English Devolution and Community Empowerment Bill (First sitting)

Miatta Fahnbulleh Excerpts

Committee stage
Tuesday 16th September 2025 Public Bill Committees

[David Simmonds]

Q One of the issues that we aired in the debate when this subject first emerged on the Floor of the House was that at the Government’s chosen footprint of 500,000 minimum population, the Bill implies the abolition of 90% of the local elected representatives in each of those areas. I know the cross-party concerns about the risk of losing that community voice. With your experience at community, district and borough level, it would be helpful for you to spell out what you think is the impact of that potential democratic deficit, especially on contested issues such as planning.

Sam Chapman-Allen: You will appreciate how busy your inboxes and mailsacks are, with the casework that you receive daily from your residents. When you begin to remove councillors, that casework does not disappear; it just becomes a bigger challenge for a single councillor. The risk is as we begin to get bigger those mega-councils, and we begin to think about how to ensure that those councillors can represent their communities. Does it become a full-time job? Does it then preclude other people from being able to stand to become community champions?

The reason why local government and district councils work successfully, in the same way as London boroughs and Manchester metropolitan councils, is because they are hyper-local. There are circa 200,000 to 350,000 residents per council, and they have local councillors representing a couple of thousand people. As we move forward with mega-councils, the risk is that a single councillor will be representing some tens of thousands. The independent think-tank Localis has done some analysis of the current proposal for a 500,000 threshold. We could see 90% of councillors across shire areas removed overnight. That would be a democratic deficit and an absolute catastrophe.

If we look back through the pandemic, as Justin has alluded to, community councillors were out every single day, just as you were as MPs, supporting the most vulnerable, making sure that communities could bounce back and, more importantly, giving support to local businesses to make sure that they could bounce back as well and grow from strength to strength. My concern is that if we begin to move ourselves to a distant model, there will be a democratic deficit and unaccountability, and the ability of a councillor to know that every resident, street, business and community leader will be lost.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

Q My first question is for Councillor Chapman-Allen. First, I should put on the record that the 500,000 number that has been cited is not fixed. The Government will prioritise making sure that there are clear links and that we have that democratic basis, so that communities feel connected to their local institutions. That is a priority for us and we will proceed on that basis.

Strategic authorities are made up of constituent local authorities, and at their best, where they work, it is based on partnership. Can Councillor Chapman-Allen give the Committee examples from among his membership, where strategic authorities already operate, of that collaboration among the constituent authorities, which will always have a key role, working in tandem with the mayor to deliver for communities?

I also have a question for Mr Griggs. The role of neighbourhoods and the connection between communities and the places where elected representatives serve is fundamental to what we are trying to do with the Bill. The part of the legislation on neighbourhood governance is looking to bolster and strengthen that. What are your views on how that will create new opportunities not only for community partnership working but, critically, for community voice and power?

Sam Chapman-Allen: Thank you for your question. To start, I think the 500,000 figure as the initial threshold has caused confusion. I think that many of the submissions that will be received in the devolution priority areas next week and then in the rest of the country in November will show that many councils are submitting models of 500,000-plus. Let us put that into context: they will be some of the biggest councils in the western developed world. I think that will ensure there is a democratic deficit.

In relation to strategic authorities and constituent members, the only model where all district councils, or all principal councils, are members are in Cambridgeshire and Peterborough. If you look at what is taking place there, you will see it is a really successful model. Yes, there is a little bit of grit every now and then, but that is why scrutiny, governance and accountability are so important. We will not always agree on everything.

If we look at a model in which all principal councils are members—I cite Greater Manchester, with Andy Burnham and his 10 councils within that area—they all share responsibility together. All of them within that locality are the responsible authorities for housing and for planning, and they are working together to drive the agenda forward around the real challenges that localities face. They have had some real successes, and I do not think anybody should take that away from them. I know that you have Lord Houchen giving evidence later; he will give exactly the same example of where you have those principal councils able to pull the levers to get stuff done.

Justin Griggs: First of all—

[The Chair]

Sorry to interrupt, Mr Griggs, but you are quite quietly spoken. Could you please speak up?

Justin Griggs: Yes, Dame Siobhain, I will definitely speak up a bit.

First, congratulations Minister on your appointment; we look forward to working closely with you. I will try to channel my remarks, and also pick up on what Mr Simmonds said about the democratic deficit and the distance that there will now be because of the reorganisation in respect of new unitary strategic authorities and in neighbourhoods.

It is undoubtedly the case that if we did not have a structure called parish and town councils across 92% of England, bringing together 100,000 people to improve their areas—parish councillors put 14.5 million hours into serving their communities—we would have to set one up. It is right in the White Paper and in parts of the Bill to seek to lean into that, because decisions will be taken much further away from places. That is why it is our view, and it has certainly been the case in previous rounds of reorganisation, that it is right for the role of parish and town councils to be strengthened and empowered and to be recognised and respected partners to our colleagues in the principal authorities and in the strategic authorities.

On Sam’s point, we wholeheartedly agree with the importance of collaboration. Where the Bill could go further—we would be keen to work closely with the Government on this—is around mechanisms for more partnership at the mayoral level, linking in much more closely with communities and neighbourhoods through their parish and town councils to provide a democratic voice. They work very closely around agendas for infrastructure, housing and skills in their areas, because they will be the places that are most affected. They are local leaders with skin in the game and they know their places best, so they will be well placed to work with them.

This is where a number of mechanisms can come in that are well tried and tested across other parts of the country that have reorganised, such as the development of charters and protocols to set out how to better work closely together, and parish liaison officers working closely with council associations and local councils across a sensible authority footprint. They are the people who know parish councils best and can work as a trusted partner with the principal authorities to build their capacity and capability.

--- Later in debate ---

[Paul Holmes]

Q I have a quick follow-up question, particularly to Councillor Hicks: would it be fair to say that the policy on the local government reorganisation is a soft target, certainly, but it was portrayed as a hard target to local authority leaders at the time?

Matthew Hicks: We certainly felt in the beginning that Suffolk, with a population of 750,000, was right in the middle of the range and would be an ideal candidate for one unitary.

[Miatta Fahnbulleh]

Q I have a question for Councillors Bentley and Hicks first on unitarisation, and then, if I may, a question to Councillor Craig on strategic authorities. Obviously you are going through the process of working hard with colleagues to put together a proposal for unitarisation. I am really interested in your perspectives and insights about how you—because we are putting it in the hands of local areas to do the heavy lifting—and we get that right. Critically, we are not doing this for fun; we are doing it because we fundamentally believe it will drive better services and better outcomes. I am interested in your perspectives, from your individual areas, about the sorts of impact that you think we can deliver if we get this right.

Kevin Bentley: Thank you, and welcome to your new role; I am sure we will be seeing a lot of each other the coming months, Minister.

In Essex, there are 15 councils. If you want to look at councils of any shape or size, come to Essex; we pretty much have them all, and a lot of them, as well. And while there are four different business cases coming from Essex—and you would expect that, as it is a huge county in terms of population and people have differing views—each has been done thoughtfully and carefully. The overriding message is that the 15 councils are made up of all political parties and none, and there is common cause. No one has fallen out. There is no argument. There is no row going on at all. We meet regularly in something we call the Essex leaders and chief execs meeting—I am talking about Essex here; I will talk about the LGA in just a second—and certainly our experience is of collaboration.

We may have different views from the Government for them to consider, but the understanding that we need to do things differently is really there. That goes for all political parties. We understand that the current system cannot carry on, because it will just run out of money if we are not careful. We are already seeing that.

The one thing to say is that everyone across the sector should be allowed to have their view and decide what is right for their area. When I started as a leader, the one question that I continually asked myself, and still do today, is, “What does this mean for the public and does it improve their lives?” Unless you can answer that question affirmatively, you should stop. So far, for me the answer has been yes—yes, we can do it better than we currently do it—and I think colleagues are in the same position.

It is also important that our colleagues in local government across the country consult not only with each other but with the public to ask whether we can do this better. If they believe we cannot, okay, but I think they will find that we can. The most important thing is to not lose sight of why we are doing it. It is for the public and the people of this country, not for politicians and councils.

Matthew Hicks: I would echo that. For us, it is about building on the experience of others who have been through this. We have been out to places such as Cumbria to ask for advice on what they learned and what works well. We have learned how others delivered on business cases or struggled to deliver on some of the items they included.

Ultimately, for us, this is about a new and more positive relationship between local government and our residents and businesses; it is about doing things differently. With the two cases in Suffolk, ultimately, everyone has the interests of our residents at heart. The big issue is how you analyse the data that people are using, and the forecasting. That is where we are seeing the major variants, but the delivery and what we want to deliver are not too different.

[Miatta Fahnbulleh]

Q Councillor Craig, obviously Greater Manchester has been at the forefront of devolution and the development of mayoral strategic authorities; I had the pleasure of being there at the outset a decade and a half ago. I am interested in your take on the impact the difference and it has made on your communities and, critically, on the collaboration between constituent authorities and the mayor and the strategic authority. During the last panel, the concern was about the power, onus and importance of constituent authorities. I am interested in how it has worked in practice and what we can learn from that.

Bev Craig: That is an important question. The difference for Greater Manchester was that we asked for devolution. That started the journey across the north of England initially, but it went out across the whole country. It has come off the back of a generation of co-operation in Greater Manchester, so it was built into a system. When the Greater Manchester authority was disestablished in the 1980s, my predecessors carried on with the meetings and kept that model alive.

I will come on to accountability, but what helps is that people do not identify with local authority boundaries. We represent people who, in their normal lives, say that they are from a place. A colleague might say that they are from Middleton and they are proud to be from Middleton, but when they are on holiday and people ask where they are from, they say “Near Manchester.” There is something about creating a place that people can identify with; that has been really strong. When you look at models where mayors have been successful, it is because they have tapped into a place identity. That links to my point that rural areas can still have place identity.

On accountability, in the Greater Manchester model of combined authorities, which moved to strategic authorities, we all have a role to play. Think about the role of the city. It is a major economic driver for not just Greater Manchester but the north of England as a whole. The whole region needs Manchester city centre to do well, in the same way that Manchester city centre needs the rest of Greater Manchester to do well if it is to have people with skills, good education, homes to live in and places to celebrate that they enjoy spending time in. That is why, through our model, we all hold portfolios. I am just as interested in getting Atom Valley in the north of the conurbation to be a success as I am in growing my life sciences sector in the city centre. There is something about getting people to take responsibility.

When we look at the competencies, that is why the LGA argues for clarity in the Bill that local authorities will still have a stake in some of the areas that we might think mayoral strategic authorities lead on. I say this with kindness, and I often say it to my Mayor’s face: he can give the parameters of the homes that we build and he can help fund them, and I will put on his logo and picture if we need to, but fundamentally it is Manchester city council that is out there building council homes. That is why we built more council and social homes last year than at any point over the last decade and a half. It works when we work together.

To clarify the role of commissioners in the context of the Bill, where they have been useful in Greater Manchester has been in an advisory capacity. We have been able to draw in people like Dame Sarah Storey as an active travel commissioner. She does not need to be a deputy mayor or take away my authority as a leader of a place, but she brings something that is additional. We must not lose sight of the fact that devolution models work with systems and Bills in place to deliver them, but actually it is about collaboration. There will need to be investment in the time that leaders of a place spend together if you are to get that relationship with the mayor to work.

Kevin Bentley: The identity question was raised before and it is important that we say political boundaries might change but communities do not. Identity of communities will always remain strong, whether you are in a district or county council. I represent 1.5 million people. That could be a disparate place. If you want to say, “Which is the most important to your leader?” they are all important, because they all have their own identities.

[Perran Moon (Camborne and Redruth) (Lab)]

Q A quick question to Councillor Hicks. In your role as chair of the County Council Network, have you had any discussions with or representations from Konsel Kernow, Cornwall Council? If you have, what is the nature of those discussions in relation to mayoral combined authorities?

