of my Green party colleagues on the London Assembly questioned the Mayor of London with some urgency about the work that he is doing with local authorities and agencies across London to prepare for this. We are now approaching the end of this year and it is still not in place. I believe that the Bill is the right place to start putting this into legislation.

I do not plan to push the amendment to a vote, but I would like to hear more from the Minister about when the Labour Government plan to bring the duty into force, and what plans Ministers have to use a statutory instrument to apply it to strategic authorities and mayors. Even if they will not accept the amendment, I would appreciate anything on the record asking those bodies to get ready for the duty, so that when they are set up, they can hit the ground running on addressing poverty and inequality in their areas.

[David Simmonds]

The Opposition have some sympathy with the amendment, but we spent time reflecting on its implications and appropriateness for the Bill. I suspect that, to a degree, the Minister and I agree on this point. If we reflect on the legislative framework around our local authorities from their earliest origins, the relief of poverty and addressing inequalities—the duties that the amendment refers to—have been enshrined. It goes back as far as the Poor Laws, but in more recent years the National Assistance Act 1948 compelled all local authorities to support those destitute in their areas, and the Localism Act 2011 gives scope for local authorities to use their economic powers through activities such as procurement in ways that specifically benefit the local area.

The Levelling-up and Regeneration Act 2023, which was much debated and broadly had cross-party support, is reflected in a lot of this Bill. It was specifically about local authorities using their powers to support the economy of their local area. Just a short time ago, some of the members of the Committee were in this room debating the Planning and Infrastructure Bill, in which the Government set out a vision—contested to some extent—about how those measures affecting local authorities will address persistent issues of inequality. We recognise that sometimes that is about legislation, but sometimes it is about Government action.

Mention has been made of food banks, which were rolled out under the last Labour Government as a means of addressing persistent issues of poverty. I remember them being opened during my time as a local authority councillor, and Gordon Brown visiting and saying, “This is an example of how we expect local authorities to address some of these persistent issues.” Local authorities already have these duties at both the strategic and the micro level. I question whether it is necessary to add an amendment that, in essence, reflects existing duties throughout all the different tiers of local government in England.

[Miatta Fahnbulleh]

I shall start by setting out the purpose of clause 2, then turn to amendment 261. The clause provides some broad thematic policy areas under which functions and powers of strategic authorities are arranged in the Bill. Defining those areas on the face of the Bill will bring clarity and purpose to the role of strategic authorities, which all parties agree we need to do. We want to empower mayors, who know who their areas best, to respond to local needs, so they can be the ones driving change and improvements in economic prospects and living standards and poverty. These thematic policy areas are deliberately broad, to allow for a wide range of activities.

I have a lot of sympathy with the intention behind amendment 261. Alleviation of poverty and tackling socioeconomic inequality should be a core part of what we do and a core metric of economic success. However, as the hon. Member for Ruislip, Northwood and Pinner set out, those duties are already baked into the very function and purpose of local authorities and, critically, they cut across all the thematic areas that we have set out.

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[Vikki Slade]

Amendments 4, 28 and 29 seek to ensure that this is a genuinely community-led devolution—I am sure that we will repeat that many times throughout the morning. Fundamentally, the Bill seeks to move decision making closer to home, which we welcome. However, closer to home needs to start at home, and we want it to be councils that take the initiative to establish a single foundation authority, not the Secretary of State. We also believe that the public should play a role, and therefore this process should involve consultation, which we believe these amendments will provide.

This is a really important issue for us; we think it is fundamental to the whole concept of devolution. As a result, my hon. Friend the Member for Stratford-on-Avon will speak to these amendments in more detail, and we will push amendment 4 to a vote.

[David Simmonds]

We know there will be quite a degree of debate on this in due course. We sympathise with the objectives of the amendment, and we all share the concern that local people should be the ones who initiate change in the structures that govern their local areas, not the Secretary of State or the man in Whitehall who knows best. Therefore we have sympathy with the objective, and we shall return to that debate later on with some of the amendments around the structures.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

It is a pleasure to serve under your chairmanship, Sir John. Amendments 4, 28 and 29 would make English devolution genuinely local by ensuring that local consent and public consultation come first. Amendment 4 would change clause 3 so that local authorities must apply to the Secretary of State themselves to become a single foundation strategic authority, rather than Whitehall imposing devolution on local councils. Amendments 28 and 29 would remove the parts of schedule 1 that would allow the Secretary of State to prepare a proposal for there to be a mayor in an existing combined authority area, and for the establishment of a combined county authority, without public consultation.

One of the greatest criticisms of the Bill is that it proposes a top-down, Whitehall-led devolution, which is not really devolution at all. In my county of Warwickshire, the choice of which strategic authority we create, form or join must come from local elected representatives who are closer to their communities and understand better the needs of our constituents. Such an important shaping of future governance must have grassroots support and should not end up being imposed by central Government, especially if we want to decentralise powers to tackle socioeconomic inequalities, address regional disparities and promote real autonomy.

Without the amendment, local people will lose the right to decide their own governance arrangements. Whitehall will be able to impose devolved powers, force mayoral models on to areas that have not asked for them, and redraw local governance boundaries behind closed doors. Community involvement and local consent are essential to ensure transparency and accountability in devolution decision making.

Amendment 4 reaches the heart of the issue at hand. It would ensure that devolution is locally led, not imposed. It would ensure that a council that wishes to become a single foundation strategic authority must initiate the process itself, rather than wait for the Secretary of State to decree it. If devolution is to have legitimacy, it must be built on local consent, local ambition and local accountability. Without that, we risk the Bill becoming an exercise in central control and a top-down approach dressed up as devolution. We would like to push amendment 4 to a vote.

[Miatta Fahnbulleh]

Both the policy intent and the practice with places going through the devolution process are locally led. The impetus is coming from local leaders and local authorities that are working with their communities to drive the process.

On amendment 4, the Government have been clear that we will consider non-mayoral devolution arrangements for single local authorities on an exceptional basis where certain criteria are met. Designation is not intended as the end point; it is a stepping stone towards deeper devolution, which is what we hope will be the journey for all parts of the country. It is therefore most appropriate for the process to be initiated by the Secretary of State rather than the local authority. However, to be clear, the Secretary of State will not be able to designate a council as a foundation strategic authority unless the council itself consents to that designation. That is a robust safeguard that will protect the interests of the single local authority concerned. I agree with the sentiment behind the amendment to ensure that the Secretary of State has regard to the need to secure effective and convenient local government. I am pleased that those criteria are already embedded in the Bill when conferring functions on a single foundation strategic authority.

Amendment 28 seeks to remove the Secretary of State’s proposed power to direct for there to be a mayor for an existing combined authority without local consent. The Government have been clear about the benefits of mayoral devolution; we are seeing it across the country. For example, South Yorkshire mayoral combined authority brought the Supertram network back into public control after 27 years, and there are already drops in fare evasion, increases in usage, ticketing apps and improved clearing. Greater Manchester authority has taken control of its bus service, resulting in increased punctuality and ridership and cheaper fares. The North East combined authority has secured a £450 million development for one of the largest film studios in Europe, with the potential to create over 8,000 jobs.

We know the impact of this devolution model. We are seeing it across the country and we want to see it in more areas. We are clear that mayors with skin in the game are best placed to drive forward growth, reform public services and deliver the change that their communities want. Every resident in England should be able to benefit from deeper mayoral devolution in their area.

[David Simmonds]

There is, perhaps, a risk of the Committee being inadvertently misled, in that all these points are being described as locally led. The Committee needs to be clear: local authorities were told that they needed to submit the proposals or the Government would take powers to direct them to do it. It was a gun to their heads. It was not the case that local authorities came forward proactively. During the 14-year era under the previous Government, it was clear that proposals that did come forward for reorganisation would be entertained by Government, and a number of those were taken forward, but compulsion was not the case. It is only since the Government told local authorities that they either had to come forward or would be directed to do so that we have seen the proposals, so it is not the case that they are locally led. The Committee needs to be clear on that.

[Miatta Fahnbulleh]

I completely disagree. I have been having conversations, for example, with our strategic combined authorities that are going through the process. The difference between this Government and the last is that we have created a clear sense of the powers and the economic opportunities that areas can take forward. Take, for example, our current devolution priority area. I am the new Minister, and I am having the first set of conversations with them. Every single one is excited and enthusiastic about the prospect. At the moment, the demand for devolution deals is outstripping our ability to respond, because we have attached to them clear powers, access to funding and the ability to drive the change that we want to see in those areas. So I completely reject the premise that places are being driven to do this.

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[Vikki Slade]

Nobody is suggesting a veto; we are suggesting a voice. There is a big difference. We have already heard that district councils felt that they were pushed around by the county councils, and the experiences of town and parish councils are simply an acceleration of that; when these proposals were being put forward by the Minister earlier this year, there was absolutely no role for those councils. We are simply saying that there are layers of local accountability that we believe should be on the list of people who are consulted.

This is a simple amendment that says, “You are already consulting other organisations in the chain of command. You should also include the town parish councils in that chain.” That is why we believe that amendment 33 is critical, as it

“would require the Secretary of State to consult local councils prior to proposing the area in which they are situated is added to an existing combined authority”,

and why we will push it to a vote.

[David Simmonds]

I shall speak to the amendments standing in my name. There is a degree of overlap between the points made so far and the subject matter of my amendments: all of them revolve around the issue of localism and consent. As has been clearly expressed, I have a degree of sympathy for the points that have just been made, particularly those about the role of parish and district councils in agreeing to and steering this devolution process.

When we had our witness session just a few weeks ago, we heard from Councillor Sam Chapman-Allen of the District Councils’ Network and from Justin Griggs, the head of policy and communications at the National Association of Local Councils, which represents the parish councils and parish meetings of England. Both of them emphasised in their evidence the need for and the importance of that local voice. I reflect on legislation passed recently—particularly the Police, Crime, Sentencing and Courts Act 2022, which strengthened the powers that our communities sought for local authorities to deal with unauthorised encampments. One of the things we missed was the opportunity to enable parish councils and parish meetings to use those powers. That is a really concrete example of where our constituents would have benefited.

We know there are both sins of omission and sins of commission. I suspect it is a sin of omission that the Government have failed to use the opportunity of this legislation to complete the devolution work that they talk about, and to ask, “What role will those elected bodies at the town and parish level be able to play in the context of this new devolved world?” It speaks to something that I know the Opposition have real concern about: a form of institutionalised disrespect for local leaders that is built into this process. There is wholesale abolition of the local voice at scale, and proposals that the Secretary of State will direct, rather than consent.

Sir John, you will perhaps call to mind Lord Porter, formerly Gary Porter of South Holland, as one of those many local leaders whose approach and insight really shaped the nature of that local community. Reflecting on my time in local government, I had the opportunity to serve with people with very senior public and private sector leadership experience who steered the strategy of the local authority to deliver for local residents. To be told that the Government’s view is that they are to be mere community convenors, and they are not to have a role in that strategic leadership, is frankly insulting to the work that so many of our local leaders do.

The value of that was spelled out very clearly in our evidence session. I was particularly struck by Councillor Bev Craig, the Labour group lead and LGA vice-chair at the Local Government Association, who talked about how the Greater Manchester model worked because of that local leadership and the power of those individuals to come to the table and drive forward devolution, efficiency and service quality.

The amendments broadly fall into two categories that I have made today. The bulk of them are entirely about removing the ability of the Secretary of State to dictate to local areas—as was threatened by the Government when this devolution process started—what that devolution arrangement would look like, without the consent of those local areas. As my hon. Friend the Member for Hamble Valley has spelled out, of the many proposals that have come forward, we have not seen a single one embracing what the Government have set out, but a number of rival proposals for that reorganisation.

It is very clear that there is not any significant degree of local consent. There is a threat, and there is some money on the table to bail local authorities out, but they can have it only if they do what the Government want. If local authorities do not do it now, the Government will take powers to make them do it to their own agenda later on. That is the very opposite of localism. When we put the Localism Act 2011 through Parliament, it was broadly supported by all local leaders and Members of Parliament, and that was because we recognised the value it added at all levels. This process, however—the centralising element of the Bill—says that it will be a man or woman in Whitehall who decides: they will tell us what is in the interest of our community.

[Sean Woodcock (Banbury) (Lab)]

The hon. Member is talking about localism and the importance of things being done with communities, not to them. I was a Cherwell district councillor when we were involved in joint working with South Northamptonshire. I remember clearly that the leaders of South Northants district council were distinctly unimpressed by the level of consent that they were given when the Conservative Government told them that Northamptonshire county council, which the Conservatives bankrupted, was being disbanded and that joint unitary authorities were to be created in Northamptonshire. Was he so exercised about local consent at that point?

[David Simmonds]

The short answer to the hon. Gentleman’s question is yes. I have spent a good deal of my time in local government. One of the key issues that we learned from the process, and one of the reasons why former Secretary of State Eric Pickles said that he had a pearl-handled revolver in his desk—for anyone who came to him to suggest forcing local government reorganisation on England—was the need to get things right with local consent.

There are times, which I think we can all see in the local government landscape at the moment, when, because of geography or failure of leadership, we know it is necessary for Government to intervene, and Governments of all parties have done so. Northamptonshire was an example of such a place. Individual local authorities within it had not failed, but there had been a collective failure of the public service in that area. The Government therefore felt compelled to intervene to remedy that, as opposed to imposing an alternative vision for how they thought the local area should be governed.

New clause 23 stands in my name. It seeks to enshrine in the legislation the principle of consent. We have the very opposite of what we have been told as a Committee, that this is all locally led. Clearly, the Government are already using the levers in their power to compel local authorities down a certain route. Under the force of such compulsion, local authorities feel that that is what they have to do, because it is the only way to address some of their reasonable and justifiable concerns. The timetable, the process and all those things come at the same time as a wholesale reorganisation of planning and infrastructure, which is stripping away the local powers and voices that are so critical to ensuring that the infrastructure and new housing that we all want are delivered.

The view of the Opposition, therefore, is that we need to enshrine in this legislation not powers for Whitehall but powers for people—powers for people to shape through their local leaders the community structures of service that deliver for them and the taxes that they pay. People are represented to exercise such powers. Enshrining the consent of local authorities is a small step in that direction.

[Miatta Fahnbulleh]

I will respond to amendments 30, 31 and 33 first, and then amendments to 266 to 280. I appreciate the intention of the Liberal Democrat amendments, and I reiterate that I think we are completely aligned in this Committee in our desire not just to push power down, but do so in a locally driven way. On the specifics of the lead amendment, the principal body affected by the designation that we are seeking will be the unitary council or the county council. The Bill already provides that no designation can be made without the consent of the relevant councils.

On amendment 31, the Secretary of State must already notify the proposed constituent councils, and any other persons that the Secretary of State considers appropriate, about a proposal to direct the establishment of a combined authority. The Secretary of State must consider the representations of that body. As my hon. Friend the Member for Mid Cheshire said, there is no shortage of representation and voice from individual town and parish councils. We think that the process of engagement is already there and that to impose additional requirements to consult every town and parish council in the proposed areas would be disproportionate and also risks conflating the distinct roles of town and parish councils, which, as I said at the evidence stage, we absolutely see having a role to play in the new architecture of strategic authorities.

Strategic authorities have been created to tackle regional issues and to capitalise on the opportunities that exist over a significant economic geography, such as pursuing, for example, integrated transport. Town and parish councils, meanwhile, will continue to represent their local communities, managing neighbourhood services and supporting initiatives that improve the day-to-day lives of their residents. Each tier of local government will be accountable to their local communities and should continue to represent their interests and to work in alignment.

[Miatta Fahnbulleh]

We will discuss neighbourhood governance and neighbourhood boards later in the Bill. When it comes to areas that do not have town and parish councils, we recognise there is an opportunity for us to create structures so that there is stronger community representation and a stronger community voice. There is an opportunity for us to design something that works in areas where town and parish councils do not exist or may not be appropriate. We want to create flexibility so that local areas can find the right structures for them, so that neighbourhoods and communities have the voice and representation that we want to see across the country.

I turn to amendments 266 to 280. As I have said before, we have been accused of compulsion, and all I can do as a new Minister is point to the feedback that I get from the local areas that we speak to. Our engagement to date suggests there is genuine enthusiasm and momentum, because areas can see the economic opportunity and what a strong Mayor can do for their area. The Government have been clear in our aims: we want to get universal coverage of strategic authorities across England, because we can see the benefits that places like Greater Manchester and Liverpool are experiencing. We want that for every single resident across the area.

[David Simmonds]

During the evidence sessions, we heard senior local government leaders describe “inconsistent and…unhelpful messaging” on the building blocks of the new authorities—I quote what I wrote down. When we heard from those who are intended to be part of the investment agenda, they described no “meaningful consultation” from the Government on the proposals. How does the Minister square that with the idea that this is strategic and locally led?

[Miatta Fahnbulleh]

That is not the feedback that I heard in that evidence session. At the moment the places in our devolution priority areas are going through a process of consultation. They are talking to their constituent councils, voting it through the council chamber and taking it to their residents to make the case.

What we are seeing is positivity and momentum. Our job as a Government is to build on that and support and enable that. I come back to the point that there is a backstop power that we do not expect to use. But in the instances where we have got a blockage, we want to be able to help create a strategic authority so that we do not have devolution deserts and parts of the country left behind. We are very clear that the powers will commence only at the point that they are needed, rather than on Royal Assent.

Finally, new clause 23 would impose disproportionate consent requirements for these processes, requiring strategic authorities to seek the consent of all district, parish and town councils in their area. As I have said, there are already provisions in place to ensure a level of consultation. A primary aim for us in this Bill is to make the process simpler, more streamlined, more effective and less expensive. That is the feedback that we have had from places that have gone through the process and the feedback that we are getting from places going through the process.

My worry is that the proposed amendments would undermine the principle of having a process of devolution that is far more streamlined and far easier for places. Again, the feedback we are getting from conversations is that there is enthusiasm, appetite and commitment to do this. We want to make it as easy as possible for places, which is why I hope that hon. Members will not press the amendments.

Question put, That the amendment be made.

--- Later in debate ---

[Vikki Slade]

Our councils are struggling to make ends meet. With so many on the edge of a precipice, I can see why they would be queuing up to create a strategic authority, which come with millions of pounds. There is, however, huge concern in councils that the cost to set up and run these organisations is oblique, and that there is a risk that the cost of running them will be passed to local people through additional precepting. I can tell the Committee from experience that the tens of millions of pounds that it is said will be saved by creating strategic authorities generally are not saved, and that if they are saved, they are replaced with other costs and take 10 years to materialise. Many councils do not have 10 years before they will go bust.

I am acutely aware that some funding was put aside for those organisations in the devolution priority phase, but when I asked the previous Minister what was happening with funding for future phases, I was met by stony silence. He explained to me that in order to progress there would need to be money in the settlement, but at the same time he talked about having already made a three-year settlement. That suggested to me that those organisations that are not already funded perhaps will not be funded within a three-year period, because there is no money. Given that those organisations are already telling us that they are £300 million short this year because they are not in the programme, but the Minister has no money set aside for next year to continue the programme, where is the money coming from?

Our amendments 38, 39 and 361 would require the Secretary of State to ensure that authorities receive adequate funding at least to facilitate their establishment, if not their continuation. It is crucial that local leaders—and local people, when they vote to make this progress—do not tie themselves down to additional costs that they cannot afford. That is why we feel it is important to press amendment 39 to a vote. My hon. Friend the Member for Stratford-on-Avon will elaborate further.

[David Simmonds]

I had the privilege of spending 24 years in local government, divided equally across the previous Labour, Conservative and coalition Governments. I do not think that local government felt at any point in those 24 years that it was well funded and there was plenty of money to go around. In every single one of those years, irrespective of who was in government, our starting point when setting council tax was, “How are we going to meet a very substantial savings target?”

--- Later in debate ---

[Miatta Fahnbulleh]

Clause 4 introduces schedule 1, which will streamline and simplify existing processes for establishing new combined authorities and combined county authorities, and for changing the arrangements of existing authorities. The Government have been clear that their goal is to achieve universal coverage of strategic authorities. We are therefore confident that clear and tangible benefits of devolution will be experienced across the country. We have also been clear that we want to create mechanisms that will ensure that the process is streamlined—that it is fast, and effective and efficient locally—and allows representation, but fundamentally allow us to move through the process that we see appetite and demand for across the country.

The powers introduced by the clause will be used as a backstop. They will be deployed only where we have devolution deserts and we want to work with areas to remove blockages, to the benefit of residents.

[David Simmonds]

We return to the theme that areas can have devolution provided it is in the form that Whitehall dictates. It remains a significant concern to the Opposition that we are proceeding in this manner, but that point is made and I suggest that we move on.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Schedule 1

Establishment, expansion and functions of combined authorities and CCAs

Amendment proposed: 266, in schedule 1, page 79, line 15, leave out subparagraph (b).—(David Simmonds.)

This amendment, and Amendments 267 to 273, remove the ability of the Secretary of State to create, or make certain changes to the governance or composition of, combined authorities without consent of the councils involved.

Question put, That the amendment be made.

--- Later in debate ---

[Miatta Fahnbulleh]

I will begin by talking to Government amendments 63 and 65. The Government recognise that the creation of a combined authority or combined county authority can cause some concern in prospective constituent councils. One of the main worries is that the new institution could create new financial burdens on existing councils.

Many existing combined authorities and combined county authorities already include provisions in their constitutions that enable constituent councils to veto decisions that could create a financial liability on them. We recognise that those provisions have helped to soothe concerns about establishing new combined authorities and combined county authorities. That is why the amendments will create a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of affected constituent councils before exercising their functions in a way that could create a financial liability on these councils. That will ensure that any future non-mayoral combined authorities or non-mayoral combined county authorities will need to comply with this requirement without the constituent councils needing to secure agreement to its inclusion in the individual authority’s constitution.

I turn to Government amendments 62 and 64. In the English devolution White Paper, the Government set out that in combined authorities and combined county authorities without a mayor, most decisions would require a simple majority vote. That is provided for in clause 6. However, in the White Paper, we also said that key strategic decisions would require unanimity in non-mayoral authorities. The budget for the authority is one of those decisions.

Similarly to amendments 63 and 65, amendments 62 and 64 introduce a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of all their constituent councils when adopting or amending their budget. That includes the direct contribution of those councils to transport expenditure.

Government amendments 66 and 67 are minor, technical amendments. They amend the terminology used in schedule 1 so that references to secondary legislation within the Levelling-up and Regeneration Act 2023 use the term “regulations” rather than “orders”.

[David Simmonds]

I have a couple of questions for the Minister. It feels as though these amendments are intended to bring some welcome consistency and clarity.

The Committee will know that local government finance is largely regulated by the Local Government Finance Act 1992, but that older legislation on council tax fixing and budget setting all essentially states that a local authority’s budget must balance in-year. A local authority is not the same as central Government—it cannot borrow to fund its day-to-day expenditure.

However, one implication of the Secretary of State’s allocation of all these new powers to mayors or combined authorities is that they may choose to incur expenditure that imposes a liability on an individual local authority without seeking that authority’s consent. For example, there would be a legislative conflict if the mayoral combined authority decided to increase spending, or to increase rights to services for social care, which a local authority has to pay for, without giving the local authority the opportunity to include that in its budget.

Will the Minister give us clarity, first, on accounting standards? The legislation mentions that local authorities should refer to guidance from the Chartered Institute of Public Finance and Accountancy. CIPFA is not the only accepted accounting standard in the public sector, although it is generally a reliable one. Given our previous discussions and the evidence we have heard about access to local audit and financial advice, can the Minister confirm that accounting standards other than CIPFA will be accepted, if a local authority relies on them? Or will they have to be reframed within CIPFA? That will let the Committee and member authorities know exactly where they stand.

Secondly, while this is a fairly catch-all provision, there will be areas—we have seen this in Greater Manchester most recently—where central Government fund the investment and set-up of a new transport network but the ongoing running costs must be met by trading that service to local residents, and a large deficit emerges; essentially, the service runs at a significant loss. Especially if the underlying authority is a transport authority that issues freedom passes, that can have a significant financial impact. Essentially, council tax payers of one authority subsidise the costs of service delivery by a mayor.

We see significant elements of that in London under Mayor Khan. I think that was one reason why the Labour leader of Manchester city council spoke about how Manchester works and London does not. It would be helpful to have clarity—if necessary, in writing to the Committee—about how those trade-offs will be managed effectively, so that the capital costs of mayoral projects are not subsidised by the revenue or capital budgets of individual local authorities. Particularly with larger projects, mayoral authorities do not always have to meet the same tight financial requirements, especially in respect of things like education. It would be useful to know how that will be managed so that local authorities do not suddenly go bust because something emerges from the financial accounting arrangements between the new structures.

[Miatta Fahnbulleh]

I thank the hon. Member for his detailed, complicated questions. We will write in response, particularly on the public accounting standards.

We have set what we think is a good baseline. There will obviously be some flexibility for constituent authorities. The hon. Member will remember from the evidence session that the accountability and financial framework across local government is a current challenge, so we are looking to drive improved standards across the piece. That will apply to strategic authorities as much as to local authorities, but we will write fully in response.

On the wider question about the balance and the trade-off, our judgment is that for non-mayoral combined authorities, where constituent authorities operate together, we should put in those safeguards. In essence, constituent authorities act in concert, collectively, to make decisions. Whether it is a question of financial liabilities or transport budgets, it is right that all the constituent authorities provide consent. In the case of the mayor, however, our view is that because the mayor has his or her own democratic mandate and the ability to direct, that is separate from what we see in non-mayoral combined authorities.

Inevitably, there will be safeguards. In the evidence session, we heard really powerful evidence that the mayoral model works well when the mayor works in lockstep with constituent authorities and the two are aligned, with a strategy that they work around. We have seen examples of where the model does not work well, and we have had to go in and support and remediate the process when the mayor works without their individual local authorities. The model drives that. However, we think that there is something specific in the mayor’s democratic mandate; we have a model where there is a majority vote, with the mayor on the side of the majority, in order to drive through big strategic decisions.

[David Simmonds]

I am grateful to the Minister for undertaking to provide that clarity in writing. She said that there are differences between a mayoral authority and a combined authority without a mayor. We have seen a good case study in the Mayor of London’s decision that he wished to be seen to fund free school meals in primary schools, but the budget that is provided is less than the cost. School budgets, which are determined by the Department for Education, are subsidising the shortfall in the money provided by the mayor. We see posters on the tube saying that the mayor is funding this, but in fact the amount he provides is less than the cost. Probably all London MPs have had representations from schools that have said, “We are having to make staff redundant because of this shortfall. It’s a significant burden. It is causing a real cost.”

That is an example of where accounting and legal decision making sit across several different authorities. Although it is not the only ringfenced local authority grant, it would be helpful to have clarity about how the dedicated schools grant will be managed in a mayoral combined authority, so that we do not see a repeat of what happened in London with school budgets being raided to cover up a shortfall in a mayoral policy proposal.

[Miatta Fahnbulleh]

I am happy to provide that clarity in writing.

--- Later in debate ---

[Manuela Perteghella]

This Government’s plans for devolution involve folding existing local government structures into larger combined authorities. From a central Government perspective, the benefits are clear. Each region has a single point of contact, accountability and new structures through which to work. However, devolution should deliver benefits in both directions and be truly community-led.

If proposals are prepared by the Secretary of State and the Department rather than being locally-led, we believe that a basic requirement should be that each new authority is appropriately sized, and that physical geography and cultural identities within the authority—especially community identities—are looked at. We need to look at the boundaries of other public service structures in the area that could be affected by the new combined authority, such as fire and rescue services, police forces and integrated care boards. In my area, we have local government reorganisation and the ICBs are being reorganised as part of NHS England reform or abolition, so both are changing at the same time. In geographical local areas, we have not just NHS commissioners but other NHS services, such as local NHS trusts.

Looking beyond size—I hope that the Government are flexible about size, because of all the other important considerations with any new authority—authorities should be shaped carefully to reflect economic zones, as well as physical geography. Crucially, there must be careful thought about how the proposals will align with public services. I have already talked about the organisation of ICBs, but there are also, for example, existing transport hubs and established boundaries for fire and rescue services.

A less tangible but no less important requirement is respect for distinct community identities. For example, my area is in the county of Warwickshire. South Warwickshire is very rural, with hundreds of parish and town councils, while north Warwickshire has different economic areas and is more populous and urban. Proximal areas may not be well-suited partners in new combined authorities, so what kind of flexibility will there be to think about services and the shared history of local communities so that such areas do not have a false cohesion?

We would like regional and sub-regional cultures to be taken into consideration, because those are what brings communities together. This goes back to the role of parish and town councils as the first tier of government: they know their communities best, which is why they should have a say in any consultation. They know their boundaries; they know which bus services should be improved so that residents can go to hospital and so on.

Practically, we are asking the Government to consider all these areas, boundaries and services, because if combined authorities backfire, governance structures could fail and might not deliver at all for areas that are already struggling. Requiring the Secretary of State to make a statement accompanying each proposal for a new combined authority, covering its impact on the shared areas that I have mentioned, would improve the quality of combined authority proposals.

[David Simmonds]

The Opposition have listened attentively to the points made by the hon. Member for Camborne and Redruth and by my hon. Friend the Member for Isle of Wight East (Joe Robertson). My hon. Friend the Member for Hamble Valley may speak later to the amendments in the name of my hon. Friend the Member for Isle of Wight East, but they both relate to the need to recognise in local government structures the heritage of the parts of England that are affected.

From all the evidence that we have heard, and from many Members’ contributions, we know just how important it is that people feel that the name of their local authority area—that most basic of things—has a connection to them. On top of that are layers of geographical and economic considerations, as well as the trouble of learning it, all of which have an impact. That is why we and others are so keen to support measures to ensure that historical names are not lost in any of the Government’s proposed devolution measures, and that that heritage is fully recognised in any structures that follow.

[Paul Holmes]

I will briefly elaborate on what my hon. Friend the shadow Minister has said about amendments 43 and 44. I do so on behalf of my hon. Friend the Member for Isle of Wight East, who has been a tireless and fierce campaigner for his constituents, and not only at Prime Minister’s questions.

