Devolution (East Anglia)

Lord Jackson of Peterborough Excerpts

Wednesday 27th April 2016 Westminster Hall

[Mr Stewart Jackson (Peterborough) (Con)]

I beg to move,

That this House has considered Government proposals for devolution in East Anglia.

It is a pleasure to serve under your chairmanship for the first time, Mr Crausby. It is also a pleasure to see the Minister, who in his relatively short time in post has done an excellent job of driving the Government’s regional and devolution agenda, particularly as the Minister with responsibility for the northern powerhouse.

I come to this debate wearing two hats: one as the Member of Parliament for Peterborough for the past 11 years; and one as someone who is genuinely asking the Government to explain more coherently their rationale for this policy as it pertains to East Anglia. Obviously, we are a proud municipal entity in Peterborough. Our local authority was first incorporated in 1874, and 20 years ago we were liberated by throwing off the yoke of Cambridgeshire County Council to become, like other notable cities in England, a unitary authority as the city and county of Peterborough.

I am not ideologically against devolution in any sense, but it is incumbent on the Government to explain their position. It would be remiss of me not to draw the House’s attention to the excellent National Audit Office report published on 20 April, which was considered by the Public Accounts Committee on Monday in unison with another excellent report, produced on 23 March, on local enterprise partnerships.

Obviously, devolution is predicated on Government functions being moved to local areas and local entities. It is very much a bottom-up, not a top-down, process. That has certainly been the case in the majority of the 34 English local government areas that submitted bids following the Government’s invitation in 2014—the successful bids were announced in the 2015 autumn statement—but the policy of devolution must be seen within a wider context.

When the coalition Government were elected in 2010, we expressly set our face against regional government. We got rid of regional assemblies, having seen the mess made by the regional policy of the previous Labour Government, the rejection of regional government by the people of the north-east and, particularly, the rejection of the regional spatial strategies that had been trying to force inappropriate housing on many largely rural areas across the country. That was the basis of the Government’s position, and the then Secretary of State, my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles), specifically said at the time that there would be no further local government reorganisation.

It seems strange that, in what is essentially a financial statement, the Government disregarded the good work being done in places such as Manchester and Birmingham to announce, out of the blue and with limited consultation and collaboration with key stakeholders, local enterprise partnerships, local authority leaders and majority groups, three further devolution schemes in Greater Lincolnshire, the west of England and, of course, East Anglia. Given that the overall tone of the NAO report is that the process is a potential risk, and complex, the Government need to explain why that happened.

The policy involves 16 million people across 10 deals, and it arises from the Cities and Local Government Devolution Act 2016. I can understand why the policy is attractive to local authorities. It involves a cumulative sum of £7.4 billion over a 30-year period, or about £246.5 million per annum, but in the east of England it is only £30 million, which has to be set in the broader financial context. Currently, the three counties in the East Anglia scheme already spend £660 million in capital infrastructure funding and have already received £37 million of growth funding in the last financial year. The deal promises officially the lowest per capita funding of all the 10 devolution deals: £13 a head. That compares, for instance, with £22 a head for Sheffield, £20 a head for Liverpool and £23 a head for Tees valley—I am sure the Minister will have something to say about Tees valley.

If it were genuine devolution, I would be a bit more sanguine. I agree, of course, that it is not an ignoble aspiration for any Government to integrate and promote collaboration between key public services to improve them in sectors such as transport, business support, further education, housing and planning, although, incidentally, we are not devolving to any great extent the work of the Department for Work and Pensions, which has never been very agreeable to having any kind of subsidiarity or devolution. Also, the area of health is pick ‘n’ mix; some of the deals will have some health funding devolved and some will not.

A number of key issues cause me concern. One is about synergies. Is there really a synergy between the Suffolk coast, south Suffolk, St Neots, King’s Lynn and the city of Peterborough? I do not think there is. We should remember that the regional policy of the Labour Government was about reducing inequalities in the economies within regions and between regions, but the local enterprise partnerships that were established by the previous coalition Government were intended to take into account infrastructure and economic growth in travel-to-work areas, which, incidentally, are not coterminous with these new devolution deal areas.