Matthew Hicks: I have only been in post a week, so I cannot give you an answer as to whether those discussions have taken place in the past. Certainly I know we have looked at the Cornwall business case and Cornwall has always been well represented and a strong voice at the CCN, putting its case very strongly, and I am sure that will continue in the future. However, I cannot answer that question today.

--- Later in debate ---

[David Simmonds]

Q This question is to both witnesses. There are a number of different elements in the Bill on which you have relevant expertise, but can you give the Committee your view on the impact of the envisaged reorganisation on the planning system? What impact will the measures in the Bill about upward-only rent reviews have?

Ion Fletcher: Good morning, everyone. My name is Ion Fletcher. I am the director of finance policy at the British Property Federation. Our members own, develop and invest in both commercial and residential property across the UK.

In high-level terms, our members have had a good experience with devolution so far. Having combined authorities with responsibility for planning, transport and place making, and strong convening powers, means that our members are able to invest with confidence, knowing the strategic aims for that area. We hope to see that replicated with strategic authorities. We can get into more detail—Cat is better placed to comment on the reorganisation and the impact on planning.

We feel that the way that upward-only rent reviews were introduced into legislation without any meaningful consultation is not good policymaking. We feel that it will not do much to help the high street and it could have a negative impact on new investment and development.

Catriona Riddell: Hello, I am Catriona Riddell, a strategic planning specialist. There are two components to this. First, it is about the fact that fewer than 30% of local plans are up to date. That is partly because all the decisions and all the financial, technical and political risk sit with individual local planning authorities. It is right that there is a separation of decision making in the way that we had before 2010 for 40 years.

If that decision making is now through the new strategic authorities, that is probably the right place for it in terms of the new spatial development strategy, which I know sits with the Planning and Infrastructure Bill. However, there is no point in strategic authorities having the responsibility to prepare those strategies if they do not also have some responsibility to deliver them. The range of delivery mechanisms set out in the Bill will help that.

For example, in the last few weeks, the Mayor of the North East combined authority announced a massive housing development in Newcastle on a site that has been derelict and unviable for many years. She has used her convening and financial powers to bring together Homes England, local authorities and others to bring forward development on that site. On the delivery side, the powers and funding that the mayors will have to make sure that spatial development strategies and local plans are implemented will be really important

In terms of local government restructuring, it is fair to say, as everybody has already this morning, that resources are thin on the ground. They are getting thinner the longer this goes on. People want a resolution. They want to move to the new local government structure as soon as possible to make sure that the resources within the local government family remain.

But, again, before 2010, for 40 years planning resources were done in two ways. The strategic level is where all the specialist skills sat, and then the planners and others were within the local authorities. They worked as two parts of the same team. We do not have the specialist skills in local authorities anymore; they have to pay to bring that back. A lot of specialist skills are rare anyway, so they are difficult to get. Having some teams and general support at the strategic scale will be invaluable to local authorities going forward.

[Miatta Fahnbulleh]

Q I have a question for Mr Fletcher and then a question for both witnesses. You have expressed some reservations and concerns about the upward rent review. Is it fair to say that the position among your members is not unanimous? Mark Allan of Landsec, who I think was the previous president of the organisation, has said that he thinks the changes are favourable, and that the status quo is complex and suboptimal. It would be good to clarify that there is not a single position that thinks this is averse.

Northern Ireland went through a very similar reform about a decade and a half ago. I am interested in your assessment, because most people would look at that property market and think it works well. There was a transition, and it has ended up in a position that, most people would argue, is not just benign and effective but consistent with what we see in other countries. I am interested in your views, and then I will have a question for both of you.

Ion Fletcher: I think that Mark would also say that the way it was announced was not great; it should have been done with prior consultation. One of our main concerns is about how one of our members was recently in Malaysia and Singapore, and his investors were asking him questions about it: “Where did it come from? Why was there no consultation?” It has been noticed overseas, and by people who are deploying capital into our towns and cities. It was not something that was trailed, either in the Labour manifesto or in any of the discussions about devolution. In fact, it is a bit odd to find commercial leasing provisions in a Bill that is mainly about local government reorganisation and strategic authority powers.

There is also the focus on the high street. Upward-only rent reviews are not what is keeping shops empty at the moment. That is more to do with business rates and a lack of demand for space. Most high street shops are on leases of five years or less, so upward-only rent reviews are not going to be an issue; they do not have those clauses in them.

The real value of upward-only rent reviews to investors and developers is that they provide predictability of income. If you are thinking about undertaking a new development project or refurbishing an existing commercial building, having the confidence about the level of income that you are going to get gives you much more security, and it de-risks the project. It makes it more likely to happen. At the moment, there is a shortage of development going on—there is a bit of a development viability crisis across both residential and commercial property—so adding more uncertainty in the form of unexpected policy changes does not help.

In relation to your point about international comparators, yes, Ireland went through this, as did Australia about 20 years ago. There is a transition period. The industry can and would find ways to adapt, but the point is: what problem is it really trying to solve? Is the disruption that it is going to cause in the meantime—the transitional costs, for example—worth the candle?

[Miatta Fahnbulleh]

Q But if I may, Mr Fletcher, do you recognise that the UK is an outlier? What we are doing is moving to a system that is consistent with other major economies and works well. Commercial investors operate in those systems with no issues.

Ion Fletcher: England and Wales is an international outlier in that; it is also an international outlier in the strength of the rights that it gives to occupiers to renew their leases. Generally speaking, where countries offer occupiers the automatic and statutory right to renew their commercial leases, it tends to be restricted to particular sectors. That is not the case in England and Wales. You have to look at it in the round.

[Miatta Fahnbulleh]

Q We think that strategic planning and the role of strategic authorities within that are quite important—in the context of how we want to “build, baby, build”, to quote my boss, the Secretary of State for Housing, Communities and Local Government. I am interested in your take on how, if we get this right, it will have an impact on the Bill, and critically, where you think we might need to go further to make sure that we are delivering the buildings and the growth that we need?

Catriona Riddell: What is set out in the Bill is going to help to develop things more quickly. We have just talked about viability; that is such a massive factor in everything that we do at the moment. In relation to strategic planning and spatial development strategy, I think the Minister for Housing and Planning, Matthew Pennycook, has referred to it as a spatial investment framework. If you look at it as that, and not as a big local plan, and if it does that role, that is going to set the precedent. It is going to say: “This is where we want to invest.”

They are also long-term plans; they are 10, 20 or 30-year frameworks. Again, that is to start building investor confidence in these areas. What is needed, in terms of building investor confidence, is leadership and that is where the strategic authorities can help. Some of the planning mechanisms in the Bill are really important, but actually, it is more about the wider powers, such as the convening powers and the duty to talk to your neighbouring mayor—the sum of the parts has to add up to a national picture. We do not have a national spatial framework in this country, so the sum of the SDSs has to add up to that national picture. I think the softer powers in the Bill that mayors and strategic authorities will have to bring together stakeholders will be really important.

I would say the measure needs to go further. My understanding of the convening powers is that they are largely about bringing local authorities and the public sector together, but one of the biggest challenges we have is around the infrastructure side of things—with utility companies, such as water companies and electricity companies, that engage at the very end of the process. We need to use these mechanisms—the convening powers—to bring them into the plan-making bit about the spatial development strategy from the start, so that there are no surprises at the end and nobody says, “We don’t have enough water or electricity to plug into these new homes that we have already permitted,” because that is what is happening all over the place. This is about getting the system working up front, much further upstream, so that the decisions on planning applications are much easier further down. The strategic authorities have a huge role to play in that.

The only other, minor change I would mention is on national parks. I think that once we have gone through local government restructuring, all local planning authorities will effectively be a constituent member of a strategic authority. National parks will continue to be local planning authorities. They have plan-making powers and development management powers. At the end of this, they will be the only planning authorities that will not actually be part of the strategic authority, so I guess we need a shout-out to national parks and some thinking about what their role should be in this.

[Mike Reader (Northampton South) (Lab)]

Q Can I pick up on upward-only rent reviews? I recognise the points you made about consultation. The intention is primarily to focus on high streets. Do you think, with the way the legislation is written currently, it is focused on that narrow area, or is it broader? Could we see unintended consequences in things like—this is important to my constituency—logistics and advanced manufacturing?

Ion Fletcher: That is a really good question. Yes, as currently drafted, the Bill applies to all commercial tenancies, regardless of whether they are on the high street or in an industrial park, a data centre or a laboratory.

Upward-only rent reviews have definitely been highlighted as an issue among high street small businesses and in the hospitality sector, and I have a lot of sympathy for businesses that have been on high streets and going through a lot of change and turbulence over the last decade or so. At the same time, they have not really been raised as an issue by occupiers in logistics parks or in office buildings. I guess the main reason is that property costs are a far smaller proportion of their total cost base than for retailers and hospitality businesses.

Larger businesses also tend to be well advised and are aware of the trade-offs that come with upward-only rent reviews. They can allow property owners to give a longer rent-free period, for example, or a bigger contribution to fit-out costs. There is definitely merit in thinking about how the Bill might be more closely targeted at those areas where there is perceived to be more of an issue.

--- Later in debate ---

[Vikki Slade]

Q Welcome to the Committee. Communities will be able to nominate assets of community value that are of economic value. Nick, that is particularly relevant for the community businesses that you support. Can you say a little about how communities could use the new power, and whether there are resources that need to come with that power?

Nick Plumb: At Power to Change, we think that the Bill’s provisions on community right to buy are a positive step forward. Power to Change has been calling for this for several years. To illustrate why the right is so needed, the key piece of data on the current regime on assets of community value and the community right to bid is that of every 1,000 assets that are listed as assets of community value, only 15 end up in community hands. The expansion of the definition of assets of community value to include economic as well as social benefit is a positive step, as is the introduction of a community right to buy as opposed to a community right to bid.

Some of the questions lie in the implementation. We think that there are potential challenges with this new right if you are asking councils to maintain a broader list of assets of community value and trying to get the new right to live up to the expectations that communities are rightly bringing forward. One thing that Power to Change has been calling for since the end of the community ownership fund is continued community ownership funding to support groups, particularly at the early stage at which groups might have a great idea for an asset but are not quite sure how to take it forward. A combination of revenue and capital funding is really important.

One of the lessons of the community ownership fund is that communities have a real ability to raise funds themselves. One of the great stories of the fund was that Government money leveraged lots of other investment, whether that was through private loans or by community share raising, where groups go out to the community to raise money from local members. Any future funding model for community ownership to sit alongside the community right to buy could be quite mixed. It could involve grant, loan and, importantly, revenue funding support and training. I know that there is mention of that in the Bill, and I am pleased to see that.

There is one final point to add, on the economic contribution of community-owned assets. Power to Change recently did some work with the 11,000 community businesses across England and found that they contribute roughly £1.5 billion in direct gross value added to the economy, which is equivalent to the solar sector, so they are important economic actors. Importantly, the economic contribution of community-owned assets sticks locally: we found that roughly 56p in every £1 circulates in the local economy, due to local supply chains, compared with roughly 40p for large private businesses. With the agenda around local growth, I see a successfully implemented community right to buy as a key driver of local growth outcomes.

[Miatta Fahnbulleh]

Q Thank you for setting out how we are building on the community right to bid and the additional powers that are baked in to the legislation that will generally give communities the power to take over assets. One of the things that we have done a huge amount of work on over the past decade and a bit is building the capacity of our community organisations to be in the position to do this. I am interested in your take on the relationship with the neighbourhood governance powers in the Bill and the extent to which you think that this is an opportunity to build the capacity of some of our community organisations both to take over ownership but, critically, to have voice and power to change their places.

Nick Plumb: I want to make a couple of points. It was a really interesting conversation this morning on neighbourhood governance from colleagues from parish councils and local government. Power to Change is a member of the We’re Right Here campaign, which has been campaigning for community power legislation such as some of the measures in this Bill. We are keen that the neighbourhood governance measures that are introduced through the Bill allow for local variation and for a whole range of different organisations that exist at a neighbourhood level to be a part of that neighbourhood governance arrangement. We think that one of the risks with the area committee model is that it is a prescriptive top-down model that says, “This is the way to do things,” rather than saying, “What exists already in a neighbourhood, and how do we build on that?”