I represent a Hampshire constituency whose southern parishes look out on the Isle of Wight. If I take a walk down Hill Head beach or somewhere in Hamble, I always see it. In Hampshire, the Isle of Wight is a constant. It is a constant presence on the coast of southern England, but it is also a vital part of our county. It has a proud set of people who have a booming economy that contributes so much to the county of Hampshire, and which is a major part of the county’s identity.

The Minister has talked about wanting local views and localism to be at the heart of the devolution agenda. I believe her. We had a brief interaction earlier, and although we can disagree about whether that devolution has been forced or voluntary, I absolutely believe that the Minister intends to make sure that if devolution happens, the regions involved have an identity and the right to an economic injection that delivers for people locally.

It would be very easy for the Government to accept amendments 43 and 44, because they would do nothing to change the mechanics or principles of the Bill. They would merely ensure that a region of very proud people is included within the description of the mayoralty that is proposed for Hampshire.

--- Later in debate ---

I have had several conversations with Ministers and am satisfied with the Government’s assurances at this stage that Cornwall will receive a devolution arrangement that allows us to access the highest level of devolution without the requirement to join a mayoral combined authority, and that the recognition that we live on a multinational island will be protected. It is very important to understand that—

[David Simmonds]

I know that the hon. Gentleman is not the only person with an interest, and that there are other amendments on the same topic. He mentions that he is satisfied with the Government’s assurances. We have not directly sought those assurances; would he be willing to set out for the Committee the nature of them, so that we can all understand what has been committed to and can be well informed when we come to make voting decisions later on?

[Perran Moon]

I have had no commitments; I have had discussions with Ministers. We have had discussions about the difficulties with the proposals made here, with the potential for the Bill to become a hybrid Bill and the complications that that would bring. I am happy to keep talking to the Government in a spirit of openness, reflecting the views of every political party in Cornwall bar one. On that basis, I am content to keep talking. I cannot support the amendments because of the negative change that I think they would make to the nature of the Bill, so I will be voting against them.

English Devolution and Community Empowerment Bill (Fourth sitting)

David Simmonds Excerpts

Committee stage
Tuesday 14th October 2025 Public Bill Committees

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

The amendment would require the Secretary of State to publish a statement when directing the establishment of a new combined authority, setting out how the proposed combined authority would affect the physical geography, community identity and boundaries of other public services in the local area. I have no doubt that the intention of the hon. Member for Stratford-on-Avon is absolutely right and that such matters are important; as I have said, the examples of the Isle of Wight and Cornwall highlight that. In practice, however, such matters will already have been considered through the process set out in the Bill.

In deciding whether to establish a new combined authority, the Secretary of State will already be required to have regard to the likely effect on the exercise of functions in neighbouring local government areas. In addition, the Secretary of State is already subject to the statutory tests requiring them to have regard to the need to secure effective and convenient local government in relation to areas of competence. The proposal itself can be expected to cover those issues. There is therefore no need for a separate statement, and so I hope that the hon. Member will withdraw the amendment.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

In our consideration of the issue, the Minister is asking the Committee to give a great deal of weight to the meetings she has described having had with various local leaders and Members with particular concerns about the impact on their local areas in terms of national identity, heritage and geography. Will she share with the Committee a little more detail on the substance of those discussions, so that before we vote we can understand what exact assurances may have been given to local leaders and what their understanding of them is, so that we are all completely clear?

[Miatta Fahnbulleh]

On Hampshire and Solent, for example, our conversation was very candid. The leaders were clear about some of the debates that they had had within the council; as the Minister, I said what opportunities would be open to them, and I expressed the fact that in the context of the Isle of Wight, the name was completely down to the constituent authorities. We support constituent authorities working together collaboratively to ensure that all the constituent parts are happy with the deal and the proposal.

On Cornwall, I believe that the Secretary of State, my boss, had those conversations, but I have also had some with MPs. We absolutely recognise the uniqueness of Cornwall and its identity. There are clear things that we know Cornish MPs and the council want, such as protection for the Cornish language, which we are in discussion about. There are clearly opportunities to build on the existing devolution deal. The previous Government provided a devolution deal for Cornwall in recognition of that exception. Another issue might be housing, which is big in Cornwall, for example, and the area is especially exercised about that, in particular in the context of the impact of tourism. We are happy to have a conversation about continuing to support the local authority to make inroads on some of those issues.

Question put, That the amendment be made.

--- Later in debate ---

[Miatta Fahnbulleh]

Once the Bill comes into force, there will be various ways in which functions can be conferred on a combined authority or combined county authority that will be operating as strategic authorities. The clause makes the necessary amendment to existing legislation to clarify these wider options. It is a small but important clause that will ensure our new devolution framework can operate effectively.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I thank the Minister for that introduction. It is the implementation of this that is the subject of political contention, but a great deal has been said, and a vote has been taken. There is nothing further we can do on those issues at this stage, but I expect they will be the subject of great debate in the remaining stages of the Bill.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

Combined authorities and CCAs: decision-making and validity of proceedings

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Schedule 2 stand part.

New clause 48—Greater London Authority: decision-making—

“(1) The Greater London Authority Act 1999 is amended in accordance with this section.

(2) In section 42B (Assembly’s power to reject draft strategies), in subsection (5)(b), leave out “at least two-thirds” and insert “a simple majority”.

(3) In schedule 4A (Confirmation hearings etc)—

(a) in paragraph 10(5) leave out “at least two-thirds” and insert “a simple majority”;

(b) in paragraph 11(5) leave out “at least two-thirds” and insert “a simple majority”.

(4) In schedule 6 (Procedure for determining the authority’s consolidated council tax requirement)—

(a) in paragraph 8(4) leave out “at least two-thirds” and insert “a simple majority”;

(b) In paragraph 8C(4) leave out “at least two-thirds” and insert “a simple majority”.

(5) In schedule 7 (Procedure for making of substitute calculations by the authority), in paragraph 7(4), leave out “at least two thirds and insert “a simple majority”.”

--- Later in debate ---

[Siân Berry (Brighton Pavilion) (Green)]

I rise to speak to new clause 48, tabled in my name. I also want to raise another issue for consideration by the Minister at a future stage.

In clause 6, the new rules for mayoral combined authorities give simple majority voting for relevant decisions by bodies to adopt budgets or policies, such as spatial development strategies, local transport plans and other strategies set out elsewhere in the Bill. For example, schedule 2 outlines that

“a resolution to adopt the strategy is to be made by a simple majority of the constituent members present and voting”.

There are other rules to do with a tied vote.

I think that the Bill should also amend the Greater London Authority Act 1999 to give simple majority voting for decisions by the London Assembly on the budget and mayoral strategies of the Mayor of London. That is for consistency of decision making across the different authorities and bodies, and for fairness to London’s democracy. Along with many Opposition Members, this is something that I have wanted for some time now, as I was a member of the London Assembly in my previous job. In these Committee debates I will frequently bring up examples from my long experience of being part of an effective scrutiny body in a devolved authority at the strategic level—I feel that I have a good handle on how it works.

Using “a simple majority” is the right way to go about this. The Minister has talked about building consensus and working in partnership. I really value it when cross-party working can result in genuine dialogue, with mayors that will listen and make changes, and bodies scrutinising or working with them to put forward their own ideas and have them taken up. Those are all really healthy things for our democracy. New clause 48 would simply amend the parts of the 1999 Act that outline how the Assembly votes. Currently, the Act requires at least a two-thirds majority for any changes to be made, and the new clause would instead insert the words “a simple majority”. It is a very simple change, which the Minister should consider.

The second issue I want to raise relates to forward plans, which are incredibly useful for the general public, or anyone who wants to influence mayoral decisions and the decisions of combined authorities or local authorities. At the moment, only local authorities have this particular requirement written into law, under the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012, which clearly set out how key decisions are to be included in forward plans. I am not talking about planning decisions but key decisions, as set out in the schemes of delegation. Those forward plans are required to be published in advance, so that people who want to influence or scrutinise those decisions can bid to change them, or for things to be taken into account at the appropriate time.

Again, this certainly comes out of my experience in the London Assembly. It unanimously passed a motion in 2022 that was put forward by one of the Liberal Democrat members and me, which said that the Mayor of London should publish a forward plan. However, he did not agree to do that, as he said that he was complying with everything in legislation; so the answer seems to be for legislation to require both the Mayor of London and these new combined authority mayors to publish a forward plan along the same lines. Looking at the 2012 regulations, it would be very simple to change the current wording, “local authorities”, to “strategic and local authorities”, if the Minister wanted.

I also point the Committee to the excellent report published last month by the GLA oversight committee, a cross-party committee currently chaired by a Labour member of the London Assembly. It makes exactly the same request: for a forward plan of key mayoral decisions to be put into the 1999 Act. Because of the complexities of the different regulations, I have not tabled an amendment for such a change, but I hope the Minister would consider the question of effective scrutiny of these new bodies and the ability to influence them. I hope she could potentially come forward with a new clause at a later stage for us.

[David Simmonds]

The Opposition support the amendment; the principle of having a simple majority is sound. In oral evidence, we heard about why Manchester works and London does not, and there is a logic to implementing those measures consistently across the country. We support introducing that consistency.

There is a broader question, however. I understand what the Minister and the Government are trying to achieve; it would clearly be frustrating if one authority was effectively acting as a blocker. However, I asked the Minister earlier to give us some assurances about the treatment applied when financial impacts occur that affect one or more of the constituent authorities in a combined authority area. There will be cases—we have seen them in planning, for example—where an authority argues that to deliver its housing target, a site in another local authority’s area must be developed, because it does not have sufficient developable land to hit the target that it has been given; legally, it is not that authority’s decision. There will be other examples.

I am mindful of some of the Government’s amendments that introduce a lot more scope into this Bill for mayors and combined authorities to undertake their housing responsibilities. One of the main routes for funding is through borrowing against the housing revenue account, which is ringfenced. Each individual local authority has a legal duty to balance that account and the power to borrow against it; it also holds all of the legal housing duties and responsibilities. The purpose of the measures is to make mayors the vehicle for the delivery of asylum accommodation, as opposed to asylum hotels, as is the case now to some degree. Yesterday, on the Floor of the House, another Minister in the Department alluded to this in his response to a question about asylum accommodation.

Those decisions will have a significant impact on the legal obligations of the authorities that sit beneath the mayoral authority. There is a risk that being outvoted in a decision made at combined authority level would put an individual constituent authority in breach of its legal obligations to balance its dedicated schools grant, its housing revenue account or some other element of its council tax account. Will the Minister, either now or in writing, set out what arrangements will apply in the likely situation of a conflict between the legal obligations on a constituent authority to balance the budget and the strategic decisions put forward by the combined authority? How will the conflict be resolved without undue detriment to the constituent authority in particular, which is the one that will find itself in court?

[Miatta Fahnbulleh]

I will respond to the amendment to clause 48, and then I will pick up the specific questions from the hon. Member. The GLA has a different and long-established governance model. In London, the mayor is elected by the people of London to make decisions; the Assembly’s role is to scrutinise those decisions. As a London MP, I think that model has worked well for London for well over 25 years. It is tested and it strikes the right balance between the executive authority of the mayor and the scrutiny of the Assembly.

--- Later in debate ---

[David Simmonds]

Let me give a concrete example: the long-standing proposal for Heathrow expansion airport. The Chancellor of the Exchequer has set out her absolute determination to ensure that happens, because it is part of her Government’s growth agenda. It is likely to be directed under these powers and in the purview of the Mayor of London, who will ultimately have some planning role in the decision making. However, as well as being the planning authority, the London borough of Hillingdon, within which Heathrow sits entirely, has legal duties in respect of air quality. It is already breaching those duties, which it has no means of fulfilling, simply because of that external factor.

If the Treasury and the Mayor of London were say to the combined authority, “In pursuit of the growth agenda with which we have been tasked, we are determined to see this expansion take place,” immediately that local authority would be put in significant legal jeopardy. To give an indication of the scale, when the Localism Act 2011 was debated and there was also interaction with European Union standards, it equated to an annual fine of £150 million to be paid by the legally responsible local authority. That is a significant jeopardy, and it is by no means the only one—in the case of special educational needs and disabilities obligations, for example, there are significant duties to pay compensation in the event of failure.

We can all envisage situations where a mayor decides that, for the good of everybody, they want an individual place to take a hit, but through the judicial review process that places that individual local authority at significant moral and financial risk. If the Minister sets out how those very significant and real risks will be addressed, I will be grateful.

[Miatta Fahnbulleh]

I thank the hon. Member for that very detailed and specific example. The concerns he raised have been heard and noted. Both in practice and principle, ensuring that no constituent authority is put in either financial or legal jeopardy underwrites all of this. I will take the hon. Member’s points away and write to provide the relevant reassurances.

--- Later in debate ---

[Miatta Fahnbulleh]

The devolution White Paper set out our commitment to introduce a new category of established mayoral strategic authority, representing the highest level of devolution in England. The clause delivers on that commitment. It enables a mayoral strategic authority that meets the eligibility criteria set out in the English devolution White Paper to submit a written proposal to the Secretary of State for designation as an established mayoral strategic authority. Designation will provide a strategic authority with access to the highest level of powers and functions in the devolution framework, as well as the right to request additional devolved functions and eligibility to receive an integrated funding settlement.

In the event that a Secretary of State decided not to designate an authority as an established mayoral strategic authority, they would be required to notify the authority in writing of the reasons for their decision. It would remain open to the authority to submit a fresh request at some future point. Importantly, once an authority has been designated as an established mayoral strategic authority, it will not be possible for Ministers to remove its status through secondary legislation. In that way, we will hardwire the powers and functions of established mayoral strategic authorities into our system of government, future-proofing arrangements against unnecessary change and ensuring permanent and enduring devolution.

[David Simmonds]

I draw the Committee’s attention to a topic to which we will return throughout our proceedings: the extent to which the devolution legislation is about the powers of the Secretary of State to designate this or direct that. Ironically, we are embarked on a course of action that started with us hearing about how it was going to be locally led, despite all evidence to the contrary, yet as we proceed, we have clause after clause and paragraph after paragraph referring to new powers for the Government to make local authorities do this or to direct them to do that. It is clearly not in the spirit of devolution.

[Miatta Fahnbulleh]

The clause does two things. The proposal to become an established mayoral strategic authority will come up from the locality. The power is about the ability of the Secretary of State to designate it as such at its request; it is not about the Secretary of State imposing the status on any area. Critically, it will lock in the established mayoral authority for good, and will, in fact, contain and curtail the power of future Secretaries of State to decide that they will change the status of an established mayoral authority, therefore locking in devolution for the long term.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Appointment of commissioners by mayors

--- Later in debate ---

[Sam Carling (North West Cambridgeshire) (Lab)]

With your permission, Sir John, I will make some references to schedule 3 as well as clause 9, just to do it all in the same place. I will start by responding to some of the hon. Lady’s points. She raises some valid concerns. I will just give the perspective of someone who lives in quite a fractious combined authority area. I think my combined authority board currently has two Conservatives, two Lib Dems and two Labour—that is not enough people, so it must be 3:3:2, but I cannot remember which way around.

We also have the Manchester system at the moment, whereby different people hold different portfolios, which has led to a lot of politicisation. We have a Conservative mayor now, and we previously had a Labour mayor, but under both there was a lot of game-playing going on and a lot of difficulty, so I think it would be helpful for the mayor to be able to appoint commissioners just to get on with delivering their strategy. They are directly elected, and although I disagree with my mayor on a lot of things, I accept his mandate. It may well be helpful for mayors across the country to be able to deliver the strategy that they have stood on.

My concern relates to the relative sizes of combined authorities in a uniform approach to commissioners, and whether we can look at how to deal with that. To give an example, Greater Manchester has 3 million residents; Cambridgeshire and Peterborough has around 1 million. Similarly, the Greater Manchester combined authority has 3,500 staff—or 4,600 if you include Transport for Greater Manchester—while Cambridgeshire and Peterborough combined authority has 139 employees, according to a freedom of information request from March 2024. The difference in scale is significant, and obviously the amount of work for commissioners to oversee is therefore significant.

I do not want to put the Minister on the spot now, but could she write to me at some point to give context on whether the Government have considered modifying the number of commissioners that a combined authority mayor can appoint with respect to that variance in size, or perhaps the allowance payable to those commissioners, so they would be more part time in smaller authorities? I note that amendment 293, which we will discuss later, relates to allowances, and I can imagine that the Government want to allow flexibility so that local areas can do what is best for them, which makes perfect sense.

Within my area, if commissioners were paid at director level, that could cost well over £1 million. Senior officers can earn in excess of £100,000, which is a significant sum, and it is more than mayors themselves or many Government Ministers earn. That may well be appropriate in London, where it works and seems to be doing a great job, but London is a lot bigger than some other authorities. I thank the Committee for listening to those thoughts, and if the Minister could give some clarity on how we can deal with some of those issues, I would be really grateful.

[David Simmonds]

The Opposition have some sympathy with the points that have been made in the debate. It is an area in which there is scope to move towards a degree of consensus. I think that we all recognise that part of the underlying thinking behind the mayoral combined authority is that it brings a new element of leadership, and from those models where they are established, such as in London, we can identify some of the issues. As we heard at the start of the Committee, there is clear evidence about accountability.

One of the issues that persists in London is that there are a number of advisers—whether they are commissioners or not is a moot point—who undertake sometimes quite highly paid roles on behalf of the mayor, but they are not visibly accountable to the GLA, the boroughs or anybody else. That begins to undermine public confidence, and it clearly creates a sense of distance between those who are elected and those who they are there to serve.

While I agree that there is no reason why somebody who is elected should not occupy those roles, one of the issues with the proposed amendment is that there is clearly a risk of constraining them—in particular, in relation to the wording of the proposed amendment. When we consider some of the statutory roles that might be occupied—directors of children’s services, statutory directors of social care, monitoring officers, section 151 officers and others who have legal duties—there is a risk that by defining it as narrowly as the amendment does, we create some concerns about the interaction between those who are part of the professional officer corps that serves local government and those who are political appointees. I do not think that that is intentional; it is simply a risk that arises from the way in which it is drafted.

We will not be supporting the amendment, but I am mindful of the comments that have been made by those on the Government Benches about the need to ensure that those who occupy the roles are fit to do so, and that they are publicly accountable, because they will be public servants and they need to be answerable to effective scrutiny measures for the work that they do.

[Siân Berry]

I want to participate in this debate, despite having not tabled any amendments. I am grateful to the Members who have done so. The issue of commissioners is interesting. It is also interesting that the Government have chosen this model to codify in the Bill. From my experience, I believe that the London model of how this is done is far ahead of other combined or strategic authorities that already exist, and of the Government’s imagination in terms of the Bill. London Assembly members are used to having the equivalent of commissioners—deputy mayors—to scrutinise. The Assembly members do that effectively, not only by asking the deputy mayors questions and making them accountable, but also by providing them with evidence and new ideas, and by highlighting problems across the strategic area. Many effective changes have been brought through in that way.

However, to have those kinds of commissioners without that level of scrutiny is a mistake. In that respect, I am not in favour, and I am not convinced by the argument from my Liberal Democrat colleagues that people who are separately responsible for running services—many of them statutory services—and who have a lot of other responsibilities and duties in the constituent part of the strategic area are the right people to be given those kinds of roles. It is a really interesting question.

I have also found that, aside from a very short period when a Green deputy mayor was appointed to serve under an independent mayor in London, most mayors seem to be allergic to appointing anyone from an opposition party to any of those roles. There are examples of independently minded, effective, delivery-focused people. Chris Boardman, in Manchester, was mentioned. However, there does seem to be a party political element to the appointment of the roles, if the Minister and the Chair were to look at the record.

In conclusion on this clause—and it will come up in relation to other parts of the Bill—we collectively need a wider discussion about scrutiny and governance of the new roles. Some of the comments earlier from the hon. Member for Ruislip, Northwood and Pinner suggested that if we all got together in a room, we might be able to come up with a better idea than what is being proposed. I very much agree with that. There are things that we should be discussing.

It was pointed out to us in evidence that we will lose something like 90% of our elected representation in certain areas. In certain parts of the country, people will end up with somewhat of a deficit of overall elected representatives—people to come to with casework. More should be looked at on whether or not a model more like the London Assembly could be adopted, where people are separately elected with strategic responsibilities. In London, there are constituency Assembly members, and Assembly members who are London-wide and take a more strategic view. Those are good models that have worked, and the Government and others should look at that. It is not up for debate today, but my new clause 15 proposes a review of scrutiny, which I will argue for later. When the Government come to look at this in review, which inevitably they will have to do, I hope they will look again at potentially having more directly elected—

[David Simmonds]

Will the hon. Member give way?

[Siân Berry]

I will.

[David Simmonds]

I am listening attentively to what the hon. Lady described. We heard in evidence from Councillor Sam Chapman-Allen of the District Councils’ Network that under these proposals, shire England stands to lose 90% of its elected representation, which the hon. Lady referred to. There is not anything really concrete in the Bill that sets out what scrutiny should look like—what those minimum standards should be. There are elements about conduct and things like that, but that is very basic. Does the hon. Lady have a view about what a good model should look like, so that local residents can exercise their control over what happens in their neighbourhood effectively?

[Siân Berry]

I am attempting in my speech not to be too biased towards what I am used to, because that is a failing as well. We should discuss this in a very open way. Other new clauses I have tabled contain proposals for things such as a citizens assembly. We should look at international examples as well. When there are proposals to spend a significant amount of money on the commissioners, there is value in spending an appropriate amount on decent scrutiny and elected representatives. Again, I am biased—I am an elected representative. I think we are good value, but that is a case to be made.

Finally, I cannot find any mention in schedule 3 about guidance that the Secretary of State may issue to commissioners about conduct, standards and transparency. I would like some reassurance from the Minister about guidance on those aspects of the job. Even if they are not elected, they are accountable to the public and must be given a process and regime of standards, and potentially be brought into existing standards systems. Without scrutiny, standards and regulations to govern their behaviour, I worry about this in the same way as several other Members today have.

--- Later in debate ---

[Miatta Fahnbulleh]

The amendments will prevent a commissioner from exercising certain fire and rescue functions that should be reserved as functions of the mayor, as head of the fire and rescue authority in the area. The effective delegation of fire and rescue functions to a commissioner can ease capacity constraints on the mayor, by ensuring that there is a dedicated individual with the time and expertise to focus on executing those functions. Fire and rescue functions are already delegated successfully to deputy mayors for policing and crime in Greater Manchester and in York and North Yorkshire. The ability to delegate to a commissioner, without the need for secondary legislation, simplifies that process. If they wish, mayors will be able to make an existing deputy mayor for policing and crime the public safety commissioner, meaning that individual could lead on both policing and fire.

However, certain functions should be the sole responsibility of an elected mayor, as head of the fire and rescue authority. The retained functions are those with the most significant bearing on the strategic direction of the fire service, such as its budget, its risk plan, and the appointment or dismissal of the chief fire officer. It is important that these decisions are taken right at the top, and that the person taking them is accountable at the ballot box.

These amendments provide for the effective delegation of fire and rescue functions. They ensure that decisions are taken at the right level and support the Government’s commitment to ensure that our communities are safe.

Amendment 70 agreed to.

Amendment made: 71, in schedule 3, page 112, line 3, at end insert—

“(6) In this paragraph “excepted fire and rescue functions” means—

(a) functions under the following provisions of the FRSA 2004—

(i) section 13 (reinforcement schemes);

(ii) section 15 (arrangements with other employers of fire-fighters);

(iii) section 16 (arrangements for discharge of functions by others);

(b) the functions of—

(i) appointing, suspending or dismissing the chief fire officer;

(ii) approving the terms of appointment of the chief fire officer;

(iii) holding the chief fire officer to account for managing the fire and rescue service;

(c) approving—

(i) the community risk management plan;

(ii) the fire and rescue declaration;

(d) approving plans, modifications to plans and additions to plans for the purpose of ensuring that—

(i) as far as reasonably practicable, the CCA is able to perform its fire and rescue functions if an emergency occurs, and

(ii) the CCA is able to perform its functions so far as is necessary or desirable for the purpose of preventing an emergency or reducing, controlling or mitigating the effects of an emergency, or taking other action in connection with it;

(e) approving any arrangements for the co-operation of the CCA in relation to its fire and rescue functions with other Category 1 responders and Category 2 responders in respect of—

(i) the performance of the CCA’s duty as a fire and rescue authority under section 2 of the Civil Contingencies Act 2004 (duty to assess, plan and advise);

(ii) any duties under subordinate legislation made in exercise of powers under that Act.

(7) In sub-paragraph (6) and this sub-paragraph—

“Category 1 responder” and “Category 2 responder” have the meanings given in section 3 of the Civil Contingencies Act 2004 (section 2: supplemental);

“chief fire officer” means the person with responsibility for managing the fire and rescue service;

“community risk management plan” means a plan which—

(a) is prepared and published by the combined authority in accordance with the Fire and Rescue National Framework, and

(b) sets out for the period covered by the document in accordance with the requirements of the Framework—

(i) the combined authority’s priorities and objectives, and

(ii) an assessment of all foreseeable fire and rescue related risks that could affect its community, in accordance with the discharge of the combined authority’s fire and rescue functions;

“emergency” has the meaning given in section 1 of the Civil Contingencies Act 2004 (meaning of “emergency”);

“fire and rescue authority” means a fire and rescue authority under the FRSA 2004;

“fire and rescue declaration” means a document which—

(a) is prepared and published by the combined authority in accordance with the Fire and Rescue National Framework, and

(b) contains a statement of the way in which the combined authority has had regard, in the period covered by the document, to the Framework and to any community risk management plan prepared by the combined authority for that period;

“fire and rescue functions” means—

(a) functions of a fire and rescue authority which the combined authority has by virtue of an order under section 105A, or

(b) functions which the combined authority has as a fire and rescue authority by virtue of section 1(2)(f) or (g) of the FRSA 2004;

“Fire and Rescue National Framework” means the document prepared by the Secretary of State under section 21 of the FRSA 2004;

“fire and rescue service” means the personnel, services and equipment secured for the purposes of carrying out the functions of a fire and rescue authority under—

(a) section 6 of the FRSA 2004 (fire safety);

(b) section 7 of the FRSA 2004 (fire-fighting);

(c) section 8 of the FRSA 2004 (road traffic accidents);

(d) any applicable order under section 9 of the FRSA 2004 Act (emergencies);

(e) section 2 of the Civil Contingencies Act 2004 (duty to assess, plan and advise) and any applicable subordinate legislation made under that Act;

(f) any other provision of, or made under, an enactment which confers functions on a fire and rescue authority;

“FRSA 2004” means the Fire and Rescue Services Act 2004.”—(Miatta Fahnbulleh.)

This would define the “excepted fire and rescue functions” which a commissioner appointed by the mayor of a CCA would be prevented from exercising by Amendment 70.

[David Simmonds]

I beg to move amendment 293, in schedule 3, page 112, line 16, at end insert—

“(2A) The relevant remuneration panel may not recommend allowances which exceed the amount paid in salary to a person employed at director level within the relevant authority.”.

This amendment ensures that Commissioners cannot be paid more than Directors working for the authority.

[The Chair]

With this it will be convenient to discuss amendment 292, in schedule 3, page 112, line 22, at end insert—

“(5) The relevant remuneration panel must consider, and make recommendations about, whether commissioners appointed by the mayor, and councillors in the constituent areas, should be eligible for the local government pension scheme.

(6) Recommendations of the relevant remuneration panel relating to the local government pension scheme must have the aim of achieving value for money.”.

This amendment requires remuneration panels to consider whether mayoral commissioners should be eligible for the LGPS and justify those findings.

[David Simmonds]

These amendments concern the remuneration of commissioners and have two purposes.

There is a long-established principle within the arrangements for the remuneration of elected officials in local government that an independent panel, which is able to take evidence from the public and other good sources in the local area, will make a recommendation to the local authority about what the scheme of allowances payable should be. That brings a degree of transparency. Councils are currently required to consider the recommendations and to update their scheme from time to time, including voting to renew it each year. That has certain elements. One is whether commissioners—in this case, those who are appointed and are part of a mayoral combined authority—should be eligible for the local government pension scheme.

We heard an announcement from the Secretary of State on this issue, and it is the view of the shadow team that it is a sensible step. Changing the local government pension scheme from a final salary scheme to an average salary scheme was led by councillors, and it was instrumental in convincing a very large body of appointed officials to move over to that scheme, saving the taxpayer millions of pounds. However, it is also important that those appointed as commissioners are considered for eligibility and that each mayor is transparent about the recommendations and advice they have undertaken around that.

The second point to consider is around remuneration. We often hear it cited that there are people in the civil service, the NHS and local government who are paid more than the Prime Minister, which is used as a benchmark for excessive pay. Whether or not we agree with that—personally, I do not, as I recognise that there is a professional salary structure for these roles, in which those people will participate for the whole of their careers, that is very different from the context for politicians—it is none the less important to recognise that those who are appointed into mayoral roles should be subject to some degree of constraint.

As is the case with local government, it seems reasonable that we do not see elected officials appointed on a very significantly higher salary than senior professionals who are advising in the same field. The amendments aim to bring a degree of transparency and rigour to that, and to ensure that, in the potential circumstance where a mayor chooses to stretch the limits of their powers of appointment, shall we say, there is some degree of constraint so that the public can see that the taxpayer pound is being carefully husbanded.

[Sam Carling]

We have just heard the Minister speak about having statutory guidance on this issue. Does the hon. Member agree that one way of making this change, rather than through these amendments, would be for the guidance to include some clear indications to the remuneration panels about what roles they should consider comparable for mayoral commissioners. That might be council leaders or cabinet members rather than senior officers; or it may be senior officers, where appropriate.

[David Simmonds]

I understand the issue that the hon. Member is highlighting. One thing that emerged from the debate about councillor pensions was that they were essentially taken away by a decision of Parliament, without the process of legislation. One of the risks here is that statutory guidance, robust as it can be and coming with a duty to “have regard”, can be changed quite quickly. Therefore, if this is not clearly set out on the face of the Bill, the ability of this Parliament and of local communities, as we are observing, to exercise the degree of accountability and scrutiny that they might wish is undermined. That is why we have proposed these amendments.

