Draft Combined Authorities (Borrowing) and East Midlands Combined County Authority (Borrowing and Functions) (Amendment) Regulations 2025

Debate between Jim McMahon and Paul Holmes

Wednesday 8th January 2025 General Committees

[Jim McMahon]

I thank the shadow Minister and wish him a happy new year in return. His were generally positive comments, with the exception of the standard view of the Mayor of London, who is obviously doing a fantastic job of delivering the Government’s missions—and long may that continue.

Let me answer the shadow Minister’s questions, all of which were completely legitimate. We expect all public bodies, whether they are councils or mayoral combined authorities, to exercise their borrowing powers with the restraint that the public would expect. We expect them to borrow for a purpose and honour their borrowing commitments through the repayment schedule. That is why there is a clear mechanism in place for HMT to assess borrowing caps on an individual basis, reliant on the financial status of the local or combined authority in question. The checks and balances are robust and in place, and it may well be that the powers are not used in some places.

The point is that as we move towards a new phase of devolution there has to be an assumption of trust and autonomy for local authorities to do what is right for their local communities, without them always coming cap in hand to the Government or waiting for a new Government grant scheme that they can bid into. In the end, areas will be expected to self-organise, to work with their local business community and investors, and to marshal projects for the economic wellbeing of the country. This devolution mechanism is very much about bringing the relevant areas in line with other authorities that already have those powers.

We have seen mayoral combined authorities in particular making a difference to economic growth. Greater Manchester is significantly outperforming large parts of the economy elsewhere in England. That has been in large part because of the mayor’s convening role and the activity and energy of the local authorities, but also, importantly, because they have been able to team up and label different elements of funding to make schemes stack up and bring them to market so that they can be achieved. Having that role in place, with the legal powers required, is entirely what this mechanism is all about.

I have a different view from the Opposition on the use of a mayoral precept. The reason for that is that every mayoral operation has a cost to it. We can all agree that we want them to be slim, efficient and nimble, but the idea that some mayors have a cost to them and some do not is frankly ridiculous. Every mayoral combined authority has an operating cost. The more that authority does, the higher that cost will be, reflecting the activity that has been undertaken. There are two ways to meet that cost. We can have a levy or a charge on the local authority, which is not particularly transparent and cannot be seen by the public. The public do not even get to see on their council tax bills how much has been spent on that function, so where is the democratic accountability? Alternatively, we can shine a light on it and say that the public have a right to know how much mayoral combined authorities cost. That should be transparent on the council tax bill, and the public, through the democratic voting process, will have the right to say whether they believe that money is being used to the best effect.

[Paul Holmes]

I do not want to break the spirit of consensus, but although the Minister is quite right that transparency is crucial to all local mayors and that the public must know how much the authorities cost, why is it that Labour mayors seem to be raising their precept much more than any Conversative mayor? Is he saying to the Committee that Labour mayors are inefficient and their operations cost more than those of Tory mayors?

Oral Answers to Questions

Debate between Jim McMahon and Paul Holmes

Monday 2nd September 2024 Commons Chamber

[Jim McMahon]

I pay tribute to my hon. Friend for the work he did in local government, and as chair of the LGA, to make sure that the sector spoke with one voice and worked in collaboration with Government to try to get a better outcome for local councils. This Government will continue in that spirit.

[Paul Holmes (Hamble Valley) (Con)]

The Minister for Local Government may be aware that Liberal Democrat-controlled Eastleigh borough council is subject to a best value notice, due to its unsustainable £700 million of debt. More audits have been undertaken that show that more borrowing is taking place, so will he meet me to discuss this risk to my constituents and their taxpayers’ money?

[Jim McMahon]

I am very happy to have a meeting, probably next week, on that issue.