Local Authorities (Conduct of Referendums) (England) Regulations 2012

Lord Bilston Excerpts

Monday 6th February 2012 Lords Chamber

[Lord Bilston]

Would the Minister allow me to ask a question about costs? We are all well aware of the problems that the majority of people in this country are facing at this moment. How do the Government reconcile the spending of £2.5 million on these referendums, £85 million on the AV referendum and £25 million on the referendum for police commissioners? How can we square this vast amount of expenditure when there is so much poverty and we are taking legislation through this House which will make people more impoverished? We are voting on measures which are unnecessary, certainly in the minds of the public. As we have heard, they are not interested in these kinds of changes. They want local government as they have always understood it: councillors working together for their communities, most often across parties, to bring about the improvements that people look for. I suggest that this is a complete waste of time and money.

[Baroness Hanham]

My Lords, when we have had the referendums we will know whether or not people want to have a mayor, or whether they want changes to their local governance system. This is in 12 cities, that is all: the 12 largest cities. It is not in the rest of the country, which, as the noble Lord, Lord Beecham, said, can already have those referendums if they can get enough people to sign the bits of paper under the Act passed by the previous Government.

The value of large cities effectively led by powerful mayors is demonstrated by international and domestic experience. I am not going to quote Barcelona. There is, not least, the Mayor of London: the capital has benefitted from having a strong voice and leadership. As a result it has been possible to start devolving powers from the centre to the mayor, who is then able to work in conjunction with local government and see major infrastructure projects, such as Crossrail, implemented. It is exactly because of these and similar benefits which we believe that mayors will bring to other large cities that, in our view, those large cities should all have the opportunity to be governed by elected mayors. Evidence shows that, on average, local authority mayors are known to 57 per cent of local people—over twice the percentage for a council leader. I will not tempt the noble Lord, Lord Beecham, to tell me what percentage of people recognised him on the streets of Newcastle. I am confident that it might be a smidgen under 57 per cent, but I am not going to make a bet on it.

Noble Lords on both this and a previous occasion have argued against these orders, and against what they see as being compulsion, citing the current provisions under the Local Government Act 2000, which include the petition trigger and the ability for a council to resolve to change its governance arrangements, as being sufficient. This is consistent with the approach taken by the previous Government, who legislated to hold a referendum in 1998 on an elected mayor for London, which has also already been referred to by my noble friend Lord Tope.

However, I would like remind noble Lords that, under the Local Government Act 2000, which was enacted by the previous Government, there were two further triggers for a referendum. Section 35 of the 2000 Act provides that the Secretary of State may make provision enabling him or her, in circumstances set out in the regulations, to direct a local authority to hold a governance referendum. Section 36 of that Act provides that:

“The Secretary of State may by order make provision requiring every local authority, or every local authority falling within any description of authority specified in the order, to hold a referendum”,

on whether those authorities should operate a specific form of governance, which could include the mayoral form of governance. We are not on a unique path here. In fact, the previous Government used the power under Section 35 of the Act to compel the London Borough of Southwark, which I think the noble Lord mentioned, to hold a referendum on its governance model in January 2002. Indeed, this compulsion was in the form of a direction and was not even subject to parliamentary scrutiny, as this legislation is. The provisions in the Localism Act 2011 are therefore not new or confined to this Government, who are concentrating, as I have said, on just 12 cities—but that is now 11, following Leicester’s decision to adopt the mayoral form of government.

It has also been argued that there is no appetite for a mayor or, indeed, for a referendum but I would like to be clear that a case for a referendum under these circumstances is not about whether there is a clamour for one. It is about the governance of our big cities and their contribution to the country as a whole, and about how a mayor can help their city to perform even more strongly economically, socially and environmentally. That is why we believe, at the very least, that the people of the city should have the opportunity to address—and seriously address—the question of whether to have a mayor. The choice is theirs.

In the next few months, discussions and arguments will take place about the strengths and weaknesses of a mayoral model—I am saying “mayoral” because I am not sure that it is “mayoreal”, as I do not think there is an “e” in it. It is exactly this type of debate and discussion that points to the validity of an exercise in giving local people the opportunity to address the question of whether to move to that. Let us be clear; we see mayors as being better able to deliver growth and prosperity to our larger cities, something which I know that we all want.

During Grand Committee, and indeed today, noble Lords asked about the cost of a mayor against other governance structures, and about internal administrative costs and savings or allowances. As we made clear in the impact assessment, which I am sure noble Lords have all studied, and as I said in Committee, any costs or savings will depend on how much reorganisation a city council decides to undertake to accommodate the mayor. In order to do so, it may of course reallocate resources internally in a variety of ways. However, based on the 11 authorities which have adopted an elected mayor since 2000, there does not appear to be any substantial difference in the corporate and democratic core costs of having a mayor compared with a leader. Perhaps that underlines my reply to the noble Lord, Lord Grocott, last time. In the light of the current financial position, I am sure that any elected mayor would want to keep their costs and allowances down to ensure that they remain within budget.

I think it is correct that the version of the question which the noble Lord, Lord Grocott, was kind enough to tell the department that he would ask is not entirely the question that he asked in the Chamber. I am going to reply as on the first, if I may. He had asked what the costs were in the administration of the Greater London Council in its last year, if that is correct, and what the costs are now that we have a mayor and Assembly. The noble Lord is nodding his head, so I assume that is right. I can tell him that the GLC and GLA are not directly comparable in terms of function, particularly since information on the GLC is now historic. The combined component budget for the GLA—that is, the mayor and Assembly—for 2011-12 is £155.1 million. That is net of any specific grants of council tax and is the closest publicly available figure to an administrative budget that we can find. The noble Lord may wish to note that the current Mayor of London has in fact frozen council tax during his last four years in office, helped in part by this Government’s two-year council tax freeze. By contrast, under the previous Mayor of London the Greater London Authority's council tax levy almost trebled.

Finally, my honourable friend the Minister for Cities in the other place, Greg Clark, recently announced the Government's intention that the first election of a mayor will take place on 15 November of this year, fulfilling the Government's commitment that mayoral elections would take place shortly after any referendum which resulted in a yes vote. I am sure that there will be vigorous debate between 3 May and then if there are to be any elections.

We are clear as to why we believe that elected mayors would enhance the leadership of the 11 major cities, delivering greater growth and prosperity. We cannot compel an outcome but we can give local people the option of a change of governance. I am grateful to my noble friend Lord Shipley for his comments, and, indeed, to my noble friend Lord Tope. I hear what he says. It will be interesting to see the outcome.

In response to the amendment of the noble Lord, Lord Beecham, I simply add that these orders will give the people of the cities involved an opportunity through a referendum to consider and decide on their future governance without the cost falling on the cities themselves. I commend the orders to the House.