[Miatta Fahnbulleh]

I thank the hon. Member for his thoughtful contribution on this critical question of how to ensure value for money in the remuneration of commissioners. It is important that allowances paid to commissioners accurately reflect the work they do but also represent value for money. We completely agree with that principle. That is why the Bill, as drafted, has a clear process for setting the allowances of commissioners. The relevant authority must consider a report by a relevant remuneration panel, and payments cannot exceed the amount specified in that report.

Ultimately, what commissioners are paid is a local decision, and we have crafted the measures for that, but it is a decision that needs to be made in alignment with recommendations, as is the practice across local government. Adding a further requirement that commissioners cannot be paid more than directors would reduce local autonomy in decision making and would pre-emptively undermine the relevant remuneration panel. The Bill is about empowering places, but what we can and will consider is how we set up statutory guidance to provide clarity about what is possible and to deal with some of the potential pitfalls that the hon. Member has raised.

Amendment 292 seeks to place a duty on remuneration panels to consider and make recommendations about the local government pension scheme. Again, I understand the intent behind the amendment and the importance of ensuring that public officials in local government are properly remunerated and incentivised. However, I do not believe the amendment necessarily advances that.

We value the work that remuneration panels do to make considered recommendations about allowances that should be paid locally. However, overall access and eligibility to the local government pension scheme is dealt with at national level. It is therefore not clear what value the amendment would add, which is why I ask the shadow Minister to withdraw it.

[David Simmonds]

I have listened intently to what the Minister has said. I think the risk is that, if things are delegated to statutory guidance, what emerges later on will not meet the expectations set out in the debate. I will therefore push for a vote on these amendments.

Question put, That the amendment be made.

--- Later in debate ---

[Miatta Fahnbulleh]

The clause will ensure that all combined authorities and combined county authorities can pay their members an allowance where they take on special responsibility for the combined authority or the combined county authority. Constituent council members regularly take on important additional responsibilities, particularly leading on policy portfolios such as housing or transport. We heard from the leader of Manchester city council about the important role she plays for that combined authority. They are crucial in driving forward local policy, ensuring that it meets the needs and aspirations of our communities. Indeed, their role will grow in importance as we increase the powers and functions available to combined authorities and combined county authorities.

However, currently, constituent council members can be paid for such special responsibilities only by their council, not the combined authority or combined county authority. This simply is not right; members should not be expected to do important work for free, and constituent councils should not foot the bill for work done in service of another body. Ensuring that the combined authority or combined county authority can pay its members creates a fairer system, allowing areas to recognise and reward hard work that delivers for communities. To ensure transparency and accountability, pay will be determined following a report by an independent remuneration panel.

[David Simmonds]

I draw the Minister’s attention to the existing arrangements for independent remuneration panels. She has referenced the proposals for how this kind of situation will be handled. However, we can envisage circumstances such as those that we heard about in Greater Manchester, where the mayoral commissioners are effectively drawn from the leadership of those local authorities.

There is a degree of ambiguity in proposed new sections 52A(6) and 113E(6), which refer to allowances paid

“in respect of the same special responsibilities”.

For example, I think of a situation where someone is a cabinet member with responsibility for transport in a constituent authority and also undertakes a strategic transport role as part of the combined authority. We as politicians would recognise that those are two different things, in the same way that a Minister undertaking duties in the Government is paid separately from their role as a Member of Parliament because those two things are distinct.

Transparency and clarity are important to retaining public confidence. Clearly, we do not want to create a situation where there is a degree of dispute, such as where a mayoral combined authority expects the constituent council to pay, or vice versa, and where an individual who wishes to take up those duties is inhibited from doing so. It would be helpful if the Minister could set out how the statutory guidance will address that issue so the Committee can be confident that we will not see this act as a barrier to participation in the governance of these new authorities.

[Sam Carling]

I have some more thrilling financial commentary, so I hope the Committee will forgive me. First, I welcome what the Minister has just said. Exactly this situation happened in Cambridgeshire and Peterborough, where our mayor went on medical leave for some time. His deputy, Councillor Anna Smith, who is a good friend of mine, ended up taking on the deputy mayoral role, so she had to drop hours at work and faced a significant loss of income. Our council took the decision to pay her as essentially a cabinet member, but it was not ideal. Clause 10 will resolve so many issues.

I want to highlight a discrepancy in that, at present, there is usually no allowance for members who sit on the combined authority board. A lot of the time, it is the leader of the council who does so, and it is often considered to be part of their portfolio, but it is not always leaders who sit on the board. That can lead to people taking on a very significant commitment without any financial support, despite potentially having to reduce hours at work and the like, if the councillor in question has a job, as many do. That is not conducive to having a diverse range of elected representatives to do these jobs.

Following local government reorganisation, if we have fewer leaders on boards and more holders of other portfolios and councillors, we may see this problem increase. I encourage the Minister to consider either altering the clause or making other provisions as the Bill progresses to allow combined authorities, if they wish, to pay an allowance to their board members for that role.

--- Later in debate ---

[David Simmonds]

The Opposition have significant concerns about the import of amendments 82, 76 and 79. We have made a number of references to some interactions with different elements of local government finance, but clearly the measures will open the door to very substantial tax rises through the vehicle of the mayoral precept. Worse than that, they open it up to being used for any purpose, in effect.

In the sometimes tense relationship between central and local government, there are disputes about who should pick up the tab—for example, the ongoing debate about asylum costs. That is very much having an effect in my local authority, which has the highest number of asylum seekers per capita of any in the country. Such individuals are only a cost to the local authority, as a result of central Government policy. The Bill opens up the scope for mayors to directly tax people for the purposes of environmental legislation, or social care, which consumes around 70% of the budgets of local authorities, or any other function that authorities may choose to undertake—making Manchester a nuclear-free zone, or whatever it may be—despite the fact that those are not functions that mayors undertake by statute. I am sure we all agree that there should be an opportunity for politicians to speak up, but there needs to be some limit on it.

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[Miatta Fahnbulleh]

I would just point out to the hon. Gentleman that the mayoral precept was introduced in 2017 by a Conservative Government, and that mayors are directly elected. Like Members of Parliament, mayors are not immune to political pressures around tax rises, and examples across the country show that mayors are as thoughtful about the right balance between investing in their services and managing tax increases as national politicians—in fact, when we think about the record of the last Government, perhaps more so.

[David Simmonds]

That was a fairly shameless political pitch, but we should just reflect on the debates that took place across the Dispatch Boxes yesterday during Housing, Communities and Local Government questions, when it was highlighted that we have a Mayor of London who is quite happy to issue precepts to indulge his personal political priorities but is an abject failure in discharging his mayoral functions around housing. Thousands of people are unable to find homes in the capital because the mayor is failing to build out more than 300,000 planning permissions that have already been granted by the local authorities. That is an injustice that is being inflicted on the citizens of our capital, and this provision, as envisaged by this Labour Government, potentially inflicts the same, or an even greater, injustice on other areas of the country. For those reasons, we remain deeply concerned about it.

Particularly in an environment where, as we heard earlier, local authorities were left £1.5 billion worse off—net—by the Government’s decision to introduce additional taxes on their employees, the temptation will be for the mayoral precept to be seen as the catch-all or safety valve through which additional taxes can be extracted to meet whatever demand central Government choose to impose, without central Government being accountable for it. That is why we oppose the measures.

[Siân Berry]

I had not previously heard the Conservatives’ argument on this issue, and I have to say that I disagree. The Minister said that the original intention of the policy was to allow for a wide range of precepting, and if there is one thing that directly elected mayors are really accountable for, it is the level of precept that they set.

I am in favour of creativity in conversations with the electorate about what initiatives, appropriate to the local area, might be funded by precept on a short-term basis or just in the local area. The way that the provision is set up allows mayors to be properly accountable for that. I worry less about it resulting in huge tax rises without consent, because consent is built in at election time.

I appreciate the concerns about austerity continuing in councils that are underneath and part of the combined authority if mayors are taking up available taxpaying powers. In every debate in this Committee, I would love to bring up the fact that all this reorganisation is happening in the absence of an end to austerity. The Government need to provide more funding to local councils so that this is not all being taken in council tax, which is a very unfair tax.

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[Miatta Fahnbulleh]

The amendment relates to where a mayor has police and crime commissioner functions: secondary legislation about the arrangements for setting the precept must provide that the police and crime commissioner component is ringfenced. Where a mayor has police and crime functions for more than one police and crime commissioner area, secondary legislation must provide that there is a separate police and crime component for each area. The legislation currently provides that there must be separate components for police and crime administrative functions and for mayoral general functions.

The amendments mean that Ministers have the flexibility to provide for either one component for non-police and crime functions, or multiple separate components for different types of non-police and crime functions. I hope Members are following. This gives Ministers the option to direct how precept spending on non-police and crime functions is accounted for, by setting this out clearly in secondary legislation. In doing so, they will be able to ensure that the precept is accounted for in ways that best reflect how the precept should be spent—whether that means allowing for full flexibility across the non-police and crime component, or ringfencing money to be used for certain functions.

Amendments 78 and 81 will give the Secretary of State the ability to make an order about the preparation of budgets for all an authority’s functions. The provision in the Bill currently only provides that power in relation to the mayor’s general functions. This needs to be updated to align with the expanded mayoral precepting powers introduced by the Bill. This allows Ministers to set out the procedures that should be followed in the preparation and calculation of a budget.

By enabling Ministers to set clear direction on the preparation of budgets and the calculation of precepts, these amendments allow for consistent processes to be set across the sector, to give full effect to the expanded precepting powers.

[David Simmonds]

I have two questions for the Minister. First, given that these budgets, and the precepts that the amendments relate to, will sit within that bit of the Local Government Finance Act 1992, will the requirement for budgets to be balanced in-year apply to all the accounts that the Secretary of State will be giving direction to?

The second question—the Minister may wish to write to the Committee on this—is, will the consistency that she referred to be introduced by giving the Secretary of State individual, and in effect case-by-case, power to issue these directions for different authorities? Clearly, our concern is that if the door has been opened to, in effect, unlimited precept rises, and these were to be used by the Secretary of State to bail out a significant amount of debt in one of these reorganised local authorities—which I know is a significant concern of many of the local authorities that are proposing reorganisation—that would not apply everywhere.

There are certain parts of the country where there are very high levels of debt, and others where those levels of debt do not exist at all. It would be, in effect, a condition of those constituent authorities’ doing the devolution at all that they were not asked to bear that cost. Yet this Bill introduces a back-door power for the Secretary of State to direct that they would go down that route. How do the Government propose to ensure that that is forestalled, so that they can have the assurances that they would need as a necessary minimum?

[Miatta Fahnbulleh]

There are two processes that I, as the Minister for devolution, as opposed to the Minister for local government reorganisation, am constantly keen to emphasise. There is a devolution process and there is a local government reorganisation process, which my colleague the Minister for Local Government and Homelessness, my hon. Friend the Member for Birkenhead (Alison McGovern), is taking forward. We know that some authorities are in a difficult financial position as part of that, and we are having a conversation with those authorities in the context of the proposals they are putting forward. That is still very distinct from what we are trying to do through the devolution process, and it is important that colleagues do not conflate the two.

What I would say on the wider questions that the hon. Gentleman raised is that there is nothing that we are proposing to do through the Bill that denudes or undermines the standards for financial prudence and financial accountability that sit across the local government landscape.

[David Simmonds]

Turning to the question of how a mayoral precept will be used under this group of amendments that the Government have tabled, if we think of the reorganisation in Thurrock or Surrey, both those local authority areas contain a single authority that has a very high level of capital borrowing, or a high level of debt. Those authorities have been assured that there will be three years’ worth of revenue support; in effect, there will be a Government grant to cover the revenue cost of the borrowing for three years. However, the borrowing cost is extended over 40 or 50 years, so there will be a very long period of time where, as things currently stand, that local authority will be expected to meet that cost, when it comes into being.

Clearly, one way of doing that is for the Secretary to State to say, “You will raise your precept, and that is how we will deal with the debt,” but that runs contrary to the proposals for devolution where those authorities have said, “We will do this, but it is simply not fair or ethical for us to accept those debts on to our books.” I am just seeking an assurance from the Minister that either the existing provisions that require the in-year balancing will apply, in which case the Government will deal with this prior to the devolution arrangement coming into existence, or the provisions will not apply, in which case those authorities need to be mindful that the likely consequence of devolution will be a massive increase in the precept levy purely for the purpose of paying off someone else’s debt.

[Miatta Fahnbulleh]

To answer the specific question, yes, in-year balancing will apply. The purpose of the precepting function is to allow the mayor to invest in key things that will drive the economic prosperity of the area and the core functions that we have set out in the Bill. It would be a very brave mayor who chose to raise the precept not to deliver on that. In the end, they are democratically elected, and it will be for their residents and constituents to show them the consequences of that at the ballot box.

Amendment 77 agreed to.

Amendments made: 78, in clause 11, page 15, line 15, at end insert—

“(b) in subsection (5)(b), after ‘functions,’ insert ‘or the other functions of the authority (other than any PCC functions that are exercisable by the mayor), or both’.”

This enables the Secretary of State to require the mayor of a combined authority to prepare an annual budget in relation to the authority’s functions, excluding any mayoral PCC functions, either separately to or in combination with the budget relating to the mayor’s general functions.

Amendment 79, in clause 11, page 15, line 17, at end insert—

“(b) in subsection (2), omit ‘in respect of mayoral functions’.”

This provides that the issuing of precepts under the Local Government Finance Act 1992 in respect of expenditure relating to the functions of a mayoral CCA is a function exercisable by the mayor acting on behalf of the CCA.

Amendment 80, in clause 11, page 15, line 17, at end insert—

“(b) in subsection (4)(a), for the words from ‘consists’ to the end of that paragraph substitute ‘includes a separate component in respect of the mayor’s PCC functions,’.”

This provides for flexibility where the mayor of a mayoral CCA has PCC functions as to how the components of the CCA’s council tax calculation which relate to the CCA’s other functions (both mayoral and non-mayoral) are to be set out.

Amendment 81, in clause 11, page 15, line 17, at end insert—

“(b) in subsection (5)(b), after ‘functions,’ insert ‘or the other functions of the CCA (other than any PCC functions that are exercisable by the mayor), or both’.”—(Miatta Fahnbulleh.)

This enables the Secretary of State to require the mayor of a CCA to prepare an annual budget in relation to the CCA functions, excluding any mayoral PCC functions, either separately to or in combination with the budget relating to the mayor’s general functions.

Clause 11, as amended, ordered to stand part of the Bill.

Clause 12

Power to borrow

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[Miatta Fahnbulleh]

I will speak to clause stand part and amendment 83 before responding directly to amendment 20. On the clause, all existing mayoral combined authorities and mayoral combined county authorities have powers to borrow for all their functions. That allows them to invest in economically productive infrastructure. Unlike for local authorities, the existing process for confirming the power to borrow money on mayoral combined and mayoral combined county authorities is by making a bespoke statutory instrument after an institution has been established. To confirm such powers by bespoke statutory instrument is highly inefficient and slow. The clause streamlines the process by giving the power to borrow to mayoral combined authorities and county authorities for purposes relevant to all their functions. It preserves existing safeguards by requiring them 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 commend the clause to the Committee.

Government amendment 83 is minor and technical. It simply clarifies that the reference to section 12 coming into force relates to clause 12 of the Bill. Amendment 20 would require a combined authority or combined county authority to produce a report, to be laid before the House by the Secretary of State, detailing the reasons for which they are seeking consent to exercise borrowing powers. As my hon. Friend the Member for Banbury and Opposition Members have pointed out, this would be an onerous, costly and time-consuming process. The amendment is well-intentioned, but we do not think it necessary.

Like the rest of local government, combined authorities and combined county authorities must operate within the prudential framework, which comprises statutory duties and codes that are intended to ensure that all borrowing and investment is prudent, affordable and sustainable. The framework already provides robust mechanisms of oversight and accountability. In addition, the exercise of borrowing powers by mayoral combined authorities and county authorities to date has not raised issues. Amendment 20 also contradicts the Bill’s aim of furthering devolution and increasing financial autonomy for these authorities. For this reason, I hope that the hon. Member for Stratford-on-Avon will withdraw it.

[David Simmonds]

I want to make sure that I can reconcile the Minister’s observations and the import of the amendments with her reply to me earlier, when she said that the requirement to balance in-year will apply. Clearly, the provisions essentially state that the Secretary of State can give consent for a substantial degree of borrowing, but it is not at all clear in the clause or the amendments what the purpose of the borrowing would be.

Manchester’s improvements to its transport system are fantastic, but they were funded by central Government as part of the devolution deal, and they are now creating a significant ongoing deficit in the mayoral budget, which has to be covered, essentially, through precepting—by levying those in the local area to cover the cost. There is clearly a concern with that. If the borrowing is for capital purposes there is a clear strategy for its repayment, and it must be for the purposes of capital investment. However, if borrowing is undertaken to cover shortfalls between revenue and the mayor’s expenditure on day-to-day costs, this House would have significant concerns about it in relation to our national accounts. Can the Minister tell the Committee how that decision making will sufficiently constrain a mayor or combined authority from undertaking borrowing that is for the purposes of day-to-day revenue expenditure, so that we do not find a large debt bubble growing underneath these new bodies?

[The Chair]

Minister, do you want to comment on that particular point?

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[Miatta Fahnbulleh]

As the local transport authority, combined authorities and combined county authorities deliver a range of local transport functions across their area. Each combined authority or combined county authority agrees its own transport budget for the year and, in many cases, constituent councils contribute to this through a transport levy. This is because constituent councils receive funding for some transport functions directly from Government.

The clause standardises the power for combined authorities and combined county authorities to levy such funding from their constituent councils to cover the cost of their transport functions, where they are not otherwise met. This power has proved effective in supporting transport delivery in local areas. For example, each of the seven councils of the West Midlands combined authority pays a levy based on its population figures, which goes on to fund a range of functions from subsidised bus services to the English national concessionary travel scheme, which provides free bus travel for eligible older and disabled people.

This power complements clause 39, which provides combined authorities and combined county authorities with the power to pay grants to constituent councils. Together, these powers support partnership working between combined authorities and combined county authorities and their constituent members.

[David Simmonds]

Again, I seek a point of clarification from the Minister. I understand the purpose of the clause, but clearly there is a distinction between a levy, where it is the constituent authority that is required to pay, and a precept, where it is the taxpayer who is paying for it through their council tax bill. I would be grateful if the Minister could clarify, if necessary in writing, how it will work where there is a dispute about the payment.

If we take London as an example, we have a London-wide concessionary travel scheme, but it is has very different application in different boroughs. It is easy to foresee a situation where, particularly if the purpose of the overall transport levy does not benefit the whole of the mayoral combined authority area, there will be a dispute about whether that is an appropriate way forward. Particularly if the levy is large, it would have a significant impact on the budget of the constituent local authority. Can the Minister set out how that type of process will be addressed in practice?

[Miatta Fahnbulleh]

I have agreed that I will write on the specifics; I think this question comes back to the same theme of how we mitigate collective decision making and agreement across constituent authorities that put at risk their financial viability, or cut across the legal obligation of a particular constituent authority, and I will capture that in writing. However, I would say that we cannot legislate for every eventuality. Indeed, I do not think that is the purpose of legislation. What we can draw on is the practice that we see across the country. Broadly, it is not in the interests of a mayor, who has been democratically elected by the residents and constituents of any of their constituent authorities, to make decisions that will be fundamentally detrimental to those constituents.

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[Miatta Fahnbulleh]

It is vital that the devolution framework works for the unique circumstances of London’s governance, which we have talked about in this Committee. That is why the Bill will enable Government to confer functions on the Mayor of London, the Greater London Authority and its functional bodies. Previously, the Government could change the powers of the Greater London Authority only via primary legislation. This clause brings London into line with other strategic authorities by enabling the Government to change its powers via secondary legislation. This will ensure that the Greater London Authority benefits from the devolution framework and can deepen its powers over time.

[David Simmonds]

Again, I have a question of clarification; can the Minister tell the Committee whether these powers apply to a transfer of functions, as opposed to the conferral of functions? We know there have been situations, and we can certainly envisage some within the overall package of the Bill, where the statutory duties of the constituent authorities could be transferred over to the mayor, either en bloc or in part. Indeed, there might be times when it might be a sensible approach; if there is an example of a significant failure in one authority, that could be looked after by the mayoral office while the situation is turned around—that goes to the point raised about South Northamptonshire. However, can the Minister clarify whether this refers solely to new powers that are conferred, or opens up the door to the transfer of functions that are currently statutory duties of constituent authorities?

[Miatta Fahnbulleh]

This clause relates to functions and powers that sit underneath the devolution framework that we have talked about and are putting on the face of the Bill, and the seven areas of competencies that this measure applies to.

We currently have a situation where, for example, certain powers will go to Greater Manchester that currently would not necessarily go to the Mayor of London and the GLA, and that does not feel right. Clause 15 allows a mechanism and a process to make sure that there is consistency across the piece, and that we can achieve that without having to go through primary legislation.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Clause 16

Members of legislatures disqualified for being a mayor of a strategic authority

Question proposed, That the clause stand part of the Bill.

[Siân Berry]

I agree with the principle of not having too many people able to do double-hatting, but it is a fact that there have been overlapping periods when mayors of different combined authorities and London have also been MPs, either at the beginning or end of their term. That has been dealt with in a pragmatic way, with nobody overextending those kinds of double-hatted jobs.

As I understand it, and I would like the Minister to clarify this, writing this rule into statute would mean that, while nobody would be prevented from campaigning to be a mayor or an MP while in either of these jobs, at the moment they are elected, the situation then becomes illegal. An instant resignation takes place on that day. There would be immense disruption across a wide area—perhaps not so much for one constituency, as we have got used to having by-elections for various reasons, but in holding a mayoral by-election.

I wanted to check whether the Government’s intentions here, in making that resignation statutory and instant, are not a bit too much, when these issues have been previously worked out. Does there need to be more detail in the clause to allow for a transition period?

[David Simmonds]

The Opposition have a high degree of sympathy with the points made by the hon. Member for Brighton Pavilion. It is very striking when we compare our local and regional democracy with those of other countries: in our nearest neighbour, France, with the cumul des mandats, there is almost an expectation enshrined in their politics that, for someone to become Member of the national Parliament, they will have represented their area as a mayor. Indeed, when President Chirac cast around to find someone who was eminently qualified to become Prime Minister of that country, he took the view that there was nobody within the National Assembly who could possibly meet that standard; it needed to be somebody from local or regional government. He lighted on Alain Juppé, the well-reputed mayor of Bordeaux, who served with great distinction as Prime Minister. If we begin to introduce restrictions of this nature, it will significantly constrain the ability of our politics to rise to the challenges that our communities and our areas face.

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[Miatta Fahnbulleh]

I will take the other interventions.

[David Simmonds]

I ask the Minister to reflect that it used to be the practice of this House that any MP appointed as a Minister had to resign and fight a by-election, because they were undertaking a function different from that for which their constituents had originally elected them. That practice was abandoned because of the extent of the disruption it caused to the work of government and of the House, as well as the cost of those by-elections, so I ask the Government to reflect. We have learned from experience, cross-party, that having these types of requirements is not conducive to good democracy. Perhaps the Minister will undertake to reflect on that.

[The Chair]

Are you going to intervene as well, Mr Holmes?

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[Manuela Perteghella]

The amendment and new clause 46 are about giving devolution in England a clear direction and fair footing, and replacing uncertainty with a proper plan and accountability. It will create a clear road map for devolution.

The Bill already includes a requirement for an annual devolution report to be published, but there are currently no plans to include any forward-looking strategy. Why is a commitment to publish a strategy and timeline for further devolution important and necessary? The local authorities that were left out of the devolution priority programme are facing a cliff edge in terms of funding streams that are now being redirected to mayoral strategic authorities.

Right now, devolution is happening, but unevenly. Cumbria, Cheshire, Warrington, Greater Essex, Hampshire and the Solent, Norfolk and Suffolk, and Sussex and Brighton are all in the devolution priority programme, putting them on a fast track towards improved transport opportunities, housing and economic growth. Regions such as Kent and Wessex, which were left out of the devolution priority programme, are left not only without the benefits of funding and the regional voice of an elected mayor, should they want one, but without the knowledge of when they can expect those things. The amendment would require the Government to report annually to Parliament on progress made. This transparency will prevent future Ministers from delaying or cherry-picking which regions get devolution next.

The amendments, which require a forward devolution strategy to be published, are therefore important to give councils like those in my area, which are at the beginning of their devolution journey, reassurance that plans are being progressed for devolution in their areas if they are not in tier 1. It is important that councils know not only their current financial situation, but how and when finance and governance are likely to change. The amendment would give local authorities certainty as councils could plan ahead, invest and prepare for new responsibilities. As I said earlier in the debate, devolution must be equitable and consistent, not a patchwork of deals and negotiations.

[David Simmonds]

The Opposition have sympathy with the points the hon. Member made. We can rarely have too much transparency, but we are conscious that these new bodies and devolution arrangements will be subject to a degree of political oversight. There will be manifestos, on which the public will have a vote. There will be the element of scrutiny, which we have not heard enough about yet but which we would like to think will be built into the new arrangements for these authorities. There will also be a regular process of elections, which will determine who provides the necessary level of leadership. Layered over that, there will be both the political priorities of the devolved authority and those things that are more part of the administrative function. Local authorities have historically had council plans and forward plans that set out decision making, all of which are part of this arrangement. Although the points have been well made, the Opposition are therefore not convinced that what the amendment would add is sufficient to justify its inclusion in the Bill.

[Miatta Fahnbulleh]

I will respond to amendment 363 and new clause 46 before discussing clause 19.

In the English devolution White Paper, the Government set out clearly our ambition to have universal coverage of strategic authorities in England. That direction of travel is clear. It is also important that the process is led locally, and that areas can submit proposals for devolution that reflect their unique circumstances at a time that makes sense for them. A centrally mandated strategy would cut across that principle, requiring areas to work to a timeline set by Government. That would not only be challenging, but go against the grain of what we are trying to do. The new clause is therefore not necessary. We have set the ambition, and we will work with areas to enable them to come forward with proposals at the appropriate time.

Clause 19 amends existing requirements for the annual report on devolution to ensure that it reflects the introduction of strategic authorities as a category in law. To indicate how the report will look should the Bill receive Royal Assent in its current form, this year’s report was laid before this House and the other place earlier today, so Members can spend their evening reading the report with a glass of wine if they wish. It covers strategic authorities that were established and details of the new devolution framework as set out in the English devolution White Paper.

I commend the clause to the Committee, and ask the hon. Member for Stratford-on-Avon to withdraw the amendment and not to press the new clause.

English Devolution and Community Empowerment Bill (Fifth sitting)

David Simmonds Excerpts

Committee stage
Thursday 16th October 2025 Public Bill Committees

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve with you in the Chair, Mr Stuart, and to resume consideration of the Bill.

The Opposition are proud that the general power of competence was introduced when we were in government during the coalition years. It was something that I, as a serving local authority councillor at the time, lobbied hard for. The then Secretary of State, now Lord Pickles, was very receptive to the view that local authorities should have a greater remit, rather than being constrained to do those things that they were specifically permitted to do by law.

I have a question of clarification for the Minister. She said that the general power of competence could be exercised for economic purposes. Will the authorities have the full general power of competence, or will the power be constrained to a specific set of mayoral functions? Constraining it would not be entirely consistent with what was said in previous proceedings about the use of precepts.

[Miatta Fahnbulleh]

For mayoral strategic authorities, it will be the full general power of competence, but for foundation strategic authorities, at the single tier level, it will be exercised in the context of economic development and regeneration; the constituent local authority that makes that foundation strategic authority already has the wider general power of competence.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.

Schedule 4 agreed to.

Clause 21

Power of mayors to convene meetings with local partners

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I beg to move amendment 8, in clause 21, page 23, line 28, leave out subsection (b) and insert—

“(b) one or more of the following—

(i) health and social care;

(ii) planning;

(iii) environmental concerns;

(iv) funding;

(v) sustainability measures;

(vi) education;

(vii) transport provision and

(viii) green and community spaces.”.

This amendment ensures that mayors must consider specific community matters when consulting with local partners.

In previous contributions, my hon. Friend the Member for Stratford-on-Avon and I have made clear the importance of decision making at the lowest possible level. I welcome the explicit provision on convening meetings with partners.

On clause 20, the Minister talked about the breadth of issues that come under the general power of competence and the scope and interest of combined authorities and mayors. We are concerned that the wording in clause 21 on the topics about which meetings can be convened is too narrow, as it is restricted to the items in clause 2.

There should be an ability to convene meetings at a strategic level about matters that are not covered there, such as education. Where skills are within the remit of the strategic authority, and education remains the remit of the constituent parts, the impact and the opportunities available would be across the strategic area.

There is also a concern that while the Bill provides the opportunity to convene meetings and consult, share and partner, it does not provide any sense of obligation for a mayor to do so where others are involved. We would like to see more of an obligation on mayors, rather than a sense of, “Let’s hope they do; if they don’t, never mind.”

The amendment seeks to broaden the scope of clause 21 beyond the items listed in clause 2. I am looking for some assurance that the Minister will be interested in broadening the clause so that we get a meaningful sense of two-way discussion, where the mayor is part of that area conversation.

[David Simmonds]

The Opposition are not entirely persuaded of the argument for this amendment, although the point is well made. We will be listening attentively to what the Minister has to say.

We are always very conscious that there is a risk with this legislation of creating conflicts. I know you have done a lot of work in the past in the field of education, Mr Stuart; we have seen that the well-intentioned education policy of school autonomy can come into conflict with the statutory duties placed on a local authority. We need to ensure that is resolved. As we heard from the hon. Member for Mid Dorset and North Poole, education is a good example of where conflict can crop up—for example, a university technical college is part of the skills economy, but is also, for the purposes of the Bill, a school. There is a need to ensure that all those statutory duties are squared off.

Although we are not persuaded of the need for the amendment, we would like to hear what the Minister has to say so that we can be confident that those points have been fully taken into account.

