Growth and Infrastructure Bill

Lord Smith of Leigh Excerpts

Wednesday 30th January 2013 Lords Chamber

[Lord Shipley]

My Lords, in speaking to this amendment I first declare that I am a vice-president of the Local Government Association and, as your Lordships know, a government adviser on cities policy. This amendment would extend the city deals structure, potentially to all councils, and it would be a practical manifestation of what we passed in the Localism Act. I welcome that. The aim of this amendment is to boost economic growth, based on the core package for wave 2 cities. As the noble Lord, Lord McKenzie, explained there will be a confirmation, I think within a few weeks, of those wave 2 cities. However, the core package will be derived from the experience of those in wave one. I expect that that announcement will be made during March; I certainly hope it will be before Easter.

The amendment would mainstream the core package of the city deals. When the Deputy Prime Minister launched the wave two process at the end of October, he said that,

“while it’s too early to talk exactly about what a third Wave might look like, I very much see this”—

wave two—

“as a step in a journey”.

I have concluded that the door is ajar and that this amendment may well represent a means of providing it with a gentle push, for all the reasons that my noble friend Lord Jenkin outlined. There is a very clear base of evidence that if you localise, decentralise and devolve, you will actually drive faster economic growth if you provide local councils and their local enterprise partnerships with the statutory means of delivering that economic growth.

I have one caveat. Councils will need to show governance structures demonstrating their stability, their ability to manage risk and their ability to pool thinking and resources with their local enterprise partnerships and neighbouring councils so that driving growth in an area is seen as a collaborative process rather than a competitive one. I am particularly impressed by the governance structure that is in place in Greater Manchester, where the combined authority—enabled under legislation from 2009—provides a model that could be built on in other parts of the country.

Finally, on timing, if wave 2 city deal announcements are made later in 2013, this amendment will be implemented some time around the summer or autumn of 2014. As my noble friend Lord Jenkin said, this gives the Government an opportunity to consult and think further—but then to come forward with a means whereby the powers that are being given to a number of cities will actually be available to all of local government.

[Lord Smith of Leigh]

My Lords, I must follow the noble Lord’s compliments to Greater Manchester by speaking at this point. I need to declare my interests, which I repeat from Second Reading, particularly to mention that I am the chair of the Greater Manchester Combined Authority. I therefore support this amendment, which gets to the heart of the Bill’s Title—it is what the Bill should be about.

I took part in the negotiations with the Government over the city deal. It was a very interesting process. Obviously, we developed ideas on our own and in conjunction. The noble Lord, Lord Jenkin, is absolutely right that it needs to involve not just local authorities but the local business community. It takes a very special skill for many businesspeople to rise above their day-to-day work to have that comprehension of local economic policy, but in Greater Manchester we are fortunate to have many people who can do that. We rely on them and other partners such as universities, which are very important, too. On the key partners, we need to remind the Government that this is not a financial issue for local authorities. We are actually asking for devolution—not necessarily for more money but to have the money spent at a local level, where many of us believe it will be spent more effectively. In some cases, no money is involved at all; it simply gives us permission to do what we currently have to do.

The city deals work. They can harness the strengths of local partners and build on local knowledge, and they can be addressed to the local circumstances. I am sure that the city deal for Greater Manchester is different from the city deal for Newcastle, because the issues are clearly different. We will have some similar issues. No doubt skills are a very important part but, for us, transport was a key issue. As the noble Lord, Lord Jenkin, rightly said, this amendment mirrors the report of the noble Lord, Lord Heseltine. It is really beginning to address this point about freedom. At a meeting of the Greater Manchester Combined Authority on Friday, we were pleased that we were beginning directly to fund local businesses to take on new workers and expand, so the measure is working practically on the ground. It is not a theoretical thing, and I will be very glad to see the rolled-out programme.

Like the noble Lord, Lord Shipley, I am a bit concerned about the wording of the amendment because I would not like every local authority to have to have its own deal with the Government. That is not what the spirit of this measure is about. What we did very carefully in Greater Manchester was to think about the functional economics. What is an economic area that makes sense? As important and lovely as the great city of Manchester is, its geography is a very odd shape. It is very long and thin. It is not a functioning economic area. The centre of Manchester and the centre of Salford are very close together, so we need to go over local authority boundaries. I hope that in passing some version of this amendment, we can encourage local authorities to be co-operative, as the noble Lord, Lord Shipley, said, to work together to think about what is in the interests of their communities and to make sure that we start to deliver what all noble Lords want, which is more growth, more employment and more opportunities in the country.

[Lord Greaves]

My Lords, I am pleased to follow the noble Lord, Lord Smith of Leigh, because outside Greater London, Greater Manchester is probably the best example of a classic city region in this country. City regions suddenly became all the rage a few years ago under the Labour Government, and they are perhaps making a bit of a comeback now.

The problem is that when people get new ideas, they tend to regard them as a template that applies everywhere. There is no doubt that city regions can be very powerful places in democracy and growth, but the geography of this country is not the same everywhere. Even within England, there are places which it is difficult sensibly to allocate to a city region. The temptation is for people to look at the model and try to impose it everywhere, instead of asking about the geography of this country, which is very different in different places, and about the appropriate model given the geography of a region or sub-region.

A classic example is the towns of west Cumbria—Barrow, Whitehaven and Workington—and their local authorities, Allerdale, Copeland and Barrow. It is very difficult to say which city region they can be part of. Newcastle upon Tyne might have imperialist designs on them and pretend they are part of it, but they are clearly not, and they are equally clearly not part of the Greater Manchester city region, Merseyside or whatever. They are different. The largest places in those areas, including Carlisle, are smaller than the largest places in west Yorkshire or Greater Manchester, obviously, so the system that is used ought to take account of the geography of those areas. That is not to say that they should not have the kind of powers which are set out in this amendment, the powers that existing city deals have, which will, I hope, go on to get more; it is to say that central government has to get out of the mindset of trying to fit everybody into the same size bottle and accept powers have to be devolved to some smaller places because that is the nature of the economic geography and the economic regions in those areas.

It will not surprise noble Lords to learn that I think that east Lancashire is another area, not quite as extreme an example as west Cumbria, that is very difficult to fit sensibly into any particular city region. If we were forced into a big city region, it would be Greater Manchester, but we would always be peripheral and far too far out. Despite the wishes of some people in Preston, it is very difficult to claim that Lancashire is in any way geographically a city region with Blackpool out on the coast, Blackburn and Burnley, former county boroughs, further inland, Lancaster further to the north and then all the other places.

If this is going to be successful, it has to be accepted that it is not just the major metropolitan centres, such as Manchester, Leeds and Newcastle, and smaller but equally important ones such as Norwich, that are going to be the engines of growth in this country. They are probably the main engines of growth because of geographical factors, but the rest of the country needs a fair deal as well, and we do not want to be looking forward to a country where some areas are growing: the south-east and Greater London, obviously, but also those cities that have been remarkably successful in recent years, of which Leeds and Manchester are perhaps the leading examples. Those of us who live out in the sticks need a decent standard of life, a decent level of growth and a decent level of local services, just the same as everywhere else.

My final point is that it is more difficult institutionally where there is two-tier local government. In some areas, the districts are not important. District councils vary hugely across the country. There are some areas where shire districts are not really important within the economic development sphere, never have been and are never going to be. Some of them are quite weak rural authorities in that sense. There are other areas where they are the motors of economic development and the places were inspiration, motivation, ideas and people from the public sector and the private sector come from. I suggest that west Cumbria and east Lancashire are classic examples of this there the county councils traditionally have not had a very strong economic development role.