Cities and Local Government Devolution Bill [HL]

Lord Smith of Leigh Excerpts

Monday 22nd June 2015 Lords Chamber

Moved by

[Lord Smith of Leigh]

8: Clause 1, page 2, line 10, at end insert—
“(9) An order under subsection (1) shall provide that remuneration for the elected mayor shall be determined by an independent remuneration panel established by the combined authority for that purpose.”

[Lord Smith of Leigh (Lab)]

My Lords, we come to the tricky issue of what an elected mayor is worth. We know what the public perception is about politicians being paid and what they are worth. Local authority members are currently controlled by the Local Authorities (Members’ Allowances) (England) Regulations 2003, which require each local authority to establish a scheme which involves setting up an independent panel to determine members’ remuneration. A panel would normally consist of a small number of individuals who can come from different parts of a local community—business, the third sector and so on—or have wide experience of local government. All this simple amendment does is provide for the same process for an elected mayor where one is chosen.

It would be wrong to be too prescriptive about the criteria. If the panel is to live up to its name and be independent then it needs to set its own criteria, but I am sure that it would take into account the size of the area, the level of functions being devolved and the pay levels within local authorities. The public at large has little faith where politicians determine their own allowances and expenses, so this amendment proposes that we get an independent panel to do that and show that it can be done in an independent manner and be made more publicly acceptable. I beg to move.

[Lord Shipley (LD)]

My Lords, we have tabled Amendment 13, which would short-circuit the need for an independent remuneration panel by setting the sum of pay and compensation of the mayor of a combined authority to be no larger than that of the leader of a constituent council with the highest total pay and compensation package. That is the conclusion that we reached.

I am not convinced that simply adding another independent remuneration panel will necessarily produce the right answer. I have grave doubts about the way in which independent remuneration panels do their work. That is not to say that individually they do not do a good job. The difficulty is that they come out with very different answers depending on the authority they are in. There are a number of occasions when one cannot satisfactorily explain why they have arrived at their conclusions. Nor do I like the fact that councillors are then required to vote for their own remuneration, because they have to agree to the recommendation of the independent remuneration panel. Presumably, the members of the combined authority would have to agree with the conclusions of an independent remuneration panel established under Amendment 8.

I am for a simple solution here, but I am perfectly happy to enter into further discussions about it. Simply adding an 11th independent remuneration panel in Greater Manchester does not seem to me to provide a helpful solution. If speed is of the essence, one simple solution is to tie the pay of the elected mayor to that of the highest-paid council leader. We can look further at that as we move towards Report but at this point I prefer the conclusion that we have reached in Amendment 13.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)]

My Lords, I appreciate the intentions behind these amendments, and noble Lords have made very valid points. I have just asked for some comparator salaries for city or conurbation mayors. The London mayor earns nearly £144,000 a year, and the Bristol mayor earns nearly £66,000.

There are already statutes in place regarding independent remuneration panels and the remuneration of elected members. A combined authority’s constituent councils are required by the Local Government and Housing Act 1989 to establish and maintain independent remuneration panels which make recommendations to local authorities regarding the remuneration of elected members to which local authorities have to have regard. To take my noble friend Lord Heseltine’s point, there is nothing to stop them making international comparisons.

It would seem that to make provisions for a combined authority to establish its own independent remuneration committee merely to determine the remuneration of the elected mayor would be introducing an unnecessary layer of bureaucracy and would take away some of the flexibility that this Bill offers to those areas that seek to establish a combined authority. Further legislation, the Local Transport Act 2008, enables the Secretary of State to make provisions about the remuneration of, and pensions or allowances payable to or in respect of, any member of the combined authority. That includes making provision about the remuneration—that is, the allowances—of a metro mayor, including the part to be played in setting those allowances by independent remuneration panels in the combined authority’s area. As this power already exists, we consider it unnecessary to make further regulations in connection with the remuneration of elected members. With those explanations, I hope that the noble Lord feels able to withdraw the amendment.

[Lord Smith of Leigh]

My Lords, I thank noble Lords for contributing to this very brief debate; it is about time we hurried up a bit on the Bill.