[Miatta Fahnbulleh]

I thank the hon. Member for Mid Dorset and North Poole for her amendment. I am not sure that, as drafted, it achieves the intended effect. The Bill already defines the meaning of a relevant local matter as one that occurs within the geographical boundary of a strategic authority and relates to one or more of the areas of competence set out in clause 2. The areas of competence are deliberately broad to allow for a wide range of activities to fall within scope. However, the amendment would remove the existing references to skills and employment support, economic development and regeneration, climate change, public service reform and public safety. That risks inadvertently constraining the matters on which a mayor may convene meetings with local partners.

On the specific point about the dialogue needing to be two-way, I refer the hon. Member to the evidence we heard in the context of the Greater Manchester combined authority. Ultimately, for the mayor to have impact and traction, and to deliver, they must work with key partners, because ultimately those partners are the delivery arm of any strategic intent of the mayor. That requires two-way engagement and a two-way conversation. While we have not locked that in explicitly in the way that the hon. Member suggests in her amendment, that is fundamentally the principle that sits behind the way a mayor ought to work.

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[Miatta Fahnbulleh]

This Government have committed to empowering mayors to make the right decisions for their local communities—a thing that runs through every aspect of the Bill. The new power to convene meetings with local partners and the corresponding duty on those partners to respond to any meeting requests will strengthen the ability of the mayor to drive local action. The use of the negative procedure provides an appropriate and proportionate level of scrutiny for the regulations. The amendments will enable us to efficiently deliver the legislative framework needed to support our mayors to effectively use their powers to engage local partners and deliver for their local communities.

[David Simmonds]

We have concerns about these measures; I will briefly explain why. As we have seen in the passage of the Bill so far, much of what is proposed for mayors will cut across different Government Departments. It could have financial and legal implications for constituent authorities, and there is plenty of scope for disputes to arise, not least where there might be different political control across different authorities. Our concern is that if we go down the route of using the negative procedure, there is a risk that the awareness of the issues in government will not be triggered and that what we will, in fact, be doing is setting up the authorities to fail by not having the appropriate procedures for getting the issues resolved at the first point where they arise, rather than waiting until they are the subject of disputes in the courts. So we are not content that this is the best way to address the issue.

[Miatta Fahnbulleh]

I understand the hon. Member’s concern. The process is an iterative one. Strategic authorities do not operate in a vacuum. They are in constant conversation with the Government. We have set up the mayoral council as a way for us to have that conversation and dialogue. The fundamental role of national Government is to ensure that our mayors succeed. If issues arise in the way that we are seeing with existing mayoral authorities, there is a space for conversations and mechanisms for those issues to be resolved. I do not think we need an onerous legislative and regulatory procedure to resolve that. The amendment looks at the duty to convene the relevant partners. That matters where the mayor has a mandate to do something, but it requires them to bring lots of different partners around the table to deliver that. We are seeing mayors using their soft power. We have created an additional power to enable them to perform that vital function.

Amendment agreed to.

Amendment made: 85, in clause 21, page 24, line 18, at end insert—

“(2A) In section 117 of LDEDCA 2009 (orders and regulations), in subsection (3)(a), after “order” insert “or regulations”.”—(Miatta Fahnbulleh.)

This provides that any regulations made under the Local Democracy, Economic Development and Construction Act 2009 that are not subject to the affirmative resolution procedure will be subject to the negative resolution procedure. This will include regulations under new section 103B (mayoral power to convene meetings with local partners), as inserted by Clause 21 of the Bill, and section 107N (public authorities: duty to have regard to shared local growth priorities), as inserted by Schedule 19 to the Bill

[David Simmonds]

I beg to move amendment 295, in clause 21, page 24, line 27, leave out subsection 3.

This amendment would remove the requirement on local partners to respond to a meeting request from the Mayor.

[The Chair]

With this it will be convenient to discuss amendment 294, in clause 21, page 24, line 35, leave out from “specified” to end of line and insert “by the Mayor;”

This amendment would give Mayors, instead of the Secretary of State, the power to define the meaning of a local partner.

[David Simmonds]

The purpose of the amendments is to continue a theme that we have woven throughout our amendments to the Bill: to ensure that this is genuine devolution and that it is the mayor and local authority that make the decisions rather than the Secretary of State. There seems to be an inherent contradiction. We are talking about a devolution Bill that increases the decision-making powers of the Secretary of State to determine what goes on in each local area. The amendments seek to ensure that it is the mayor—the elected local person, of whom we have heard a great deal—who makes the decisions, and that where disputes arise, where one of the local partners feels it is not appropriate to respond to a meeting, there is provision in the legislation for that to happen. I think particularly about how the previous debate is relevant to this one.

If we look at the situation in London, the mayor has decided to spend a proportion of the mayoral precept on funding free school meals, but has not funded them sufficiently, so local authorities are faced with bills for making schoolteachers redundant because of budget shortfalls caused by that mayoral decision. There needs to be a process for resolving such issues. Simply assuming that everyone will have a meeting and that that will resolve it will not resolve those kinds of hard-edged issues. We need to make sure that local discretion works in practice and that it is not simply a matter of the Secretary of State dictating it from Whitehall.

--- Later in debate ---

[Miatta Fahnbulleh]

I am sympathetic to the hon. Gentleman’s point. The regulation, when drafted, will be permissive, because we recognise that it will be different in different places. Through the regulation, we are trying to ensure that it is proportionate. We are also trying to make sure that the scope is drawn as broadly as possible in a way that makes sense for the mayor. I come back to the point that this is not a compulsion to be around the table; it is to trigger a process that means that if a public utility is required around the table, they have to engage. Even if the engagement is to say no which we would hope it would not be, it forces a process of engagement. We think that gives the mayor an additional tool to get the right people around the table to drive the change they want to see.

[David Simmonds]

My major concern is that it sounds like a mess. We can easily imagine situations, given the diverse job of the mayors and some of the ambitions envisaged for them as part of the legislation, where there will be a high degree of confusion about what is expected of whom and who has what obligations.

To simply say that it will be the subject of a permissive regulation when drafted seriously risks setting this up to fail, particularly when it comes to the envisaged economic partnerships. The Committee has not seen that regulation, and has no idea how it will work in practice at a local level.

We will push these amendments to a vote, which is all we can do at this stage. I am sure we will return to this issue during the later passage of the Bill.

Question put, That the amendment be made.

--- Later in debate ---

[The Chair]

No pressure, Mr Simmonds.

[David Simmonds]

I entirely disagree with my hon. Friend—he has not been nearly vocal enough in expressing the level of his concern.

The faults in new clause 19 are multiple. It would compel mayors, in a Bill that is supposed to be about devolution. Having spent a part of my life engaged with deliberative democracy and citizens assemblies, I agree with my hon. Friend. While I am sure they were an uplifting experience for all concerned, they achieved absolutely nothing. They wasted a huge amount of taxpayers’ money. If we reflect on the previous Labour Government’s Local Agenda 21, all the money was spent on meetings to discuss what to do about climate change, and there was nothing available to implement any of it. On Building Schools for the Future, years were spent on consultations and project planning, with not one brick laid and not one school roof repaired as a consequence. We have seen lots of examples where these kinds of processes have led citizens up the garden path.

The point about trust and consent is an important one. I reflect on my own party’s experience in government during the pandemic of low-traffic neighbourhoods. A vocal minority argued for them, but did not remotely gain the trust and consent of the affected residents. That sparked a backlash, which has led to their removal, at great expense to the taxpayer, in order to enable people to go about their daily lives. Our experience with these processes is quite negative. If a mayor wishes to implement such a process, in particular on a specific policy area, they should be free to do so, but they should not be compelled. I suspect we and the Government will find common cause on that.

The hon. Member for Banbury made reference to talking shops. We do not like talking shops in the Conservative party. I am sure he will find one quite easily if he wishes to continue his proposed debate about capital punishment and the death penalty—I am sure there are many people who would like to discuss that. It is really important that mayors are focused on the things that they can do on behalf of their constituents. We should not set up authorities that are there to talk; they should be there to do things on behalf of their constituents.

[Miatta Fahnbulleh]

I thank the hon. Member for Brighton Pavilion for tabling new clause 19. I have a lot of sympathy and support for the concept of citizens assemblies, so I have sympathy for the intention behind the new clause, but it is really important that mayors, as locally elected leaders in their region, should have the ability to decide how best to engage with their local communities.

Mayors can already convene citizens assemblies using functional and general powers of competence as a way of hearing from local people and ensuring that local voices play a role in decision making. I give the hon. Lady the example of the Mayor of the West Midlands, and the Mayor of South Yorkshire, who held a citizens assembly on climate—they are already happening across the country.

Once the Bill becomes law, all mayors will have the general power of competence that we have talked about, which will enable them to convene citizens assemblies should they wish to do so. However, as other hon. Members have said, placing a duty on all mayors to convene a citizens assembly, irrespective of whether it is appropriate or how costly it is, would take away the local choice of mayors to decide how best to engage with their residents. I therefore ask the hon. Lady not to press the new clause.

On new clause 42, I again completely recognise the spirit in which it has been tabled. It will be important for all mayors to engage with the wider public and with local authorities when delivering their functions. On that we are completely agreed. However, the Government cannot accept the new clause, because, as my hon. Friend the Member for Banbury said, it would impose a disproportionate and unworkable administrative burden on mayors of strategic authorities. By way of illustration, North Yorkshire alone comprises 729 individual parishes, which are organised into 412 town and parish councils. Expecting a mayor personally to discharge the proposed duty in respect of each body would, I fear, be impracticable and inevitably crowd out the time needed for the office’s other core strategic responsibilities: driving change and economic outcomes across the area.

Furthermore, many public service providers will be commissioned and contract-managed by local authorities. Superimposing a parallel mayoral duty would blur lines of accountability, cut across established commissioning arrangements, and risk duplication, confusion and delay. I therefore hope that the hon. Member for Stratford-on-Avon will not press the new clause, however well-intentioned it may be.

Question put and agreed to.

Clause 21, as amended, accordingly ordered to stand part of the Bill.

Clause 22

Duty of mayors to collaborate

[David Simmonds]

I beg to move amendment 296, in clause 22, page 25, line 29, at end insert—

“(7A) The guidance issued by the Secretary of State under section 7 may not include a role for trade unions.”

This amendment would prevent the Secretary of State from creating a role of trade unions in the execution of mayors’ duty to collaborate.

I shall speak briefly about the motivation for tabling the amendment. A concern that has run through the Opposition’s responses to a number of the Government’s measures, especially in the space of economic development, is that the Government have chosen not to enshrine the roles of businesses, entrepreneurs or local employers, but always to give a statutory privilege to trade unions to be part of discussions. Although it is wise for any local leader to include the broadest possible range of stakeholders, singling out one, which serves the interests of only one group—sometimes at the expense of others—is simply not a process that any democracy should envisage. We tabled the amendment to ensure that that is not the case in the Bill, and we will press it to a vote. We are clear that, following a change of Government, this is one provision that we would seek to repeal very rapidly.

[Miatta Fahnbulleh]

There are two issues with the amendment. First, we believe that it could create an inconsistency between the powers of mayoral combined authorities and their equivalents elsewhere in England, because it would change only the Levelling-up and Regeneration Act 2023.

More fundamentally, we have already talked about the duty to bring local partners around the table. Underneath that is a presumption and expectation that all relevant parties, including parties in the private sector, that are fundamental to the mayor driving outcomes on behalf of his voters and residents come together to deliver things. There is a vital role for trade unions both in being a clear voice for workers in an area and in being a fundamental part of that economic partnership to drive outcomes.

[David Simmonds]

May I ask the Minister to clarify something? Some 70% of workers in this country are in an enterprise with fewer than five employees in total. Where is their voice at the table? Why is it only the unions representing large-scale organised labour that are compelled in legislation to be at the table when the mayor makes decisions?

[Miatta Fahnbulleh]

Business organisations, whether small businesses, the Confederation of British Industry or chambers of commerce, will inevitably be around the table when a mayor worth their salt is making economic decisions and driving forward strategic partnerships.

The Government believe that as part of that partnership between workers, businesses and civic leaders, it is right that trade unions are firmly around the table. They give voice and expression not only to their individual members but to key concerns for workers across the piece. We do not resile from that; we think it is critical.

--- Later in debate ---

[Miatta Fahnbulleh]

We will specify in secondary legislation the range of local partners, based on feedback from mayors. Again, this is not compulsion; we think it is really important that civic organisations, local leaders and the mayoral strategic authority engage with organised labour. That is part of the economic model that we think is right, because it means we have the voice of organised labour around the table, driving outcomes on behalf of workers. I know the Conservative party struggles with that, because the idea of empowering workers is a bit of a strain for them, but Labour is very clear. We are building a model that ensures we have the voice and representation of labour alongside businesses and our civic leaders, driving change in the economy for working people.

[David Simmonds]

I spent many years chairing employers’ organisations, negotiating with trade unions about all kinds of matters. I have a very high degree of respect for them in the space in which they have expertise, but I do not really understand the Government’s rationale for arguing for a model in which one specific group—perhaps coincidentally, a very large-scale Labour funding group—is given a privileged place at the table when decisions are made about political matters for which the mayor is elected. That place at the table is not protected in statute for anybody else affected by it. That seems to me to border on abuse of the political process. It is very serious to be putting trade unions in a position to make decisions on matters that are not remotely within their area of competence and for which they have no mandate whatever. It is simply unacceptable.

[Miatta Fahnbulleh]

Will the shadow Minister give way?

[David Simmonds]

I have finished my remarks.

[Paul Holmes]

I want to make some brief remarks agreeing with my hon. Friend. I have negotiated with trade unions and I have a huge amount of respect for them. When I was cabinet member for children’s services and learning at Southampton city council, a hugely unionised organisation, I was responsible for negotiating some of the pay contracts for our really important staff. I had a very productive relationship with my trade union representatives and held them in great respect, as my hon. Friend did his when he was deputy leader at a local authority.

We are not anti-trade union, but we do not believe that there should be political favouritism for organised labour, where private business is essentially left out. Why does the Minister believe that organised labour, who, I must say, have intrinsic links with the Labour party movement, should have that prestigious and privileged seat at the table with the elected mayor? The Minister has resisted legislating for a mayor to have a duty to ensure that private business is included around that table; she is leaving that to the direction and the whim of the mayor elected at the time. Why can she not take that same attitude towards organised labour and the union movement?

Finally, I would say that this is very closely bordering on abuse of the political system. We on this side of the House firmly believe that. [Interruption.] Government Members can chunter as much as they want, but I ask them again: when they go around their constituencies and speak to private businesses that have been drastically affected by the decisions of this Government, will they say to those businesses, “It is absolutely fine that, when you get a mayor, you will not be legislatively consulted, but the unionised, organised labour workforce will be guaranteed a prestigious seat at that table”? That is a clear blurring of the lines on what a mayor should be doing. That is why we in the Opposition are opposed to that legislative proposition. As I have said clearly, Conservatives—including any Conservative Government and my hon. Friends and I here today—are not anti-trade union, but the measure gives legislative access on a dangerous scale, and that is why we will be opposing it. [Interruption.] The hon. Lady is welcome to intervene if she wants to.

--- Later in debate ---

Division 32

Ayes: 3

---

Conservative: 3

Noes: 11

---

Labour: 10
Green Party: 1

[David Simmonds]

I beg to move amendment 297, in clause 22, page 26, line 22, at end insert—

“(3A) If a collaboration request is denied by mayor B, the request may not be appealed or reissued for the same purposes.”

This amendment would prevent a collaboration request which has been denied by mayor B from being appealed or reissued.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 298, in clause 22, page 29, line 27, at end insert—

“(3A) If a collaboration request is denied by mayor B, the request may not be appealed or reissued for the same purposes.”

See explanatory statement for Amendment 297.

Clause stand part.

[David Simmonds]

The purpose of amendments 297 and 298 is to forestall the possibility—with reference to the Minister’s earlier comments—that, when in response to a request to collaborate or engage with an issue an organisation legitimately says it is not prepared to do so, that is followed by multiple repeated requests, which would create a situation in which there was a foreseeable conflict that should be avoided. That is the purpose of the amendments, which sit together. We will see what the Minister has to say about how that particular risk will be managed.

[Siân Berry]

I am speaking to clause stand part. Broadly, I very much support the duty. I do not agree with the amendment moved by the Conservatives. I cannot see how that would be logical or work when a mayor or council might well change. Similarly, in the sense that I would like it clarified today, I raise the issue of why the clause only seems to allow for collaboration between pairs of mayors. The various proposed new sections for the different Acts in this clause—often in the proposed new subsection (4)—seem to mandate that the two areas must be adjoining. A mayor may therefore only make a request to a neighbour, and I do not think that they may request to collaborate with a number of neighbours. However, a key transport connection in the strategic rail or road networks could lie in the next mayoral area beyond. A mayor might want to approach the other mayor about the possibility of collaborating on approaching Great British Railways about some financing ideas, for example. Likewise, a key hospital or employer might be in a nearby mayoral area that is not adjoining—a collaborative project at a strategic mayoral level might still be appropriate.

For a mayor in the middle, potentially a chain of collaborations could be set up, but were it a transport link, if the mayor in the middle was not that bothered or was focused on other things, such as digital tech rather than transport links, they might be able to stand in the way. I want to check whether the clause needs some amendment to allow for more flexibility in how mayors collaborate, and with which other mayors.

--- Later in debate ---

Of course, there may also be political consequences if a mayor consistently fails to engage with others in good faith. If a request is genuinely identical and made for the same purpose, it will be open to the receiving mayor simply to refuse it and refer back to the reasons already given. In that way, the risk of creating an impracticable administrative burden can be mitigated. By contrast, the amendments would invite legal uncertainty—for example, over whether two requests were truly the same or made “for the same purposes”. That would create unnecessary scope for dispute and challenge. With that explanation, I hope the shadow Minister will withdraw his amendment.

[David Simmonds]

Following discussion with colleagues, we remain concerned about this, but we made the point in earlier debates and there has already been a vote on a similar issue. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 ordered to stand part of the Bill.

Clause 23

Regulation of provision of micromobility vehicles

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

The clause gives the Secretary of State the ability to empower local authorities to license on-street micromobility services, such as dockless cycle schemes, operating in their areas. The market for those services is currently unregulated. Operators do not have to get permission for services, and local leaders are limited in their ability to address antisocial behaviour and poor parking. We have all seen the issues created by rental e-bikes obstructing pavements. It is apparent in my constituency, and I know that other hon. Members will have it in theirs. The Government remain committed to keeping streets safe, and the clause will tackle this directly.

Local leaders have been vocal about their need for more powers to ensure that schemes work for their communities. We want more shared cycle schemes across the country, and ensuring that local leaders have the powers to manage them properly will be key to delivering sustainable, long-term growth of these services. The industry is also keen to see regulation, but the patchwork system is creating burdens on business and holding back growth and investment in the sector.

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[Vikki Slade]

That deals with my first concern, but the second one was about subsections (2) and (3) in proposed new section 22G on the first 14 lines of page 124. However, I apologise and withdraw my comments—the clause applies specifically to the exemptions and not to the ruling. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[David Simmonds]

I beg to move amendment 300, in schedule 5, page 128, line 11, at end insert—

“(3) The regulations must include a requirement for the license holder to maintain sufficient docking space for the micromobility vehicles for which they hold a license.

(4) The regulations must include requirements for license holders which would require them to ensure that the micromobility vehicles for which they hold a license do not obstruct any highway, cycling path, footpath, bridlepath, or subway.

(5) The regulations must stipulate that failure of license holders to comply with subsections (3) and (4) will warrant a loss of license.”

This amendment would require that regulations ensure that license holders for micromobility vehicles are responsible for maintaining sufficient docking space for their vehicle and ensuring their vehicle does not obstruct any highways or public paths, or else lose their license.

From the interactions so far on the subject, I feel as if there is a high degree of consensus on this point. The purpose of the amendment is to ensure that any regulations under the Bill will answer some of the questions that many of our constituents have been asking about such micromobility schemes. A number of Members present have a particular interest in this topic and a series of pilot schemes across the country on the hire and use of micromobility were broadly modelled on some of the previous schemes that were introduced to improve access to bicycles. They have met with mixed reviews.

The key thing that comes up repeatedly is the number of micromobility vehicles that are left to cause obstruction to people who have disabilities, parents who have pushchairs, people who have vision difficulties or are partially sighted, and those who are undertaking duties such as repairs, maintenance and cleaning. They all can find such vehicles a significant problem if not properly managed. The purpose of the amendment—I particularly draw attention to proposed new subsection (5)—is to be clear that if the provider of the scheme fails to manage its vehicles properly, the licence may be removed. I am open to what the Minister has to say about how such a provision could be enshrined.

[Paul Holmes]

Does my hon. Friend the shadow Minister agree that part of our problem in many of our city centre locations, as he rightly outlined, is the impact of the vehicles being discarded across the pavements? The operators do not necessarily have the wherewithal or enforcement ability to take responsibility. Does he agree that the amendment absolutely places that responsibility on them, so that there is no doubt about their duties with regard to the public?

[David Simmonds]

My hon. Friend is absolutely right to spotlight what is at the heart of the matter. The learning from the pilot schemes is that they are widely engaged with and used, and I know Members of this House who use micromobility hire as part of their commuting near the Palace of Westminster. Such schemes potentially form a responsible and useful part of our transport system, but we need to ensure that the issues that persist in undermining them are addressed. I will listen closely to what the Minister has to say about how the Government propose to deal with the issues.

Ordered, That the debate be now adjourned. —(Deirdre Costigan.)

English Devolution and Community Empowerment Bill (Sixth sitting)

David Simmonds Excerpts

Committee stage
Thursday 16th October 2025 Public Bill Committees

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I have nothing to add, apart from the fact that this is a good addition; but the hon. Member for Hamble Valley mentioned pedicabs, and I cannot let that go by without asking the Minister to look again at that issue, because they are absolutely blighting the part of London where we work, making tourists’ lives utterly miserable, and contravening virtually every traffic law I have seen, with little enforcement. If there is any opportunity to go further on pedicabs, bring it on.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. It seems to the Opposition that this schedule is weaker than it would have been had the amendments been accepted. I know that when we have debated other areas of local government legislation, the issue that comes up time and again is the frustration that our constituents feel when they are unable to get what sounds like a perfectly robust regulation enforced in practice—whether that is fly-tipping, antisocial parking or the point made by the hon. Member for Brighton Pavilion around delivery drivers, scooters and so on, which I know exercises many of my constituents.

We remain concerned that this is a missed opportunity to give local authorities the most robust tools that would put beyond doubt what the test that had to be met was, and create the appropriate legal path for effective and rigorous enforcement locally. None the less, the schedule broadly represents a step forward. Therefore we will not oppose it.

[Miatta Fahnbulleh]

I thank hon. Members for their contributions and the support for the schedule. In response to the questions raised about additional types of vehicles on the road that are of a similar nature, obviously the scope of the schedule is on micromobility, but the points have been made well—they are also being made by local authorities and our communities. We are considering how we can respond so that mobility vehicles—of sorts—on our streets are not blighting our communities, and we will take that away.

Question put and agreed to.

Schedule 5 accordingly agreed to.

Clause 24

Arrangements to carry out works on highways

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Miatta Fahnbulleh]

Strategic authorities are uniquely placed to provide oversight of the construction and maintenance of the highways in their area. That is particularly likely to be the case when required works cross local authority boundaries. As such, the clause provides that all existing and future strategic authorities can, when asked to do so by the Secretary of State, carry out work on trunk roads on behalf of National Highways. The second measure in the clause allows strategic authorities to enter agreements with local authorities and National Highways regarding highway planning and maintenance.

The strategic authority is uniquely placed in that it has a transport planning role encompassing the whole authority area. This provision capitalises on that and would, for example, enable strategic authorities to enter agreements on the maintenance of cross-boundary roads. Both those powers would only be allowed with the consent of the relevant constituent authority. Together, those two measures will enable strategic authorities to oversee a co-ordinated approach to improvements to local roads, leading to less disruption and better outcomes for motorists.

[David Simmonds]

We understand the logic of this. Could the Minister set out for the Committee where the liability will sit for issues arising from the maintenance, standards or provision of those roads under the clause?

[Miatta Fahnbulleh]

In the end, this will only come into place where the constituent authorities support it. When it is the Secretary of State making the request, it would be with the Secretary of State; when it is constituent authorities coming together to do maintenance or works that they would do anyway, it would be shared among them.

Question put and agreed to.

Clause 24 accordingly ordered to stand part of the Bill.

Schedule 6 agreed to.

Clause 25

Civil enforcement of traffic contraventions

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[David Simmonds]

We have tabled amendment 291 to schedule 7. I know that this is an issue of great contention; the major concern is, as we have seen to a degree in London, mayors choosing to use their powers to levy fines, largely as a way of generating income. That sits somewhat ill with the regulations for parking, which are treated separately and are a local authority matter, where the proceeds from fines and enforcement activity is part of a ringfenced parking revenue account that may only be used for purposes connected to parking and the maintenance of the highways and the roads. There is therefore already a measure, regarding local authorities, that ensures that those who are paying the fines, fees and charges can see that the contribution that they are making through those is used to improve the safety and quality of the environment in which they drive, walk or cycle.

We remain concerned about the implications of this measure; some of those mayors and combined authorities may see this as a very handy revenue raiser, and start to ramp up enforcement in a way that is unhelpful. As we have seen in the case of Greater London, policies that might work well in highly congested central London are simply totally inappropriate on the fringes, and a replication of that scenario could be seen across other parts of the country—a one-size-fits-all approach that we would wish to see avoided.

That is the motivation behind amendment 291, but I will be interested to hear what the Minister has to say about how the Government will ensure that this is not simply a measure to use motorists as a cash cow.

[Vikki Slade]

Before I speak to amendments 246 and 348, I just want to reflect on the Minister’s comment about the ability of local authorities to enforce things such as yellow boxes, and the requirement to still obtain that consent from the Secretary of State. At Bournemouth, Christchurch and Poole council, we were granted the rights to do that, but the council was incredibly limited in the specific locations in which it was able to apply for that right. There were a number of places that felt their yellow box junctions were ignored.

In my own ward of Broadstone, one such yellow box at the entrance to a parking area regularly caused extensive delays. For local people, if we could change one thing for them, it would be, “Get that damn yellow box enforced!” However, it was not seen as strategic enough for the local authority to apply for the permissions. Enforcement is therefore reliant on police officers, who are not going to stand there and patrol those sorts of things. I would therefore be interested to hear whether the Minister would be willing to devolve that power more truly, rather than retaining it at the centre.

Amendment 246 is a simple one that seeks to retain the decision making of those new civil enforcement powers to the elected persons, whether that be the elected mayor or an elected member of the authority. Elsewhere in the Bill, there are elements that are not allowed to be devolved to a commissioner. The amendment is about ensuring that these decisions are not devolved to a commissioner but are made by the elected person, as they will have that direct impact.

Amendment 348, in the name of my hon. Friend the Member for Chelmsford (Marie Goldman), which my hon. Friend the Member for Stratford-on-Avon and I have also put our names to, seeks not to change the law on pavement parking— as we have discussed in the Chamber on a number of occasions—but to harmonise the rules so that the existing law on obstruction of the pavement, which requires the police to enforce, can also be enforced by civil authorities.

We regularly have situations in which civil enforcement officers—traffic wardens to you and I, Ms Vaz—have to walk past a car or van, often a delivery van, parked on a pavement, blocking guide dogs and people with mobility scooters from getting past. There is nothing they can do. I know that colleagues in this room will constantly be emailed by people asking, “What are you going to do about it?” All we can do is say, “Call the police.” We may be getting more police officers, but I personally do not want to see my police officers having to spend their time ticketing.

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[Vikki Slade]

I am so glad that the hon. Gentleman mentioned Guide Dogs. I have Guide Dogs written down on my notes, as well as the RNIB, the Royal National Institute of Blind People, of which I am a champion. They have been campaigning for the full change, but amendment 348 would certainly be a step along the way. I also understand that it would implement the Transport Committee’s 2019 report recommendations. A lot of work has already been done on the issue.

The second element of amendment 348 contradicts something that the shadow Minister talked about in connection with Conservative amendment 291, which relates to parking fines. As a councillor and former leader of Bournemouth, Christchurch and Poole, I was delighted that over the summer a Minister gave permission for Bournemouth, Christchurch and Poole to have a trial of extended fines. That is not about councils trying to make money, but about councils trying to balance the books and local taxpayers not carrying the burden.

Let me give the Committee an example. A parking fine for someone who parks in the middle of a roundabout, on a grass verge or somewhere else dangerous—I am talking not about not paying in a car park, but about a dangerous piece of parking—is £70, reduced to £35 if paid within 14 days. For someone who has travelled down to Bournemouth for a day at the beach, parking will cost between £25 and £30. It will cost a similar amount to park in Brighton, Bath or Oxford—in most of our thriving places.

Someone might as well pay £35 between four adults in a large vehicle that can bump its way up the kerb and park right next to the beach, where it is really convenient. The vehicle will need to be ticketed and, at some later stage, probably towed away if it is causing a danger to ambulances or bus routes. Even if it is towed away, the fine that can be levied is £150, and yet for the council to have that vehicle towed away can cost up to £800. The difference is paid by the local council taxpayer. In a typical summer in somewhere such as Bournemouth, something like 1,500 tickets are given out. Members can imagine how much of a shortfall there is.

Amendment 348 seeks to give the ability that already exists in London to other places, so that they can apply a different parking fine where deemed appropriate, potentially in limited circumstances. The system is not working at the moment. So many people think that it is perfectly okay to turn up to places and do that, although I do not think it happens quite so much in Cornwall. When I visited there, people behaved incredibly well, but people who visit places like Bournemouth behave incredibly badly, and to have that freedom would be useful.

[David Simmonds]

I am very sympathetic to what the hon. Lady has said. In my constituency, people come from as far afield as Sheffield for a day out at the Ruislip lido, the only beach in Greater London. It is a huge cause of trouble for local residents, and I am glad that we have a local authority that is using its existing powers and is implementing measures such as towaway zones and higher parking fines to begin to address that. She probably feels, as I do, that we do not see mayors who do not know the local area, but the specific purpose of our amendment 291 is to ensure that this is not an opportunity to raise funds for them at the expense of the ability of the local authority to use its powers in a specific area to deal with the traffic management issues for which it is responsible.