I do not believe that there is any synergy. In fact, this is unprecedented. Unless we count Boadicea and Hereward the Wake, no one has ever decided it would be a good idea to have an overarching governance structure for the whole of these three counties in East Anglia. This is different from the other schemes. Of course, the Greater Manchester scheme and the Birmingham scheme effectively reconfigure the old Greater Manchester County Council and the West Midlands County Council, and they make sense. But regarding economic, demographic and social links, the East Anglia scheme does not stack up and it looks like a back-of-an-envelope calculation by someone in the Treasury.

That is an issue that concerns me. Another is duplication. Let me give just two examples. What is the point of LEPs now if some of their key functions in sectors such as skills and training are devolved to an executive elected mayor and a cabinet, with the numbers, powers, duties and responsibilities unspecified? We read that the combined authority will have an education committee. What will happen to Norfolk County Council’s education committee, or Suffolk County Council’s education committee and the cabinet functions that they discharge as local education authorities?

These are important issues and I do not believe that the Minister or the Government have addressed the potential for duplication across four tiers, and that is not including parish councils. The four tiers will be the LEP, the combined authority with the elected mayor, county councils and district councils. Quite reasonably, each of those bodies—particularly the district council and county council—is saying, “Which one of us is going to be abolished?”

[Sir Henry Bellingham (North West Norfolk) (Con)]

My hon. Friend is presenting a superb case. Where would the police and crime commissioners, who have only been going for four years and who the Government now say are doing a very good job, go in all this? They are another elected tier and are doing well. Chances are that, if the elected mayor comes in, the PCC will disappear, as will the LEPs. Those two initiatives, which are actually working very well, would effectively be scrapped.

[Mr Jackson]

My hon. Friend makes a very pertinent point and I pay tribute—

[Heidi Allen (South Cambridgeshire) (Con)]

Will my hon. Friend give way?

[Mr Jackson]

May I just finish the tribute to my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham)? He raised this issue very forcefully and robustly in the Budget debate in March, and I pay tribute to him for that. He is absolutely right.

[Heidi Allen]

I am just a turkey voting for Christmas, because following on from that point it occurred to me that there will also be a debate between MPs and the mayor. Who will be fighting for the infrastructure? I do not understand where the demarcation will lie.

[Mr Jackson]

That is a superb point about competing mandates, which was eloquently made in an erudite fashion by our hon. Friend the Member for North West Norfolk on the “Today” programme this morning. It is a very important point.

We also need to look at democracy and accountability. I repeat the point that there was very little discussion or debate with important people in local government before this deal was announced at the Budget, and I deprecate that. It is not right when we are talking about a potential expenditure of £7 billion that will affect 2.3 million people. We do not know what primary legislation will be needed, and we do not really know what the powers, duties and responsibilities of the elected mayor will be. I will develop that point a bit later.

There is also a question about resilience. One of the issues that the NAO brought out in its report was whether there is the resilience in the civil service at departmental level—between the Treasury, the Department for Business, Innovation and Skills and the Department for Communities and Local Government—to manage this very complex issue of different deals across the country, because of the heterogeneous nature of each of the areas involved. I am referring to the Cities and Local Growth Unit in central Government, but also to local government. The NAO wondered whether there was the capacity to deal with this sustainably. My hon. Friend the Member for South Norfolk (Mr Bacon) knows that on the Public Accounts Committee we have seen that, in straitened financial times, when we do not have a benign environment, there have been significant problems about the sustainability of big projects, whether they are projects involving fire control, the fire service and fire authorities, the police, further education in particular, or of course local government. That is the case now, so what will it be like when we have really big budgets and functions across different boundaries?

The question is this: will devolution of the

“planning and organising services across institutional and geographical boundaries…lead to more integrated and efficient services”?

That question was put by the NAO. One only has to look at the health economy in the eastern region—at the problems at Norfolk and Norwich University hospital, at Hinchingbrooke hospital, and at Peterborough City hospital—to see how difficult it has been to align geographical areas to clinical care and to work between acute district hospital care and primary care trusts. But we are looking to do something on a much bigger scale in the future.

Of course, I welcome some aspects of the proposal—the devolution of local transport budgets, skills, adult further education and business rate retention. However, there is a lack of specificity, as well as an ambiguity, about these proposals. The Government say that over time funding streams will be put in a single pot in sectors such as transport and local growth. However, the NAO says that

“the government needs to provide a clear statement of the new accountability arrangements…aligned and coherent across government…many of the assumptions about devolution deals are untested.”

