Combined Authorities (Borrowing) Regulations 2018

Lord Kennedy of Southwark Excerpts

Tuesday 1st May 2018 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I draw Members’ attention to my interests in the register as a councillor in the borough of Kirklees in West Yorkshire and as a vice-president of the Local Government Association.

The regulation is a natural extension of the powers of the mayoral combined authorities, and in that light it is to be welcomed. The functions that will benefit from investment where the authorities choose to use the additional borrowing powers are significant and of strategic importance to the development of those combined authority areas.

I say all that because I am not criticising the fundamental issue of the borrowing powers. However, I am concerned that additional borrowing by the mayoral combined authorities will result in additional costs being passed to the constituent local authority. So will the prudential borrowing code of the constituent authorities be affected by the additional borrowing permitted under these regulations?

The direct accountability between the spending body, which is the combined authority, and the tax-raising bodies, which are the constituent local authorities, will be fairly obtuse. If these powers are extended in this way, how will local council tax payers and businesses have a clear and transparent explanation of the use of the revenues of local authorities by the combined authorities if, for instance, there is no direct benefit for that particular part of the combined authority area?

The Minister mentioned Sheffield City Region, which will be in the fortunate or unfortunate position on Friday morning of having elected a mayor who will have no powers and no resources because that agreement has yet to come to Parliament and before your Lordships’ House. It will be an interesting conundrum for the Minister and his department as to what the newly elected mayor of the Sheffield City Region—he or she—will do.

I have a final comment for the Minister. The extension of powers to the mayoral combined authorities in this way is positive, with the addendums that I have already referenced, but it begs the question as to the continuing divergence of the powers of local authorities that do not have these additional powers because they do not have combined authorities and metro mayors. That is beginning to grow. The differences are beginning to be obvious and there will be an issue that will have to be addressed by the Government in one form or another. Has the Minister any thoughts to share on that issue?

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I have no issue with the regulations before the House this afternoon and I draw the attention of the House to my relevant interests as a councillor and as a vice-president of the Local Government Association.

As we have heard, these regulations in effect implement agreements between the Government and the combined authorities referred to in this order to increase their borrowing powers for various functions as listed in the Explanatory Notes. The lists of additional borrowing approvals are different, as each deal is bespoke. I know that the Government like this bespoke deal arrangement, but I am of the opinion that the jury is still out on that way of working, as one person’s bespoke deal is another person’s confused muddle, with no one knowing or being clear why one authority has certain powers and another does not.

I also noted in the consultation, as referenced in the Explanatory Notes in paragraphs 8.1 to 8.26, that there are still very small numbers of people coming forward to give their views on these consultations. It might be that the numbers compare favourably with other consultations that the department has undertaken, but, if we are to give proper weight to the views of local people—and these areas have millions of people living in them—some of the numbers are derisory. We need to look at other ways of consulting people to get their views on the proposals coming forward. Having said that, I am happy to approve the regulations tonight.

[Lord Bourne of Aberystwyth]

My Lords, I thank all noble Lords who have participated in the debate on these important borrowing powers. I welcome their participation; it is most helpful and reflects the general support we have had for the Government’s approach and the flowering of these combined authorities and mayoralties—particularly in the north and the Midlands—to seek to redress the great growth of the economy in the south and, to some extent, East Anglia. It reflects the importance that we attach to ensuring that there is strong economic development elsewhere.

First, I turn to the points made by the noble Lord, Lord Jones. I thank him for his kind words and reflect on his distinguished service over a considerable period of time in Wales and, more broadly, in the Government in Westminster. He is right that these provisions are England-only, because the department is England-only, but he is also right that exciting and important things are happening in Wales and across the border between Wales and England, around the River Dee and Chester. Also, the North Wales Growth Deal looks to links with the northern powerhouse and the Borderlands Growth Deal encompasses southern Scotland as well as Northumberland and Cumbria. Working with the devolved Administrations in Edinburgh and Cardiff is very much on our agenda. I can reassure the noble Lord that I was in Wales just last Thursday, speaking to the Labour Economy Minister, Ken Skates, to discuss the Mid-Wales Growth Deal and possible links with the LEP in the Marches.