[Vikki Slade]

I am grateful to the shadow Minister for clarifying the purpose of his amendment 291, and I will be happy to withdraw my comment that it contradicts amendment 348, tabled by my hon. Friend the Member for Chelmsford. The hon. Member is exactly right; the purpose of these parking fines is to ensure safe parking, and it is unreasonable that there should be shortfalls for the local council tax payer. Even if there was a surplus, that money should be rolled back into the experience and hopefully into encouraging people to use different forms of travel, such as park and ride, cycling, buses, and so on, all of which would seem to make the roads safer.

I am interested to hear the Minister’s view on what has been done, what could be done and how we might use these amendments to further those aims.

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[Miatta Fahnbulleh]

The clause will make it easier for Transport for London to free up land for new housing and development in the capital. The Bill gives the Mayor of London the power to agree to Transport for London selling or leasing unneeded operational land. In most cases, this will remove the need for Government consent, which currently adds complexity and delay to the process.

To guard against the risk of Transport for London inadvertently disposing of operational land that is relied upon by the wider rail network in London, the Bill requires Transport for London to consult Network Rail before selling or leasing land involved in wider rail services. To reflect the Mayor of London’s geographical remit, and to mitigate against a democratic deficit, the Mayor’s powers to consent will apply only to Transport for London land within the Greater London Authority area. These changes will better enable the Mayor of London to unlock land for much-needed housing, supporting growth in the capital.

[David Simmonds]

The current Mayor of London clearly has a mountain to climb, given the distance by which he has fallen behind his housing targets. We remain concerned that some issues are sometimes seen as easy pickings, such as the disposal of TfL surface car parks, where we have seen a series of unwelcome planning applications that have risked creating congestion in town centres across Greater London. However, we recognise that the purpose of the clause is more about the technicality of the consultation process, and therefore we will not oppose this provision.

Question put and agreed to.

Clause 26 accordingly ordered to stand part of the Bill.

Clause 27

Key route network roads

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

The clause introduces schedule 8, which relates to key route networks in England. As we will discuss later, in the debate on schedule 8, combined authorities and combined county authorities take important roles in co-ordinating local transport networks. As I have just noted, schedule 8 sets out some of the roles for combined authorities and combined county authorities on local road networks. This will include agreeing a local key route network and power of direction, and the power to transfer a duty to make reports on traffic levels.

[David Simmonds]

Briefly, the Bill states, “including road traffic reduction”, and the Opposition’s concern is that when we consider our UK transport infrastructure, the one area in which we conspicuously lag a long way behind our peers is our provision of roads, particularly our motorways. We have about 20% less road capacity than peer countries, but we are in line with them on things like high-speed rail, trams and bus networks, where we have seen enormous progress in recent years. However, I recognise that these are plans that will be implemented subject only to that local democratic process, so we will not oppose this provision.

Question put and agreed to.

Clause 27 accordingly ordered to stand part of the Bill.

Schedule 8

Key Route Network Roads

[Miatta Fahnbulleh]

I beg to move amendment 87, in schedule 8, page 142, line 20, leave out from beginning to “that” in line 25 and insert

“under section 33 or 33A of the Traffic Management Act 2004 or under a permit scheme prepared under section 33 of”.

This amends the definition of “permit authority power” in relation to combined county authorities so that it conforms with the definition used in relation to combined authorities in section 89A of the Local Democracy, Economic Development and Construction Act 2009 (as inserted by this Bill).

Under schedule 8, the mayors of combined authorities and combined county authorities will have a power to direct local highways authorities in the use of their powers on these roads, including over traffic, highway, street and permit authorities. The power of direction will help mayors to deliver their local transport plans and assist places in developing more integrated transport networks.

The role of a permit authority is to provide permits for roads and street works. The amendment will make a minor adjustment to ensure that the definition of a permit authority is coherent throughout schedule 8. This is an important amendment to ensure that schedule 8 delivers on our aims of a consistent framework of powers across all combined authorities and combined county authorities.

Amendment 87 agreed to.

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[Miatta Fahnbulleh]

Schedule 8 will provide mayors with a power of direction on key route network roads and transfer duties to make reports on these roads to them. Combined authorities and combined county authorities have an important role in co-ordinating local transport networks, including local roads.

Although local highways authorities will rightly continue to manage local highways, mayors of combined authorities and combined county authorities will be required to propose a key route network. This will allow places to work together at the appropriate level to manage traffic and ensure that there is effective traffic planning. To this end, mayors will gain a power to direct highway authorities on these roads, helping them to deliver their local transport plan. The powers balance the important role of local highway authorities in maintaining the road network while helping mayors to co-ordinate and lead transport planning at a strategic level. I commend the schedule to the Committee.

[David Simmonds]

I will speak to amendment 287. We understand the point that the Minister is making about a need to ensure that there is strategic oversight of what is going on. Our concern is that, as we have seen in London, where a version of this already exists, there is sometimes a conflict between what a mayor seeks to do and the views of a local authority—in particular, the elected mandate of that local authority.

We have heard a lot of evidence and had a lot of lobbying as constituency Members of Parliament about issues such as the impact of floating bus stops on people who are partially sighted, and the conflict that the use of bus lanes can sometimes introduce with cyclists. Rather than a duty to implement whatever the mayor decides, there clearly needs to be a duty to “have regard to” it, so that those two things can operate constructively together. That is the thinking behind the amendment, which we intend to push to a vote in due course.

[Sam Carling]

The schedule contains comprehensive provisions around the designation of key route network roads, but I am conscious that we have not defined key route networks in statute. I am a little worried, therefore, about the potential for mayors to designate inappropriate roads as key route networks for political purposes.

I was struck by the evidence the Committee received from Mill Road 4 People, a Cambridge-based campaign group I was familiar with when I was a councillor there, although I was not involved with them in any way. The group is concerned that mayors could use key route networks to undermine or remove bus gates or low-traffic neighbourhoods that councils have introduced, in an attempt to gain votes by whipping up tensions around the so-called war on motorists. That could seriously undermine councils’ ability to bring in such schemes, very much against the Government’s commitments to active travel.

The group’s concerns are based on a local situation, as that is exactly what is likely to happen in Cambridge if the incumbent mayor gets his way over Mill Road, which is semi-pedestrianised through the use of a bus gate. Will the Minister consider introducing safeguards to prevent such issues by more clearly defining what criteria a road should meet to be eligible for designation as a key route network road? Should it perhaps have to be an A or B road, or else be subject to more detailed justification?

On a related note, has the Minister considered requiring the designation of key roads to be for a specific purpose? On page 139, schedule 8 requires that for the mayor to designate a key route network road, the combined authority has to pass a resolution approving it. However, when the mayor comes to give directions, proposed new subsection 23A of the Levelling-up and Regeneration Act 2023 does not require the passing of a resolution, and the power is vested in the mayor alone.

That could create a loophole whereby a mayor could get the combined authority to pass a resolution to designate a road for some reason, and a future mayor with different plans could use the designation for a completely different purpose without the combined authority board having to vote again. One option for solving that could be that when they create a designation, the mayor has to set out its purpose and broadly what powers they envisage exercising. I wonder if the Minister could consider whether that is an issue.

[David Simmonds]

On a point of order, Ms Vaz. I think, in my enthusiasm for the proceedings, I made reference to the amendments that we will be dealing with in the next grouping. I shall not repeat my observations, but I am sure the Minister will hold my comments in mind and be desperate to respond to them when she makes her introduction to the next group.

[The Chair]

You are welcome to say it all again.

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Constituent councils to act in accordance with local transport plans etc

[David Simmonds]

I beg to move amendment 287, in clause 28, page 36, line 12, leave out “implement” and insert “have regard to”.

This amendment, and Amendment 288, would ensure that councils had to have regard to local transport plans, rather than be under a duty to implement them.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 288, in clause 28, page 36, line 33, leave out “implement” and insert “have regard to”.

This amendment is linked to Amendment 287.

Clause stand part.

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[David Simmonds]

Mindful of your invitation to repeat my earlier remarks, Ms Vaz, I am none the less going to risk your displeasure by refraining from doing so.

[Lewis Cocking]

I am in favour of the two amendments in the name of my hon. Friend the shadow Minister. I have served on a district council and a county council. Some of the powers to do with highways will sit with the constituent authorities and some will sit with the mayor, so we could end up in a scenario in which a person is elected as mayor with one thing in their manifesto, a council is elected on another manifesto and the two things contradict each other. I was leader of Broxbourne council, and we have the A10 going through the entirety of my constituency. That was not a priority for Hertfordshire county council, which had some highways authority powers over it, and that caused a lot of tensions about where we were going to have growth and where the investment was going to go.

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[Miatta Fahnbulleh]

Under schedule 9, all combined authorities and combined county authorities will hold powers and duties over travel concessions. This includes the duty to provide concessionary fares for older and disabled people, as well as a power to provide concessionary fares beyond those that are mandatory.

Government amendments 98, 103 and 104 provide for a transition period for all recently established authorities, during which time they will hold these powers and duties concurrently with constituent authorities. That transition period will extend until the end of the first full financial year following the establishment of the authority, at which point the combined authority or combined county authority will become the sole travel concession authority for the area.

These are important amendments that mean that schedule 9 delivers on our aim to have a consistent framework of powers across all combined authorities and combined county authorities. That will streamline the management of travel concessions, making better use of local government resources. Having only one travel concession authority in an area means a uniform approach for passengers, who can rely on their concession passes working across their local area.

I now move to Government amendments 101 and 102. It is essential that newly established strategic authorities can staff themselves and establish robust decision-making procedures—for example, before exercising certain vital transport functions. That is why amendment 101 introduces a transition period, so that newly established combined authorities and county authorities do not have to secure the provision of passenger transport services on day one.

Until the end of the combined authority or combined county authority’s first full financial year, their constituent councils can continue to exercise that duty to ensure that bus services, for example, are provided for local residents. The transition period allows the combined authority or combined county authority to build up capacity and capability, and to agree a suitable approach to taking on the exercise of these functions. That will support a smooth transfer that minimises disruption for passengers and supports the continued delivery of services.

Finally, Government amendment 102 introduces a transition period for powers to make agreement with Transport for London specifically regarding paying for public transport services, in line with similar transition periods for other local transport powers and functions already provided for in the Bill. Proportionate transition arrangements are essential to support the smooth transition of transport powers from constituent councils to newly established combined authorities and combined county authorities. That will be particularly relevant for councils that border London if they form new strategic authorities. Any agreements that they have made with Transport for London to pay for public transport services can remain in place for the transition period, which gives the combined authority or combined county authority time to negotiate agreements during that period, rather than having to do so on day one.

[David Simmonds]

We have some concerns about the real-world impact of the measures outlined in these amendments. We all recognise that there is a logic in bringing consistency to concessionary travel, but public transport is commonly not uniformly available across all parts of single existing and combined authority areas. If we think of the footprint of Greater London, there are places such as Harefield in my constituency and Orpington on the opposite side of London that are essentially rural villages that do not have access to trains and are not on the tube network. They are entirely reliant on buses and their transport connections are frequently outside the boundary of Greater London. The value to people who live in those places of the transport network for which they are paying is therefore significantly less than it is to people who live in the centre of the city.

It certainly feels like this set of measures will benefit people in urban areas at the heart of some of these new combined authority areas, but leave people in areas on the fringes paying but not seeing much benefit in terms of access to transport. We know that in many rural parts of the country, access to bus services, for example, is infrequent. Such services are certainly not fit for purpose in terms of providing school transport and transport for medical appointments or similar purposes.

I have a couple of questions for the Minister. One is around how existing settlements—whereby local authorities that will become constituent authorities are already, in effect, levied through the local government finance settlement to pay into a centrally co-ordinated concessionary travel scheme, which is what operates in London—will be managed.

The London boroughs effectively forgo a part of their budget in return for free public transport being paid for children of school age. The Freedom Pass also operates for older people, alongside a variety of other concessions—for example, for people with disabilities. How will that be managed so that we do not see a situation where the mayor takes control of it but has no responsibility for that element of the financial impact, or indeed chooses to redeploy resources away from the things for which that resourcing was originally provided?

Secondly, how will that issue be addressed in areas where this factor is newly established? When the end of that first financial year comes into effect, the constituent authorities, which may have a variety of schemes—for example, because one has a particular priority around access to apprenticeships and may have set up a concessionary travel arrangement to enable people to access that—might find themselves at risk of losing them because the combined authority does not have the same priority? It would be helpful to hear from the Minister how those arrangements, many of which are designed to take account of specific local circumstances, will be accounted for in the provisions.

[Miatta Fahnbulleh]

I will write to the hon. Member on the specifics of that. I will say that the mandatory concession scheme is determined by the Department for Transport and would operate in that way, and then there is the ability for greater flexibility for additions on top of that. The way that is applying at the moment is that it varies between different strategic authorities in the approach that they are taking, both in terms of who is eligible and the way that they implement it. On the details of how the provisions in the Bill are mitigating against the scenario that he sets out, where the strategic authority wants an additional concession and it has a financial impact on constituent authorities—

[David Simmonds]

If the Minister can give us an assurance that she will provide that in writing before the conclusion of the Committee, I am happy not to press these amendments to a vote.

[Miatta Fahnbulleh]

I am very happy to give that assurance. I think the hon. Gentleman can accept my word: in a previous sitting, I assured hon. Members that I would come back in writing, and I think we did that within a day.

Amendment 98 agreed to.

Amendments made: 99, in schedule 9, page 152, line 15, leave out “place insert” and insert—

“places insert the following definitions”.

This amendment is consequential on Amendment 90.

Amendment 100, in schedule 9, page 152, line 17, at end insert—

“‘non-mayoral CCA’ means a combined county authority that is not a mayoral CCA,

‘non-mayoral combined authority’ means a combined authority that is not a mayoral combined authority,”.

This amendment is consequential on Amendment 90.

Amendment 101, in schedule 9, page 152, line 30, leave out from “are” to the end of line 31 and insert “—

(a) where the combined authority or combined county authority has completed its first full financial year, references to the combined authority or combined county authority (instead of to the council), and

(b) until that time, references to the combined authority or combined county authority as well as to the council.”

This provides for combined authorities and CCAs to have joint transport functions with county councils within their area until they have completed their first financial year, and thereafter to hold those functions alone.

Amendment 102, in schedule 9, page 153, leave out lines 6 and 7 and insert “—

(a) where the combined authority or combined county authority has completed its first full financial year, references to the combined authority or combined county authority (instead of to the council), and

(b) until that time, references to the combined authority or combined county authority as well as to the council.”

This provides for combined authorities and CCAs to have joint transport functions with county councils within their area until they have completed their first financial year, and thereafter to hold those functions alone.

Amendment 103, in schedule 9, page 153, line 13, at end insert—

“19A In section 93 (travel concession schemes), after subsection (8) insert—

‘(8A) A county council or a council of a non-metropolitan district is not a local authority for the purposes of this section where—

(a) the council is a constituent council of a combined authority or a combined county authority (and here “constituent council” has the meaning given by section 104(11) of the Local Democracy, Economic Development and Construction Act 2009 in relation to a combined authority and section 10(11) of the Levelling-Up and Regeneration Act 2023 in relation to a combined county authority), and

(b) the combined authority or combined county authority has completed its first full financial year.’”

This removes certain jointly held travel functions relating to travel concessions from constituent councils of a combined authority or CCA once the combined authority or CCA has completed its first full financial year.

Amendment 104, in schedule 9, page 153, line 18, at end insert—

“(d) after subsection (3) insert—

‘(4) The power under subsection (1) does not apply to a county or district council where—

(a) the council is a constituent council of a combined authority or a combined county authority (and here “constituent council” has the meaning given by section 104(11) of the Local Democracy, Economic Development and Construction Act 2009 in relation to a combined authority and section 10(11) of the Levelling-Up and Regeneration Act 2023 in relation to a combined county authority), and

(b) the combined authority or combined county authority has completed its first full financial year.’”—(Miatta Fahnbulleh.)

This removes the power in the Transport Act 1985 of constituent councils of a combined authority or CCA to provide travel concessions once the combined authority or CCA has completed its first full financial year.

Question proposed, That the schedule, as amended, be the Ninth schedule to the Bill.

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[Miatta Fahnbulleh]

Mayors will be given new powers in relation to planning applications of strategic importance, in order to help them to shape the strategic development in their area. The Secretary of State and the Mayor of London have long had the power to intervene and call in planning decisions; we want to ensure that mayors across the country have the opportunity to do the same. This will help to decentralise decisions away from Whitehall—something that I know all Committee Members are keen on.

Clause 31 introduces schedule 11, which works alongside schedule 12, which is inserted by clause 32. The schedules expand existing Mayor of London powers in sections 2A and 74(1B) of the Town and Country Planning Act 1990 to give mayors outside London the ability to call in or directly refuse applications. Schedule 11 also amends section 2A of that Act to allow call-ins when the local planning authority is a mayoral development corporation.

The powers will apply only to the most significant developments that have the potential to raise genuine strategic planning issues—for example, large-scale housing and commercial developments, or significant development on protected areas such as the green belt, which could have a bearing on the implementation of the area’s adopted spatial development strategy. Mayors will be able to intervene only where applications meet thresholds set out in secondary legislation.

The Government have made clear the importance of getting a spatial development strategy in place, so we will legislate so that a spatial development strategy must be in place before the powers can be used. We will consult on legislation before bringing the powers into force. I strongly emphasise that local planning authorities will continue to make decisions on the vast majority of applications without recourse to the mayor.

Finally, the new powers will not affect the well-established arrangements that have been in place in London for more than 15 years. We are, however, engaging with the Mayor to improve the process in order to support greater housing delivery in London, which I know the hon. Member for Ruislip, Northwood and Pinner is very keen on.

[David Simmonds]

I rise to ask some brief questions of the Minister, perhaps starting with the last point, about where there is a conflict. London is a good example. The Mayor’s total failure to achieve the housing targets set by central Government is creating a knock-on pressure at local authority level. We know that, in trying to unlock developments, the Government are currently engaged in discussion about significantly reducing the target for affordable housing. There is the potential for call-in powers to create a conflict with the housing duties of the local authority against its overarching objectives. I can think of places in or close to my constituency—a good example is Hendon circus, where 27 years ago I chaired a planning committee that granted consent. That is still a derelict site, despite multiple interventions with the Mayor of London, because it has basically been ping-ponging between developers. We need to make sure that this legislation has rigour and will actually deliver.

Will the Minister provide some assurance that an effective mechanism will be in place? It is all very well talking about mayoral powers to direct planning authorities, but we often see a mayoral failure to progress developments, to the frustration of a planning authority. How will we ensure that there is that rigour, so the homes for which planning consents are granted actually get built?

[Siân Berry]

I, too, have much experience of the London system of planning—of putting together the London plan and its implementation through strategic planning applications. I have a couple of things to say.

First, as alluded to by the hon. Member for Ruislip, Northwood and Pinner, we have heard alarming reports today that the well-worked-through, evidence-based requirements that were put into the London plan may be undermined by an unclear process. We would like assurance that once the processes are carried out—once local people have engaged and many local authorities have given evidence in respect of a plan and some policies—the policies are kept in place and used by the mayors who have gone to so much trouble. We hear rumours of CIL holidays and other really worrying things. I will not ask for answers on that now, but we will discuss the community infrastructure levy later.

The issue I want to raise is the transparency and clarity of the online information that accompanied the Mayor of London carrying out his strategic planning responsibility in respect of individual planning applications. As an expert user of that online information in the past, I know it is vastly worse than what is commonplace and very good from most local authorities. One does not get easy access to the accompanying documents or other people’s comments as they come in; they can be incredibly useful in local authority planning applications. By contrast to the national infrastructure planning process, the documents associated with the planning application are not published and the timetable is not necessarily available. I had endless trouble while trying to scrutinise and take part in the process.

I beg the Minister to look at putting in place a more standardised way of making the planning applications that are intervened on by mayors, and the process that happens, more transparent. It should match either of the other two planning levels we have. At the GLA end of things, it has not been very good.

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[Miatta Fahnbulleh]

I recognise the intent behind the amendment, but we cannot accept it. In any planning process, constituent authorities will be fully consulted and engaged. Ultimately, the implementation of a local transport plan or of transport decisions that are made through a mayoral development order will require engagement and work with the constituent authority, so the process will be one of consensus. In the broad majority of cases, we expect to see that consensus. Indeed, where we currently see collaboration across boundaries, consensus is what is driving decisions across those boundaries.

However, we recognise that there will be occasions when consensus cannot be reached. It is absolutely right that mayors can then refer the case to the Secretary of State and the Planning Inspectorate, to be assessed on its planning merits. The ability to make a referral to the state and the Planning Inspectorate is a standard feature of the planning process, even for local authorities, and we think it is right that it operates. I come back to the point that, ultimately, to implement big schemes, constituent authorities need to be brought in and to be part of the implementation. Finding consensus is not only what happens in practice but the spirit in which we expect mayors to work. This provision is but a backstop.

[David Simmonds]

I listened carefully to the Minister. We have great sympathy with the amendment. One of the concerns that has run throughout this debate and that on the Planning and Infrastructure Bill, with which this legislation interacts, is that it complicates the planning system still further. My earlier example illustrates that well: a developer applies to the local authority and gets consent for something; it comes back for something larger, but is refused; it goes to the planning inspector, gets consent for something else; it puts in another application, going to the mayor and getting the chance of going to a Secretary of State call-in; and then the developer sells the site, and the whole process starts again. No homes are built and no infrastructure is delivered, but value is added from the developer’s perspective, because it has traded the site on.

There is clearly a risk to introducing that extent of mayoral call-ins as well. They will provide massive incentives for a developer at every stage to second-guess the decision maker, whether that is the planning committee at the local authority, the mayor, the planning inspector or the Secretary of State, continuing the merry-go-round of the 1.5 million planning permissions in England at the moment where development has not commenced. In many cases, that is because of that trading process.

We are minded to support the amendment. I appreciate that the Government have the numbers and we will be defeated, but the point is well made: we need to streamline the system, not add to its complexity and bureaucracy in this way.

[Miatta Fahnbulleh]

The Government agree that we need to streamline and simplify the planning process, making it much quicker and smoother. I will again put on the record that the previous Government had 14 years to do that, but they absolutely, categorically, failed to do so. We are now getting on with it, and my colleagues in the Department have taken the Planning and Infrastructure Bill through the House. Hon. Members on the Conservative Benches should not want to be talking about their record, because they should be ashamed of it.

On the key point about adding another level of complexity, I point hon. Members to the fact that the measure applies only to strategic sites. The planning system will operate as usual, with local planning authorities having the key remit to drive things forward. This provision is for strategically significant sites, partly because of their scale or because they are critical to the strategic development plan.

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[Manuela Perteghella]

The amendment would require mayors to ensure that planning approvals are consistent with the strategic spatial energy plan and the land use framework for their area. I want to tell the Minister that this is a friendly and collaborative amendment. We want development to be coherent with energy policy and land use. That is important, especially in rural areas that are off grid, or in areas vulnerable to flooding or with protected landscapes, for example. Without the amendment, decisions about housing, infrastructure and new settlements can be made without proper reference to energy needs, grid capacity, or wider environmental and land use priorities. In our view, that would be a great mistake. We have the chance to improve the Bill here.

The strategic spatial energy plan and the local area energy plans set out how an area intends to meet its energy demands and, most importantly, to decarbonise its supply and deliver the infrastructure needed for the transition that we all want to see to net zero. The land use framework also provides a strategic view of how land is allocated to balance the needs of housing, agriculture—in my constituency—and businesses. Education and skills are also important, including adult education, as are transport and so on.

By requiring mayors to check that development applications are consistent with the strategic frameworks and any strategic visions, the amendment would ensure that short-term decisions are made with a strategic mindset and a long-term vision, taking into consideration our national commitments to sustainable growth, sustainable energy, net zero targets and local priorities in a given area, which could be the visitor economy, agriculture, business and so on.

Like the other amendments that the Liberal Democrats have tabled, the amendment would strengthen local voices in decision making. Our local energy plans and land use frameworks are documents and visions that are made by consulting local people. The frameworks have been developed through public consultation and partnership with local councils, businesses, residents and, as I have mentioned before, town and parish councils. Those efforts should be recognised and embedded in the Bill.

The amendment is pragmatic and constructive. It would not remove any powers from mayors, but only ensure that those powers are used in a way that respects local frameworks and national targets, and supports the needs and interests of our communities.

[David Simmonds]

I shall speak to amendment 304, which stands in my name. I would like to think that it is one of those amendments that the Government will adopt, if they are wise, because it would do something practical towards the delivery of a higher level of housing through the Bill.

Despite the provision of very large amounts of capital funding by the previous Government, the Mayor of London has been a case study in the failure to deliver. There will be complex reasons in the wider market why it has been a challenge, but the previous Government delivered just shy of a net additional 1 million new homes over the life of the previous Parliament, in line with the target. Since then, house building has collapsed. Partly that seems to be because operators in the market—big developers and house building companies—are looking at the Bill and seeing opportunities to increase the potential value of their sites by arbitraging between all the different layers of bureaucracy, rather than delivering homes.

However, many of our constituents look at areas that have good PTAL—public transport access levels—scores, and so an ability to access effective public transport, as offering a high degree of opportunity. The Opposition’s view is that we should prioritise sites like that, which in some cases are quite close to securing planning consent, because of their ability to densify our urban centres. In London and other big cities, such as Manchester, where we had our recent party conference, we see examples of this approach delivering large amounts of additional housing in city centre areas. It contributes to growth, to housing delivery and to the economy of those local areas.

For all those reasons, the amendment is positive, so I hope that the Government will accept that it would add significant value to the Bill. I look forward to the Minister’s response.

[Paul Holmes]

I echo some of the words of my hon. Friend the shadow Minister, and I want to talk briefly about one of the things I feel particularly passionate about in planning: the densification of our urban centres. I spoke at a number of events at Conservative party conference where I advocated for it, as my hon. Friend has, as well as speaking about where we did not get it quite right when we were in government.

I am the first to say that we did not come down as hard as we should have on many speculative developments on green spaces, both in my constituency and across the country. We lost a lot of the ability to regenerate some of our urban centres, which is a fortunate and necessary by-product of unlocking some of the sites in our urban centres, as amendment 304 is intended to do. Our urban centres are where many of our younger people want to live. There is a connectivity already. The infrastructure exists, although I am the first to say that much of the infrastructure in our urban centres needs to be improved. That is where our younger people, our more mobile people, our entrepreneurs and those who want to make a success of their life, particularly in tech centres and economic centres, want to live; but, unfortunately, that is where the higher-priced properties are.

English Devolution and Community Empowerment Bill (Eleventh sitting)

David Simmonds Excerpts

Committee stage
Tuesday 28th October 2025 Public Bill Committees

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

When I spoke last week on why clause 60 should stand part of the Bill, I covered the provisions in the schedule, but I will restate my position. The schedule strengthens the existing assets of community value scheme in England and will give communities real power to take ownership of cherished local assets. Together with clause 60, the schedule is vital to delivering the Bill’s community empowerment goals and protecting assets at the heart of our local communities.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve with you in the Chair, Sir John. My hon. Friend the Member for Hamble Valley set out the view of the official Opposition during the debate last week, so I will not relitigate that in its entirety, although I am sure he will be keen for me to emphasise the sheer cross-party commitment on assets of community value.

We know about the risk to assets that are at the heart of a community, from a village pub or cricket field through to community centres and business premises. We need a means laid out in the law whereby the value they add to the local community can be retained where necessary. That was enshrined in legislation by our party when we were in government, and in general we support the direction of the current Government in taking up those principles. We will listen carefully to the debate.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

It is a pleasure to serve under your chairmanship, Sir John. I will speak to new clauses 12, 20, 52 and 59. New clause 12 stands in my name, new clause 20 in that of my hon. Friend the Member for Frome and East Somerset (Anna Sabine), new clause 52 in that of my hon. Friend the Member for Richmond Park (Sarah Olney) and new clause 59 in that of my hon. Friend the Member for Twickenham (Munira Wilson).

New clause 12 would give local councils a legal duty to oversee how land listed as a community asset is managed. That means that if the owner neglects or mismanages land of community value, the council can take powers to purchase compulsorily, take ownership and restore the land to community use, or to block planning changes that would further damage or undermine the land’s community value. Such powers are essential to protect local assets from being run down deliberately to justify redevelopment. By granting councils those powers, we enable them to hold absentee or speculative owners accountable and ensure that designated community assets are properly maintained and used for community benefit. We all have in our constituencies examples of land that has been mismanaged or assets left derelict. With the new clause, councils would become a genuine safeguard for assets of community value far beyond simply listing the assets. They would have real power to hold landowners and speculative developers to account.

New clause 20 would give community groups and parish or town councils a legal right to apply to buy sports facilities such as playing fields, leisure centres, gyms or pitches that have been derelict for two or more years, managed in a way that harms their sporting value, or unreasonably made inaccessible to the public. If the council agrees that those criteria have been fulfilled, it will be able to facilitate negotiations for a sale. As we spoke about in a previous debate, the abolition of district councils means that town and parish councils will be asked to take on more assets. It is therefore important that the safeguards are in place and that the unitary councils support them.

New clause 20 would save local sports facilities that have been locked up or left to decay by private owners by empowering local communities to bring them back into use. I had an example of that in my constituency a few years ago. A sports pavilion was built as part of the conditions for a new settlement, but it was locked—it was not used. When I became the councillor for the area, I asked why it was not open, and was told that the condition was to build a sports pavilion, not to manage it. The community managed to get the sports pavilion opened, and it is now a fantastic community hub and café, but it took a lot of campaigning from the community and parish councils, lots of grant applications and so on. It is important that we give councils all the tools they need. It is not fair that local sporting heritage and public access to sports facilities are lost due to neglect, speculation or profit-driven redevelopment. The new clause would put power back into the hands of communities to reclaim their pitches, courts, clubs and sports pavilions, and to keep sport where it belongs—in public hands and for the public good.