That raises great concerns about scrutiny and oversight. We got rid of the Audit Commission six years ago. We do not have a body that can look in detail at the spending priorities of the elected mayor and his cabinet. It is no good saying that we will have a scrutiny panel of, frankly, under-resourced Back-Bench MPs and small district councils to oversee these huge budget decisions and infrastructure projects. That does not really wash. We only need to look at some of the problems about cronyism and inappropriate contracts in some academy chains, and most recently the problems with the fire and rescue service in Cambridgeshire, to see that without proper accountability and oversight things can go wrong.

We need to ask questions about why there is not a proper timetable and timeline. Also, there is no clear statement of objectives. The NAO says that the Government do not have

“a clear framework for how the deals will link to other ongoing localism initiatives.”

That is an important point. The NAO also says that

“The expected…pace of future devolution deals is not known at present.”

I do not want to take too much longer, but it is important to put this point to the Minister. It is not good enough to rely on good will and a statement of intent, which is what most of the deals now are relying on. As I said, we got rid of the Audit Commission and despite improvements there is not an effective process for accountability system statements. It is no good the DCLG saying that it is reviewing accountability system statements and that it does not require any more primary legislation for oversight. I do not think that that is good enough.

More importantly, given that this major issue is about driving up economic performance and macroeconomic strategy—that includes infrastructure, regeneration, new housing and so on—no performance or cost data are outlined at the centre so that economic performance can be properly measured. In particular, no data are outlined for the proposal’s value for money to be assessed.

I will finish with a few questions for the Minister. I know others want to speak. I say in passing that we are in the middle of the EU referendum campaign, and we take different sides. I believe that in politics most things are a cock-up rather than a conspiracy, but I have to say that it is strange that those most in favour of the European Union are those most in favour of this regional governance scheme. I wonder why that is. They include the council leaders who wrote to the East Anglian Daily Times saying how wonderful the European Union was about six weeks ago. The small print says that the new East Anglian combined authority would be the intermediate body for the European social fund and other European structural funds. I see the fingerprints of a well-known former Deputy Prime Minister all over the proposals. I am young, but I am way too cynical.

When will we see primary legislation come forward to allow the mayor to fund infrastructure through business rates? What non-statutory spatial framework and what local plans will be put in place? What non-statutory supplementary planning documents will be produced? What will the joint investment and asset board do? What will its powers, duties and responsibilities be? When will we see a garden town in Fenland or west Norfolk? When are we going to see a taught degree university in the city of Peterborough? That has been an omission by the Peterborough Development Corporation over the past 30 or 40 years.

Will the Minister tell us about flood defence and coastal management? Will he tell us about the potential role of the regional schools commissioner? A lot of people are concerned about that. Surely the employment and skills board will duplicate some of the work of the local enterprise partnership. There is also the Orwellian-sounding, Stalinist tractor organisation that is the productivity commission. No doubt the hon. Member for Hayes and Harlington (John McDonnell) would like that organisation; it is right up his street. The productivity commission—very Fidel Castro.

I generally welcome what the Government are doing, but I think there is a compromise.

[Mr Richard Bacon (South Norfolk) (Con)]

Will my hon. Friend give way?

[Mr Jackson]

I was just reaching my peroration, but I will give way.

[Mr Bacon]

I thought I would try to get there before my hon. Friend started his peroration. He reminded me of a meeting I had with the Italian Minister for productive activities in Rome some years ago. Curiously enough, he was not responsible for fertility in Italy, although one might have thought he was.

Because I cannot stay until the end of the debate, I felt inhibited from making a speech, but I want to ask my hon. Friend one thing. Also, I do not want to have to listen to the Minister, who is a noted Eurosceptic, torturing the English language in defending the deal. Unfortunately, I have other commitments.

We have 330 district councillors in Norfolk. There are 293 in Suffolk and a further 286 in Cambridgeshire. That is a total of more than 900. There are 228 county councillors for the area, and 57 councillors in the unitary borough of Peterborough. That is a total of nearly 1,200 councillors in the three counties, which feels a little top-heavy. There are also the 6,000 or so parish councillors. That is something like 7,500 councillors altogether. Has my hon. Friend the Member for Peterborough had people queueing at his constituency surgeries—I certainly have not—demanding more elected representatives?

