Levelling-up and Regeneration Bill

Lord Shipley Excerpts

Report stage
Thursday 13th July 2023 Lords Chamber

Moved by

[Lord Shipley]

26: Clause 8, page 8, line 4, leave out paragraph (f)
Member's explanatory statement
This amendment would ensure that the duty to allocate seats to political groups to the executive of a CCA or to a committee of such an executive would continue to reflect the requirement for political balance defined in the Local Government and Housing Act 1989.

[Lord Shipley (LD)]

My Lords, I shall speak also to Amendments 30, 31 and 43 in my name. On Tuesday, I spoke on Amendment 51; I share the concerns expressed on that occasion by the noble Lord, Lord Hunt of Kings Heath. I am a signatory to that amendment, in the name also of the noble Lord, Lord Bach.

I have a particular concern in relation to Amendment 30. I should give the Minister notice that, assuming that the response I get is similar to the one I got in Committee, it is my intention to test the opinion of the House.

On Amendment 26, I expressed concern in Committee that the Local Government and Housing Act 1989 will be disapplied in so far as political balance is concerned on a combined county authority. All this group is about power structures in combined county authorities. Some of the proposals in the Bill are worrying because they will centralise power within a CCA. The disapplication of the Local Government and Housing Act 1989, because it eliminates political balance on a CCA, could lead to dominance by one party in the combined county authority and encourage a further centralisation of power.

I also have a concern about centralisation of power away from CCAs into the Treasury. With Amendment 43—I raised this matter too in Committee—I am concerned that, in terms of the Government’s ambitions for devolution, of which a great deal is claimed, no further devolution of fiscal powers is planned that I can see. For example, in the recent West Midlands deal, there is provision for the collection of local business rates locally for 10 years, but other fiscal powers are missing from that devolution agreement. I therefore have a concern in respect of Amendment 43 as well. I do not plan to test the opinion of the House on it but I hope that the Minister will understand that it is important to have a system for power structures that will stand the test of public scrutiny. I fear that these do not.

The noble Baroness, Lady Taylor of Stevenage, has two amendments in this group. I shall say nothing about those other than these Benches will support her if she decides to seek a vote on either Amendment 28 or Amendment 29.

Amendment 31 raises a fundamental issue of principle that the amendments in the name of the noble Baroness, Lady Taylor, also address: the concept of a non-constituent member of a combined county authority. That is a body, not an individual member; I will come to associate members, which are about individuals, in a moment. It refers, of course, to district councils. My Amendment 31 tries to make it clear that, where a council is the local planning authority, it really ought to be a full member of a CCA. I do not understand why that principle is opposed by the Government. I can hear the objection to what I am saying, which is, “Well then, a county will be dominated by the districts”, but there is a power in the Bill to organise a voting system, weighting it appropriately by population, to solve that problem. As a matter of principle, a district council that is a local planning authority should not be excluded from full membership of a CCA.

I move briefly on to Amendment 30. As I have said, I have a concern about the centralisation of power. There should be a principle, understood and agreed by all parties, that voting members in a CCA should be full members of the CCA and not part-time or temporary members. For that reason, I am in favour of non-constituent councils being full members of a CCA, which I have tried to explain in the context of the local planning authority.

Amendment 30 in my name seeks to prevent one party with majority control of a CCA appointing individuals as associate members then giving them a vote when those individuals are not full members of the CCA. I cannot think of any parallel. I understand why there may be a category of associate member; what I have not understood is why a CCA would have the power to permit an associate member, an individual, to have a vote on an issue. I raised this matter in Committee. The noble Earl, Lord Howe, will forgive me if I quote to the House what he said on that occasion because I got very worried about this. He said:

“For instance, a combined county authority may have provided for an associate member who, for example, may be a local business leader or an expert on a local issue to enable the member’s input on matters on which they have relevant expertise in the CCA’s area”.—[Official Report, 27/2/23; col. 113.]

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[Earl Howe (Con)]

I simply remind the noble Lord, in answer to his first point, that there has to be a public consultation. That is when the views of all interested parties can be taken into account. Retaining the present arrangements, which I guess the noble Lord would like to do, could mean that the expansion of a combined authority—where the evidence shows that would be likely to improve outcomes across the proposed whole new area—could end up being vetoed by one existing constituent council if the combined authority’s local constitution requires unanimous agreement from its members on this matter. That could happen, irrespective of support from the potential new member, the mayor and the great majority of constituent councils.

I hope the noble Lord appreciates why these provisions are framed as they are. I know that he believes there is an underlying malign motive. Again, I emphatically repudiate that idea. The current regime acts as a barrier to the expansion of an existing combined authority, even when there is a clear economic rationale in favour of it. The Bill will make it less difficult for combined authorities to expand into more complete and stronger economic geographies. For that reason, I ask him not to press his amendment when it is reached.