New clause 52 would create a new category complementary to assets of community value: assets of negative community value. Those would be properties or land that encourage, for example, antisocial behaviour, cause harm or disruption to community wellbeing, or have been vacant and derelict for at least three years with no attempt at restoration. I am sure we all have such assets in our constituencies. I can think of a couple in mine. Once the assets are listed, local authorities could take steps to secure temporary management or community stewardship. That would also contribute to wider community wellbeing. The councils could invite community groups to propose new uses or use compulsory purchase orders to bring the assets back into productive community use. New clause 52 would also allow local authorities to tackle eyesore or nuisance buildings that attract crime or vandalism. It is a way to contribute to the sense of place. We could speed up regeneration by giving councils and communities tools to deal with long-term neglect.

New clause 59 would give local councils greater power to protect and manage land that has been officially recognised as being of community value, such as local parks, playing fields, pubs or community halls. If a council found that such land was being mismanaged, it would have the power to compulsorily purchase it or, again, to refuse planning changes. The new clause would strengthen community protections against speculative neglect and misuse of valued local assets. For example, it would stop landowners from deliberately running down community buildings, green spaces or sports facilities so that they can later argue for redevelopment. The new clause would make councils stewards of community assets, rather than just record keepers of a list. It would give real teeth to the community right to buy, which obviously is welcome, and to the assets of community value system, which is set out in the Bill.

Overall, our new clauses would expand community rights and local authority powers from just protecting community assets by listing them to actively reclaiming and repurposing land that has been neglected or misused. We feel that the new clauses are drafted in the spirit of the community empowerment aspect of the Bill. They aim to strengthen local control and community ownership, especially where private ownership fails the public interest.

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[David Simmonds]

I sympathise with the Minister’s argument, but does she agree that there is a general weakness in the Bill in that the opportunity has not been taken to tidy up the legislation, particularly the role of parish councils and parish meetings in this context? The point has been well made that it is often through those vehicles that we see districts and others going through reorganisation already looking to enshrine the community value of these assets. It is a missed opportunity if we leave it hanging so that the convoluted but robust powers that the Minister outlined, which can take years to put into effect, remain the only available route, when there is an opportunity for an alternative structure to deal with that now.

[Miatta Fahnbulleh]

I take the hon. Member’s point. I also take the point that a process of asset transfer between authorities and town and parish councils is happening. Our judgment is that the provisions we are putting in place sit well alongside that and will enable the processes to happen, but we will keep that under review, because the end goal is to ensure that communities are able to say, “This asset really matters to us, and we want it for the use of the community,” and that we enable them to do that. As we do with any legislation, we will keep this under review ,and if it is not biting in the way that we intend, we will consider how to build and strengthen the provisions. None the less, the intent is very clear.

On new clause 52, I commend and share the ambition of the hon. Member for Stratford-on-Avon to combat antisocial behaviour and eliminate vacant and derelict properties. We all have them in our constituencies; we know how much they are hated and the blight they cast on our communities. We are absolutely committed to creating thriving places and to reversing the decline seen in many of our communities. That is why, through our £5 billion pride in place programme, we are enabling communities to play a role in driving forward. Alongside that funding, we have ensured that local authorities have access to a suite of tools to meet the challenge, which we understand and we know is real. That includes powers to auction the lease of persistently vacant high street properties via our high street rental auctions and compulsory purchase powers, which we have discussed. Section 215 of the Town and Country Planning Act 1990 sets out powers to clean up land and buildings that may be affecting the amenity of the area and encouraging poor behaviour. The community right to buy will play an important role in ensuring that assets are used in a way that is appropriate and adds value to the community.

Finally, through the Crime and Policing Bill, the Government are strengthening the powers available to the police and other agencies to tackle antisocial behaviour. Every police force now has a dedicated antisocial behaviour officer to work with communities to develop an action plan and give residents a say. We recognise the problem that the hon. Member for Stratford-on-Avon has highlighted through new clause 52, and we have put in place a suite of things that will fundamentally get to the heart of that problem, which we know all our communities despair of and hate. I ask the hon. Member to withdraw the new clause.

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[David Simmonds]

Again, the Opposition are broadly sympathetic to the Government’s direction of travel, but I will put a couple of questions to the Minister. I previously raised the issue that, in respect of local audit, there are a number of accredited accounting bodies to which professionals may belong. I have not seen a response, but I know that at the time there was some discussion about the Chartered Institute of Public Finance and Accountancy being the identifying body. I seek an assurance that the Government have given due consideration to what will happen where that qualified individual of an appropriate status belongs to another professional body that sets accounting standards, rather than CIPFA, not least because accounting is often as much an art as a science, and there are differences of opinion as to how different accounting provisions might be made.

Secondly, I would be grateful if the Minister can give some clarity to the Committee. Government amendment 237 requires that, when a penalty is imposed, the Local Audit Office must pay the sum of that penalty to the Secretary of State. Clearly, where there has been a failing in local audit, it is the specific local authority, or the general group of local authorities, that is the victim; they are the ones who have suffered a demerit or deficit as a consequence. It seems a little illogical that the penalty would be paid to the Secretary of State rather than those who have been directly affected by that failing. It would be helpful if the Minister set out how the Government will ensure that, where those failings have had an impact, and where penalties have been gathered to make some degree of remedy, it is the victims that see the benefit, rather than it essentially sitting in a Government office.

[Miatta Fahnbulleh]

I thank the hon. Member for his questions. He raised the question of CIPFA, and I committed to clarifying that in writing. I believe we have done so, but I will make sure that we come back to confirm that. On his very good point about ensuring that the penalties are not gobbled up by the central state, we are moving towards a more centralised system, whereby the LAO reports to the Secretary of State, who is then accountable to Parliament. That is the mechanism through which this will happen. However, the principle is right: if fines are imposed, they will be used to bolster the system, which we know needs huge repairs. We know that over time, as we reform the system, we will need to ensure that we are investing in it. Whatever the collection processes for these fines, it is right and fair that they ultimately go towards bolstering the system and ensuring that it is improving.

--- Later in debate ---

[Miatta Fahnbulleh]

I am happy to write to clarify that key point.

Everything that we are doing through these new clauses and this reform package is in order to ensure that we have a system that is fit for purpose, fair and operates so that we can build trust and accountability within public bodies at the local level. Committee members will appreciate the importance of providing certainty to the people who have worked to maintain the local audit over the years, which is why we are putting in place these two provisions.

New clause 9 will provide the Secretary of State with a new power to require the LAO to conduct a review of local bodies’ financial reporting and audit arrangements. The LAO will have the power, through contract management and quality oversight, to monitor timeliness in the sector, and will have levers to hold firm account where audits are late. Those statutory reviews will address the accountability gap by providing a way to understand whether individual local bodies have adequately supported the audit process. We believe that those reviews are vital to restoring public accountability, providing assurance at each stage of the audit process and rebuilding our early warning system. They are an integral part of a much bigger reform that we think is both necessary and long overdue. I commend the new clause to the Committee.

[David Simmonds]

Will the Minister set out the role of the section 151 officer in relation to the Local Audit Office? Primary accountability around local government finance is in the council tax fixing process. By law, it has to be balanced in-year. The audit process sits behind that, verifying that the information presented, on which that decision has been lawfully made, is true and accurate. The section 151 officer holds that legal duty in each local authority. Can she set out how the accountability that she has described, which revolves around the role of that individual, will be dealt with by the law, particularly given the role that the Secretary of State is taking on in the appointments process?

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[David Simmonds]

I will briefly return to the question of accounting standards and how they will operate. As the Minister set out, the aim is to streamline and, broadly, to restore the Audit Commission district auditor-type system we have seen in the past, which itself had a number of issues. Clearly, when local authority councillors make their decision on fixing council tax—when local authority finance officers put that information together—they will always be mindful of the accounting standards that apply.

One of the issues is that there are a lot of different ways of approaching that. Some may use cash accounting and some will use accruals; some will use Sage and some will use Oracle. All of those have different characteristics in managing the system, and different auditors may have different views about which they prefer. Many of us will have experience of where a difference of opinion between auditors on the treatment of a transaction can have a significant impact, including by directly impacting the level of council tax that needs to be set.

I have not been able to locate a response from the Minister on the different types of accounting. Can she set out how the system will ensure sufficient flexibility to recognise legitimate professional differences between different types of accountants, authorities, businesses and systems? None of them is inherently wrong or incorrect; they just reflect different approaches to managing the finances of that local authority. Flexibility for local decision making should remain at the heart of what is supposed to be a devolution Bill.

[Miatta Fahnbulleh]

I apologise to the hon. Member for the lack of response—I will make sure we get one to him swiftly. Inevitably, different accounting standards will be used. We will set out guidance, and we will of course look to retain flexibility within that, so that local authorities can ensure that they are using the appropriate standards. We do, however, need a far more centralised and streamlined process, whereby the appointment of auditors is done through a central function—the LAO. Across the piece, there will be uniform and consistent standards that apply both to local authorities and public bodies. That is currently sorely missing, but within the system, there will be different accounting standards and professional body accreditation that individual auditors will apply to. For us, the key is consistency and clarity across the piece on the standards and norms that all professional accountancy bodies are using.

[David Simmonds]

The key challenge is that, unlike any other public body, local authorities are democratically elected. They are subject to an annual process of budget fixing, where they are legally obliged to balance that budget in year. That rule does not apply to any Government Department, or NHS bodies and so on, all of which have a conversation with central Government about how overspends, capital expenditure, borrowing and so on are dealt with, in a completely different way from local authorities. Could the Minister address that, and ensure that the Committee is fully aware of how those provisions will be considered?

Local authority finance is not the most exciting subject—[Interruption.] I hear murmurs of agreement—but ensuring investment for housing, children’s social care, adult social care, education and local transport depends on us getting this right. Rather than create a system that sets local authorities up to fail, we need to have that debate and put that right straightaway. Taking into account fully the specific, unique legal and financial impositions on local authorities in this audit arrangement is critical, so that decisions can be made locally in good faith and with the relevant level of local democratic accountability.

[Miatta Fahnbulleh]

I misunderstood the hon. Gentleman’s original question. The accountability of the finance director, the sets of standards already locked in and the legislation they have to consider to ensure good use of public funds completely apply to this. It is their responsibility to ensure that the council’s decisions are right, that it is financially viable and that it is delivering the services required. The changes we are putting in place do not cut across that or undermine it. It remains a fundamental plank of this.

We are, however, changing the oversight. First, we are enabling an independent auditor to come in and do the function of auditing, as that is currently not happening. Secondly, it will be done with auditors who adhere to a standard code of norms consistent across the public sector. That ensures that we are raising standards across the piece. If a council gets an audit, it will know it is an audit of good quality that will drive and deliver the change that we want.

Thirdly, we already have the best value regime, where central Government can intervene when local authorities are not performing, or there are financial considerations at play. That will still apply. This takes the best of the current system but deals with the existing gap, which is that we do not have a uniform, consistent auditing regime that ensures an independent review of what individual councils are doing. The new system will also ensure that when problems are found, there is a mechanism for escalating, so that councils will be financially viable and delivering effective services. We all want to achieve that but, sadly, the audit regime is not delivering it at the moment. It beggars belief, but it is where we are now. These additional provisions will strengthen the entire infrastructure, add to the responsibilities of our finance directors as accounting officers, and deliver local authorities that are more financially secure and able to deliver the services their users require.

Question put and agreed to.

Clause 62 accordingly ordered to stand part of the Bill.

Schedule 29

Local audit: registration bodies, registered providers and qualifications

Amendments made: 238, in schedule 29, page 297, line 17, at end insert—

“Financial penalties

2A (1) If the Local Audit Office considers that an external registration body has failed to comply with a requirement under—

(a) this Act, or

(b) an agreement under section 6B(5),

the Office may impose a financial penalty on the body.

(2) A financial penalty is imposed by giving the body a written notice requiring the body to pay the Office a financial penalty of a sum specified in the notice.

(3) Such a notice must—

(a) explain the Office’s reasons for imposing the penalty, and

(b) specify the time by which, and manner in which, the penalty must be paid.

(4) An external registration body must, as soon as practicable after the end of a financial year, notify the Office of its total income in that year from fees charged under section 6A(5).

(5) The amount of a penalty imposed on a body under this paragraph may not exceed 30% of the sum last notified by the body under sub-paragraph (4).

Directions and penalties: procedure etc

2B (1) Before giving a direction under paragraph 2 or imposing a penalty under paragraph 2A, the Local Audit Office must—

(a) give the body a notice of intent, and

(b) consider any representations made by the body in response to (and in accordance with) that notice.

(2) A notice of intent is a notice that—

(a) states the Office’s intention to give the direction or impose the penalty,

(b) sets out the intended terms of the direction or of the notice imposing the penalty,

(c) explains the Office’s reasons for intending to give the direction or impose the penalty, and

(d) specifies the time by which, and manner in which, representations may be made.

(3) Where the Office has given a direction under paragraph 2 or imposed a penalty under paragraph 2A, the Office may by written notice given to that body—

(a) cancel the direction or penalty, or

(b) vary the direction, or the notice imposing the penalty, it in any way that does not make it more onerous.

(4) The Office must publish—

(a) a direction under paragraph 2,

(b) a notice imposing a penalty under paragraph 2A, and

(c) any notice cancelling or varying such a direction or notice.

(5) But it must do so only after the direction or penalty can no longer be cancelled or varied on appeal (ignoring any possibility of an appeal out of time).

(6) If a penalty imposed under paragraph 2A is not paid in time—

(a) the penalty (or the unpaid part of it) carries interest at the rate for the time being specified in section 17 of the Judgments Act 1838;

(b) the Office may recover the penalty (or the unpaid part of it), with the interest, as a debt.

Directions and penalties: appeals

2C (1) An external registration body may appeal to the High Court against a direction given to it under paragraph 2 or a penalty imposed on it under paragraph 2A.

(2) The grounds on which an appeal may be brought are—

(a) that the failure of compliance on the grounds of which the direction was given or the penalty was imposed did not occur, or

(b) that any of the following is unreasonable—

(i) the decision to give the direction or impose the penalty;

(ii) any of the terms of the direction;

(iii) the amount of the penalty, or the time or manner of its payment.

(3) If satisfied that any of those grounds is made out, the court must allow the appeal and do whichever of the following it considers appropriate—

(a) cancel the direction or penalty, or

(b) vary the direction or the notice imposing the penalty.

(4) Otherwise, the court must dismiss the appeal.

(5) The court may—

(a) make an interim order suspending the effect of a direction or penalty appealed against under this paragraph;

(b) if it allows an appeal under this paragraph against a penalty, make any order as to interest that it considers appropriate (including an order varying the effect of paragraph 4(6)(a)).

Compliance orders by the court

2D (1) This paragraph applies if the High Court is satisfied, on an application by the Local Audit Office, that an external registration body has failed to comply with a requirement under—

(a) this Act, or

(b) an agreement under section 6B(5).

(2) The court may order the body to take steps that the court considers will secure that the requirement in question is complied with.

(3) Such a step—

(a) must be one that the body has the power to take;

(b) may consist of not doing something.

(4) This court may not make an order under this paragraph in respect of the requirement to comply with a direction under paragraph 2 unless it is satisfied that the failure of compliance on the ground of which the direction was given did in fact occur.”

This amendment empowers the Local Audit Office to take enforcement action against an external registration body if it fails to comply with its duties.

Amendment 239, in schedule 29, page 301, line 28, at end insert—

“(c) arrangements for the imposition of sanctions in respect of breaches that are established, and

(d) registration rules and lead partner rules designed to secure that providers and lead partners are bound by any sanctions.”

This amendment and Amendment 240 require the body maintaining the register of local audit providers to put in place a system of sanctions, including financial penalties, against registered providers and their lead partners.

Amendment 240, in schedule 29, page 301, line 30, at end insert—

“(3) The available sanctions must include financial penalties.

(4) The arrangements and rules must allow for appeals to be made to a person who will determine the appeal independently of the maker of the decision appealed against.

(5) The arrangements and rules must allow for the Local Audit Office to be able—

(a) to determine that a particular case raises or appears to raise important issues affecting the public interest, and

(b) to assume enforcement responsibility in a case in which it has made such a determination.

(6) For the purposes of sub-paragraph (5), the Office assumes enforcement responsibility if it assumes responsibility for the final decision (subject to any appeal) as to—

(a) whether the requirement or rule in question has been breached, and

(b) if so, the sanction to be imposed.”—(Miatta Fahnbulleh.)

See the explanatory statement for Amendment 239.

Schedule 29, as amended, agreed to.

Clause 63

New appointment arrangements for non-NHS audits

--- Later in debate ---

[Miatta Fahnbulleh]

Clause 63 is central to our reform agenda. It will give the new Local Audit Office responsibility for appointing auditors for all local authorities, as well as some other local bodies, such as police and fire bodies. Currently, such bodies can choose to opt into an appointment scheme overseen by Public Sector Audit Appointments Ltd or appoint their own auditor. In practice, more than 99% of bodies are opted into PSAA’s scheme, demonstrating the sector-wide support for a centralised appointment regime.

Centralised appointments significantly reduce burdens on individual authorities. The LAO’s position at the heart of the audit system will make it uniquely qualified to ensure that audits provide value for money, support market sustainability and effectively manage audit contracts. The clause will also establish a proportionate framework in which the LAO will make appointments, including requirements regarding when and how appointments are made. I commend the clause to the Committee.

[David Simmonds]

A number of these other local bodies are subject, in the Treasury’s eyes and legally, to different accounting rules. In particular, Government Departments have revenue and capital departmental expenditure limits, and the Treasury is happy to shift money between those annually: capital may be allocated to cover revenue shortfalls and so on. That is something that a local authority cannot do. Will the Minister set out how the appointment process will ensure a high degree of transparency, particularly at the local level, so that people can see the difference between bodies that are subject to the local authority regime of in-year balancing and the other local bodies that are subject to a separate regime, and why the levels of assurance and the nature of decision making may be different? I would be grateful for clarity and assurance on those points from the Minister.

[Miatta Fahnbulleh]

I confess that I am not 100% clear about what the hon. Gentleman is getting at. I might partly answer his question by saying that the majority of public bodies—99%—are going through the Public Sector Audit Appointments regime anyway, because they see value in it. What we are now doing is taking that function, aligning it with the oversight of the entire regime and putting it in the Local Audit Office. That will make it streamlined and more effective. We are not fundamentally changing the decisions that individual local bodies are making.

If there was a big clamour for diversity in the market, that would be a different thing, but at the moment we hear from local public bodies that they want a centralised system. That makes their life much easier; it means there is a standard procurement process, which reduces the burden on them. It means that they get an auditor that is accredited and approved to be of a certain standard, and therefore they can be confident in that auditor. The system should make it easier for all our public bodies. At the moment, all our conversations suggest that they hugely support the direction of travel and have no concerns about it. Perhaps I have not understood the hon. Gentleman’s question. We are taking something that is happening by default anyway and making it better and standard, in a way that will work for all those public bodies.

[David Simmonds]

I am reassured to a degree by what the Minister says. I was personally involved in the setting up of the PSAA, although I do not have any direct interests in it. The market has clearly moved in that direction. My concern with bringing all these things into a central accountability stream that sits with the Secretary of State is that the legal and financial environments in which these bodies operate are quite different. If an NHS trust or a police organisation has overspent, it can ask the Secretary of State to reallocate capital for building, for example, a new police station to cover the revenue shortfall, but the local authority cannot do that.

The risk is that, if there appears to be a consistent standard, the judgments produced in respect of authorities that are operating within one legal and financial framework will be very different from those produced in respect of bodies operating within another. Given the Bill’s envisaged reorganisation of local government and the centralisation that the Minister has referred to, we need to retain a level of local clarity about what differences arise as a result of local decision making, so that council tax payers can see them, versus things that result from interactions with central Government via the Secretary of State.

[Miatta Fahnbulleh]

Decision making at the local authority level will remain. Accountability to the constituents in the local authority will remain. We are not fundamentally changing that regime, and hopefully we are making it better by, for example, moving to multi-year budgets for local authorities and consolidating budgets, so that there is far more flexibility for them to manage the challenges that we know they have to manage.

That is complementary to what we are trying to do by creating a national audit system that is coherent, of a high standard and works, which is not what we have now. These arrangements will not undermine the decision-making ability of local authorities. They will mean that a proper accountability system is in place, so that we are better able to validate when authorities are either failing or in financial distress and put in place the measures that I have talked about, such as the best value regime, to get them out of distress.

Once again, the clause is not an attempt to run counter to the accountability system that local authorities must have for their people. It is an attempt to strengthen that accountability system, so that local people have an independent basis to verify what the local authority is doing. I think that Members across the piece will support that.

Question put and agreed to.

Clause 63 accordingly ordered to stand part of the Bill.

Clause 64

Audit providers to nominate lead partner

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

The clause will change the current requirement whereby local audits may be signed off only by a key audit partner—a senior auditor who meets specific eligibility criteria determined through statutory guidance. The current requirement for local audit sign-off is both rigid and unique to local audits. No other audit category places such a specific condition on the eligibility of senior auditors. That has restricted the pipeline of senior auditors to the sector and places a significant barrier to market entry. It can be difficult for a firm wishing to enter the market to recruit or develop individuals who can satisfy the specific criteria.

Under the clause, the requirement for key audit partners to sign off local audits will end. Instead, local audit officers will work with an external registration body to establish suitable competence requirements. The measure will empower the sector to draw on the best possible range of talent, while continuing to ensure that senior auditors are competent and understand the distinctive element of the local audit. I commend the

[David Simmonds]

The section 151 officer is the person in the local authority who has whistleblower protection; they have a legal obligation to ensure that the local authority has the information that it needs when setting its budgets, and that the information is true and correct. However, disputes about the treatment of financial decision making are also common, where a section 151 officer may have a lesser degree of comfort about a risk arising from a decision.

We talked earlier about assets of community value, and there are many MPs in this room who will have campaigned for their local authority and undertaken responsibility or an intervention to preserve an asset or local amenity. That leads to a debate about whether that is a good use of taxpayers’ money. The elected folk may be of the view that it is, but a section 151 officer may say that it does not stack up in financial terms. There needs to be a process for resolving that dispute, and that will revolve around the professional standards that the Minister has just set out. It would be helpful if she could set out what process of assurance there will be following a decision, so that we can all be clear that there is an adequate pipeline of people, as she has described, to undertake those roles, and that we do not suck out all of the expertise of section 151 officers, who are the only people who can undertake them. What consultation has the Minister undertaken with accounting bodies, such as the Association of Consulting Actuaries, CIPFA and all the others, so that they can ensure that the necessary degree of influence has been exerted to ensure that the training standards and process that will emerge from this will be sufficiently robust?

[Miatta Fahnbulleh]

We recognise that we have a challenge in bringing in sufficient audit capacity of the standard we need. That is the status quo. We are working closely with the sector to ensure that we are generating a pipeline and that there is training provision. We are working with the Local Government Association to ensure that that happens.

To be completely candid, we are in a mess. I will not play party politics by mentioning where that mess came from, but the status quo is dire. The regime is failing, and we do not have sufficient audit capacity of the quality that we want. That is why we are putting these reforms in place. I reassure the Committee that we completely understand the challenge we face. We want to keep high-quality finance directors in local authorities. We understand the risk that there might be bleed into the much bigger audit infrastructure and regime that we are creating, but the job now is to reach into the private and public sectors to train up a cadre of auditors so that the system is fit for purpose. At the moment, the system is under strain and collapsing. There is urgency, certainly on the part of the Government—that is why we are bringing forward these reforms—to address the problem.

Question put and agreed to.

Clause 64 accordingly ordered to stand part of the Bill.

Clause 65

Code of audit practice

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[David Simmonds]

Will the Minister briefly set out some examples of things that are being undertaken but she feels are not adding value? We are all sympathetic, but it would be helpful to the Committee’s decision making if we understood what we are going to stop doing as a result of the decision we are being asked to take.

[Miatta Fahnbulleh]

It is not wild or out there to say that the new auditing body we are creating should have full flexibility to ensure that the standards being applied are appropriate. The feedback we are getting from local government and public bodies is that the status quo is not fit for purpose, that it is onerous, and that its requirements do not align with their needs or, critically, the needs of the user. Is the hon. Member suggesting that the current system is fit for purpose? Is he suggesting that we retain it or that it does not require reform? If he is, he should stand up and say so.

[David Simmonds]

The Minister is perhaps being a little mischievous in responding politically to what was essentially a technical question. We all recognise that there are challenges. Broadly, the audit system suffers not from a lack of regulation but from a lack of capacity. Measures such as Public Sector Audit Appointments were designed to address that, but they have not been sufficient, despite being implemented in consultation with the sector. We therefore agree that an alternative approach is required.

The Minister has been clear to the Committee that she feels that many of the requirements imposed by the current system are unnecessary. She has returned a number of times to the point about there being things that do not add value and are onerous. It would be helpful if she set out what those things are so that our colleagues in local authorities can understand what will be removed from the requirements upon them and the Committee can understand what risks, if any, that poses to the public.

[Miatta Fahnbulleh]

I dare not do the job of the Local Audit Office, or indeed trained auditors, and go into detail. This provision creates powers for the LAO to design a system that works for local bodies. As I said, the feedback that we have had from local authorities and public bodies is that the current system is onerous. It will depend on whether we are looking at a fire and rescue service or a local authority service, but it is absolutely right that we confer the powers on the LAO to look at the system and say, “We will change and adapt the standard so that it is fit for purpose.” I do not think that is controversial; I do not think it requires me to talk about it in great detail. We will issue guidance for the LAO and it will set the standards and what is appropriate. It is right that we give it the powers to do that in the Bill.

[David Simmonds]

The treatment of the dedicated schools grant, which has a huge impact on local authority budgets, is an example of an issue that comes up regularly on the Floor of the House. It is CIPFA’s view that, because it sits within a legal ringfence that has to be balanced each year, it is a budget killer for local authorities. However, ownership of that sits with a different Government Department that takes a different view about how it should be addressed. To me, that is a good example of something that is onerous and requires a lot of work, but in practice, the Government have collectively decided that they are going to deal with it in a different way and effectively ignore the rules that they imposed on local authorities to make it go away.

The Minister keeps returning to the point that she feels that there are elements of the system that are onerous and burdens that should be alleviated. It would be helpful if she briefly set out a couple of examples for the Committee so that we can understand what she thinks we should no longer look at so that we and our council taxpayers can at least understand the risk and reward associated with it.

[Miatta Fahnbulleh]

If the hon. Member wants examples, one example—I am sure that we can give others based on the conversations that we have had with local government—is that pensions do not drive local government decision making and financial resilience, so the audit reviews focus on operational assets that may not be necessary, depending on the local body that we are talking about. There are clearly examples within the system.

I come back to the fact that we are not prescribing this; we are saying it is right that a new body that will have oversight of a regime that we all agree needs to be reformed should be able to make sure that those standards are commensurate with what is required by the local authority and public bodies as well as the user. That is not controversial; that is common sense. It is right that we create the provisions for that new body to do that.

Question put and agreed to.

Clause 65 accordingly ordered to stand part of the Bill.

Clause 66

Audit committees

--- Later in debate ---

[Manuela Perteghella]

These amendments go to the heart of local accountability and good governance. They would ensure that the checks and balances that protect public money are independent and not micromanaged from Whitehall.

Amendments 17 and 18 would remove the Secretary of State’s power to appoint or control audit committees, and instead allow local people to decide their own membership, appointments and practices. Local audit officers are closer to the ground and so understand the specific challenges facing councils, combined authorities and local agencies. Let us give them the power to shape their own audit committees so that they reflect local context, expertise and priorities.

At a time when councils are under intense pressure, when residents are anxious about how their money is spent, and when public trust in local government finances has been shaken, the last thing we need is the perception that Ministers can influence who audits local authorities. Audit committees are there to hold power to account, not to be overseen by it. Removing that oversight would be a simple but powerful step towards a transparent and decentralised local audit system.

Amendment 362 would require mandatory training for all newly appointed audit committee members, so that they understand their responsibilities and the technicalities of local audit. Mandatory training would ensure that new members start with a shared understanding and pick up those very important skills. Without training, there could be missed red flags, opaque decisions and audit delays that cost taxpayers millions.

We are calling for the mandatory training of audit committee members so that they know how to scrutinise budgets, assess risks—that is the most important thing—and challenge constructively. Those are essential skills for their positions, so amendment 362 would raise standards across the board. As we have done throughout, the Liberal Democrats would like to see local power given to local people, with local decisions made by our local councils. We want to ensure that our local audits are not only independent but equipped with the skills to help prevent the next financial crisis before it happens.

[David Simmonds]

I am sympathetic to the issue behind these amendments, although I am not convinced that this is the mechanism to address it. I will briefly explain why, and where this sits in the context of the previous debate. The Minister gave the example of the pensions audit as something that we could alleviate, but my personal experience would suggest that is a very poor example, and amendments 18 and 17 connect to it.

If we think back to the last big financial crash when the last Labour Government were in office, the local government pension scheme, which is currently overfunded, saw a huge fall in the value of its assets to the extent that it was then 30% underfunded. Local authorities across the country, which have a legal obligation to make up any such shortfall, were then faced with this question: to what extent will we have to make financial cuts to public services to bridge that gap at short notice so that, if the pension fund is falling short, council tax will bail it out? That is not something about which we could say, “You don’t really need to know about it, and you can safely ignore it.” It is something that, if it goes wrong, could be critical to the finances of that local authority.

When these amendments talk about local arrangements, I think they are seeking to enable flexibility in a local authority, for example, whose pension fund profile may be slightly different from its neighbours or outwith the norm, because it has a younger or older workforce than is typical, or because it has entered outsourcing arrangements. That flexibility would allow the local authority to have people on its audit committee who have the relevant experience to ensure that the audits and information reflect that, and that the decision making properly reflects those risks and does not unduly impact on council tax payers. Does the Minister have a good view or a strong reason as to why that element of local expertise should be disregarded, given the extremely significant financial risks associated with the example that she gave the Committee of something that she envisages the Government will stop requiring councils to do?

[Miatta Fahnbulleh]

Let me deal directly with amendments 18 and 17. I reiterate to the hon. Member for Stratford-on-Avon what I have consistently said: the governance regime of local government finance is not changed by the measures in the Bill. It will still stand, including the decisions that accounting officers and the finance director need to take, and the accountability to the local community still holds. We are shoring up the system of assurance so that it is fit for purpose, and to ensure that there is independent scrutiny that then feeds back into what the local authority does. That is how the system should be operating, but it is not currently, which is why we are driving through these reforms.

