Cities and Local Government Devolution Bill [HL]

Lord True Excerpts

Wednesday 24th June 2015 Lords Chamber

[Lord Warner (Lab)]

My Lords, I, too, support this amendment. I listened carefully to some of the ideas about what such a bond might be used for and hope that there would not be a narrow set of functions and services for which this kind of fundraising could be used. To some extent I am following up on the point made by the noble Lord, Lord Moynihan. In particular, some of the needs of children and young people in many of these areas require a lot more support than they currently get. Even some health facilities might be the kind of thing, particularly on the preventative health side, that these bonds could be used for. It is very important that the Government give serious attention to this and also to using these bonds to leverage other funding sources for some of the projects that might be available. I hope that, if we go down this path, the uses to which these bonds might be put would be not drawn narrowly but spread over all the functions devolved to a combined authority.

[Lord True (Con)]

My Lords, I have not so far participated in this Committee and apologise to the House for that. I have just not been able to be here either for Second Reading or the first day of Committee. I declare an interest as leader of a London borough. Actually, I am rather pleased that London does not feature in the Bill in respect of the potential ideas for centralising power in London away from the boroughs. I hope we will not see any of that stuff come forward in another place at a later stage without any opportunity for debating it in your Lordships’ House. I am not going to go into the broader subjects, but I have read the debates very carefully and I find it dangerously easy to restrain my enthusiasm for imposing models on people. Very important points have been raised so far in this Committee.

I shall confine myself to this amendment, as is proper. I am not part of the little posse that came in to support my noble friend’s amendment, but I am glad to see that they are here. My own authority has been involved in discussions with the LGA proposals to look towards wider bond issues. But there are practical issues that need to be addressed, particularly in the difficult areas of things we all love and are potentially enthusiastic about, whether it is music or sport. It can be easy sometimes for that enthusiasm to run away a little. I can think of a number of local authorities not too far distant from my own where enthusiasm for the theatre has ended up with them having to underwrite substantial costs. So we need to proceed in this area with caution, but I hope that my noble friend will be able to respond positively, because caution is one thing and “no” is another. It should be possible to unleash the enthusiasm of local people. Do we not all believe in localism, as my noble friends have argued? Perhaps when she replies, my noble friend might offer to have discussions with my noble friend Lady Wheatcroft and others and representatives of local authorities and see whether, in the course of the passage of the legislation, she will give a positive commitment to considering this creative and interesting idea, albeit with corners that need to be probed—although perhaps not as many as some other aspects of the Bill. It is a very good and welcome thing that my noble friend has brought this forward.

[Baroness Hollis of Heigham]

In one sense, one very much welcomes the proposal of powers that we used to have rather more freely, in recourse to raising bonds through the municipal public works board. I myself used to buy bonds from Derby and all the rest of it, and people put them to appropriate use for their savings. I am certainly not opposed to the principle at all, but I am not clear on something—and perhaps the noble Baroness, Lady Wheatcroft, can help me on this point. The mayor will have a levy over and beyond, presumably, the council tax precept run by the combined authority. What powers the mayor will have vis-à-vis the combined authority may differ with each bespoke arrangement. What does the noble Baroness expect to be funded by a bond as opposed to a levy? The levy clearly falls on all, and all have access to those services, whereas a bond would be a voluntary subscription for an additional service which, none the less, would be enjoyed by all but possibly at a fee to fund the additional interest rate over and beyond the levy. I am slightly confused about how those two things would run in parallel. Clearly, in the past what would happen is that Derby would decide to seek £10 million through a loan on capital expenditure and fund it through the interest payments through the levy on it. In other words, part of the revenue expenditure would go to fund that bond. How does the noble Baroness envisage that working in this new financial structure?