[Mr Jackson]

My hon. Friend makes a good point. The need for an executive elected mayor is not the talk of the Dog and Duck in Peterborough, it is true. We have enough government and enough councillors. We do not need another tier of governance, as he has probably gathered from the tenor of my remarks.

Having said all that, the Government can rescue the situation with all the Cs: collaboration, consultation, clarity and coherence. If they can explain the role of the elected mayor, explain in a timely way how the passage towards powers and duties will work, create a timescale and show us that it is in the financial interest of our constituents to accept this new governance structure, we will be mindful of that and be prepared to be broadly supportive.

There is an alternative model, which would be to effectively have two greater local enterprise partnerships: one for Norfolk and Suffolk and one for Cambridgeshire, Peterborough and the city of Cambridge. That is a perfectly reasonable alternative model if the Treasury and the Department for Communities and Local Government do not get fixated on population numbers, but instead go back to first principles, which is economic sustainability.

I offer my remarks with good will and a degree of cross-party support. I am not yet persuaded, but I may be in the future. I look forward to hearing the Minister’s remarks. I hope he can specifically answer some of my queries and concerns.

[Several hon. Members rose—]

--- Later in debate ---

[Clive Lewis (Norwich South) (Lab)]

It is an honour to serve under your chairmanship, Mr Crausby, and a privilege to speak after my fellow Norfolk MP, the hon. Member for North West Norfolk (Sir Henry Bellingham).

When the devolution initiative was first proposed, I had an open mind. Like Councillor George Nobbs, leader of Norfolk County Council, and Councillor Alan Waters, leader of Norwich City Council, I wanted it to work. Lord Heseltine’s devolution report, which was published a little while ago, was quite clear that previous devolution attempts had failed because they were top down. He said that it would be different this time because local areas would write their own deal. That was what was promised, and it was on that basis that many councillors approached the initiative with a good conscience, thinking they could work with it, whatever their political party.

Unfortunately, nothing could be further from the truth. Councillor George Nobbs was a staunch supporter of the initial efforts. He wrote a letter to Lord Heseltine in which he said:

“Like you I have been an enthusiastic believer of devolving power from central to local government all of my adult life. However I feel that I should share with you, not just my views, but those of some of my fellow councillors, and ask for your help…You will know that there is widespread opposition to the concept of an elected Mayor, disquiet about the perceived rush to meet government deadlines and concern about a consultation to be held in July and August of all months. The financial incentives that are dangled in front of us, only to be threatened with withdrawal if there is any dissent, are in any case considered inadequate by many.”

We have to accept that if we are to have real devolution, we need real financial power for our local authorities and communities, which is not on offer in the deal. The past 35 years have seen centralisation by Whitehall and Westminster. In 1979, local authorities raised 75% of their own funding; they now raise less than 20%. The deal on the table goes nowhere near the level of fiscal independence required—a fact that so many councillors can now see. The meagre amount local authorities can raise from business rates was undermined in the most recent Budget when the Chancellor took money from them.

For cities in our region—economic powerhouses such as Norwich, Cambridge and Ipswich—there is little to no incentive for devolution.

[Mr Jackson]

And Peterborough.

[Clive Lewis]

Of course! I am sorry. How could I forget Peterborough?

Where is the control for local authorities over their own housing revenue accounts? Where is their control over the right to buy or the right to stay? Those would be the most effective ways to allow local authorities to build more of the affordable homes that are so desperately needed by so many people and that are acting as a bottleneck to economic progress.

Ultimately, if we want real devolution, we have to devolve control from central Government, which is increasing, to local government, and give local government the financial ability to do something with it. It is about empowering local authorities and local communities. As things stand, that is simply not happening.

--- Later in debate ---

[Mr Jackson]

It is clear that there is a broad welcome for the central concept of devolution, albeit multi-speed and multi-layer. It is clear, though, that unlike places such as Cornwall and Manchester, East Anglia is not based on established geographical and institutional arrangements and things such as coterminous local enterprise partnerships and healthcare economies.