On the amendments, I recognise the important role that the Local Audit Office will play in overseeing the local audit system. Amendments 18 and 17, however, would delegate important policy and legislative functions from Ministers—who are directly accountable to the House, which is the way we believe it ought to be—to an independent body.

Given the central role that audit committees play in local financial governance, it is essential that responsibility for their statutory framework remains with the Secretary of State, who is responsible for the overall integrity and effectiveness of the local government system. My Department will continue to work closely with the Local Audit Office and key stakeholders in the sector to ensure that audit committee requirements are effective, proportionate and well-functioning. We think, however, that parliamentarians would want the Secretary of State to be ultimately accountable, so that Parliament can hold them to account. For that reason, I ask the hon. Member to withdraw her amendment.

On amendment 362, I fully support the hon. Member’s view that audit committee members must demonstrate the necessary skill, understanding and competence that we are asking of them. The committees are integral to robust local governance, playing a critical role in ensuring that public resources are used efficiently, transparently and in the public interest. Clause 66, however, already provides for the Secretary of State to issue statutory guidance in relation to audit committees. It is our intention that the guidance will include a requirement for members to undertake appropriate training.

Alongside that, we will continue to work with the LGA and CIPFA to ensure that training programmes support existing and new audit committee members. There is a job to be done to make sure that we have a pipeline of members, that they are fit for purpose and that we have the right training and capacity building in place. I hope that that assures the hon. Member that we are doing everything we can to ensure that training is fit for purpose, as we need audit committee members of a high quality and standard, and that we will continue to work with the relevant bodies to ensure that that is a reality.

--- Later in debate ---

[Miatta Fahnbulleh]

Clause 66 introduces a statutory requirement for all local authorities, excluding NHS bodies, to establish an audit committee with at least one independent member. Members will be aware that audit committees are the cornerstone of good governance and financial management in local government. They provide independent oversight of financial controls, risk management and internal audits, reinforcing transparency and accountability in the use of public funds.

Although many councils have already adopted audit committees as best practice, and combined authorities are required by statute to do so, it is time to standardise this requirement across the board. Consistency in governance structures is essential to ensuring that all local bodies are held to the same high standards of scrutiny and accountability.

In addition, the clause mandates that at least one member of the audit committee must be independent. Independent members bring impartiality, technical expertise and continuity, ensuring that scrutiny is robust and well informed. Where elected members may lack specialist knowledge in audit or finance, independent members can provide the professional insight needed to effectively challenge financial reports.

Mandating audit committees is a key pillar of our local audit reform programme. It is about getting the basics right. Good governance and financial management start at the heart of local authorities. The clause is a practical, proportionate and necessary measure to strengthen local accountability and ensure that every authority is equipped to manage public money responsibly, and I commend it to the Committee.

[David Simmonds]

I have a brief question for the Minister. One challenge is that most local authorities will have an arrangement, although it is not always called the audit committee; sometimes it is the finance scrutiny committee or the overview committee—there are lots of different arrangements. Could the Minister set out briefly what specific requirements, if any, she intends to impose on local authorities about who can be a member of an audit committee and what its composition is? Will it sit within the overall political balance structure that exists in all local authorities? I ask that just so that we understand where it will fit within the new arrangements.

[Miatta Fahnbulleh]

We will issue guidance when the Bill gains Royal Assent. The broad principle, which is applied across the piece with all our reforms, is that where there is good practice, we look to build on that. However, we will set out principles that we want to see standardised across the piece, to ensure that we have mechanisms that are fit for purpose and effective. To take the example of the independent member, we think that having that expertise massively helps, whatever function it is. However, where there are existing arrangements in place, our intent is to transition those to something that adheres to a set of principles that we will set out in guidance.

[Vikki Slade]

Thank you, Sir John; I was feeling slightly confused. There is an irony about the issues in the Bill being followed by a reassurance that we should not worry, because the Government will issue guidance after Royal Assent. This is the point where we have the ability to improve the Bill, but we are not debating the areas where we want to do that—on things like requiring people to be properly trained—or to understand a bit more about the shape of these organisations. That is disappointing.

I want to talk specifically to new clause 45, on local public accounts committees. On Second Reading, the then Secretary of State showed a lot of support for the introduction of local public accounts committees. We have already established—indeed, the Minister just said—that all strategic authorities will be held to the same high standards, as they should be. But we believe that that should apply across the public sector and to all those who hold public sector money and contracts.

New clause 45 would make provision for new local public accounts committees to be formed within one year of the legislation being passed. These LPACs would be at mayoral strategic authority scale to ensure scrutiny and accountability of the mayor, but also scrutiny across the whole of local public services. Given the mayor’s convening power across all those areas, that feels like the right space for them.

To convince the Minister of the necessity of LPACs, I direct her towards an excellent report by the Institute of Public Policy Research entitled “Accountability matters: Securing the future of devolution”. In it, the authors summarise the case well:

“The system of mayoral accountability currently in existence is complex and broad, but yet also manages to be insufficient to keep up with the developing power of mayoral authorities.”

Therefore, there is a clear need to ensure that as the Bill broadens the range of functions to be held, a suitable accountability system is built to keep powers in check. The local accounts committee is very much about the financial lens, but we also want to talk about accountability—justifying why money has been spent in a certain way and why choices have been made. The Public Accounts Committee in Parliament is held in high esteem not only in Parliament but out in the real world, where its reports are considered to be almost a go-to space for real scrutiny.

I accept that there was talk on Second Reading about a single local public accounts committee possibly following, that is still going to be very remote. The south-west of England, for example, will have two or three strategic mayors, which is very different from Greater London or Greater Manchester. If we have a single local public accounts committee trying to talk about how things work in, say, Manchester, that will not mean very much to local people—it will not mean much more to them than the PAC here does. We have an opportunity to scale things down to a local level.

Having led a local authority—as several members of the Committee have—I regularly witnessed the frustration of the public and council members when other organisations were not democratically accountable. The health authority is the perfect example, and I can see lots of raised eyebrows in the Committee Room. As a local government leader, I tried to sit in integrated care board meetings to bang the drum for local government, but people were not interested. However, it is local members who then knock on doors and get grief about the problems in the health service, the police service, the Prison Service or housing associations—all the organisations that people have experiences with. But it is local authorities they then turn to when they want someone to blame.

Council members have a unique opportunity to ask the questions that no one else can, and it would be a huge missed opportunity—in setting up a whole new regime, with strategic authorities and the Local Audit Office—if we did not put an LPAC-shaped piece of the puzzle, as a holding space, into the regime. We are not asking for it to be set up now—we recognise that there is a lot going on—but for a commitment to put it into the system going forward, so that these organisations know that it is coming and can start to prepare for what it means. This is a perfect opportunity to do that.

I will end with a quote from the Department’s White Paper on devolution, which set out plans to

“improve external scrutiny of value for money on local public spending, including exploring a Local Public Accounts Committee model.”

So it was there in the White Paper; there were quite a lot of things in it that did not make it into the Bill, and we would like to see this one dragged through.

[David Simmonds]

The only element where I have any disagreement with the hon. Member for Mid Dorset and North Poole is over whether the legislation needs to be implemented for local public accounts committees to happen. There have been a number of measures in this regard, and I think of the Localism Act 2011, where there was a great deal of debate about the role of the local armchair auditor and the requirement for local authorities to publish all expenditure over £500—itemised—so that people can see what is being spent day to day, as a means of bringing about transparency.

In this debate about audit committees, we have already covered the fact that there are different local arrangements. Some have everything dealt with by a single, financially focused scrutiny and overview committee, while others do it as part of a wider context or in the context of individual service areas. So there are different approaches, and it is important that that local discretion continues to exist.

I am not convinced that it is necessary to have further legislation, but it is right that we bring the matter to public attention. One weakness of the Westminster-focused Public Accounts Committee is that it does not always grasp local nuance. Home-to-school transport in rural Lincolnshire or North Yorkshire is a completely different challenge from that in Greater London, where all local authorities are, effectively, levied so that public transport in the capital is free for children going to school. Such things are difficult to capture. When we hear that North Yorkshire spends £51 million over a couple of years taking kids to school, that sounds like an extraordinarily high level of expenditure, but it is driven entirely by local circumstances; it is not the result of inefficiency or negligence on the part of decision makers. The point is well made that we have to have that really clear grasp in decision making that comes from people understanding and knowing their local place.

[Miatta Fahnbulleh]

I thank the hon. Member for Mid Dorset and North Poole for tabling new clause 45, and I have a lot of sympathy with what it tries to do. She rightly quoted the English devolution White Paper, in which we committed to explore local public accounts committee models. We consulted on the initial proposal for such a model in December last year, as part of our local audit reform strategy. The Government’s response on 9 April confirmed that they would explore how any model could draw on audit findings and interact with the Local Audit Office, once established. It is important to consider how that would fit with the reformed local audit landscape.

Mayoral strategic authorities are already expected to follow the principles and processes described in the English devolution accountability framework and scrutiny protocol. That includes the requirement to have overview and scrutiny committees and an audit committee. We absolutely recognise that there is scope for further strengthening the system of accountability and scrutiny for mayoral strategic authorities, and we are carrying out engagement with the sector on what that looks like. Although I accept the principle of new clause 45, the Government intend to do further work to ensure that whatever new regime or additional arrangements to strengthen the status quo we put in place, they work well alongside not only the huge reforms we are driving through in the audit system but what already exists on the ground, to ensure that we are not duplicating or creating confusion.

We need a little time to work that through and to think about the right set of reforms to put in place. However, the principle that we absolutely need to strengthen the status quo is one we completely accept and recognise the need for. I ask the hon. Member for Mid Dorset and North Poole to allow us the time to do the work properly, so that we can come up with a system that works alongside the reforms we are driving through. I therefore ask her not to press the new clause.

--- Later in debate ---

[David Simmonds]

Broadly, the Opposition agree with the Government’s direction of travel, and this seems a logical thing to do. This kind of update is periodically required. However, it would be helpful if the Minister could set out, for the benefit of transparency in Committee, what the assurance process will be around risk. To reflect on where things have gone wrong, West Somerset district council—then the smallest local authority in England—was essentially not financially viable, but it was also the planning authority for the Hinkley Point nuclear power station, so it was absolutely critical that it could do its job for the needs of national infrastructure. Its budget was essentially broken by the loss of a business rates appeal in respect of Hinkley Point, which cost its £6.5 million out of its already very small budget.

Sometimes there are risks that sit beneath what will be classified as smaller authorities, especially given our earlier debate about how reorganisation is seeing asset transfers between districts and parish and town councils as a result of the need to manage opportunities and challenges. Could the Minister therefore set out who will be accountable? Will Ministers sign this off? What is the role of the delegated legislation Committee in making these decisions? What will be the role of the Local Audit Office in deciding how risks are managed? We need to be confident that what may appear to be a low-risk environment does not produce a very nasty surprise.

[Miatta Fahnbulleh]

It will be the Local Audit Office, working closely with my Department, but we will obviously engage with the sector while doing that. As the hon. Member will understand, there is always a judgment call in this, and it is about balancing a set of factors. Our job is to ensure that the Local Audit Office has the capabilities and skills to be able to make that judgment, working with our respective authorities. Ultimately, if we get it wrong, it is for Parliament to haul up the Secretary of State and hold them to account.

Question put and agreed to.

Clause 67 accordingly ordered to stand part of the Bill.

Clause 68 ordered to stand part of the Bill.

Clause 69

Amendment paving way for separation of LGPS accounts

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

The hon. Member for Ruislip, Northwood and Pinner was dissatisfied by my pensions example. In part, I hope the clause speaks to some of the challenges that we are trying to get at.

Clause 69 is the first step in separating pension fund accounts from the accounts of the administering authorities. It removes the implied requirement in the current legislation for the accounts to be published together. We can then make regulations to introduce the change in practice. Decoupling the accounts is widely supported by auditors and local authorities and was recommended by the Levelling Up, Housing and Communities Committee in the last Parliament. The clause implements that recommendation. It is a relatively straightforward change that will deliver real practical benefits. Pension fund audits will no longer be held up by audit delays on administering authority accounts, allowing timely assurance to be provided to scheme members and admitted bodies.

Many other organisations rely on pension fund audits to confirm pension figures in their own accounts, and their audits have been disrupted and delayed by problems around administering authorities that rarely relate to the pension fund. As well causing problems for local bodies, the issue has caused problems in completing the audits of the whole of Government accounts and at least two Government Departments. Decoupling will shorten and simplify administering authorities’ accounts. It is more logical to publish pension fund accounts separately, as those funds are ringfenced for the benefit of scheme members and not available to the administering authority for other purposes.

[David Simmonds]

In many ways, the clause reinforces the concerns that I set out earlier. The Minister said that this was an area where no value was being added and that it was the Government’s intention to reduce expectations. In fact, the clause increases expectations: it requires the publication of a separate opinion on the pension fund’s accounts. As I set out earlier, the concern we all recognise is that, where there is a shortfall, the local authority is required to make up that shortfall and, where there is potentially a surplus, it may choose to reduce the pension contributions that it makes on a regular basis, as is already the case. We have seen examples across the private sector in the past when that has been significant in both negative and sometimes positive ways.

The assumptions made about the pension fund are critical to the setting of the council tax, which is a statutory process. This is not the only set of relevant accounts that must meet that same test. Local authorities have limited but varying degrees of control over the parking revenue account, housing revenue account and dedicated schools grant, but all are ringfenced for specific purposes and all can create significant financial liabilities that fall on the council tax payer in the event that something emerges within them that had not previously been considered.

Although I understand that the Minister thinks that separating out the requirement makes life easier for some parts of the Government, it can none the less create significant issues in the council tax fixing process. Will she set out the Government’s thinking about how those risks will be managed? In particular, how will the legal requirement to set an in-year balanced budget be met, and how does imposing a requirement for an additional and separate opinion, with a separate timetable, represent a reduction of the burden on the local authority?

[Miatta Fahnbulleh]

We are having the same debate over and over again. Ultimately—I have said this before and I will say it again—it will be for the accounting officer and the finance director to make the judgment about their accounts in year and over a multi-year period. We are not changing that. Given that pensions are administered by a single body, it is bizarre that the system at the moment involves individual local authorities having to audit their pension funds.

[David Simmonds]

I invite the Minister to reflect that she may have inadvertently misled the Committee. Each local authority has a statutory duty in respect of its own pension fund. There are some pooling arrangements and common standards, but if a local authority in one place has chosen to invest in something that has gone down, it will have a shortfall that will not be replicated in the neighbouring authority that has invested in something else. It is not the case that there is one single scheme. Each of the individual schemes will have an impact on the local authority that employs those members; they are not part of some amorphous national scheme.

[Miatta Fahnbulleh]

No, they are not, but the auditing requirement at the moment is burdensome, as local authorities and, under the previous Government, the Select Committee have said. I think the hon. Gentleman is just asking a probing question, which is fine, but no one is telling us that this measure is a bad idea. No one is telling us that decoupling is not helpful. It will mean that local government auditing does not hold back pension fund auditing and vice versa. Everyone agrees that this is a simple provision.

[David Simmonds]

rose—

[Miatta Fahnbulleh]

I will not give way; I am going to have to close down this debate. Critically, none of this detracts from the core function of the finance director, nor does it detract from the core function of local authority governance or local authority financial accountability. Everyone agrees that it will make the system stronger, so I struggle to understand the hon. Gentleman’s issue with it. No one says that the status quo is fit for purpose, and he himself has conceded that it is not. We are taking the existing system and providing stronger assurance and stronger audit to fix a system that is fundamentally broken, and I come back to the fact that it was broken under the Conservatives’ watch.

English Devolution and Community Empowerment Bill (Twelfth sitting)

David Simmonds Excerpts

Committee stage
Tuesday 28th October 2025 Public Bill Committees

[Mike Reader (Northampton South) (Lab)]

As the Committee will remember, I had just covered Ireland. I will now take Committee members across the world to Australia, where a ban on upward-only rent reviews was relatively successfully deployed, as the Minister rightly said. As with Ireland, it is a very different model to what the Government are proposing. In Australia, the responsibility for setting how the model works lies with districts, so there is no Australian model that the UK can copy. In some states, the measure applies by size and sector, and the legislation is very specific to require an upward-only rent review on a size of property and a sector. In others, it applies to sectors. In at least one state, the legislation applies it to the type of business: it applies to landlords that are multinationals but small businesses can be exempt, as I understand it.

The Minister rightly says that the schemes have been applied around the world, but the scheme the Government are proposing has not. It is important that we avoid the unintended consequences of a broad, cover-all scheme. Investment in warehousing logistics, which employs one in five people in my constituency, or in the development of schemes at the Northampton Gateway, at the Daventry international rail freight terminal and right up the M1 corridor, could be hindered by an unintended consequence of our trying to deal with the issue that the Minister talked about—the unfair management of rent on the high street, particularly for small businesses.

I encourage the Minister to go further than the amendment that has been tabled to stop those unintended consequences. The measure could be applied by class of use or by rental value. In evidence, the British Property Federation suggested a £50,000 rental value cap, which would protect small businesses. That could also be specifically allocated in other ways. There are further things we can do if we want to fulfil the aim in the White Paper, which is to protect high streets, while ensuring that we do not impact the future development of health, data centres, logistics, commercial offices and all the other things we need to deliver growth in our country.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

We have some concerns, which are reflected in the amendments I have tabled. As we just heard, countries approach this issue in different ways. Broadly speaking, it sounds like one of the reasons why Ireland did not see an impact on the market was that what was implemented was the end of upward-only rent reviews almost in name only; there were still many other mechanisms that achieved the same outcome, even if that specific one ceased to exist.

Our concern is that we risk creating a number of complex structures for rental agreements that in practice have the same consequence, but without the benefit of upward-only rent reviews, which is that landlords’ certainty about their position in turn encourages investment in our high streets, the availability of the units we want to see, and those units not being turned into residences or repurposed for things other than business. The loss of upward-only rent reviews as part of the toolkit of available options undermines the confidence to invest in our high streets, and in turn undermines the objective, which we all share, of ensuring that they remain vibrant and successful. That is the purpose of the amendments, which I am sure we will come on to in due course. The Minister may have something to say about that, but that is the Opposition’s clear position.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

I thank my hon. Friend the Member for Northampton South for his thoughtful contribution. He is well versed, and has both reached out to business in his constituency and advocated his case persuasively.

We are very mindful of unintended consequences. We are also very mindful of designing this system in a way that strikes the balance between the investment that we absolutely want to unlock on our high streets and in our local communities, and the protections that we want to provide for tenants and to ensure that our high streets continue to thrive. I will take away my hon. Friend’s thoughts and challenges, and reflect on them as we go into the details of how we design this system in the best possible way.

I know that we will go into Opposition amendments in greater detail. However, the key point I want to emphasise at the start of this debate is that this is not a new debate and this issue is not a new one. We have known that we need to do something about this issue for well over a decade now. Huge amounts of work have gone into considering how we reform the system and there have been huge amounts of consultation over the years. So, we are very clear that something must be done, because the status quo is not fair and is not working for tenants, particularly the small and medium-sized enterprises on our high streets.

We need to respond and to reform, but we will make sure that we do so in a way that strikes the right balance between the protections that we must provide for tenants and the investment that we obviously want to see in our commercial premises.

Amendment 375 agreed to.

Clause 71, as amended, ordered to stand part of the Bill.

Schedule 31

BUSINESS TENANCIES: PROHIBITED TERMS RELATING TO RENT

Amendments made: 376, in schedule 31, page 322, line 24, leave out from beginning to end of line 24 on page 323 and insert—

“Part 1

Key terms

“Business tenancy”

1 (1) A tenancy is a “business tenancy” at a particular time if, at that time, Part 2 of this Act—

(a) applies to the tenancy, or

(b) has the potential to apply to the tenancy.

(2) For that purpose, Part 2 has the potential to apply to the tenancy at a particular time if, at that time—

(a) Part 2 cannot apply to the tenancy because—

(i) none of the property comprised in the tenancy is or includes premises which are occupied by the tenant, or

(ii) property comprised in the tenancy is or includes premises which are occupied by the tenant, but none of those premises are so occupied for the purposes of a business carried on by the tenant or for those and other purposes,

(b) the terms of the tenancy include terms (the “permitted business use terms”) which would permit the tenant to occupy the premises for the purposes of a business carried on by the tenant (whether the terms permit occupation for the purposes of business generally, a specific business or a specific kind of business) or for those and other purposes, and

(c) if the tenant were to occupy the premises in accordance with the permitted business use terms (and taking into account all other circumstances), Part 2 of this Act would apply to the tenancy.

(3) For the purposes of sub-paragraph (2)(b), terms of the tenancy which—

(a) would prohibit the tenant from occupying the premises for some purposes, but

(b) would not prohibit the tenant from occupying the premises for other purposes,

are to be regarded as terms which would permit the tenant to occupy the premises for the purposes which are not prohibited.

(4) Sub-paragraph (2) must be construed as one with section 23(1).

“Business tenancy with a rent review”

2 (1) A tenancy is a “business tenancy with a rent review” at a particular time if, at that time—

(a) it is a business tenancy, and

(b) it is subject to rent review terms (whether contained in the instrument creating the tenancy or not).

(2) In this Schedule “rent review terms” means terms under which an amount of rent payable under the tenancy will or may change during the terms of the tenancy (“rent under review”).

Part 2

Triggering and operation of rent reviews

Application of this Part

3 (1) This Part of this Schedule applies to a tenancy at a particular time if, at that time, it is a business tenancy with a rent review.

(2) But this Part applies to such a tenancy only if—

(a) the tenancy is—

(i) granted, or

(ii) varied so that it includes rent review terms,

after this Schedule comes into force, and

(b) the grant or variation is not made under a contract entered into before this Schedule comes into force.

Tenant to have power to trigger a rent review

4 (1) This paragraph applies if—

(a) an action is necessary for a particular rent review to be initiated (a “trigger action”), and

(b) the rent review terms, or any other terms (whether contained in the instrument creating the tenancy or not), do not allow the tenant to take the trigger action.

(2) The tenant may initiate the particular rent review by giving the landlord notice in writing.

(3) Notice under sub-paragraph (2) may not be given after the time when trigger action may be taken.

Tenant to have power to take action to enable rent review to operate effectively

5 (1) This paragraph applies if—

(a) an action is necessary for a particular rent review to operate effectively (an “operational action”), and

(b) the rent review terms, or any other terms (whether contained in the instrument creating the tenancy or not), do not allow the tenant to take the operational action.

(2) The tenant may take the operational action.

(3) If the tenant takes the operational action, the tenant must give the landlord notice in writing of the action within the period of seven days beginning with the day on which the action was taken.

Part 3

Rent review terms that are of no effect

Application of this Part

5A (1) This Part of this Schedule applies to a tenancy at a particular time if, at that time—

(a) it is a business tenancy with a rent review, and

(b) the rent review terms—

(i) do not specify new passing rent, and

(ii) include elements 1 and 2.

(2) But this Part applies to such a tenancy only if—

(a) the tenancy is—

(i) granted, or

(ii) varied so that it includes rent review terms that do not specify new passing rent and include elements 1 and 2,

after this Schedule comes into force, and

(b) the grant or variation is not made under a contract entered into before this Schedule comes into force.

Rent review terms that “do not specify new passing rent”

5B Rent review terms “do not specify new passing rent” if they are such that an amount of rent under review that will be payable at a time during the term of the tenancy (the “new passing rent”)—

(a) is not known, and

(b) cannot be determined,

at the time when the tenancy is granted or varied so that it includes the terms.

Elements 1 and 2

5C (1) This paragraph sets out elements 1 and 2.”

This would provide for various definitions; for application of provisions to tenancies that are varied; and for the provision about the triggering and operation of rent reviews to apply to any business tenancy with a rent review (regardless of the particular terms of the rent review).

Amendment 377, in schedule 31, page 323, line 38, leave out “relevant”.

This is consequential on Amendment 376.

Amendment 378, in schedule 31, page 324, line 3, leave out “relevant”.

Amendment 379, in schedule 31, page 324, line 13, leave out “relevant”.

This is consequential on Amendment 376.

Amendment 380, in schedule 31, page 324, line 19, leave out “relevant”.

This is consequential on Amendment 376.

Amendment 381, in schedule 31, page 324, line 35, leave out from beginning to end of line 19 on page 325.

This is consequential on Amendment 376, by which the new paragraphs 4 and 5 would replace the existing paragraphs 8 and 9.

Amendment 382, in schedule 31, page 325, line 19, at end insert—

“Part 4

Sub-tenancy required to include rent review terms that would be of no effect

Application of this Part

7A (1) This Part of this Schedule applies to a tenancy (the “superior tenancy”) at a particular time if, at that time—

(a) the superior tenancy is a business tenancy,

(b) the superior tenancy requires or permits the grant of a sub-tenancy (the “authorised sub-tenancy”),

(c) the authorised sub-tenancy would, at the time of its grant, be a business tenancy with a rent review, and

(d) either—

(i) the superior tenancy requires the authorised sub-tenancy to include rent review terms, and that requirement can only be complied with by the inclusion of rent review terms which (on one or more particular rent reviews) would produce, or would be capable of producing, the result that is prohibited by paragraph 6(3), or

(ii) the superior tenancy permits the authorised sub-tenancy to include rent review terms, but rent review terms can only be within that permission if (on one or more particular rent reviews) they would produce, or would be capable of producing, the result that is prohibited by paragraph 6(3).

(2) But this Part applies to the superior tenancy only—

(a) if the superior tenancy was—

(i) granted, or

(ii) varied so that it includes rent review terms that do not specify new passing rent and include elements 1 and 2,

before this Schedule comes into force, or

(b) if the superior tenancy is—

(i) granted, or

(ii) varied so that it includes rent review terms that do not specify new passing rent and include elements 1 and 2,

after this Schedule comes into force and the grant or variation is made under a contract entered into before then.

Modification of terms of superior tenancy

7B (1) The superior tenancy has effect after this Schedule comes into force as if it requires, or as the case may be permits, the authorised sub-tenancy to include rent review terms of any kind which (on each particular rent review) would not produce, and would not be capable of producing, the result that is prohibited by paragraph 6(3).

(2) The actual rent review terms that are to be included in a particular authorised sub-tenancy are to be—

(a) agreed by the persons who are to be the landlord and tenant under that sub-tenancy, or

(b) determined in such other manner as they may agree.

(3) Accordingly, the landlord under the superior tenancy may not require the inclusion of particular rent review terms in the authorised sub-tenancy (unless that is what is agreed by the persons who are to be the landlord and tenant under the sub-tenancy).

(4) This paragraph does not prevent a superior tenancy from being varied or modified by the parties to it (and accordingly sub-paragraphs (1) to (3) are subject to any such variation or modification).

Interpretation

7C (1) The following provision applies for the purposes of this Part of this Schedule.

(2) The superior tenancy permits the grant of a sub-tenancy, or the inclusion of particular rent review terms in a sub-tenancy, if granting the sub-tenancy, or including those terms, would not breach the terms of the superior tenancy.

(3) References to the superior tenancy, and references to the terms of the superior tenancy, include references to—

(a) the terms of any agreement relating to the superior tenancy, and

(b) any document or communication from a party to the superior tenancy which gives or refuses consent for the grant of a category or description of sub-tenancy.

(4) “Superior tenancy” has the meaning given in paragraph 7A(1).

(5) “Sub-tenancy” means a tenancy that is inferior to the superior tenancy (whether or not it is immediately inferior to that tenancy).

(6) The “result that is prohibited by paragraph 6(3)” means the result that the new passing rent is larger than the reference amount.

Part 5

General provision”

This would apply to pre-commencement tenancies that require any sub-tenancy to include terms that would be of no effect by virtue of paragraph 6(3) (as they could result in the new passing rent being larger than the reference amount). It would enable a sub-tenancy to be granted without including such terms.

Amendment 383, in schedule 31, page 325, line 24, leave out “new passing”.

This is consequential on Amendment 382.

Amendment 384, in schedule 31, page 325, line 27, leave out “, in relation to a tenancy” and insert—

““business tenancy” has the meaning given in paragraph 1;

“business tenancy with a rent review” has the meaning given in paragraph 2.

(2) In this Schedule, in relation to a business tenancy with a rent review—

“elements 1 and 2” means element 1 and element 2 set out in paragraph 5C;”.

This is consequential on Amendment 376.

Amendment 385, in schedule 31, page 325, line 33, leave out “4(2)(b)” and insert “5B”.

This is consequential on Amendment 376.

Amendment 386, in schedule 31, page 325, line 37, leave out from beginning to end of line 2 on page 326 and insert—

““rent review terms” has the meaning given in paragraph 2(2);

“rent under review” has the meaning given in paragraph 2(2).

(3) A reference in this Schedule to rent review terms that do not specify new passing rent has the meaning given in paragraph 5B.”—(Miatta Fahnbulleh.)

This is consequential on Amendment 376.

--- Later in debate ---

[Miatta Fahnbulleh]

This group of amendments expands the scope of schedule 7B so that arrangements such as options and rights of first refusal are also within the scope of the ban. Arrangements of this type may allow the tenant to enter into a new lease on pre-specified terms, which could include upwards-only rent review provisions. Permitting such arrangements could therefore be used to avoid the ban’s effect. As a result, we cannot permit new leases such as those to be excluded from scope, as this would likely encourage gaming of the system and prevent businesses from being protected in the way that the Bill intends.

Government amendment 389 makes a minor change to clarify that the application of schedule 7B to an arrangement can vary over time depending on the circumstances, therefore allowing for arrangements to move in and out of scope. By doing so, this amendment ensures that different types of arrangements, such as options and rights of first refusal, are caught by the ban if they meet the stated criteria at the relevant point. I commend the amendments to the Committee.

