Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority Order 2014

Lord Adonis Excerpts

Monday 7th April 2014 Grand Committee

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

My Lords, the order we are considering this afternoon, if approved, will bring about the establishment of another combined authority in another major area of our country—this time across the area of Durham, Northumberland and Tyne and Wear.

The order is very similar to those that the Grand Committee considered on 24 March, and I am happy to report that the combined authorities for the areas of greater Merseyside, South Yorkshire and West Yorkshire were established on 1 April. Noble Lords may also recall that I explained to the Committee then that the establishment of the combined authority enables the councils and their partners to work together more effectively and efficiently to promote economic growth, to secure more investment and to create more jobs.

The establishment of this combined authority opens the way for more effective collaboration between the councils and their partners to pursue more efficiently economic development and regeneration. Crucially, all the drive and initiative for establishing the combined authority has to come from the places involved. It is a process where the first steps are taken by the councils involved—what we sometimes call bottom-up.

As with the others, this combined authority will be responsible for economic development, regeneration and transport across the functional economic area. The combined authority will take over the transport functions currently exercised by the Tyne and Wear Integrated Transport Authority, which will be abolished when the combined authority is established. The combined authority will also undertake similar transport functions currently exercised by Durham County Council and Northumberland County Council. The seven councils within the area have agreed that the combined authority will be able to exercise their functions on economic development and regeneration.

By taking on those functions, the combined authority will be central to delivering the outcomes envisaged in both the Newcastle City Deal and the Sunderland and South Tyneside City Deal, the latter of which the Government have recently agreed. The combined authority will also provide the governance needed for any future growth deals drawing on resources of the local growth fund.

As I set out to the Grand Committee the other week, the Government’s approach to combined authorities is one of localism, which reflects our belief that residents and their representatives are best placed to decide what happens in their area. Where councils come forward with a proposal for a combined authority that commands wide local support and we consider that the statutory conditions have been met, we invite Parliament to approve a draft order to establish the proposed combined authority.

If in future local councils decide that changes are in the area’s best interest—perhaps another council joining, or one leaving—and statutory conditions have been met, we would bring a new order to Parliament for approval to enable the change to take place. What is important here is the area’s best interests.

We have considered the particular circumstances of this proposed combined authority, as made by the councils, against the statutory conditions, as the law requires, making sure that the proposal: is likely to improve the exercise of statutory functions relating to transport, economic development and regeneration in Durham, Northumberland and Tyne and Wear; is likely to improve the effectiveness and efficiency of transport in Durham, Northumberland and Tyne and Wear; and is likely to improve the economic conditions in Durham, Northumberland and Tyne and Wear. The Government consider that the tests are unambiguously met. The Government have also had regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government. Further, we are clear that the combined authority would command wide local support—from local businesses, other public bodies, and local people and their democratically elected representatives.

The draft order specifies the formal, legal name for the combined authority to be the Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority. All those councils have consented to that legal name but, as we discussed previously, how that authority will brand itself, including the use of any brand name, will be entirely a matter for the combined authority. That was an important point that we debated the other week, and I am sure it will be raised again by noble Lords in the discussion that follows. The draft order makes provision: for the abolition of the Tyne and Wear Integrated Transport Authority; about the transport and economic functions that the combined authority will have; and about its membership and constitutional arrangements. The combined authority will be for a larger area than that currently covered by the Tyne and Wear Integrated Transport Authority, reflecting the functional economic area. Accordingly, the combined authority will also have some of the transport functions currently exercised by Durham County Council and Northumberland County Council.

The combined authority will be governed by its members and subject to scrutiny by one or more committees with a membership drawn from members of the councils concerned, to hold the combined authority to account. As we discussed previously, good governance practice will mean that such committees will be politically balanced, enabling appropriate representation of councils’ minority parties in the governance of the combined authority. I am pleased to inform the Grand Committee that, following my exchange with my noble friend Lord Shipley during the debate on the other combined authorities, the Government have now written setting out the good practice guidance, and a copy of that letter is being published on the Government’s website. We, of course, intend to write to this combined authority in similar terms.

Noble Lords may have seen that the councils concerned with the combined authority have already confirmed that its constitution will be formally adopted at its first meeting and provides for a politically balanced overview and scrutiny committee of two members from each constituent authority, in line with good practice. Combined authorities are also subject to the same transparency and audit requirements as local authorities, so the combined authority will be audited by an external, independent auditor. Meetings of the combined authority and its committees are open to the public and minutes of the meetings are made publicly available, in the same way as for local authorities. In future, people will have the right to film and use social media to report on council meetings; that applies equally to meetings of combined authorities as it does for local authorities. Again, noble Lords may have seen that the councils have confirmed that the meetings of both the overview and scrutiny committee and the combined authority will be open to the public and their minutes published.