I take the point made by the noble Lord, Lord Heseltine, about local authorities. I decided, earlier in my career, that I would eventually become a full-time local politician and therefore I lost out on my chosen career—I probably would have been paid more money. I am sure that the noble Lord made sacrifices; if he had gone into business and used his strategic mind there, he probably would have earned a lot more money than he ever did as a Cabinet Minister or an MP. So we all make choices. It can be a dilemma, because sometimes people have to say to their families, “I really enjoy doing this job, but I’m not going to get paid as much as I might in another job”. The Minister will recall that her successor as leader of Trafford had to make that personal choice. That was a very sad loss for others, as he was making a very good contribution, but he decided that he needed to support his family more. So we make those choices.

We also need to think about the fact that the new mayor and the new combined authority’s work needs to be judged in the cockpit of public opinion. If it is perceived that people are getting overpaid, that will detract both from the reputation of the mayor and from the work of the elected members.

This is a difficult issue, and certainly we need to think about it. If we just leave it to local members to decide, as the noble Lord, Lord Heseltine, said, they will be totally criticised for that, and that would be unfair. However, we also need to respect that not all those positions will be exactly the same. The theme of the Bill has been flexibility, so in a sense there needs to be flexibility there. With those comments, I beg leave to withdraw my amendment.

Amendment 8 withdrawn.

--- Later in debate ---

[Lord Woolmer of Leeds (Lab)]

My Lords, the amendments seems to cover two different areas: first, whether there is a need for oversight of a democratically elected mayor; and secondly, the proposed way of dealing with that. This will clearly vary depending on the part of the country we are in. In my view, the way in which an elected mayor, if there is one in a combined authority, will be held to account is by the constituent local authorities, their elected representatives and the leaders of those authorities. The idea that you need another elected body to hold those people to account seems crazy to me. I think of myself many years ago as leader of Leeds and of West Yorkshire. The idea that there would be another elected body that would hold this mayor to account and that I took no part in it is simply not credible. It simply would not work. Indeed, it would not be effective at all; there would be a great deal of conflict.

So, first, such an arrangement is not necessary to hold an elected mayor to account, should there be an elected mayor. For the record and as I said at Second Reading—despite my earlier remarks, which may be misunderstood—I can understand that a combined authority may occasionally wish to have a mayor. Many will not, but some will. Secondly, the particular arrangement proposed could lead to very odd results. Take my area of West Yorkshire. The local enterprise partnership includes four of the five metropolitan districts of West Yorkshire, plus three shire districts outside that include Skipton, Harrogate and Selby, plus North Yorkshire. Having five elected persons per district would give the area containing Selby an equal number to Leeds. I suggest that that would not be democratic and it would not be understood. I do not care what the system of election would be; it would be very undemocratic and unbalanced.

Trying to find an arrangement that leads to an elected process in addition to having leaders of strong and powerful local authorities—taking the amendments as they are—does not stand up. First, they are not necessary, and secondly the proposal as made in detail is not workable. I therefore oppose the amendments.

[Lord Smith of Leigh]

My Lords, the problem with these amendments is that they want to impose a London-based solution on different parts of the country but they are not imposing a London executive mayor model. The GLA works to hold the elected mayor to account. How well it does that is open to question. I have never been to a GLA meeting but I have watched a bit on television. It was not the most riveting television I must say, but it did not seem that the mayor was particularly well disposed towards the scrutiny he was receiving, so I am not sure that it has even been that successful in London.

My noble friend Lord Woolmer of Leeds got this absolutely right: outside of London, the combined authority is a very different body. Whereas it works collaboratively and collectively to do things for the area, the 10 leaders in Greater Manchester are still advocates for their own areas. They want to work together, but if something was not in the interest of their particular area they would ensure that the mayor was fully abreast of that opinion. That is where the difference is: we would suddenly tag on, to an effective meeting of already 11 people, 50-plus others from across Greater Manchester. What kind of meeting is that? It would not be an executive meeting; it would simply be a talking shop. We do not need more talking shops. We want to make sure that this devolution really works. That means getting hold of the powers and putting them in in effective ways.

Democratic accountability in our area will be through elected local authorities. That seems to me what is missing in London: we have a big gap between the mayor and the boroughs. That is what does not work in London and what will work in the new combined authorities.