One of the ideas that Power to Change has been working on and testing in place is a community covenant. We have been testing that so far in Market Drayton in Shropshire through a partnership of 20 local organisations—everyone from the local authority to community organisations to representatives from town and parish councils—on the idea of a family and neighbourhood hub. So far, the results from that work are really positive. There was some initial scepticism about a new way of working, but one of the council officers has fed back that the new approach is a real gift that has helped them to move much further and faster with their communities than they would have done if they were just doing things from the council down.

One of the calls from us through this legislation is to try not to be too prescriptive with neighbourhood governance but lean into a model that puts people on an equal footing and gives people an equal seat at the table. I will not spend too long on this, but my other point is that it is great that we have a piece of legislation with “community empowerment” in its title, and I think that community right to buy and neighbourhood governance, if done right, go some way. Power to Change and the We’re Right Here campaign would like to see community right to buy as one of several community rights. We have been calling for a community right to shape public services, which would entail involving the people who receive services from the state in the design, delivery and development of public services. That would build on provisions in the Localism Act, such as the right to challenge, and it would make that a much more expansive right.

We would also like to see a community right to control investment, which would involve certain bits of investment from central Government sitting at that neighbourhood level. Both of those rights really lean into some of the Government’s existing agenda. The plan for neighbourhoods is a real example of that. There are some questions still to be answered on what that looks like, but it could involve trusting neighbourhoods to take hold of money and think, “How do we improve our lot together?”

The right to shape public services is very in line with some of the test, learn and grow work that is happening in the Cabinet Office. We would see the community empowerment element of the Bill really living up to its name if it was the beginning of a set of community rights rather than the community right to buy tick and done.

[Miatta Fahnbulleh]

Q Mr Whittaker, I want to pick up on the sporting asset of community value measures within the Bill. Obviously, sporting community assets are of huge value to our local communities, and I am interested in your view on whether the measures create a pathway to far greater community control and ownership of these assets.

Robbie Whittaker: Thank you, Minister. We are certainly very encouraged by the proposal to create a new designation of a sporting asset of community value. It builds on what we have traditionally had before. It is something that we have lobbied for because we think—as we would—that sporting institutions have a valuable role to play in local communities, particularly in promoting empowerment of the kind that Nick was talking about.

One of the interesting benefits of this proposal is that in the last year, as you will all know, we have created an independent regulator for football, which is going to bring profound change for a relatively small number of clubs—only 116 clubs at the very top of the English pyramid. The proposal in the Bill potentially attracts a far larger cohort of clubs further down the pyramid, which are not necessarily as commercially attractive to buyers from outside the country. Therefore, the right to buy is actually a realistic aspiration that some of those communities can have.

We are increasingly seeing valuations of football clubs at the top end of the pyramid that take them beyond the reach of local community or fan groups. But that is not the case lower down. The extent to which you can create an opportunity here for local communities and people who follow relatively small clubs to feel that it is a pathway that they can go down and sustain is very welcome.

I echo what Nick said about community ownership funding, or some equivalent thereof; the existence of that fund played a large part in the creation of the phoenix club at Bury. You may remember that Bury AFC failed spectacularly in 2019, and has caused a lot of angst within the football community ever since. The existence of that fund was quite crucial to enabling a new club to emerge in Bury that was able to play at the ground that had been used for around about a century.

[The Chair]

Your answer, Mr Whittaker, made me consider whether I should declare that I am an AFC Wimbledon season ticket holder and a member of the Dons Trust.

English Devolution and Community Empowerment Bill (Second sitting)

Miatta Fahnbulleh Excerpts

Committee stage
Tuesday 16th September 2025 Public Bill Committees

[The Chair]

Pithy answers, please.

Tracy Brabin: The mayoral precept is democratically held by the mayor for the public. It would be for transport projects; it would be allocated to something specific. For example, the Mayor of Greater Manchester, Andy Burnham, uses it for young people’s travel. The Bill widens the opportunity to use the precept, but none of the public would be happy if you were paying off debts. It is fundamentally for betterment of and investment in communities, in the way that the police and crime commissioner precept is held to deliver better outcomes, whether that is more police community support officers on the street or initiatives around violence against women and girls. It is democratically held by the mayor. We have not introduced it as yet in West Yorkshire, but others have.

Donna Jones: I will be very brief because I am conscious that there are lots of Members on the Committee. The referendum limit is the prohibitor. Essentially, a mayor, like a police and crime commissioner and a council, can precept to the level that they want, but you have to have a referendum if you are going over that limit. Although the Government are right to want some checks and balances, so that you do not get areas that are really out of kilter with others, a referendum is prohibitive: it becomes very political, and it is very costly to do. Therefore, I think there should be a simpler mechanism if a mayor wants to precept above the Secretary of State’s agreed level. Perhaps that could be with written consent from the Secretary of State, as opposed to a referendum.

Ben Houchen: I am not a fan of mayoral precepts generally. I have not raised one, and have promised ever since I was elected not to raise one. Some transparency could be brought to the legislation. You have mayoral precepts, you have transport levies, and there is lobbying from a number of mayors around tourism taxes and so on. From a constituent point of view, forgetting the rights and wrongs of it, all that could be consolidated into a single precept, rather than having a separate transport levy, which can be quite opaque, particularly where you have new combined authorities. Some of those taxations are merged into combined authorities, and who has actually raised the levy can be quite lost. It ultimately all comes into the combined authority once it is established, but the Committee could take away the question of how that could be consolidated to streamline the precept. From the public’s point of view, the mayor has the ability to raise a mayoral precept; there is no reason to have a transport levy as well. For transparency’s sake, that should be clarified as a single levy, if you are going to have one.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

Q Let me start by thanking you for the support, encouragement and enthusiasm for what we are trying to do through the Bill. You are completely right that this is our baseline—our floor—and our ambition as a Government is to build on it. In that spirit, I want to pick up on the right to request that we are introducing through the Bill. I am interested in your views on how we can ensure that the right is as effective as possible in taking us on the journey of empowering our mayors to deliver for their communities.

Tracy Brabin: I will be pithy—and congratulations on your role, by the way; I know that we have a champion by our side. What is important is the way that we can collectively come to a consensus on the Mayoral Council and say, “The mayors are agreed that this is the next step,” and then the Government have to explain why we cannot have it. There is also an opportunity for individual mayors to have something of value that relates to them and their region specifically. The key to that, Minister, is surely for it to be as straightforward and efficient as possible, rather than hoops and processes.

As mayors, one of the things that we are discussing at the moment is taxi licensing. Just to give you the numbers, 49% of private hires operating in Greater Manchester are licensed by authorities outside of the 10 local authorities. We know, from Baroness Casey’s work about violence against women and girls, how that is a weakness in the system when it comes to the safety of young women. As mayors, we are looking to the council to help us to understand how we can do that more efficiently, but that may be something that affects only some urban metro mayors and not others. It is about how we can collectively ask, which is a really fast-track process, but then there will be individual conversations.

Donna Jones: I really welcome the right to request. Following on from what Tracy just said about mayors and their unique geographical areas, in my patch, I—or whoever is successful next year—will have the largest island, aside from Ireland itself, of course, that we represent in part of England: the Isle of Wight. That piece of water creates a lot of problems for the Isle of Wight in terms of the supply chain and the skills market; things are a lot more expensive on the Isle of Wight.

One of the things that I am really pleased about is that the Government are looking, through the Bill to establish Great British Railways, which is coming forward, to give mayors greater powers around the planning, performance, improvement and project management of rail networks in their areas. I argue that that should be extended to ferries, particularly for my area. The Isle of Wight has three main transporters: Wightlink and Red Funnel are the two car and foot passenger ferries, and Hovertravel is a hovercraft that runs until 6.30 pm every day. For a lot of people who live on the island, it is cost prohibitive to travel off it and back. If it is not included in Committee or picked up by you, Minister, I will be requesting the right to have a regulator power over the ferry companies that operate across the Solent, because of course they need Crown permission to operate across that piece of water.

Following on from Tracy’s point about the uniqueness of certain geographical areas, I think that there are other good things, such as lane rental approval. I love the idea of that. Utility companies are given permission by the highway authority to dig up the road, and it goes on and on. That has an effect on transport, pollution and people’s travel to work time, and it has a knock-on effect on economic growth in the area, putting people off travelling to or from work or taking up jobs. We have to look at that. Giving mayors the ability to effectively tax or fine companies every day they go over the set period of two weeks, or however long it would be, is absolutely key. I could go on—there are some brilliant things in here—but I welcome what you are trying to achieve.

Ben Houchen: The right to request is an interesting one. There is a bit of an academic argument about the Government wanting to standardise mayoral powers so they are same across the board, but then the right to request, if done correctly, would allow for differentiation. There is an issue about whether we are looking for a standard model or whether we want more of a patchwork. That is for members of the Committee to think about, but it is important: at the nth degree, if you have differentiation through the right to request, you could have areas with hugely different powers. That is going to create political problems, with people feeling like one area has more control than another.

Administration from a central Government point of view is also difficult. Irrespective of devolution, there is always a clawback into central Government. That is probably right, rather than giving us carte blanche over everything, but it goes back to the strategic question about what you want to happen. The ultimate right to request—this is where you are going to have proper devolution that allows for earned autonomy over time—is the relationship between combined authorities, the Department and the Treasury. The key question that needs to be answered is how you get the combined authority to have an accountable officer within the organisation. Where I think combined authorities should get to is being treated as geographical Departments. We should be treated in the same way as a Department, bidding into Budgets and spending reviews, with our full, eclectic mix—from housing to transport and everything in between—and we should be accountabledirectly to the Treasury.

The only thing holding that up is the internal civil service mechanism of having an accountable officer outside Whitehall. That sounds flippant, but it is a difficult thing for the civil service to deal with; once you deal with that, it negates the need for a right to request or anything else, because over the years organisations will mature with that direct relationship with the Treasury.

It also gets into some key niggles that I know other mayors care about: “Why do you therefore need organisations like Homes England?”. If you get into the right to request, you do not need them. At the minute we are already doing half of what Homes England does. The Government have again gone into this halfway house of strategic partnerships, instead of taking the bold leap they should have taken: where you have mayors, you do not need Homes England, so make them the financially accountable body and ensure there are ties back in to central Government for oversight and value for money. Something more strategic could be done, but for me it goes back to the point that the Government did not want to address the strategic question of where devolution is going over the next five or 10 years.

[Sam Carling (North West Cambridgeshire) (Lab)]

Q I have a question for the whole panel, but first I would like to come on to something Mayor Brabin just said. I was really pleased you raised the issue of taxi licensing. We have a border problem around my area of Cambridgeshire and Peterborough, where taxis register in certain councils because they have laxer standards. Do you think there is a case for adding something to this Bill to give mayoral authorities a role in that licensing process, or at least for making it one of the first things brought forward under the right to request?

Tracy Brabin: Thank you for that question; I know your mayor has raised that with me. The strategic overview is really helpful, because some councils might have different processes. Uniformity across mayoral strategic authorities can only be helpful. I would say that the majority of mayors feel that that is a solution to some of the problem, where we have seen cowboys from way outside people’s patches, not necessarily with the same expectations on their vehicles or safety and so on, and we do not know who they are. It is important to have that clarity for the safety of the public.

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[The Chair]

Can I just ask you to keep your answers fairly short? We have two very important questioners coming up. I call the Minister.

[Miatta Fahnbulleh]

Q Thank you, Ms Vaz. You have both campaigned to remove upward-only rent review clauses. Could you give us a sense of the negative impact that those clauses have had on your members, and, if we remove them, the impact that will have on both your members and the wider economy?

[The Chair]

Before you answer, can I ask you to direct your answers to the speaker or the Chair, rather than to each other?