[Lord Shipley (LD)]

My Lords, I am grateful to the Minister for his reply. He has not allayed my concerns about the dangers of greater centralisation of power in a CCA, and I am unconvinced by his argument about local planning authorities. I still think that a district council which is a local planning authority ought to have an absolute right to membership of a CCA. It should not be at the discretion of existing members of a combined authority. We may come to that issue in a moment, but for the time being I beg leave to withdraw Amendment 26.

Amendment 26 withdrawn.

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Moved by

[Lord Shipley]

30: Clause 10, page 9, leave out line 35
Member's explanatory statement
This amendment seeks to ensure that only full members of a CCA would have the right to vote.

[Lord Shipley (LD)]

My Lords, I find myself unconvinced by the Minister’s reply on associate members’ right to vote. I wish to test the opinion of the House.

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Moved by

[Lord Shipley]

32: Schedule 1, page 280, line 33, leave out “at least one member of an audit committee is” and insert “a minimum of three members of an audit committee are”
Member’s explanatory statement
This amendment would help ensure a strong presence of knowledgeable, independent persons on an audit committee thus avoiding too great a dependence on members of constituent councils.

[Lord Shipley (LD)]

My Lords, I have two amendments in this group. It is not my intention to speak at length about them or to test the opinion of the House.

I have a great concern about the role of audit. I do not think that the existence of Oflog is sufficient to address the problems that we have experienced recently around processes in local government being inadequate to prevent excessive expenditure—particularly capital expenditure—which has spiralled out of control. There is a big issue for local authorities and combined authorities to address in terms of their ability to undertake an audit effectively. We are aware that a number of local authorities have not had their audits signed off for some time. There seems to be a capacity problem across local government in terms of the audit function.

All that said, my amendment is not a matter on which I will divide the House. I just hope that Ministers will try to address the issue of capacity in the audit function on audit committees where they exist. There will be audit committees for a CCA. I would like to think that enough expertise will be there to do the job properly. Simply to have at least one member is not enough. I have proposed a minimum of three. This is very important. When councillors are members of an audit committee, they have many demands on their time. What is required is a more professional focus of those who are trained in the area.

The second amendment relates to the ability of an audit committee, where it exists, to publish a report. At the moment, it is required to report to the CCA. I do not know what will happen if the CCA decides that it does not like it or does not want to publish it. Does the CCA have the power to prevent publication? I hope to hear from the Minister that something can be done to reassure me that an audit committee of a CCA can publish a report, even if the CCA does not wish it to do so, where the audit committee believes it to be in the public interest.

These two amendments are as simple as that. I am very happy for the Minister to take the issue away, to see what might happen when some of these statutory instruments start to come through your Lordships’ House. I beg to move Amendment 32.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall be very brief. I want to express our support for the amendments of the noble Lord, Lord Shipley, and to reiterate our concerns around audit and Oflog and how that will operate within its responsibilities. We need to ensure that there is a sufficient set-up to deal with the huge problems facing local authorities regarding audit. We know that some authorities have not had an audit for years, so this is clearly a real problem. We thank the noble Lord for tabling the amendments and hope that the Minister and the department will look carefully at his concerns and constructive suggestions, as we really need to resolve this issue.

[Earl Howe (Con)]

My Lords, Amendments 32 and 33 in the name of the noble Lord, Lord Shipley, seek to increase the transparency of CCAs. Greater functions and funding must come with strong accountability, but that must go hand in hand with decisions being made at the most local level possible. I can deal with this quite briefly and, I hope, to the noble Lord’s satisfaction.

As the Bill is drafted, a CCA’s audit committee can appoint three independent members, should it wish to, but it should be a matter for the CCA to decide exactly how many above one. The regulations that will establish the combined county authorities will set out the audit committee arrangements. They will provide that, where practicable, the membership of the audit committee reflects the political balance of the constituent councils of the combined county authority. Membership may not include any officer from the combined county authority or the combined county authority’s constituent councils. The regulations will provide for audit committees to appoint at least one independent person.

As regards transparency, in addition, Part VA of the Local Government Act 1972 provides powers to require the publication of reports of a committee or sub-committee of a principal council, including audit committees. Schedule 4 to this Bill already includes a consequential amendment to apply Part VA to CCAs.

I hope that that is helpful. The noble Lord has already kindly said that he will not press his amendment, but I hope that what I have said will reassure him.

[Lord Shipley (LD)]

I thank the Minister for his assurances. I think there may be a way forward here—I hope very much that, at the very least, we will have strong guidance. When the statutory instruments come before the House—assuming that they do—I hope they will ensure that the ability to have three members is translated into having three, as opposed to having at least one person. There has recently been developing concern among the public as to what has happened in some local authorities whose audit systems simply do not seem to be strong enough to prevent capital investment going wrong. With that, I beg leave to withdraw the amendment.

Amendment 32 withdrawn.