Barnsley, Doncaster, Rotherham and Sheffield Combined Authority (Election of Mayor) Order 2016

Lord Bourne of Aberystwyth Excerpts

Monday 18th July 2016 Lords Chamber

Moved by

[Lord Bourne of Aberystwyth]

That the draft Order laid before the House on 27 June be approved.

Relevant document: 5th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and the Wales Office (Lord Bourne of Aberystwyth) (Con)]

I shall also speak to the West Midlands Combined Authority (Election of Mayor) Order 2016. The draft orders, if approved, will create the position of mayor for both the Sheffield City Region and the West Midlands Combined Authority, with the first elections in these areas to be held in May 2017; and set the first mayoral term for a duration of three years, with the next election in May 2020, with subsequent four-year terms. The Government committed in their manifesto to,

“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have directly-elected mayors”.

To give effect to this commitment, the Government passed the Cities and Local Government Devolution Act earlier this year. As I set out to the House during the passage of this enabling legislation, the Government have introduced clauses to allow directly elected mayors for combined authority areas because devolution of the ambition and scale set out in the Government’s manifesto requires strong, clear accountability and leadership. It is necessary that, when major powers and budgets are being devolved, local people know who is responsible for decisions. Mayoral governance offers a proven model for effective local leadership which has worked around the world.

On the Sheffield City Region, this order is a milestone in the implementation of the devolution deal agreed between the Government and local leaders on 2 October 2015. It follows the establishment of the combined authority on 1 April 2014, from which time it has been serving the Sheffield city region, bringing together across the area the closely interconnected issues of transport, economic development and regeneration. On 2 October 2015, the Government and combined authority announced a devolution agreement which provided an offer of powers and budgets from government on the basis that the area will deliver certain reforms and measures, including adopting a directly elected mayor covering the whole of the combined authority area. This agreement included that the mayor for the Sheffield City Region would be responsible for: a consolidated, devolved transport settlement; following the introduction of the necessary primary legislation, be responsible for the franchised bus services, which in turn will support the combined authority’s delivery of smart and integrated ticketing across the combined authority’s constituent councils; take on responsibility for an identified key route network of local authority roads; and have responsibility for strategic planning, including the responsibility to create a spatial framework for the city region.

In turn, the combined authority of Sheffield City Region takes on responsibility for: devolved funding—that is £30 million a year over 30 years; control of the devolved 19-plus adult skills funding by 2018-19; joint responsibility with the Government to co-design employment support for harder-to-help claimants; and a devolved approach to business support from 2017, to be developed in partnership with government. In addition, the Government agreed to pilot a scheme in the Sheffield City Region Combined Authority that will allow the area to retain 100% of any business rate growth beyond that forecast. It will also enable the combined authority to create an investment fund of £900 million through the 30-year gain share funding. In return, the area has agreed appropriate governance for these new powers and budgets, centred on a combined authority and a directly elected mayor providing the vital, sharp, single point of accountability that is essential if such wide-ranging powers and budgets are to be handed to the area.

The West Midlands order is a milestone in the implementation of the devolution deal agreed between the Government and local leaders on 17 November 2015. The first step in implementing this deal was made on 17 June 2016, when the combined authority was established, with powers over transport, economic development and regeneration. On 17 November 2015, the Government and the leaders of the West Midlands announced a devolution agreement which provided an offer of powers and budgets from the Government on the basis that the area would deliver certain reforms and measures, including adopting a directly elected mayor covering the whole combined authority area.

The agreement included that the mayor for the West Midlands would individually exercise some functions in relation to transport and strategic planning, and the combined authority would take on responsibility for: devolved funding of £36.5 million a year over 30 years for the West Midlands area; control of the devolved 19-plus adult skills funding by 2018-19; joint responsibility with the Government to co-design employment support for harder-to-help claimants; and a devolved approach to business support from 2017, to be developed in partnership with the Government. It will also enable the combined authority to create an investment fund of over £1 billion through the 30-year revenue stream and locally raised finance. In return, the area has agreed appropriate governance for these new powers and budgets, centred on a combined authority and a directly elected mayor providing that vital, sharp, single point of accountability to which I referred in relation to the Sheffield City Region.