Andrew Goodacre: Running a high street business, whether it be retail or whatever else, is expensive, and the costs are going up all the time. When you talk to those business owners, they will tell you that the three biggest chunks are labour, business rates and rent. If your rent is only ever going to go up because the lease stipulates it and there is no negotiation around that, irrespective of what the economic climate might be or what has happened in the local area to perhaps take footfall away to a different part of town, your business is left with ever-increasing costs and no power to change it. That just does not seem right.

If there is pain because of a change in the area, the landlord, the property owner, has to feel some of that as well. At the moment it is only ever faced by the commercial tenant who has a difficult decision to make: either they go with the higher rent in the hope that they can compensate for it or they leave the business. They should not be faced with that choice, in fairness. These are hardworking businesses. People have probably been running those businesses for many years. There needs to be a more sensible, mature conversation taking place between landlords and commercial tenants. I think it does happen; I think there are good examples of it. But if we leave it to best practice, if we leave it to the industry and good actors dominating, we will be waiting another 20 years and sat here moaning about upward-only rents, so we do need to remove it.

Allen Simpson: Two quick points on rent reviews. The first thing is that upward-only rent reviews also drive up business rates because of the link between rateable values and rents. So the Government’s intention to reduce business rates expenses for businesses relies on addressing upward-only rent reviews. They do bake in inflation in the way that you say. There is an A/B test here, which is that the pubs code, of course, banned them some years ago. That has increased the amount of time that the average pub tenant stays on site. It has not led, that I can see, to any other negative outcomes, so there is evidence that it does actually increase tenancy rates.

[Miatta Fahnbulleh]

Q To follow up on the point that you made around local growth, which is a big driver of everything that we are doing, what things should we think about in the context of local government and powers and resources in order to deal with the huge challenge that we have around reviving our high streets?

Andrew Goodacre: We touched on good examples, and we should look to learn from them. On local engagement, you need local leadership, but they need help sometimes. That help could be internally from the next level of authority up, or it could be from an external body. One body that I thought was beneficial to high street regeneration at a local authority level was the high streets taskforce that was set up as part of the Institute of Place Management for Manchester Metropolitan University. It has now ended as a body, although in name it carries on because stakeholders—we were one of those stakeholders—would meet on a quarterly basis to discuss opportunities, challenges, good news and bad news on high streets and high street regeneration. We would share those ideas and share them back with the high streets taskforce, and they would help that local decision making.

Quite often what you find is that people know what they want to do. They just do not quite always know how to do it. A think-tank independently managed and run could help them with that “how” and the implementation of their ideas. If you do not bring it back as it was, something similar would really help that local decision making, because sometimes the pride is there, the passion is there; they just do not always have the nous to make it work in the way they hoped for.

With regard to high streets, I see it from a retail point of view, but I recognise the fact that high streets are increasingly dominated by experiential elements—cultural, leisure, more hospitality driven—and I have no issue with that. It does mean that we need better change of use of some of the retail sites that become empty. I know planning is part of this whole issue, so speeding up the planning process is important.

Ideally, I would like to bring homes back into high streets where the possibility exists. There are some large, empty buildings. I live quite near Stratford-upon-Avon and I still go past a VHS store that closed in 2016. It is still empty. I find it remarkable that a landlord can let a big place like that stay empty for so long. We have not looked at the opportunity of what more we could do with that, or what we could do differently with that. If we can bring homes and people back into high streets as places where people want to live, preferably with affordable properties for younger people, I think you would start to create local economies that would drive some of those high streets as well.

Allen Simpson: The question is what level you devolve at. Clearly, we are all nimbys. Nimby is an irregular verb—you are a nimby; I am concerned about my local environment. There are circumstances in which we need to find ways of treating high streets like strategic infrastructure. There will be asymmetric benefits and costs if you live close to a high street or, as people used to, above shops—that is less common than it was—versus being in the surrounding community. Sometimes local politicians do need help. We have seen an approach to that in London that the Committee will have views on.

I am very much in favour of hospitality zones, which have specific licensing approaches, where there is some form of recognition that you get to a “yes” more quickly. There is a specific question around Andrew’s point about bringing people back into former high street or commercial areas, in the City of London or elsewhere, around agents of change. I am very in favour of placing a burden on developers to fit the development around hospitality, rather than buying a flat next door to a pub and then being annoyed that there is a beer garden, for which I have zero sympathy.

[David Simmonds]

Q At what level, or by what mechanism, do you think the views of local businesses, particularly smaller businesses, should be captured and used to influence the decision making of the new authorities that will come into being? I was very conscious listening to your descriptions that you very ably depicted some issues that those businesses might face. How do you make sure that the mayors, and the decision makers feeding into those mayors understand what the impact of those decisions will be, and take those views into account?

Andrew Goodacre: That is a good question. What works well at the moment is the business improvement district model. Where it falls down slightly again depends on the people involved. A good BID represents the voice of local businesses, which are paying through business rates, because the levy is on the business rate, as we know. What I saw in Enniskillen at that time was a BID that really listened to its stakeholders, shared ideas with them and took back the feedback. One of the things introduced there was an Enniskillen gift card that could be used in any shop in that area—ideal for the tourist market that it is trying to appeal to.

We should establish BIDs; the problem with them is that they can be very indifferent, in terms of their make-up and the quality of them. Again, the funding often becomes a point of contention because you are adding to business rates, which is already a massive point of contention for most business owners. In a way, I would like to see BIDs funded in different ways, through the devolution White Paper. Their performance would therefore be a bit more targeted. Part of their performance metrics should be the ability for them to show that they have engaged, understood and taken forward what local business people want, in my case, within their high street.

Allen Simpson: An observation: if you are looking to drive growth, by definition you are looking to bring in businesses that are not there or do not exist, so to some extent your problem is how you consult businesses that do not currently exist. To some degree, it is less about having consultation with specific businesses and more about having an approach that is pro the foundation of businesses in a given area. Clearly, there will be examples where licensing rules could be better consulted on so that existing businesses can expand, but I wonder whether it is less about consultation and more about taking a proactive approach to growth.

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[The Chair]

We will now hear evidence from Gareth Davies, Comptroller and Auditor General at the National Audit Office, and Bill Butler, chair of Public Sector Audit Appointments. For this panel, we have until 3.40 pm.

[Miatta Fahnbulleh]

Q I am interested in you giving us an assessment of the current system and the current state of the local audit regime. What your views are on the key benefits of us getting that system working right?

Gareth Davies: I will start, and then Bill can come in with some facts and figures on the current state of play with the firm’s contracts. First, it is important to say that, before I did this job at the National Audit Office, I was an auditor in local government, so in the past I have had a foot in both camps. Audit in the public sector is a fundamental part of our democracy; in local government, it is a fundamental part of local democracy.

Ensuring effective local accountability through independently audited council accounts, governance and value for money arrangements is a fundamental part of a healthy, functioning, tax-paying society. There is no doubt that we have run into some very serious problems with that in recent years, such as big backlogs of unaudited accounts. When those backlogs start to be cleared, at first we are seeing disclaimed audit opinions, which are essentially the auditors giving no assurance on those accounts. That is an unprecedented and unacceptable position to find ourselves in for a significant amount of public money. People have a right to expect audited accounts as a bare minimum when they pay their council tax and business rates, so this is a big system failure that needs fixing as quickly and robustly as possible. That is my starting point.

The obvious question is: why has this happened? Unusually, we have a natural experiment in the UK on this. No other devolved country has the same problem as England, with a failure of local government accountability and audited accounts. Everybody has had a pandemic and changes in auditing standards and so on, but only one country has dismantled its audit machinery and expected it to function nonetheless. Those changes were not implemented in Wales, Scotland and Northern Ireland, so we do not have to look far for the explanation. That is why I welcome the creation of the Local Audit Office in the Bill. It is the right measure to correct that problem. It is necessary, but it is not sufficient. We will want to explore what else will be necessary.

The reason it is necessary is that it brings back together the essential functions that make for a robust audit regime. That includes letting the contracts with the firms to do the work, specifying that work; holding the firms to account for delivery on time and to the right quality standard; supporting the firms with technical advice and help with tricky issues, many of which we are seeing across local government; and robustly speaking with local government about where problems need to be fixed.

It also includes working as a partner with local government to improve the quality of accounts, and make them less burdensome to local authorities and more useful to taxpayers and businesses. There is a big agenda beyond just the creation of the Local Audit Office—it is a necessary but not sufficient requirement.

Bill Butler: I should also declare an interest, although mine is slightly more historic than Gareth’s. I spent 35 years in local government audit before I escaped. As you can see, Chair, I have been dragged back. I hope I am not going to sound too much like an echo, but I agree with everything that Gareth said. The effective audit of public bodies, which are funded by compulsory taxation and not by voluntary shareholders, is fundamental to proper democracy, governance and the financial credibility of English local government.

The world looks down on the large number of disclaimed audit opinions. We should not underestimate what bankers in New York and the large accountancy firms are thinking. When they look at that, they cannot comprehend how we have ended up in this position. We therefore strongly welcome the commitment to reform, the changes in the Bill and the creation of the Local Audit Office.

We particularly like the fact that it will reestablish a co-ordinated local audit system, and bring together responsibility for audit appointments, the code of practice, audit quality and the performance of auditors, because local government audit is in a very bad position. The only option available that anybody could think of to tackle the increasing backlog of delayed accounts was to disclaim opinions. It is really important that we do not replace a backlog with disclaimed opinions. Currently, there are 273 bodies that have received disclaimed opinions—51% of the bodies in England and Wales that we are responsible for appointing to. That is up to ’23-’24. Of those, 236 are for two or more years, and 53—that is 11%—are for four or more years. In total, that means there are 716 sets of accounts in English local government for which there is no assurance from the auditors. Gareth did not mention this, but it also affects his opinion on the whole of Government accounts, which he has had to disclaim owing to the disclaimers in local government, which affect and knock on to the credibility of Government across the country.

We also think that there is a risk to the broader proposed local government reform because of the bad apple in the barrel. If you are constituting a new authority and you are incorporating an authority with a number of years of disclaimed opinions, sorting that out will get in the way of the effectiveness of those bodies at exactly the time when you want them to be focusing on their new responsibilities and opportunities. I will say the same thing as Gareth, but in a slightly different way: we cannot envisage a solution without the Local Audit Office, but it is not the solution. Bold action is required to cut through the Gordian knot that exists at present. The sector seems unlikely to resolve the underlying issues without, as Gareth has made clear, support both to those bodies preparing accounts and to those auditing the accounts.

[Miatta Fahnbulleh]

Q Thank you, Mr Davies and Mr Butler, for setting out the gravity of the situation, the urgency and need to reform, and how the Local Audit Office is an important step. You both candidly made the point that it is necessary, but not sufficient. I am interested in what key building blocks are needed in addition. Obviously, we need to deal with the backlog—that is a given—but, alongside creating this institution, what are the top three things that the Committee should have in mind in order to deal with the problem we have today?

Gareth Davies: The first would be skills and capacity. This sector has suffered from a loss of skilled expertise. Public audit is not interchangeable with company audit; it is a specialist field—you are auditing political institutions and reporting in the public interest. It is a different skillset, with some common areas with the rest of the auditing profession, and it attracts people who are interested in how public bodies become successful and how they achieve value for money, and so on. The pool of experts in that area has reduced sharply, so the system faces the challenge of building up that body of expertise and skills.

It is not just the auditors. In the past, the auditors did a lot of the training, and people then went on to careers in local government, the rest of the public sector and other sectors. It was a breeding ground for the finance function of local authorities. Individual local authorities cannot typically sustain large training programmes of accountants on their own, so having a regime that supports the development of that skillset is vital.

The other essential is getting hold of local government financial reporting and radically simplifying it, streamlining it in a way that can still be incorporated into the whole of Government accounts. That is always the caveat, and the reason for some of the complexity, but I do not believe that it is an impossible task. At the moment, the accounts are too easily dismissed as only of interest to the auditor because they are long, complex and quite difficult to follow in many places. There is no reason why we should put up with that. I know the Chartered Institute of Public Finance and Accountancy and the wider profession have started work on what professionals think would represent a high-quality, meaningful financial statement that would clearly explain to taxpayers how we have used their resources.

