Devolution in England

Mark Pawsey Excerpts

Monday 2nd March 2015 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

My hon. Friend is talking very eloquently about the need to devolve powers to communities. Does he agree that neighbourhood planning represents an opportunity for communities to express their preferences in respect of how they see their communities developing over time?

[Damian Collins]

I agree with my hon. Friend and believe that having a good local plan is the best guarantee a local community has that it can design its future in line with its own aspirations and ambitions. That is a process that councils work on in different ways, but I believe that a strong and robust local plan and good neighbourhood plans are a very important way of designing the services that people want and allocating them as communities want. It is something they should pursue.

I shall not take up any more time as other Members wish to speak, but I just want to reiterate the fact that I think the devolution of power from central Government to English county regions should be considered, as well as for major city regions. The major county regions such as Kent are just as capable of taking on those powers as major city regions. We should also consider creating more strategic authorities that look to centralise powers between districts and borough councils within those strategic authorities. We should look not just at devolving power from the centre but at how those local authorities might work together, and, wherever possible, at devolving further power to the communities themselves. That is the general approach we should follow. I welcome the Select Committee report and the important debate it has started.

--- Later in debate ---

[Robert Neill]

Local authority leaders are elected via their local authorities. We can talk about the time frame for having a directly elected mayor, but I am afraid that we are again allowing process to get in the way of the principle of fiscal devolution, which is the most important thing. When one looks at local authority systems in other countries where there is significantly more financial devolution, of which France is a very good example, the public participation at elections is significantly higher because people realise that their vote makes a difference. That is the main objective that we should be aiming for.

As a Greater London Member of Parliament, I also welcome the devolution package that was announced by the Chancellor and the Mayor of London. It does not go quite as far as the Greater Manchester package, but it is extremely valuable. It is worth noting that it was a Conservative Mayor and the Labour-led London Councils that agreed, in a pragmatic fashion, on a set of 10 principles for how London local authorities would use the extra devolved powers and the even greater devolved fiscal power that was recommended in the London Finance Commission report, which I hope will be adopted by the next Government—I hope of my complexion—in the next Parliament. Again, the hugely important point to make is that when local government is pragmatic, it delivers better.

The Prime Minister gave me hope in his speech in June. The Financial Times reported him as saying that

“devolving power and money from Whitehall to the cities…is the future. The debate now is about how far and fast it can go.”

I hope that in the next Parliament, we will see a significant increase in the amount of public spending that is devolved. We have made a valuable step, because some 70% of council income is now raised locally. That is a big improvement on where we were. However, council income is not the same as total spend.

That is why the pooling arrangements between health and adult social care in Greater Manchester are an important step forward. Anyone who has served on a top-tier authority, whether it is a county, a unitary, a London borough or a metropolitan district, will know that adult social care is one of the principal cost pressures. The ability to align it more closely with the health service makes obvious sense financially and in terms of better and more effective service delivery. As has been observed, local authorities are often better placed to nuance the delivery arrangements to reflect the needs of the population.

The Chairman of the Communities and Local Government Committee made a perfectly fair point about where we should go from here. I think that we should start to look at the further devolution of property taxes. That is the most obvious thing to do. We have made a start with the local retention of the increase in the business rate. He was kind enough to make observations about the methodology that was put in place. He was perfectly right that we always envisaged the methodology as being capable of improvement and refinement. It would be easy to increase the locally retained share. I welcome the fact that the Secretary of State talked at the Local Government Association conference last year about raising it to the high 80s or 90s. The Prime Minister has spoken in similar terms. Personally, I hope that we will move to make all the additional business rate retained in the next Parliament. We should aim, within not too short a period, to re-localise the whole of the business rate.

[Mark Pawsey]

My hon. Friend is making a strong case for increased devolution, which is exactly what we heard on the Select Committee. He has been a Minister in the Department, so what does he think are the obstacles within the institutions of government that prevent that devolution from taking place? Why has it not happened before now?

[Robert Neill]

There are two things. One is a practical matter that we must address seriously, which is the need for equalisation arrangements. As the Chairman of the Select Committee fairly said, we have a model already in place that could be adjusted to deal with that. I therefore do not think that we should allow the need for a measure of equalisation to fall in the way of further devolution. The question of risk of local authority failure is sometimes raised, but I think that it is overstated, first because of the public law constraints that are already there and, secondly, because in truth if we believe in devolution we must accept that sometimes, very occasionally, a local authority will fail. That is what democracy is about. Allowing failure as a result of a democratically elected body’s decision, provided there are sensible reserve powers that can be put in place, as the Chairman of the Select Committee properly and sensibly set out, is a sensible way forward. We could easily deal with that.

The final problem is the institutional inertia of a system in which so much has come to this place over the years that initiative at a local level is often stifled. The most talented in politics and business see London and Westminster as the centre of operations rather than driving forward their careers at a local level. In France, it would be perfectly natural for the mayor to be a significant political player. The combined authorities in France referred to by the Chairman of the Select Committee work exceptionally well and have done for some 30 years. They have delivered on social care and on major infrastructure improvements. That is a sensible and pragmatic way forward that can be tweaked to reflect areas and on that basis there is no reason why we cannot also consider similar but not exactly identical arrangements for the shire counties. My hon. Friend the Member for Folkestone and Hythe (Damian Collins) is absolutely right that they are capable of significant devolution too.

This is a most important debate. I am glad that we have had some thoughtful and constructive speeches and it is a good report. This is a piece of work that we must continue in the new Parliament, as we cannot continue with the current set-up. The Government are entitled to congratulations for what has been done so far, and I hope that it is work on which we can build.