In delivering the full range of commitments in the devolution deal, the Secretary of State intends, subject to statutory requirements and parliamentary approval, to make further orders to implement the deal. Subsequent orders will include the transfer of budgets and powers over planning, transport, education and skills.

These draft orders establish mayors for both the Sheffield City Region and the West Midlands, set out the dates of elections, and set the first and subsequent term lengths. The orders are laid before Parliament following the statutory process specified in the 2009 Act, as amended by the Cities and Local Government Devolution Act 2016. As required, all the constituent councils in the combined authorities have consented to these orders being made. As required, we are now seeking Parliament’s approval before making these orders.

These orders are about delivering devolution and empowering local authorities to set their own policy agendas. They provide enhanced local leadership in the form of directly elected mayors, with a strong democratic mandate and independence from the combined authority. The mayors will work closely with local leaders, who will sit on the combined authority boards. Together they will drive forward the economic opportunities presented by devolution, with the mayor acting as chairman or chairwoman of the combined authority and providing a single voice for the area that can both be prominent nationally and help drive the devolution agenda.

As noble Lords may recall, in the passage of the enabling legislation for this order, there was debate on the necessity of mayors in devolving powers to local areas. The Government have made their position clear on the necessity of mayors. However, the Government are not alone in this belief. Research commissioned by the Centre for Cities in May 2016 found that members of the public across five devolution deal areas surveyed supported the notion that directly elected mayors should have greater powers than local council leaders.

That said, it is important to note that no one area has been required to adopt the mayoral model. The Government’s position is that if an area is to have a mayor it will be because that area, through its democratically elected representatives, has chosen to have one. However, the Government view the devolution deal as a two-way process. As such, it is the Government’s clear intention that the accountability offered by a mayor is desirable and therefore this forms part of the devolution deals that have been agreed between the Government and local leaders.

The Government are making excellent progress in implementing their devolution agenda. An order establishing the position of mayor in Greater Manchester was made on 29 March 2016. As noble Lords will recall, last week the Grand Committee debated orders to establish the position of mayor for the Liverpool City Region and for Tees Valley. An order to establish the position of mayor for the north-east has also been laid. All these areas are scheduled to hold their first mayoral elections on 4 May 2017.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I thank all noble Lords for their contributions to what has been a wide-ranging debate. I shall try to deal with the various issues raised, I hope for the most part in the order in which they were raised. I turn first to the noble Lord, Lord Beecham, and I thank him very much for his kind comments. I well remember seeing him down in Wales at the time of the Beecham report, as it became known, and I am happy to update him on the progress—or perhaps lack of it in some areas—on local government reform there.

Let me try to deal with the points he raised. First, there is obviously a different approach to the issue of local mayors. We are of the view that there is a need for strong local leadership to carry this forward—somebody who will be accountable as a leader. It is the sort of thing that the Labour Party used to believe in, but it may be that it now has some issues about that. This should not take anybody by surprise because it is something that we have signalled clearly. Perhaps I may say that the Henry Ford analogy is somewhat unfair because local authorities have the option not to go down this route. Gateshead, for example, has chosen not to do so. So there is an option not to pursue the mayoral route but to have the quite separate arrangements that Gateshead has opted for.

I should also say that this will be somewhat different from mayoral elections that have taken place previously, which were not for combined authorities. This is a combined authority where the elected mayor will be responsible for the combined authority responsibilities but not for the constituent parts of the combined authority. As I indicated when introducing the Motion, while I know that polls are notoriously dangerous, a ComRes poll did show support in all the areas where we have proceeded so far for mayors taking over responsibility over all other types of organisation.

