Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) Order 2016

Lord Young of Cookham Excerpts

Thursday 26th January 2017 Lords Chamber

Moved by

[Lord Young of Cookham]

That the draft Order laid before the House on 28 November 2016 be approved.

[Lord Young of Cookham (Con)]

My Lords, if approved and made, the draft order we are considering today will provide the basis for a robust and consistent approach to accountability in combined authorities across the country. The order will be another key step in implementing the agreed devolution deals and is essential for ensuring effective accountability for the new budgets and powers devolved to directly elected mayors and combined authorities. I remind noble Lords that Parliament has approved, and we have already made, orders establishing city region mayors in Greater Manchester, the Liverpool city region, the Sheffield city region, the West Midlands and the Tees Valley. Furthermore, orders creating such mayors in the west of England, for Cambridgeshire and Peterborough have been laid before Parliament to be considered and, if approved, will be in time for elections in May.

These devolution deals confer greater powers and budgets on the combined authorities. The order puts in place a robust framework to ensure that once powers and budgets are devolved and mayors elected, the actions of combined authorities and mayors are openly and effectively scrutinised and those responsible held properly to account. The approach we are taking in this order, therefore, is to mirror the current scrutiny arrangements in local government and to strengthen them where necessary. Such strengthening, for example, includes requiring at least two-thirds of members to be present before the business of an overview and scrutiny committee can be transacted. It also includes a requirement for any independent chair of an overview and scrutiny committee—that is a person who is not a member of or otherwise associated with any of the constituent councils or the combined authority—to go through an open and transparent recruitment process.

The order will be supplemented by practical guidance provided by the Centre for Public Scrutiny—chaired by the noble Lord, Lord Kerslake, who was here a moment ago—on how these arrangements will operate on the ground. Officials are working closely with the Centre for Public Scrutiny, and we are very grateful for the centre’s support and commitment to provide this practical guidance. It is through such practical guidance that a strong culture of scrutiny can be built to ensure that transparency and scrutiny are embedded in the day-to-day operation of combined authorities and their mayors.

Along with such guidance, it will be important that combined authorities ensure that scrutiny is adequately resourced and that there is sufficient capacity and expertise for the scrutiny function to be effective and credible. This is essential if combined authorities are to fulfil their duty to ensure value for money.

The order provides for a core legal framework for scrutiny arrangements in combined authorities, which the Government have developed in consultation with local areas and relevant stakeholders, including the National Audit Office, the Centre for Public Scrutiny, existing combined authorities and those involved in establishing new combined authorities. This order is the first piece of secondary legislation to be made under paragraphs 3 and 4(3) of Schedule 5A to the 2009 Act. It makes provision for the composition and proceedings of overview and scrutiny and audit committees, similar to the provisions in the Local Authorities (Committee System) (England) Regulations 2012 and the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012. The order, if made, will commence after the new combined authority mayors take office in May 2017.

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[Lord Young of Cookham]

My Lords, the Hansard report of what the noble Lord just said should be sent to the members of every overview and scrutiny committee throughout the country in order to get an insight into how these committees can effectively further local democracy.

I will deal with some of the questions that were raised by the noble Lord, Lord Shipley. First, yes, the template that we are setting out today will apply not just to the authorities already up and running but to all combined authorities, whether or not they have a mayor—so existing and future.

The noble Lord then asked about risk. The 2016 Act sets out the requirement to establish an audit committee and gives these committees the power to review and scrutinise the authority’s financial affairs, including the,

“risk management, internal control and corporate governance arrangements”.

He asked whether we would monitor the appointment of the independent members to make sure that they were genuinely independent. Yes, we will. As for times, these are maximum times, and I may be able to say a little more about that in a moment.

The noble Lord also mentioned the absence of a governance framework. The order provides the broad legislative framework, while the guidance, which the Centre for Public Scrutiny is preparing, will help each combined authority to develop its detailed framework and operational arrangements for scrutiny. Officials worked with both the NAO and the centre in the development of this legislation, and their proposals have largely been included. We will work closely with the CfPS on the guidance, which it is going to publish shortly.

On access to information and the ability to summon, the overview and scrutiny committee has access to information powers, including the power to require the mayor, officers and members of the combined authority to come before the committee and answer questions and give evidence. The combined authority will establish an O&S committee and the order requires that the majority of the members of that committee must be constituent councillors. It is for the combined authority to determine the size of the committee, taking into account the political balance requirement. It will be serviced by officers of the combined authority, who will indeed need to have the necessary resources to make sure that it can discharge its duties.

As to whether decisions will open to the public, the minutes of the committees are public, except that personal and confidential information, as defined in the order, will remain unavailable to the public.

We have dealt with the issue of holding the mayoral elections on the same day as a general election. There may be some other questions that the noble Lord asked which I have not answered, in which case I will write to him. He can get up and ask me again, but the chances are that I will still say, “I will write to the noble Lord”.

[Lord Shipley]

May I just clarify the Minister’s very helpful comment on officers of the combined authority attending overview and scrutiny meetings? The officers of a combined authority will administer the work of the overview and scrutiny committee. The Minister may prefer to write on this, but can they be the same officers as those who are administering the combined authority? In other words, there is a question about the independence of advice that is given to the overview and scrutiny committee. Who decides, for example, what gets on to an agenda of a meeting and how do the members of the overview and scrutiny committee know what they should be discussing? Presumably, the officers of the combined authority who are managing the work of the overview and scrutiny committee will tell them what that is, but I hope that when guidance is issued, it will be made absolutely clear that an overview and scrutiny committee must be given the maximum information possible to enable it to do its job properly.

[Lord Young of Cookham]

I think I need to write to the noble Lord. I understand the point he is making, which is that there could be a conflict of interest on the part of the employees of the combined authority who may be servicing the O&S committee but may also be employees of the authority doing something else, so one needs some form of Chinese wall to make sure that the O&S committee gets the information it needs, even if that may embarrass some of its fellow employees on the combined authority.

The combined authority must appoint a scrutiny officer whose role is that of scrutiny, which is helpful. As I say, perhaps I may write to the noble Lord to amplify the issues he has raised about conflicts of interest, Chinese walls and so on. I commend the order.

Motion agreed.