There is a danger that everyone focuses only on the council budget and ignores the accounts. That is dangerous, because the balance sheet matters as well as annual expenditure.

Bill Butler: I can save quite a lot of time by saying that I agree with all of that. This may happen on a number of occasions, and we have not shared briefs. If you start with those who prepare the accounts, that needs to be revitalised. It is moribund, and people are looking at the scale of this task and finding it difficult. Some of this can be the support that Members and Ministers can bring to bear in terms of its importance, because—again, echoing Gareth—it is not considered to be interesting and it is too easily put aside, but that is not going to get any better. There is a real risk that it will get worse unless preparers are properly supported, and unless it is clear what revisions are possible to make the accounts simpler and deliverable.

There are issues around how we encourage colleagues who work in the audit firms. That is a broader issue, because they are bound by the technical standards imposed across the firms by their relationship with the Financial Reporting Council. However, at the moment, that seems occasionally to act as a block to overcoming that risk. We need to be honest about the fact that that risk assessment is there and about what we can do around it.

As Gareth said, we have been looking, with CIPFA, at reforming local government accounts for some considerable time. The clock has now ticked down, I think. One of the things I hope for is that the commitment shown to reform so far carries on across these broader areas, not of all of which are susceptible to legislation, but all of which would be, I hope, susceptible to encouragement.

Gareth Davies: I would like to add one other thing, because an important bit of the full picture is governance arrangements in local authorities. I know that the Bill includes provisions on audit committees, but it is important that local authorities have robust audit committee-type arrangements. I am not prescriptive about exactly what form they should take, but meaningful engagement with internal and external audit and a connection to the governance of the authority as a whole through its political leadership are essential to good governance. That means having somewhere where difficult questions can be asked and answers gained.

In quite a few of the disasters we have seen in local government finance in recent years, it is the governance arrangements that are primarily at fault in not picking up on excessive risk-taking and lack of understanding of the nature of the risk being taken on, and so on. It is another example of where a more robust audit system will not, on its own, solve everything—although it will definitely help, because it will bring those questions to the audit committee table—but the audit committee itself needs to be a functioning, robust and effective part of the governance of the authority.

Bill Butler: If I may say so, these are not things that can wait for the Local Audit Office, which has a massive task to perform anyway. If we wait, these problems become intractable, and the organisation’s chances of succeeding, if it has any at all, are very low,. They are issues that need to be addressed now, while we have the opportunity and—I hope everybody agrees—a pressing need.

[David Simmonds]

Q I would like to ask you some questions about the risks you outlined in broad terms, and how they play out in the context of the devolution and reorganisation envisaged in the Bill. For the record, I was involved in launching public sector audit appointments some years ago.

In a local authority, there is the collection fund, which essentially covers all the income that it is due to collect, then there are pension schemes, the dedicated schools grant, the housing revenue account and the parking revenue account, where there are slightly variable legal ringfences. All of those pose risks and many of them are impacted by elements of the devolution proposals affecting who will be responsible for decision making and what that revenue might underpin in terms of borrowing or day-to-day expenditure. Will you give us a sense, from your experience, of what the risks are, what the potential opportunities are and where changes are needed to, for example, the ringfences, and your views on the inclusion of the dedicated schools grant in the annual, legal council tax-fixing process, which might help or hinder the proper management of some of those financial risks.

Gareth Davies: Do you want to go first, Bill?

Bill Butler: Yes, then you can agree with me.

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[The Chair]

We will now hear evidence from Mark Stocks, head of public sector assurance at Grant Thornton UK. For this panel we have until 4 pm, unless we are interrupted by a vote—I am sorry about that, Mr Stocks.

[Miatta Fahnbulleh]

Q In the last panel, we got a sense of some of the challenges in the local government audit system. Clearly, multiple organisations currently oversee and regulate the audit sector. I am interested in your views on the impact that has had on the system more broadly. Aligned to that, the Government are introducing a set of local government audit reforms through the Bill. How do you see that impacting the private sector audit landscape?

Mark Stocks: I have done this for a rather long time. I was an auditor with District Audit back in the day, then with the Audit Commission, and I am now with Grant Thornton. I have seen quite a lot of changes. The division of the Audit Commission duties has probably been the most impactful change, because it has created quite a confused landscape in terms of what the priorities are. The National Audit Office maintains responsibility for the code, which sets out the basis of our work, but our primary regulator has been the Financial Reporting Council, whose focus tends to be on the accounts. Public Sector Audit Appointments sets out the fees, and the Institute of Chartered Accountants in England and Wales decides whether we can act as a key account partner. That is quite difficult to cope with.

Throughout my whole history as an local auditor, the accounts have been important, but it has been equally important that I spend my time on value for money. I have to look at the financial sustainability of authorities, as well as their governance and performance. That has changed, to be candid, over the last 10 years. The code changed, so we spent less time on value for money. Then it changed again, so we spent more time on value for money. However, our primary focus in the last five years has been on the accounts, which has led to a confused environment in terms of how local auditors have acted.

In terms of what the Bill does, bringing in the Local Audit Office is crucial. Somebody needs to speak to the Government about the issues that auditors are seeing and what is actually happening out there, because some of the pressures on local government are quite immense. To be candid, I need somewhere to go and someone to speak to when I am concerned about what I am finding—someone who can say, “Let’s do this, or we’ll speak to the Ministry of Housing, Communities and Local Government.” The changes in the Bill are crucial for a functioning local audit in the future.

[Miatta Fahnbulleh]

Q And in terms of the interaction with the private sector?

Mark Stocks: You only have the private sector. It provides all of local audit now. We are used to working with the PSAA, so I do not see any issue in working with the Local Audit Office. It will make it easier; we will have a single code and a single arbiter of what quality is for a local auditor. I think that will be easier for us, as the private sector auditors, than it is now. I would not want the Committee to go away thinking that there is no commitment to this from the private sector. It was a difficult procurement the last time round, but the PSAA did manage to appoint sufficient auditors and we remain committed—I certainly remain committed—to a successful local audit system.

[Miatta Fahnbulleh]

Q I have a final question, if I may, Chair. We heard very clearly from the last panel that the reforms that were put in place are necessary but not sufficient, and that we need to think about how we build on things such as skills and capacity. From the perspective of someone at the coalface, what are the things that we need to get right? What should we reflect on as we take through these reforms in the Bill?

Mark Stocks: It is still fragile. I thought Gareth and Bill were accurate in what they said. We need to have more capacity so that we are not reliant on just a few suppliers. For that, there has to be consistency in terms of message. We need to get to grips with local authority accounts. If I went and did a set of NHS accounts, they are perhaps 100 pages long. The average local government accounts are 200 to 250 pages long, so the work involved is immense. That is why it takes longer, so we have to get that right.

We need to start to deal with some of the risks in local government, to be candid. It is quite difficult to deal with the breadth of what local government does. If you add on top of that the financial issues that they face and the issues that are asked of them in terms of policy, that layers on quite a scope for auditors, which means that we have to bring in specialists to do some of the work. I do not think that will get any easier under the current landscape.

[David Simmonds]

Q The previous panel addressed some of the complexities of the local government finance landscape, with the different accounts and so on. I am interested in your perspective as someone from the audit sector that receives many of these contracts, first on the challenges involved in skilling up the sector with the necessary knowledge and training. I am also interested in your perspective on the standardisation question. I think we all understand that audit is sometimes more of an art than a science—sometimes the other way round. How do you end up with something where everybody understands what is expected of them, in the context of a high degree of transparency that often is not really there in the commercial sector? How do decisions to deviate from that standard impact on the wider perception of the state of that organisation?

Mark Stocks: Local government accounts are complex. These are highly complex sorts of businesses, if I can use that phrase, that deal with any number of services. What we see now are local finance teams who are stretched, to be candid. There has been a lack of investment in them over the years. Gareth talked about trainees going from the Audit Commission into local government, but that does not happen now. There is a bunch of people who are around 50, who may be disappearing in the short term, so we have to sort out the strength of local government finance teams. As I said, we also need to sort out the complexity of the accounts.

In terms of the standards, all local government accounts are under international financial reporting standards, and that will not change. That is a Treasury requirement. How that is interpreted and what is important in those accounts is open to judgment. The emphasis from the LAO on whether it is more important for us to audit income or to audit property will make a difference to what local auditors do. I would always argue that it is more important to audit income.

It is very difficult to standardise anything that we do, because local government is not standardised. I can take you from a district authority that spends £60 million, most of which is housing benefit, to an authority that spends £4 billion and has significant regeneration schemes and companies. The skillsets that you need and the ability to standardise is very difficult. You have to have the right skills to do the work.

--- Later in debate ---

[The Chair]

We will now hear evidence from Zoë Billingham, director of IPPR North, and we welcome back Professor John Denham, professorial research fellow in the department of politics and international relations—that is a long title—at the University of Southampton and director of the Centre for English Identity and Politics. We will have until 4.40 pm for this panel.

[Miatta Fahnbulleh]

Q I want to talk a bit about the Bill, and I know you have publicly shown support for the direction of travel. I want to get your views on how important it is for us to be putting strategic authorities and our devolution framework on a statutory footing, in the way that we are for the first time, and what the impacts and implications are for the longevity and momentum that we are trying to create around devolution.

Professor Denham: Thank you very much, Minister. It is absolutely crucial that the Bill underpins a really robust legal framework for devolution if it is to last—it cannot be for one Parliament. I will talk today about work that I have developed with Sir David Lidington—so that was a Labour Minister and a Conservative Minister coming together to say, “You need to have a consensus that lasts; otherwise, the Government changes.”

This is where I would say we are at the moment: there are many good things in the Bill, but there are some real areas of weakness that could lead to it being undermined quite quickly. It depends on financial commitments to integrated settlements and long-term funding, which are not even mentioned in the Bill. The Bill creates no forum in which finance can be discussed between strategic authorities and central Government. One of the ways in which that could be mitigated, at least to some extent, is to put the mayoral council on a statutory basis. Mayor Brabin said earlier today, “Well, the mayoral council is where we talk about new powers for mayors.” The mayoral council is not in the Bill. If Ministers decided tomorrow that it was not going to meet any more, it would not. It has no terms of reference and no secretariat. The mayors have no legal right to put items on its agenda.

I would give that as one example of where things could be embedded much more deeply. Parliament would have to come back and say, “We are going to abolish it”, in order to stop that meeting happening. If that sounds very radical in our system, every other European nation with a devolved system of government has a layer between the devolved level and central Government. I would suggest that it will be of benefit to Ministers, too. It is probably possible to manage relationships with a relatively small number of powerful mayors, but when there is one for every part of the country, there will be a cacophony of people demanding special treatment for their areas. The ability to corral that into a proper process would be an advantage.

This has to be embedded. Prior to this, regional arrangements lasted for about 10 years before Government lost interest in them. If you want this to be here in 30 years’ time, doing the Bill, but adding to it, is crucial.

Zoë Billingham: I absolutely agree that it is essential that devolution through this Bill should be put on a statutory footing. I would highlight a few things that I think achieve that entrenchment, in addition to the legal aspect of that. First, the broadening and deepening is absolutely essential, with the right to request in combination with that, so that strategic authorities can decide what further powers they wish to request from Government. I agree with John that the integrated settlement is a really important entrenchment to give places the flexibility they need to demonstrate how different places make different choices about how they spend public money. That will be essential to showing how devolution can deliver differently according to the needs of different places.

The moves towards votes at 16 and returning to a supplementary vote system for our mayors is absolutely essential to broaden the number of people who can take part in in local democracy. I would urge the Committee to consider going further in a few areas in the Bill, to build on that entrenchment from a statutory footing. Fiscal devolution has so far been completely omitted from the Bill. We at IPPR North have been looking at options, including a visitor levy to start with, to start the process of fiscal devolution that we think will really help to mature the model that we have today. Accountability is another key area. I know that you have talked in previous sessions today about LPACs, and we absolutely agree that we need to beef up the accountability of mayoral combined authorities—that is a two-way street, but I am sure we can get on to it later.