This draft order will enable the seven councils concerned and their partners to work together more effectively to deliver economic growth across their areas. Establishing the combined authority is what the councils and their partners in these areas want, because they believe that it is the most effective way for them to do what councils across the country should be doing: putting the promotion of economic growth at the heart of all that they do. That is a priority for them, and a priority for the Government. I commend the draft order to the Committee, and beg to move.

[Lord Adonis (Lab)]

My Lords, I strongly support the order and I commend the noble Baroness for the extremely able way in which she introduced it—though, taking up her point about the title, it is one of the greatest mouthfuls in the history of mouthfuls. I am sure that the authority will rapidly come to be known as the north-east combined authority, which is the right thing.

Two years ago I was privileged to chair the North East Independent Economic Review. My fellow commissioners included the then right reverend Prelate the Bishop of Durham before he was translated—or as some in the north-east think, demoted—to become the most reverend Primate the Archbishop of Canterbury, and the noble Lord, Lord Curry of Kirkharle. The key recommendation of that review was for a combined authority, broadly as proposed in this order, uniting seven authorities of the region, together with the local enterprise partnership, with a mission to improve transport, infrastructure, skills and economic development in the region.

I pay tribute to the chair of the local enterprise partnership, Paul Woolston, and his team, and to the leaders of the seven local authorities for embracing this agenda, which has led to the order before us today. I also congratulate Simon Henig, the leader of Durham County Council, on his election as chair-designate of the combined authority, and I am also very glad to see that all seven leaders of the local authorities within the north-east region are taking constructive leadership roles within the new combined authority.

This order is about the legal structure and mechanisms of the combined authority. However, it cannot be stressed too much that the combined authority is a means to an end. The report of the independent review highlighted five priorities in particular, on which we very much hoped the combined authority would focus. First, we hoped that it would champion North East International, promoting the region at home and abroad as a magnet for trade, talent, tourism and inward investment. The north-east is doing very well on inward investment. It is the only region of the country with a positive balance of trade. Nissan is one of the most successful exporters in the country, and I am delighted that recently another major Japanese exporter, Hitachi, has also invested in the north-east. It is creating upwards of 700 jobs and is at the moment constructing its new factory in the north-east. However, much more can be done. As those companies have said, they are sure that the north-east could do even better in attracting inward investment and using it as a basis for exporting to the continent. I am glad to see the noble Lord, Lord Wrigglesworth, the former chair of the Port of Tyne in his place. The ports in the north-east are excellently placed for exporting to mainland Europe. The potential for using the north-east as a platform for significant further exporting industries is huge with the right economic infrastructure in place.

The second priority that we identified for the combined authority was doubling the number of youth apprenticeships to tackle the evil of low skills and high youth unemployment, alongside higher skill standards and an increase in the proportion going on to higher education. The north-east needs a further skills revolution. It will not be able to compete successfully without higher skill levels. Regrettably, it has a lower than national average proportion going on to higher education and fewer than one in 10 of 18 year-olds goes on to an apprenticeship. That situation needs to change radically if the north-east is to be able to compete. A focus on a really significant improvement in skill levels by the combined authority is important.

The third priority we identified is the development and strong innovation in growth clusters, stimulating universities and their graduates, existing companies and public institutions to create and finance new high-growth enterprises and jobs. The north-east has four outstandingly good universities that are all strongly committed to economic growth and regeneration within the north-east, and the combined authorities of which their representatives would also be members through the local enterprise partnership could make an important contribution there, too.

The fourth priority identified was the need for big improvements in transport infrastructure and services to overcome the relative national and international isolation of the north-east, and to improve connections within the north-east so that people can get to and from work more easily. It cannot be emphasised too strongly that transport connections and improvements in national and international connectivity are crucial for the future of the north-east. The west coast main line has significantly improved in recent years, which has brought Manchester and the north-west relatively closer to London. The journey times on the east coast main line have regrettably slowed down over the period. Despite the debate that we had within the north-east economic review about what we hoped was the imminence of a transatlantic flight starting from Newcastle Airport, that still has not happened, and improving transport connections will be important. Within the region, there is significant room for improvement in the ITA’s activities but it has done good work. However, this order also brings County Durham and Northumberland within the ambit of the combined authority, and that could be very beneficial for improving transport connections within the region.

Fifthly and finally, we identified the need for the creation of stronger public institutions, including the location of key national institutions in the north-east. In the report we identified the British Business Bank as a possible candidate for location in the north-east. I regret to say that that opportunity was passed by, but there are many other candidates that we ought to review. In what noble Lords think was one of my more quixotic moments, I even suggested that your Lordships’ House might be relocated, and I cannot think of a better location for it than the north-east. However, I mainly offer that as an illustration of the possibilities that might be available.