[David Simmonds]

I want to make the same point again, but I will not go back and repeat it. We remain very concerned about the loss of freedom of contract that this represents. Clearly, this is consistent with the Government’s direction of travel. The Minister refers to protecting businesses, some businesses will benefit from this and others will lose out, including property investors who are critical to the success of our high streets and commercial sectors. They are facing rapidly rising business rates and increases in national insurance, all of which are hammering our commercial sector and resulting in a very large number of job losses. We see this as part of that picture. We encourage the Minister to think again, reflect and perhaps change direction on this matter.

[Miatta Fahnbulleh]

My summing up will be very short. There is clearly a problem. That problem has been around for decades. Upwards-only rent reviews are an outlier internationally, and it is putting huge pressure on our high street. I absolutely recognise that we have to strike a balance between the investment that we want to see in our local economies and commercial property sector, but we also need to protect tenants. It cannot make sense to have a system whereby rents can only go up, irrespective of what is happening in the market, and cannot go down if the market goes down. That is an illogical system and one that is putting huge pressures on businesses, particularly small and medium-sized ones. There is a reason why all other advanced countries do not apply this system. Those countries all function well and have vibrant property markets. Critically, there are specifics around individual places and the reforms that they have been through, but the lesson across the piece—whether in Ireland or Australia—is that reforms are possible, and in the end we can still have both a vibrant sector and a property market that is far more rational from the perspective of tenants. I commend these amendments to the Committee.

Amendment 387 agreed to.

Amendments made: 388, in schedule 31, page 326, leave out line 5 and insert “Application of this Schedule”.

This is consequential on Amendment 393.

Amendment 390, in schedule 31, page 326, line 6, leave out “to an arrangement”.

This is consequential on Amendment 393.

Amendment 389, in schedule 31, page 326, line 6, leave out “if” and insert—

“at a particular time if, at that time,”.

This would make clear that the application of Schedule 7B to an arrangement can vary over time depending on the circumstances.

Amendment 391, in schedule 31, page 326, line 9, leave out paragraph 2 and insert—

“2 (1) Condition A is met if Part 2 of this Act—

(a) applies to the tenancy, or

(b) has the potential to apply to the tenancy.

(2) In the following paragraphs of this Schedule—

(a) the tenancy to which Part 2 applies, or has the potential to apply, is referred to as the ‘existing tenancy’;

(b) the premises let under the existing tenancy are referred to as the ‘relevant premises’.

(3) For the purposes of this paragraph, Part 2 has the potential to apply to the existing tenancy if—

(a) Part 2 cannot apply to the existing tenancy because—

(i) none of the relevant premises are occupied by the tenant, or

(ii) the relevant premises are or include premises which are occupied by the tenant, but none of those premises are so occupied for the purposes of a business carried on by the tenant or for those and other purposes,

(b) the terms of the tenancy include terms (the ‘permitted use terms’) which would permit the tenant to occupy relevant premises for the purposes of a business carried on by the tenant (whether the terms permit occupation for the purposes of business generally, a specific business or a specific kind of business) or for those and other purposes, and

(c) if the tenant were to occupy relevant premises in accordance with the permitted use terms (and taking into account all other circumstances), Part 2 of this Act would apply to the tenancy.

(4) For the purposes of sub-paragraph (3)(b), terms of the existing tenancy which—

(a) would prohibit the tenant from occupying relevant premises for some purposes, but

(b) would not prohibit the tenant from occupying relevant premises for other purposes,

are to be regarded as terms which would permit the tenant to occupy relevant premises for the purposes which are not prohibited.

(5) Sub-paragraph (3) must be construed as one with section 23(1).”

This would replicate the new paragraph 1 of new Schedule 7A that is contained in Amendment 376.

Amendment 392, in schedule 31, page 326, line 17, leave out “put option” and insert “tenancy renewal arrangement”.

This is consequential on Amendment 393.

Amendment 393, in schedule 31, page 326, line 19, leave out from “to” to end of line 25 and insert—

“a tenancy renewal arrangement.

(2) In this Schedule—

‘new tenancy’ means a new tenancy of the whole or a part of the relevant premises;

‘tenancy renewal arrangement’ means an arrangement under which the tenant under the existing tenancy—

(a) can require the landlord or another person to grant a new tenancy, or

(b) can be required by the landlord or another person to take a new tenancy.”

This expands the scope of new Schedule 7B to cover any arrangement under which the grant of a new tenancy can be required, whether it is the landlord or tenant that can impose the requirement.

Amendment 394, in schedule 31, page 326, line 26, leave out “put option” and insert “tenancy renewal arrangement”.

This is consequential on Amendment 393.

Amendment 395, in schedule 31, page 326, line 27, leave out “put option” and insert “tenancy renewal arrangement”.

This is consequential on Amendment 393.

Amendment 396, in schedule 31, page 326, line 31, leave out “lease” and insert “tenancy”.

This would ensure the defined term “new tenancy” is used.

Amendment 397, in schedule 31, page 327, line 1, leave out “put option” and insert “tenancy renewal arrangement”.

This is consequential on Amendment 393.

Amendment 398, in schedule 31, page 327, line 3, leave out “put option” and insert “tenancy renewal arrangement”.

This is consequential on Amendment 393.

Amendment 399, in schedule 31, page 327, line 6, leave out “put option” and insert “tenancy renewal arrangement”.

This is consequential on Amendment 393.

Amendment 400, in schedule 31, page 327, line 14, leave out “lease” and insert “tenancy”.

This would ensure the defined term “existing tenancy” is used.

Amendment 401, in schedule 31, page 328, line 22, leave out “put option” and insert “tenancy renewal arrangement”.

This is consequential on Amendment 393.

Amendment 402, in schedule 31, page 328, line 35, leave out “(2)” and insert “(2)”.

This is consequential on Amendment 393.

Amendment 403, in schedule 31, page 328, leave out line 36.

This is consequential on Amendment 393.

Amendment 404, in schedule 31, page 329, line 2, at end insert—

“‘tenancy renewal arrangement’ has the meaning given in paragraph 3(2);”.—(Miatta Fahnbulleh.)

This is consequential on Amendment 393.

Schedule 31, as amended, agreed to.

--- Later in debate ---

[Vikki Slade]

There is a village in my constituency called Shapwick, which, for some reason I cannot quite understand, did not take the opportunity to do a neighbourhood plan a couple of years ago, and now has lost that opportunity. It is surrounded by green fields. There are four or five sites within this small National Trust village where there are gaps, cottages either having fallen down or burnt down over the years. We could recreate a beautiful chocolate box village that would really boost our local tourism and enable local services such as the nursery and the pub to maintain themselves in the long term by having a slightly increased population.

As Shapwick does not have a neighbourhood plan, however, it is reliant on Dorset council, which, through the Government’s desire to build 1.5 million new homes, is now expected to find 55,000 homes in the county of Dorset—not the Bournemouth, Christchurch and Poole element, just the Dorset council element. That will ruin small villages with 50 or 60 homes, as they now run the risk of having 300 or 400 homes that will change their nature forever. A neighbourhood plan would allow those villages to go, “Do you know what? We could probably get to 75 or 80 houses and still maintain everything that we love about our village.” That cannot happen now, because there is no capacity with such a small village to raise the funding required to produce a meaningful neighbourhood plan.

New clause 43 simply says that if neighbourhood plan funding is not directly restored, local authorities should be able to provide professional planning support to councils for the purposes of developing their neighbourhood plans. My preference is for the Minister to commit to restoring the independent funding, so that our town and parish councils and communities do not have to go to the local authority, but failing that, our only option is to push this approach and say, “If we can’t have our money back directly, let’s do it through this method.”

[David Simmonds]

I will try to deal with the two main issues raised by the new clauses, in reverse order.

We all recognise that last year’s Budget was a disaster for local government. The rise in national insurance alone was a £1.5 billion net cut, but the loss of funding to support neighbourhood plans, although small in the grand scheme of things, was one of the most challenging elements. As we heard from the hon. Member for Mid Dorset and North Poole, it is at that neighbourhood level—in the locality—that the buy-in of our constituents for new homes is often first secured.

The inability to support that work any longer is particularly challenging for very small local authorities. Although they do not employ many people, so they were not as hit by the national insurance rise as the big local authorities that do social care, the town and parish councils that support those neighbourhood plans—and the district councils that support such work in the local areas—have been particularly hit by the loss of funding. Ensuring that funding is there to deliver the vision that we set out when we were in government for neighbourhood planning is really important.

New clause 5 is about the ability to deliver local elections. The Government are in a bit of a mess on this issue: the messaging on devolution is that there is no point in having elections to councils that are about to be abolished, which I think we would all agree with, but the legislation simply defers the elections for one year. That is what the laws that we have passed actually do, so as far as the law stands, all the councils set to be abolished are due to have elections on their current footprint next year unless the Government return with further legislation to cancel elections under different provisions or to defer them again. The risk highlighted by the hon. Member for Mid Dorset and North Poole remains a live one.

Multiple Ministers and two different Secretaries of State have assured us at the Dispatch Box that there will be elections, but without giving any specific commitments. In many places, in the normal cycle of events, there will be district elections. If the new mayoral authorities come into being, there may be mayoral elections. If there are not, under the current legislation, those existing counties will go to the polls next year. It would be helpful if the Minister could provide a clear assurance that the existing provisions that guarantee an additional separate grant to fund elections to take place will continue to apply, as has been established practice for a long time.

Will the Minister also tell us—or at least give us a steer—whether the Government intend to introduce further legislation to defer elections again, so they will not take place as scheduled next May in councils that are set to be abolished, or do the Government have a different intention? That may well affect how we vote on these new clauses; we oppose the deferral, delay or cancellation of elections, but we need to know the Government’s intentions so that we understand what we are voting for or against.

[Miatta Fahnbulleh]

Let me address the question directly, and then I will turn to new clause 5, on the cost of local elections, and new clause 43, on support for neighbourhood planning.

We like elections, and we think it is absolutely right that voters have the opportunity to exercise their democratic mandate. We have therefore proceeded with elections. It is important to clarify that we opted to delay them where there were specific requests from the local authorities involved, because they were going through the process not only of local government reorganisation but of creating mayoral strategic authorities. The concern was that the capacity, resource and transitional arrangements would be jeopardised by early elections. All reasonable Members will understand that it is right that the Government listen to constituent authorities that are going through what we all acknowledge is a difficult reform and transition process, and that we get that balance right.

Our principle will always remain that we want elections to go ahead, because it is critical that voters have the chance to exercise their democratic rights. We are balancing that with being fair minded, rational and reasonable. When constituent authorities, including authorities of both parties, tell us that there is a genuine transitional and delivery risk that we need to take into account, we are sensible and reasonable, and take that into account. That is the balance that we will continue to hold to.

[David Simmonds]

On a point of clarification, when the process of reorganisation was embarked on, local authorities were told quite clearly, in accordance with long-established practice, “If you are due to have elections but we are going to abolish your council as a result of this process, we will not hold elections to that council again, because it is not going to exist.” However, the legislation introduced to Parliament simply delayed the elections for 12 months. All those authorities, including Surrey, which was today announced as the pathfinder, are, as a matter of law, expecting to have elections next May, but on the undertaking of Government they are not expecting to have any further elections to the existing authority again. Are the elections to the county councils that are about to be abolished going to proceed next year, or are the Government going to introduce legislation to delay them again?

[Miatta Fahnbulleh]

I think I have been very clear. The legislation is very clear, and Members of the House were all involved in agreeing it. We are proceeding with elections. The principle that has guided what we have done is that the preference is always to have elections, but if there is a reasonable, justified case that there is a risk to delivering our reforms, or that the risk to the transitional arrangements is a genuine, material consideration for those authorities, it is right, rational and sensible for the Government to listen to them.

The legislation is that legislation that we have. We are proceeding with elections, and certainly the Labour party is gearing up to speak to its voters and ensure they come out—no doubt parties across the piece are doing that. That is the mode in which most of local government is operating, and certainly we on the Government Benches are.

The cost of local elections is met locally. Again, I refer Members to the new burdens doctrine, which requires that any new responsibilities are assessed. That is how we will approach elections, which are locally funded. Broadly, we are not hearing about issues with constituent authorities that are undergoing this process at the moment, but we will continue to review the new burdens doctrine to ensure that critical elections are held with no detriment to the voters in those particular areas.

--- Later in debate ---

[David Simmonds]

It is tempting to make reference to all sorts of detailed points of local government finance that we could bring up in a debate about allotments. However, I purely want to make a point about where this issue sits, which I think other Members have touched upon. The Opposition are big fans of allotments, just as everybody else is, but the local plan is the mechanism by which that should be delivered. We all know—particularly those of us, like myself, who have lots of allotments in our constituencies—that there are often waiting lists for some of the more desirable sites and also huge numbers of vacancies on others.

When allotments on their current scale were introduced in the 1950s, food was one of the biggest costs that households faced. Today, the UK has some of the cheapest food in the world, relative to household budgets. The UK and the US spend the lowest proportion of household expenditure on food in the developed world. Indeed, the proportions have reversed since the 1950s, and housing costs are now the highest factor.

One of the Opposition’s concerns about the purposes of this Bill, and about where the Planning and Infrastructure Bill was going, is that the focus on units and achieving targets will mean losing green spaces, particularly gardens and spaces outside people’s homes. When we pass this legislation, it is through the local plan that we will be able to ensure that we are not using allotments to plug a massive gap that has arisen because of those housing targets, but are instead building the types of homes that people want to live in, particularly those that include outside space. That is why, although we agree with the sentiment behind the new clause, we are not minded to support it.

[Miatta Fahnbulleh]

We understand the intention behind this provision on allotments, and we are big fans of allotments and nature-rich spaces. However, I would point out that a duty to provide allotments already exists and sits with local authorities, which is the appropriate level. In addition, the provision of nature-rich spaces is already being tackled through multiple Government initiatives, whether that is the access to nature programme or the Natural Environment and Rural Communities Act 2006, which places a duty on all public authorities operating in England to consider, from time to time, what action they can take to further the conservation and enhancement of biodiversity.

We recognise the need for green spaces and allotments for communities. We think that there is already sufficient provision in legislation, so the new clause is unnecessary. Actually, putting the duty at the strategic authority level is not appropriate; it should be at the local authority level. For that reason, I ask the hon. Member for Brighton Pavilion to withdraw the motion.

--- Later in debate ---

Brought up, and read the First time.

[David Simmonds]

I beg to move, That the clause be read a Second time.

The need for this new clause has become greater as the Committee’s consideration of the Bill has continued. The original legislation and amendments from the Government have set out that new mayors will have precepting powers that will apply to non-mayoral functions. That gives rise to a suspicion, particularly in the context of the Government’s frankly dire financial situation, that such powers will be used as a means of levying, through a mayoral precept, additional resources that will be funnelled not into the priorities of local government but—the Government having set out that they see these new authorities as the local delivery agents of central Government—into the priorities of Government.

It is a long-established principle—it has been implemented for a good, long time now—that there should be some degree of constraint, and that consent should be required before a local authority seeks to proceed with a council tax rise above a certain level: 5% is the current figure. It seems to us a reasonable principle that the new mayoral authorities should be subject to the same constraint to ensure that the tax rises, which would of course be inflationary, notwithstanding the impact they would have on household budgets, would be subject to a similar process of democratic consent, rather than being something that a mayor can simply proceed with without needing to go down that route. That is the objective of the new clause, and it will be interesting to hear what the Government have to say about it.

Our key concern is that these new authorities do not become a means of addressing shortfalls in other areas of Government spending or simply backfilling some of those costs. The Minister likes to talk about a financial mess, and it is noteworthy that the Government have borrowed over £80 billion in this financial year alone already. We heard the Chancellor talking about a £22 billion black hole, which she alleged existed after 14 years of Conservative Government. I use the term “alleged” advisedly, because the Office for Budget Responsibility, which did the calculations, swiftly came back and said that it did not stand by the figure used by the Chancellor. That is £22 billion after 14 years versus £80 billion since the start of this financial year alone.

It is clear that the country’s finances are facing an exceptionally challenging time and have deteriorated exceptionally fast. Local government, in particular, has a £1.5 billion black hole that has been created purely by last year’s Budget, as a result of the national insurance rise, notwithstanding any previous challenges that may have existed. There will naturally be a temptation to see an unlimited, uncapped and unrestricted mayoral levy as a means of tapping taxpayers’ pockets further. We need to make sure that that is constrained in a proper democratic manner.

[Miatta Fahnbulleh]

Let me respond directly to the inference by the hon. Member for Ruislip, Northwood and Pinner that, through the Bill and the devolution of power, we are essentially imposing the Government’s own agenda and requirements on strategic authorities, mayors or local authorities. Let me be very clear: that is not the intent. The intent is to enable mayors and local and strategic authorities to define and drive their own priorities. If the hon. Member spends any time with any of our brilliant mayors or our emerging strategic authorities, it will be incredibly clear that they have their own agenda, which is driven by the priorities of their local people. The idea that we can impose on them a set of things and use them essentially as a new revenue-raising mechanism is for the birds.

We do not think that the desire expressed in the new clause to impose restrictions on the ability of the mayor to raise a precept is right or proportionate. We are clear that the precept must be both proportionate and fair. Ultimately—I said this before, and I will say it again—mayors are democratically elected. They are no less immune to the requirements and the political pressure from their voters than I am or the hon. Member is. The process of democracy—of people having to account for both revenue-raising and, critically, for what they are investing in—is absolutely right. I trust our mayors to do that. Ultimately, if they do not raise revenue and, critically, invest it in things that improve the lives of their constituents, they will pay the price at the ballot box. They do not need the hon. Member to impose his requirements on them.

[David Simmonds]

Given the significance of this issue, we will push the new clause to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[David Simmonds]

I beg to move, That the clause be read a Second time.

We have spent a good deal of time debating the importance of housing and the delivery of housing targets. If we reflect on the construction industry news that came out yesterday, it is clear that there has been an absolute collapse in confidence in house building. Here in London, around 4% of the mayor’s housing target is being delivered, despite his having been allocated billions of pounds for that purpose.

[Miatta Fahnbulleh]

Can the hon. Member remind the Committee when housing stocks plummeted? Was it not in 2023, on his watch?

[David Simmonds]

I think the Minister will probably be aware that the net additional new homes target that we set ourselves in the last Parliament was 1 million new homes. While we were, frustratingly, slightly below that target, we none the less delivered, in round terms, 1 million net additional new homes in this country. The collapse, as the Minister well knows, has taken place since the change of Government. That is an unfortunate reality. We know that the Budget in prospect later in the year is a significant issue of a conspicuous lack of confidence and a desperate need to get construction activity going again.

[Paul Holmes]

It is even worse than that: in the previous debate, the Minister said that she did not want the Government to be able to impose their ideals on mayors, but now they have reduced the affordable housing target for the mayor, to try to fiddle the figures and make it look as though more houses are built. That is poorer people suffering in our capital city.

[David Simmonds]

My hon. Friend is absolutely right: it is desperation in action, and we can see that happening, as can the whole world. We would like to see the Government succeed—we would like to see the country succeed in developing the new homes that it needs. However, it has been a continuous theme in our contributions to debates on the Planning and Infrastructure Bill that we must ensure that the 1.5 million homes that already have planning permission in England get built, rather than focusing on tearing up the green belt and on more permissions that also do not get built.

We know that in our capital city there are more than 300,000 new homes that already have planning permission, but on which work has not started. The purpose of the new clause is to ensure, just as we have sought to in the past in respect of private sector developers where there is a failure, that where a local authority or a mayor is in charge of a development, they are required to build it out in good time. That is so that we do not see a repeat of the situation where well-intentioned changes to the planning system simply result in more unbuilt permissions, while people who need homes do not have access to them, because that is not what is being delivered.

The focus of the new clause is to ensure that the system does what it is intended to and actually builds the homes, as opposed to churning out more planning permissions. Given the Government’s desperate need to move somewhere in the direction of achieving their 1.5 million target, I am sure the Minister will welcome the new clause and ensure that the Government support it.

[Miatta Fahnbulleh]

I understand the intent behind the new clause, and the Government are absolutely committed to building the homes that people across the country need. But I cannot let it pass without setting the record straight: housing delivery plummeted because of action taken by the previous Government, including the scrapping of housing targets across the country, the under-investment in social and affordable housing and, dare I mention, Liz Truss—remember her?—who saw mortgage rates skyrocket. Those are the factors that have driven down housing stock, and we, again, are having to fix the mess left by the previous Government. I will take no lectures from them on house building, given their record.

We are determined to deliver the 1.5 million homes that we know the country needs, and we will work with strategic authorities and local authorities to do that. There are already provisions that will enable mayors to accelerate housing development and drive economic growth, and we are providing further tools through the Bill, whether that is the strategic planning powers, the ability to raise the community infrastructure levy, the extension of the ability to form mayoral development corporations to all mayors outside London or, importantly, the land assembly powers given to strategic authorities to unlock development. We are very clear-sighted about what needs to be done, and we are already equipping and empowering mayors to do that.

We already have examples of where this is working, such as the Olympic legacy in Stratford and the huge progress delivered in London through that. There are provisions in the Bill. Our challenge is that we have to fix the mess that we inherited, but we are absolutely determined to do that, and we will do it in partnership with mayors.

[David Simmonds]

Many interpretations can be placed on the facts, but it is very clear if we look at the numbers that Government borrowing costs are now significantly higher even than under Liz Truss. It has been a pretty disastrous period for Government finances. If we are to see the measures to which the Minister has just referred succeed, there must be some imperative around building. We cannot simply see a tranche of mayors granting permissions, assembling sites and failing to deliver in the way that Mayor Khan has in London.

[Mike Reader]

The Leader of the Opposition, the right hon. Member for North West Essex, said at the Conservative party conference that she wanted to cut regulation on building, but she was silent on the Government’s consultation on speeding up building. Is this a change of policy? Are the Conservatives now supporting the Government on build-out programmes? Can we look forward to the hon. Gentleman joining us in the Lobby when the proposal comes forward?

[David Simmonds]

It is a nice try by the hon. Member, but I think we know that there have been areas of deregulation where there is a high degree of consensus. In particular, we know that one of the reasons why some of those 1.5 million homes have not been developed is that, after local authorities have granted consent, delays are created by, for example, waiting for permission from the Environment Agency to proceed. There are elements of deregulation that I think we all support, and we can see how they would be of benefit, but where we have mayors such as the Mayor of London who are just abjectly failing, we need to make sure that there is a degree of compulsion so that the homes that our capital city and our country need are delivered.

Just as we would like to see that level of compulsion apply to private sector developers, who can be as guilty of this as Government—they might be land banking or looking at those permissions not as an opportunity to create homes, but simply as a means of creating a tradeable asset—we need a degree of imperative to hold the feet of those mayors to the fire to ensure that the new homes are delivered. I hope the spirit of the Government’s response signals their support for this amendment, which I will press to a vote.

Question put, That the clause be read a Second time.

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Brought up, and read the First time.

[David Simmonds]

I beg to move, That the clause be read a Second time.

The intent of the new clause is very much in line with the recommendations that Mr Speaker has recently made in respect of Members of Parliament. There has been a degree of concern about the intimidation and victimisation of politicians and the impact that has had on wider public debate. It has been a long-standing principle that a person needs to declare their eligibility to stand in a particular place, and in a local authority there are specific requirements connected to the local area that person is seeking to serve.

However, it has been a widespread view for some time that there needs to be a degree of confidentiality so that members who are concerned that they will be victimised are able not to have that data, that information, placed in the public domain. Once they have satisfied the local authority’s returning officer that they meet the requirements—with evidence, as is currently the case—their home address does not need to be placed in the public domain, creating risk.

We think the precedent that Mr Speaker set out in respect to Members of Parliament is absolutely right. The intent of the new clause is to achieve the same for our locally elected brethren. I am sure that to achieve that objective, the Government will be pleased to support the new clause.

[Miatta Fahnbulleh]

I thank the hon. Member for this new clause. We wholeheartedly agree with its intent. In the English devolution White Paper, the Government committed to removing altogether the requirements for local government members’ home addresses to be published. The new clause would not achieve that aim because it relies on a member requesting non-publication. We believe that the default position should be non-publication, and we intend to legislate with more robust provisions when parliamentary time allows.

In light of the reassurance that we will be legislating on this important issue, which we agree on, I ask the hon. Member to withdraw his new clause.

[David Simmonds]

I am afraid that I am not reassured. I am particularly concerned, because we know that “when parliamentary time allows” means this could be kicked into the long grass for a very long time. Given some of the incidents we have seen, which have affected both Members of this House and our locally elected peers, we know this has become a more pressing issue.

Some locally elected members see it—as some Members of Parliament do—as an advantage to have their home address published, and we, as Members of Parliament, are free to make that choice. At the moment, we can say, “I wish it to be known that I live at this address,” or, “I wish it to be known that I live, anonymised, in a constituency”, which is how it is listed for Members of Parliament. Broadly, the same provisions should apply, so those councillors and candidates who prefer to keep their address confidential should be able to do that, as we can. Those who choose to take advantage of that additional degree of confidentiality—perhaps because they have a young family or caring responsibilities, or whatever it may be—should be able to take advantage of that.

If we fail to include this measure in the Bill, I suspect we will see a number of local election cycles in which local council candidates will not have the same opportunity as we do. I will therefore be pressing the new clause to a vote. I encourage the Government, if they are not minded to accept it now, to consider implementing it when the Bill gets to the Lords, because we have a duty of care to our local councillors. Giving them the same opportunity that we have as Members of Parliament seems an entirely reasonable and minimal measure of protection to offer.

Question put, That the clause be read a Second time.

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[Vikki Slade]

I beg to move, That the clause be read a Second time.

I will speak on behalf of my hon. Friend the Member for Harrogate and Knaresborough (Tom Gordon). I am sure that in doing so I will also speak on behalf of other Members, in areas such as Cornwall and Yorkshire—my hon. Friend the Member for North Cornwall (Ben Maguire) in particular, but I suspect there may be others, even in this room, who support the intent of the new clause. In short, the new clause would push devolution a step further.

[David Simmonds]

Does the hon. Lady share my concern that during the passage of the Bill we have heard from some Members that they have been given assurances from the Government? Ministers have clarified that no such assurances have been given. Indeed, in response to a written parliamentary question from my right hon. Friend the Member for Braintree (Sir James Cleverly), the Minister set out that there are no provisions in the Bill that would provide such identity protections. Does the hon. Member for Mid Dorset and North Poole feel that this is something to which we need to return? Despite an impression that assurances have been given, it is clear that they are not present.

[Vikki Slade]

I thank the hon. Gentleman for his intervention. I did a little research on the national minority status introduced by the former Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, back in 2014. This is fundamental. Cornwall has national minority status and it is critical that no Bill, including this one, should undermine that position. Other areas with strong regional identities and commonalities could potentially benefit from the new clause, which would allow for a degree of regional governance, across a number of mayoral regions, through the creation of regional assemblies. The clause includes protections: the Secretary of State would be required to assess the local appetite and need for a body, and Parliament would have to approve the creation of such an assembly. We hope that those will be effective in securing the support of the Minister.

This new clause is hugely important in relation to the people living in these areas. It would introduce greater protections and rights for local populations in those areas, devolving more decision-making powers and granting more freedoms from decisions made in Westminster, which are less applicable to these distinct areas. It would advance on the Bill’s power for collaboration across areas by providing an assembly structure through which multiple councils and mayors—although I recognise that if it was Cornwall, it would be a single council, probably with no mayor—could work together at scale to drive coherent change for a given region.

Clearly, the measure would need to be developed through the regulations listed in the new clause. The provision is embryonic, so that it allows for a lot of work and consultation to be done in the areas where it would apply. This is an opportunity to signal a direction of travel towards genuine devolution for places with special characteristics—I would argue that the Isle of Wight might have such special characteristics—or national minority status. We hope that the Minister will take the opportunity to embrace this change.

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[Perran Moon]

I thank the hon. Lady, but I note that according to the amendment paper, one of the two Cornwall Members has not put their name to the new clause. The hon. Member for St Ives is not on the list.

I will make some progress. We are two weeks on, and we have come full circle on the Cornish question. I am glad that the hon. Lady mentioned national minority status, which is the crux. I have said it before and I will say it again: the Cornish people have a unique place on this island, as we are the only people with national minority status who do not currently have access to the highest level of devolution, even though the people of Cornwall want it. That can be seen very clearly across the political spectrum. Conservatives, Liberal Democrats, Labour, Green, independents and Mebyon Kernow are all in favour of greater devolution for Cornwall without the requirement of a mayor, which is the highest level of devolution. Only one party supports joining a mayoral combined authority: Reform. It would be a dereliction of duty on my part not to raise those concerns.

[David Simmonds]

It falls to me, as the shadow Minister, to be the voice for Conservatives in Cornwall, who would absolutely agree with everything that the hon. Gentleman says. There is strong cross-party consensus. The reason we tabled our amendments, which were very similar in spirit to the hon. Gentleman’s, was to seek an assurance that because of Cornwall’s unique situation, there would be provisions in the legislation that would protect it.

The hon. Gentleman said very clearly that he had received assurances on the basis of which he had decided to withdraw his amendments. Since then, the Minister has clarified, in response to a written question, that there are no provisions in the Bill that would provide that protected status. Can the hon. Gentleman share with the Committee whether he has had any further assurances since that date to give us all comfort that the unique identity of Cornwall will be protected in the changes envisaged in this legislation?

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[Vikki Slade]

I would like to thank all the Committee staff, yourself, Dame Siobhain, and all of the other Chairs, and all the Members on the Committee. I also thank the staff in our offices, who have had to work really hard and stay quite late into the evening to ensure that everything gets put into the Public Bill Office for the next stage. I pay tribute to all of them.

[David Simmonds]

I echo those comments, Dame Siobhain. The Bill may be poor, but the organisation and support have been flawless—[Interruption.] And the quality of the heckling is without parallel. I know we will be returning to many of the topics of debate later on in the parliamentary process, so we will have the opportunity to relitigate and seek to deliver the necessary improvements to the legislation. I thank all the officials, all those who contributed to the Bill, and the witnesses, whose evidence has been so helpful.

[Siân Berry]

To what everyone else has said, I want to add that, while I have spent a lot of time in the Committee complaining that scrutiny is not done well, we have done a really good job of scrutinising this Bill. My team has had the most amazing support from the Public Bill Office and the Clerks, and the Chairs have been fantastic, so thank you very much, everyone.