Finally, in terms of public support, the flip side, if you will, of further empowering and rolling out devolution to the country is demonstrating to the public what devolution can deliver for them. The evidence shows that in places that have more powers and freedoms, voting turnout and engagement with local democracy go up, so we think it is important not just for the economy, but for democratic reform.

[Miatta Fahnbulleh]

Q If I can pick up on the point about scrutiny and accountability, there are two parts to my question. Some evidence has been raised in these sessions about the connection between people and communities and the mayors who serve them. We have had a decade and a half of this experiment, so I am interested in your views on whether the claim of a democratic deficit—which I do not buy—is about something genuine in the experience we have seen.

Secondly, we need to ensure strong scrutiny and accountability for any institution. We heard in the last session about some of the challenges with local government accountability and scrutiny. I am interested in your views on what we need to do to strengthen that and the provisions in the Bill to build on that.

Zoë Billingham: First, to your point on the democratic engagement of mayors, I do think, and I stand by the evidence that suggests this, that the more powers that mayors get, the more they are able to demonstrate to the public how they can tailor and do things differently in their places, according to what the public want. That is essential for the responsiveness of democracy; therefore, I also think that votes at 16 and the return to a supplementary vote are helpful additional aspects to this Bill, in terms of demonstrating that the Government are serious about broadening engagement with mayoral combined authorities.

I would also pick up the proposal in the Bill for neighbour area committees. Something along those lines is essential. We know that, as currently drafted, the Bill is proposing full unitarisation of local authorities to a 500,000 population level, which is far larger than we see in local government in our European counterparts, for example. There is a question about how those unitaries engage with those communities, not on an ad hoc basis, but as an ongoing community conversation. I wonder whether, for instance, the neighbourhood area committees could be predominantly made up of community representatives and young people, so that they do not replicate the district level that the Bill proposes to abolish, but instead create an ongoing, democratic renewal at that local level.

Secondly, to pick up your point on scrutiny, this is essential. If you speak to local leaders, mayors included, they are absolutely game for it. It is not something that central Government are imposing; it is an essential part of both enabling the further devolution of power and resources, and ensuring that the current model is not undermined because there is not enough scrutiny in place for what is already there. I totally support the proposal for a local public accounts committee—we have built on that idea ourselves at IPPR North, looking at mayoral accounts committees, which bring together overview and scrutiny, and local public accounts committees.

We think that those committees need to represent place leadership; this is no longer narrow lines of inquiry about certain budgetary lines or solely about audit. It must be much broader. This is about place-based leadership, not only by the mayor and the mayoral cabinet, but by other public leaders locally who could be brought in front of such committees. We think that is a really important thing to go hand in hand with the future of devolution.

Professor Denham: May I pick up and develop a couple of those points? There is no doubt that the Bill has a danger of an upwards movement of power: things are being moved from local authorities to strategic authorities and mayors have more autonomy. I understand why that is being done, but the Bill needs to build in a healthy counterpoint to that. I, too, would go beyond the neighbourhood governance proposal, which sounds a bit narrow and a bit prescriptive, as though the same model will work everywhere.

Sir David and I proposed what we called community empowerment plans, and we proposed them even when we did not know there was going to be local government reorganisation. The strategic authorities should have a legal duty to set out how they will engage with local people across the whole range of activity—I should have declared an interest, in that I am the honorary president of the Hampshire Association of Local Councils—

[Paul Holmes]

Hear, hear!

Professor Denham: So I am familiar with town and parish councils, and there are some very good ones, including in Mr Holmes’s constituency. But they are not uniform everywhere within the area, so a single prescriptive approach is unlikely to work.

There has also been, in the last 10 or 15 years, a transformation in our understanding of deliberative, participative engagement with local communities by many local authorities. We need both the strategic authorities and the unitary authorities to set out, in a document that should be challengeable, how they propose to do that. I think that would be useful.

Secondly—I will embarrass her—Zoë has written the best policy paper on local public accounts committees, so I will not say any more about that, except that I agree with Gareth Davies in an earlier panel: the challenge here is not local council audit, but the whole of public spending across a mayoral area. I was delighted to see the new Secretary of State backing the concept of total place, which is something I was involved in as a Minister 15 years ago; but, if that is going to work, you cannot combine that with upwards accountability to departmental accounting officers.

Local authority scrutiny has very good people, but it is not up to the job. You have to create a new local institution, the local public accounts committee and, picking up on what Mayor Houchen said earlier, make the chief executive within the area the local accounting officer. So you have a complete audit model at local level that is not then channelled upwards through departmental accounting officers. I think that is what we need to work towards. Those two things would not only empower local people, but ensure that you have local scrutiny of what is being spent and what is being done with their money.

--- Later in debate ---

[Siân Berry]

Q Others might. I want to move to duties. We see duties for health and health inequalities in the Bill already. Are there any other duties that you would like to see added, potentially in Committee or at the next stage?

Richard Hebditch: As I mentioned, these are potentially very powerful bodies, as the Bill collects powers and duties from other legislation, rather than being a stand-alone piece of legislation. The health duty is potentially important. We would like to see duties around climate and nature. Those are long-term issues; they are not the kinds of things where, as a mayor or an authority, you are under short-term pressure—or, necessarily, pressure from central Government—to deliver, but they are really important. In the collection of duties from elsewhere—on local transport plans, for example—there are duties to have regard to national policy, but not in terms of the exercise of your functions, so these strategic authorities will be powerful delivery bodies in their own right, not simply as plan-making and strategy bodies, which makes it important to have those climate and nature duties as well.

Naomi Luhde-Thompson: The Labour Government in Wales introduced a different format in the Well-being of Future Generations (Wales) Act 2015—a public authority duty. It has a series of goals, and each public authority has to carry out those duties in relation to their functions. I should declare that I am a member of the Eryri national park authority, so I have a very close view of how this is actually carried out. It comes to the point about where the public interest is in the proposals in front of us. There is growth and a bit about health, but where is the public interest? It does not seem to me to be properly explained or described in the Bill that this is all about delivering on the public interest—what is the Government’s role in doing that?

There is a bit of confusion between the two Bills. Look at the health duty in this Bill and then look at the Planning and Infrastructure Bill, which is obviously in the Lords at the moment. There is no consultation for health groups in the Planning and Infrastructure Bill, but there is a health duty on the combined county authority. It is just not connected. On the spatial development strategies, it is not particularly mentioned as a group, but there is a duty on the CCA, so it is really important to examine the connection between the two a bit more closely.

[Miatta Fahnbulleh]

Q I have two questions, one at the strategic level and one at the community level. Obviously we are pushing through strategic planning powers for mayors. I am interested in your assessment, given your huge expertise, of whether that is the right function, and what we need to do to ensure that it delivers sustainable development, which is obviously our objective.

At the community level, we obviously want to build in a way that is sustainable, but we need to make sure that there is public consent. I am interested in how we ensure that strategic planning powers sit alongside community engagement and community consent to make sure that there is a whole place sense of the direction of travel and the development that needs to happen, in a way that builds public support.

Naomi Luhde-Thompson: On public participation, the UK is a signatory of the Aarhus convention. Article 393 of the trade and co-operation agreement is really clear that when you are doing something that has an impact on the environment you must have a proper process of public participation. It must happen at an early enough time to influence the outcomes; otherwise, what is the point of having people involved? You are literally just asking them, “What colour do you want the gates to be?” You are not asking them to be involved in the full decision.

The issue that you have here—I will talk about the products that are produced—is that, if you look at the spatial development strategies, it specifically says in the Planning and Infrastructure Bill, in proposed new section 12I of the Planning and Compulsory Purchase Act 2004:

“No person is to have a right to be heard at an examination.”

That is completely the opposite of what you have on local plans: any person who makes representations must be given the opportunity to be heard in front of the examiner. That is not going to send out a strong signal that you actually want people to participate in the making of these spatial development strategies.

It is not a sell-out event to go to a plan examination, so I do not think that you need to be worried about that. I do, however, think that you need a right to be involved at that stage, and it cannot be at the discretion of someone else. I think that is one of the issues: if you have to wait for somebody else to give you consent or permission to enter that space, you do not have a right to enter it, because it is at somebody else’s discretion. That is why the formulation of such a right of access—a right to participate—is really important.

Your other point was about the duties, and how that is carried out. I would be really interested to see how the local growth plan is supposed to comply with, for example, the environmental principles policy statement. How does it combine with that? How does it combine with the spatial development strategy? What is the interaction there? It is quite complex, if you look at the organogram of the different plans that, if you are a member of the public, might affect and shape the place in which you live, and therefore what the purpose of all these plans are—whether they are there to achieve sustainable development in the public interest—and how you are supposed to get involved in influencing the outcome of the decisions that are made through these plans.

Richard Hebditch: It is probably also worth talking about the resourcing of all this. As people have discussed, we have the local government reorganisation at the same time. The new format for local plans, which are out of date, has new housing targets as well. Then we have the SDSs—spatial development strategies—on top of that. How do we make sure that we have the resourcing to develop all those things, which are happening at the same time? We then have wider planning reform, and we might have another planning Bill in the new year. There is a lot of potential chaos at the same time. I am sure the Government want to address that, and the resourcing for planners to develop the SDSs is very helpful, but there is a risk of not necessarily having a clear road map for how you get to that place. As I was saying, we are very supportive of the idea of spatial development strategies and the strategic layer, but the journey there is going to be quite chaotic. I think it would be good to look at issues around workforce skills and the timing of all the different things that are going on.

[Miatta Fahnbulleh]

Q The Government will do our very best to make sure that chaos is not the thing that comes out of this set of reforms. I think most people would concede that the status quo is not optimal and therefore reform is required. The piece that I want to push back and follow up on is the need for public participation. That is the whole basis on which our planning system works, but there is something about accountability and the mandate that sits with the mayor. Ultimately, if people do not like the set of decisions that the mayor drives through a development plan, they can boot them out in an election, so there is a specific piece around the function of the mayor that means that they can hold that development plan and the public are able to hold the mayor to account.

Naomi Luhde-Thompson: I think we need to reflect on what became of the regional spatial strategies, and on whether that was an issue around social licence and public consent. Obviously, an examination was attached to them in their development, and there was accountability in different formats. If it is not clear to people that they are going to be involved, you will just get disempowerment and disenfranchisement, and then people are just going to say, “Well, it’s nothing to do with me. I haven’t been able to be involved, and I haven’t been able to have an influence.” Those routes to influence and to participate properly, which means having an impact on the outcome, need to be very clearly laid out so that people can participate. I agree with you that it is a whole discussion. Planning is the way we organise ourselves in space, in society and in places. That is what it is supposed to be, so we need to make it like that.

Your point about democratic accountability is really important. One of the things that the Better Planning Coalition has been looking at is the national scheme of delegation, which will have a huge impact on whether there is democratic accountability for planning decisions at local level. If people realise what is happening only when the bulldozer turns up at the end of the road, that is obviously a failure of the system. If they feel that a decision has not been made in a way that is accountable, if there is no one for them to go and talk to, and if they do not have public speaking rights at planning committees any more and cannot have their say on that decision, I think that will lead to a democratic deficit.

[David Simmonds]

Q To pick up on the point about a democratic deficit, one of the things that has been much debated is that the Government have embarked on two major pieces of legislation: the Planning and Infrastructure Bill, and the English Devolution and Community Empowerment Bill. Both will have a huge impact on the policy area, particularly around housing. We know that housing delivery has collapsed, and part of the solution to that in the Planning and Infrastructure Bill is to strip out a lot of the environmental protections, which you have referred to. Then the devo Bill comes along and removes much of the community voice as well—for example, by reducing the number of planning applications that may be considered by a local planning committee. Can you tell us a little bit about how, perhaps in an ideal world or a more optimal world, that community voice could be secured behind the delivery of the types and number of homes that communities want, but in a way that best reflects the needs of those local communities and those areas?