The issue of Bassetlaw and Chesterfield was raised. As I understand it, while it is true that there is an issue in relation to Chesterfield and Derbyshire, I think, although I may be proved wrong, that the discussions between Bassetlaw and Nottinghamshire are fruitful and moving forward. I will write to noble Lords about the progress of Bassetlaw and Chesterfield because I am not entirely sure where we are on that. Noble Lords will appreciate that I picked up the brief only yesterday afternoon, so I would be the first to admit that there are gaps in my knowledge.

If the Secretary of State is not satisfied that the statutory test has been met that the change is likely to improve the exercise of statutory functions in an area, he will be able to turn it down. That should give noble Lords some comfort on that point.

Perhaps I may deal with the point raised by several noble Lords about the Public Accounts Committee report published just over a week ago and the recommendations made in it. On the November 2016 deadline that was suggested in relation to overview and scrutiny committee obligations, we intend very much to honour that deadline and indeed to be ahead of it. I should like to offer that assurance. We will obviously—indeed we are statutorily obliged to do this following the Cities and Local Government Devolution Act 2016—ensure that there is an independent and appropriate chair of both an overview and scrutiny committee and an audit committee. But I appreciate the point that where it may be a single party in relation to a devolution arrangement, we need to flesh that out and look at it in more detail. I undertake to have a closer look at that.

The appointment process will be open, transparent and based on open advertisement. I am also happy to be able to confirm that it will follow the Nolan principles. As I say, we will be bringing forward statutory guidance and fleshing out some of the rules as suggested.

Perhaps I may say in relation to a point made by several noble Lords—and certainly by the noble Lord, Lord Prescott—about Humberside and other areas that it is open to all authorities to come forward with proposals and the Government will take a close look at them. He is absolutely right to say that we are already looking at Greater Lincolnshire, which is Lincolnshire plus north-east Lincolnshire as a possible devolution deal, and others are being taken forward as well. We are looking at proposals in East Anglia that are still at a very nascent stage. So we are certainly open to looking at that; I can give that undertaking.

In relation to points raised by the noble Lord, Lord Shipley, about whether a district can be a full party to more than one devolution deal, a district or county council can be a full party to just one deal, but a county council could be a party to two or more deals because different parts of its area could be in different devolution deals. So a district or county council could not be part of more than one deal. That seems to be the logical position.

The noble Lord, Lord Scriven, asked about Sheffield and a mayoral power of veto. I understand that the only veto that exists is with the Government. I do not think that the mayor would have a veto, but I shall write to the noble Lord if I am wrong about that.

[Lord Scriven]

The issue was within the devolution deal. The mayor could have a veto on a vote of the combined authority. That was the issue that the leader of Sheffield City Council took exception to and, apparently, there has been some way forward, but it has not been reported to the people of South Yorkshire. The Minister’s letter would be welcome on that issue.

[Lord Bourne of Aberystwyth]

I am most grateful for that clarification. I certainly will write to the noble Lord and copy it to other noble Lords who have participated in the debate. I will ensure that everybody who has participated in the debate is sighted on all the points that have been raised and discussed.

I hope that I have covered all the points that have been raised. They were various, relevant and germane. In so far as I have missed anything, I undertake to pick that up in my response.

The noble Lord, Lord Beecham, raised a point similar to that from the noble Lord, Lord Prescott, about the North Midlands. It is certainly open to the North Midlands to come forward with proposals on a devolution deal if it wishes to do so. If Bassetlaw and Chesterfield were to be part of the Sheffield city deal, they would obviously not be able to participate in both. It could involve parts of Nottinghamshire or Derbyshire in any North Midlands deal.

On one last point that I have not covered, the noble Lord, Lord Scriven, asked whether the £30 million for Sheffield—and, by implication, the £36.5 million for the West Midlands—was capital or revenue. I confirm that it is indeed both.

I will write to noble Lords on the points I have missed. I thank them very much for their participation in this debate, and beg to move.

Motion agreed.