--- Later in debate ---

[The Chair]

We will now hear evidence from Sacha Bedding MBE, chief executive of Wharton Trust and a member of Locality. For this panel, we have until 5.20 pm.

[Miatta Fahnbulleh]

Q My first question is about your views on how the community right to buy provision in the Bill will help communities to better make use of and take ownership of community assets.

Sacha Bedding: We welcome the community right to buy. It is a good step, a big step, and it is important. Communities often do not feel that they have those rights, because they do not, and when they see a treasured building or space go up for sale, and they have no opportunity to purchase or reclaim it—lots of these things are already ours—they feel disillusioned and hopeless. To have an avenue and pathway to change that will be important and helpful. It will need to be properly resourced; I think we should look again at a community ownership fund or a successor to it. Places that do not have capacity but have a willingness and desire should be supported in creating that. But it is a great opportunity for the people of this country.

[Miatta Fahnbulleh]

Q To build on that, vibrant, strong communities and community organisations are critical to our vision and to taking advantage of the powers that we are providing through the Bill. I am interested in your views on the new duty on local authorities to make effective arrangements at the neighbourhood level. Also, with your vast experience in the sector, what is your sense of what we need to get right to ensure that we genuinely empower community organisations, when we know that they have the capacity to have a voice, representation and power for the communities they represent?

Sacha Bedding: I watched some of the proceedings, and I understand why there is a desire for an expansion of parish councils. It is what we look like, and it is a reflection of this at a local level, but it is not right for everywhere. There are places up and down England where organisations like mine—Locality has hundreds of them as members—have the opportunity to create an active role in making sure that decisions reflect the will, the want and the need of the people who are going to be affected by those decisions.

That will happen only if we do not prescribe a one-size-fits-all solution to what neighbourhood governance looks like. Neighbourhood governance should mean that when the people in that community are asked, “Do you feel you have a stake in this place and the opportunity to shape where you live?” the answer is yes. At the moment, our opinion is no: roughly 80% of people say they do not feel they have that stake in their community. We see that in election turnout: the by-elections in Hartlepool, which I know well, had turnout of under 20% or 15%. That is an issue, and I am afraid that it is not going to be solved by creating another layer of councillor. I live in a parish area, by the way. Where parish councils do tremendous work, perfect—build on it—but where it is not right, let’s not mandate it. Let’s be creative and braver than we have been so far.

[Miatta Fahnbulleh]

Q You make the point about creating organisations and capacity that reflects the will and want of the people. A big part of that is diversity and representation. One of the challenges that we have had in the community sector is that it tends to be those parts of the community who have the social capital, the time and so on who are at the forefront of that. I am interested in your views on what we should be thinking about to ensure that whatever neighbourhood governance structures we create are genuinely representative and have that diversity of views and opinions to genuinely drive the will and want of the community.

Sacha Bedding: The first thing is that we have to make it accessible. I will always advocate for a community organising approach, because I think that releasing people’s agency, so that they feel that they can take action on the things they care about, is a route to that. However, whether it is asset-based community development, old traditional community development or community organising, that is where we start. We start where people are, not where we would like them to be.

If we can do that and resource that, there are thousands of people willing to roll up their sleeves and get involved where they live. I see it every day; you see it in your constituencies every day. This is not some great big secret—it is just, “Go out and ask them.” On the flipside of that, our sector, like every other sector, has been hammered for a long time, but releasing the skills and talents of local people to take action on the things they care about will answer that question.

[Vikki Slade]

Q I absolutely support your comment about the reopening of the community improvement fund or similar, but last week we had the Museum of Broken Dreams downstairs, which showcased some incredible projects that had failed due to various issues. This Bill is a good start, but does it go far enough? For example, it is great to see supporting assets included, but are they the right ones? What about environmental assets—places within communities for nature and open space? Would they be something you would be interested in expanding to?

Sacha Bedding: I do not work in an area of environmental concern. If there are environmental opportunities in places, the broader the scope of what we consider an asset of community value to be, the better, in my opinion. I do not think we should prescribe that it must be bricks and mortar. For us in Hartlepool, things such as long-term plans for neighbourhoods should include the sea. That is our greatest asset, after the people who live there, and every community plan could involve the sea, for example. The environmental opportunities are there; whether we can distinguish whether they are social or environmental does not matter—let us expand the scope.

However, we should also look at the right to shape public services, because too often the people who are receiving services do not have a stake in the design of those services and the right to control investment. That is a big one. I do not mean, for example, Hartlepool getting 10 nuclear modular power stations, although that is great news; I mean at the neighbourhood level, where houses can be built, or not built, as we have just heard. People should have a stake in that decision. If you want more housing built, work alongside people who live in that community now. Do not just internally exile them, flatten the houses and say, “Hard luck, son.” That is not an answer.

The more expansive the assets of community value are, the better. The opportunity to expand the community rights is there, and it makes more sense for everybody. On homelessness strategies, where people are still on the streets and we are spending hundreds of thousands of pounds, or a literacy strategy, where one in three people is illiterate and that works with cohesion, if people can bring those together, they will coalesce around a place, and they can do that far better if those rights are enhanced.

English Devolution and Community Empowerment Bill (Third sitting)

Miatta Fahnbulleh Excerpts

Committee stage
Tuesday 14th October 2025 Public Bill Committees

[The Chair]

With this it will be convenient to consider new clause 35—Standardisation of definitions—

“(1) Within six months beginning on the day on which this Act is passed, the Secretary of State must by regulations standardise the definition in legislation of—

(a) ‘national’,

(b) ‘strategic’,

(c) ‘local’ and

(d) ‘community’

for the purposes of ensuring each refers consistently to the appropriate level of local government across all legislation.

(2) Regulations under this section are subject to the affirmative resolution procedure.

(3) In exercising this power, the Secretary of State must have due regard to the need to ensure consistent use of the words listed in subsection (1), to facilitate public understanding of devolution.

(4) Within six months of a statutory instrument under subsection (2) being made, the Secretary of State must lay before Parliament a report setting out how the power under this section has been used this power, including any reasons for failure to exercise it where there is inconsistent usage of the words listed in subsection (1).”

This new clause would ensure that words like “strategic” and “local”, where they relate to a level of government, have consistent meaning across statute.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

It is a pleasure to serve with you in the Chair, Sir John. Before I speak to the first group of amendments, I put on the record my thanks to the witnesses who gave up their time in September to give evidence to the Committee. Their comments were insightful and will inform our scrutiny over the remainder of Committee stage.

The English devolution White Paper committed to introduce in law the concept of strategic authorities, which sits at the heart of our new devolution architecture for England. The clause makes good on that commitment and establishes a more consistent and simple model of devolution. The clause sets out the three levels of strategic authority: the single foundational strategic authority, the combined foundational strategic authority and the mayoral strategic authority. Each category will have access to a consistent set of devolved powers and functions.

Mayoral strategic authorities that meet specified eligibility criteria may be designated by secondary legislation as established mayoral strategic authorities, unlocking further devolution. We believe that that will deliver a permanent shift in power from Whitehall to all parts of the country, with consistent powers at the right level across all of England, so that empowered mayors can drive growth, unlock house building and infrastructure, and deliver the change that our communities want.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I echo the Minister’s welcome, Sir John. It is a pleasure to serve with you in the Chair.

We will refer to a good deal of evidence on all parts of the Bill, but it is important to set out briefly—in terms equivalent to those used by the Minister—the concerns that the Opposition continue to have about the significant democratic deficit that arises from the measures in the Bill; the risk of losing the efficiency and local insight that come from many of our local government structures; and, in the context of a country that already has fewer elected representatives per voter than any other developed democracy in the world, the impact of stripping out, by some estimates, up to 90% of elected representation. I therefore echo your comments, Sir John, on the importance of scrutiny of the Bill. Local authorities are the means by which our voters, our residents, exercise control over what happens in their neighbourhoods and communities. It is critical that the legislation gets that right.

[Miatta Fahnbulleh]

We absolutely recognise the hon. Member’s point about democracy. Directly elected mayors can play a powerful strategic role. They are a key new part of the devolution architecture that we have seen work well across the country. I point to Greater Manchester, which has delivered the fastest growth of any local economy. They sit alongside strong democratic structures that we will have in local government. The Bill is complementary to that and does not cut across or undermine those structures.

[Siân Berry (Brighton Pavilion) (Green)]

It is a pleasure to serve under your chairmanship, Sir John. This is not my first Public Bill Committee, but I have had the whole summer to forget how these things work, so I look forward to being firmly guided by you if I stray from good practice.

I will speak to new clause 35. In that context, I emphasise how friendly, constructive and helpful the new clause is intended to be as a way of getting the Committee started on a good note. I ask Ministers to take the need for it on board, although I will not press it to a vote. I tabled the new clause to ensure that, more broadly, words such as “strategic” and “local”, where they relate to a level of government or a level of area of policy, have a consistent meaning for strategic authorities, constituent authorities and community-level groups.

I will give some examples of possible confusion growing in the areas cited in new clause 35. We have a strategic road network, which is in fact a national network managed by National Highways. We have new strategic authorities, which will have to manage a key route network, analogous to the Transport for London route network. We also have local roads managed by local authorities. In the Bill, however, we have strategic authorities being asked to make a local transport plan. That could be more helpfully named a strategic transport plan.

Another area of policy I am very familiar with is the community infrastructure levy. In later clauses, we will discuss new applications of the mayoral community infrastructure levies. I have experience of how, more locally, spending on what most local councils call strategic community infrastructure levies is done by local authorities. Decisions on local CIL spending, which is what councils normally call is, are made closer to the community, often by ward councillors or neighbourhood forums.

We are slightly better off in planning, where there is a national basis for decisions on nationally significant infrastructure, and where strategic planning applications may be called in by regional strategic level mayors under current or new structures. However I do think that we lack rigour, sometimes logic, and often clarity in all these terms now. More thought about making things more standardised and easier to understand would be very welcome. I am not proposing a vote on this new clause, but what I would like to hear from the Minister today is that she will take this away, ask for at least a report on the current range of terminology we have ended up with in different areas of policy, and consider potential further amendments and the fuller review the new clause calls for.

[The Chair]

As a point of advice, if people want to contribute after I have called the Minister to sum up then just let me know in advance and I will call the Minister at the end, so she can respond to a variety of points that have been made. I do not want the Minister to have to keep getting up and responding to every speech. I know people are new to Committee, but it helps the Minister be able to sum up her consideration of all the points that have been made.

[Miatta Fahnbulleh]

I am sympathetic to the intentions behind the new clause, and the hon. Member for Brighton Pavilion makes a good point regarding the tapestry of terms that we have in a very complicated local government structure; however, the Bill already includes defined terms relevant to interpreting local government structures. For example, clause 1 defines exactly what strategic authorities are. My concern is that taking a one-size-fits-all approach might have unintended consequences by altering existing definitions that have been deliberately tailored to work in specific legislative contexts. My view is that as we go through this process of standardising the new structure, with strategic authorities now established in legislation working alongside local government and community structures, the roles and the definitions of different structures of government will become much clearer. I hope the hon. Member will not press the new clause.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Functions of Strategic Authorities and Mayors

[Siân Berry]

I beg to move amendment 261, in clause 2, page 2, line 21, after “economic development”, insert “, poverty and socio-economic inequality,”

This amendment would make poverty and socio-economic inequality an area of competence for devolved authorities, ensuring they can take action to address the root causes of disadvantage in their areas.

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[David Simmonds]

The Opposition have some sympathy with the amendment, but we spent time reflecting on its implications and appropriateness for the Bill. I suspect that, to a degree, the Minister and I agree on this point. If we reflect on the legislative framework around our local authorities from their earliest origins, the relief of poverty and addressing inequalities—the duties that the amendment refers to—have been enshrined. It goes back as far as the Poor Laws, but in more recent years the National Assistance Act 1948 compelled all local authorities to support those destitute in their areas, and the Localism Act 2011 gives scope for local authorities to use their economic powers through activities such as procurement in ways that specifically benefit the local area.

The Levelling-up and Regeneration Act 2023, which was much debated and broadly had cross-party support, is reflected in a lot of this Bill. It was specifically about local authorities using their powers to support the economy of their local area. Just a short time ago, some of the members of the Committee were in this room debating the Planning and Infrastructure Bill, in which the Government set out a vision—contested to some extent—about how those measures affecting local authorities will address persistent issues of inequality. We recognise that sometimes that is about legislation, but sometimes it is about Government action.

Mention has been made of food banks, which were rolled out under the last Labour Government as a means of addressing persistent issues of poverty. I remember them being opened during my time as a local authority councillor, and Gordon Brown visiting and saying, “This is an example of how we expect local authorities to address some of these persistent issues.” Local authorities already have these duties at both the strategic and the micro level. I question whether it is necessary to add an amendment that, in essence, reflects existing duties throughout all the different tiers of local government in England.

[Miatta Fahnbulleh]

I shall start by setting out the purpose of clause 2, then turn to amendment 261. The clause provides some broad thematic policy areas under which functions and powers of strategic authorities are arranged in the Bill. Defining those areas on the face of the Bill will bring clarity and purpose to the role of strategic authorities, which all parties agree we need to do. We want to empower mayors, who know who their areas best, to respond to local needs, so they can be the ones driving change and improvements in economic prospects and living standards and poverty. These thematic policy areas are deliberately broad, to allow for a wide range of activities.

I have a lot of sympathy with the intention behind amendment 261. Alleviation of poverty and tackling socioeconomic inequality should be a core part of what we do and a core metric of economic success. However, as the hon. Member for Ruislip, Northwood and Pinner set out, those duties are already baked into the very function and purpose of local authorities and, critically, they cut across all the thematic areas that we have set out.

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[Manuela Perteghella (Stratford-on-Avon) (LD)]

It is a pleasure to serve under your chairmanship, Sir John. Amendments 4, 28 and 29 would make English devolution genuinely local by ensuring that local consent and public consultation come first. Amendment 4 would change clause 3 so that local authorities must apply to the Secretary of State themselves to become a single foundation strategic authority, rather than Whitehall imposing devolution on local councils. Amendments 28 and 29 would remove the parts of schedule 1 that would allow the Secretary of State to prepare a proposal for there to be a mayor in an existing combined authority area, and for the establishment of a combined county authority, without public consultation.

One of the greatest criticisms of the Bill is that it proposes a top-down, Whitehall-led devolution, which is not really devolution at all. In my county of Warwickshire, the choice of which strategic authority we create, form or join must come from local elected representatives who are closer to their communities and understand better the needs of our constituents. Such an important shaping of future governance must have grassroots support and should not end up being imposed by central Government, especially if we want to decentralise powers to tackle socioeconomic inequalities, address regional disparities and promote real autonomy.

Without the amendment, local people will lose the right to decide their own governance arrangements. Whitehall will be able to impose devolved powers, force mayoral models on to areas that have not asked for them, and redraw local governance boundaries behind closed doors. Community involvement and local consent are essential to ensure transparency and accountability in devolution decision making.

Amendment 4 reaches the heart of the issue at hand. It would ensure that devolution is locally led, not imposed. It would ensure that a council that wishes to become a single foundation strategic authority must initiate the process itself, rather than wait for the Secretary of State to decree it. If devolution is to have legitimacy, it must be built on local consent, local ambition and local accountability. Without that, we risk the Bill becoming an exercise in central control and a top-down approach dressed up as devolution. We would like to push amendment 4 to a vote.

[Miatta Fahnbulleh]

Both the policy intent and the practice with places going through the devolution process are locally led. The impetus is coming from local leaders and local authorities that are working with their communities to drive the process.

On amendment 4, the Government have been clear that we will consider non-mayoral devolution arrangements for single local authorities on an exceptional basis where certain criteria are met. Designation is not intended as the end point; it is a stepping stone towards deeper devolution, which is what we hope will be the journey for all parts of the country. It is therefore most appropriate for the process to be initiated by the Secretary of State rather than the local authority. However, to be clear, the Secretary of State will not be able to designate a council as a foundation strategic authority unless the council itself consents to that designation. That is a robust safeguard that will protect the interests of the single local authority concerned. I agree with the sentiment behind the amendment to ensure that the Secretary of State has regard to the need to secure effective and convenient local government. I am pleased that those criteria are already embedded in the Bill when conferring functions on a single foundation strategic authority.

Amendment 28 seeks to remove the Secretary of State’s proposed power to direct for there to be a mayor for an existing combined authority without local consent. The Government have been clear about the benefits of mayoral devolution; we are seeing it across the country. For example, South Yorkshire mayoral combined authority brought the Supertram network back into public control after 27 years, and there are already drops in fare evasion, increases in usage, ticketing apps and improved clearing. Greater Manchester authority has taken control of its bus service, resulting in increased punctuality and ridership and cheaper fares. The North East combined authority has secured a £450 million development for one of the largest film studios in Europe, with the potential to create over 8,000 jobs.

We know the impact of this devolution model. We are seeing it across the country and we want to see it in more areas. We are clear that mayors with skin in the game are best placed to drive forward growth, reform public services and deliver the change that their communities want. Every resident in England should be able to benefit from deeper mayoral devolution in their area.

[David Simmonds]

There is, perhaps, a risk of the Committee being inadvertently misled, in that all these points are being described as locally led. The Committee needs to be clear: local authorities were told that they needed to submit the proposals or the Government would take powers to direct them to do it. It was a gun to their heads. It was not the case that local authorities came forward proactively. During the 14-year era under the previous Government, it was clear that proposals that did come forward for reorganisation would be entertained by Government, and a number of those were taken forward, but compulsion was not the case. It is only since the Government told local authorities that they either had to come forward or would be directed to do so that we have seen the proposals, so it is not the case that they are locally led. The Committee needs to be clear on that.

[Miatta Fahnbulleh]

I completely disagree. I have been having conversations, for example, with our strategic combined authorities that are going through the process. The difference between this Government and the last is that we have created a clear sense of the powers and the economic opportunities that areas can take forward. Take, for example, our current devolution priority area. I am the new Minister, and I am having the first set of conversations with them. Every single one is excited and enthusiastic about the prospect. At the moment, the demand for devolution deals is outstripping our ability to respond, because we have attached to them clear powers, access to funding and the ability to drive the change that we want to see in those areas. So I completely reject the premise that places are being driven to do this.

[Paul Holmes (Hamble Valley) (Con)]

There is a risk here that we are conflating what is actually happening on the ground. The Minister is absolutely right, and no one can argue that this Government have not been clear about the structures that they want to put forward. However, to say that there is a demand from local authorities requesting devolution is stretching it a bit, because it is quite clear out there—particularly in my area, in Hampshire and the Solent—that this Government have said to them, “You have to do this; otherwise we are going to force it on you.” That is not locally led, is it?

[Miatta Fahnbulleh]

I spoke to the leaders of Hampshire and the Solent just last week, and they were unanimously enthusiastic about what was being proposed, because they could see the opportunity. I am pleased that it is being voted on, and ultimately it is for places to come forward. What we have said to them is, “If you go through this journey, there are powers that you can draw down that will allow you to drive change in your areas.” The strategic authorities, combined authorities and constituent authorities can see the economic prospect. They see what is happening in Greater Manchester, the Liverpool city region and the west midlands, and they want that for their residents. That is absolutely right, and what we are doing is enabling and supporting that.

Let me talk about the backstop power provided here. We do not expect to use it, which is why it does not come into force at Royal Assent; it is there if we need to draw on it. The only reason it is there—because we think the demand and the momentum created by devolution will do the job for us—is in the instance where there are blockages. That means when constituent authorities that want to move forward are being resisted by a particular authority, we give ourselves the ability to intervene. The reason we are doing that is because we do not want any residents to be left out. We do not want areas to be devolution deserts, not being able to benefit from the economic opportunities and prospects provided.

[Vikki Slade]

The reality is that the only reason they are queuing at the Minister’s door to access devolution is that they are being denied access to funding if they do not. Let me give the example of Wessex: Somerset, Dorset and Wiltshire have all been unitarised over the past 10 years. They should have been in the ideal position, but they were overlooked for the first wave of devolution. They were apparently not ready, and I accept that fact, but they have missed out this financial year on more than £300 million—£159.29 for every single household in that area—compared with other areas. They have no real choice but to devolve to a single authority, because why would their residents think it is acceptable for them to miss out on £300 million? So it is not fair, or it is disingenuous, to suggest that this is not compulsion. The other point I want to make—

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[The Chair]

Order. Interventions should be short.

[Miatta Fahnbulleh]

It is absolutely right that we say that, in order to drive economic success in particular areas, there are powers that relate to economic drivers and levers that we want, and there is an investment fund that can be deployed at that functional level. I will not resile from that; it is absolutely the right thing to do. We are clear with places that we think a strategic authority operating at a functional geography is the way to unlock their economic potential, and we are building powers alongside that. Places that want to take it up absolutely can. At the moment they are queuing up to do so, and I am incredibly happy about that.

I am very disappointed in the hon. Member for Hamble Valley for not getting on in support of his area, which is enthusiastic for this and moving forward. Ultimately, there is momentum around devolution because the benefits of it are being seen already. It is not theoretical; it is not on paper. We are seeing it in our areas, and I want it for every part of the country, not just the ones that have gone through the journey.

[Paul Holmes]

The Minister should be very careful about attributing motives to myself that are not there. I am very supportive of the fact that Hampshire and the Solent and will have a mayor. Hopefully, it will be a Conservative mayor, as that will drive the economy going forward. I want to press the point that we can see how divisive this is in the fact that three different versions of local government reform are being proposed. Hampshire and the Isle of Wight were told, in this Government policy, that if they did not go ahead and embrace devolution, it would be forced on them in a way they may not like. That is not locally led; it is compulsion, is it not?

[Miatta Fahnbulleh]

I will not press this point. All I can say is that I sat down with the leaders last week as a new Minister—the newbie—and I asked them how it was going. They told me, “we are enthusiastic and there is momentum around this because we can see the value that it will provide for our communities, so we are driving forward. What we need is for Government to get out of the way and for the Government to support and enable us.” I take that as a ringing endorsement of what we are trying to do. I can only go by the conversations I have had with local leaders. At the moment, I am seeing momentum and support for this, and rightly so because we are seeing the impacts of this on the ground and the Bill will extend that across the country.

Question put, That the amendment be made.

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[David Simmonds]

The short answer to the hon. Gentleman’s question is yes. I have spent a good deal of my time in local government. One of the key issues that we learned from the process, and one of the reasons why former Secretary of State Eric Pickles said that he had a pearl-handled revolver in his desk—for anyone who came to him to suggest forcing local government reorganisation on England—was the need to get things right with local consent.

There are times, which I think we can all see in the local government landscape at the moment, when, because of geography or failure of leadership, we know it is necessary for Government to intervene, and Governments of all parties have done so. Northamptonshire was an example of such a place. Individual local authorities within it had not failed, but there had been a collective failure of the public service in that area. The Government therefore felt compelled to intervene to remedy that, as opposed to imposing an alternative vision for how they thought the local area should be governed.

New clause 23 stands in my name. It seeks to enshrine in the legislation the principle of consent. We have the very opposite of what we have been told as a Committee, that this is all locally led. Clearly, the Government are already using the levers in their power to compel local authorities down a certain route. Under the force of such compulsion, local authorities feel that that is what they have to do, because it is the only way to address some of their reasonable and justifiable concerns. The timetable, the process and all those things come at the same time as a wholesale reorganisation of planning and infrastructure, which is stripping away the local powers and voices that are so critical to ensuring that the infrastructure and new housing that we all want are delivered.

The view of the Opposition, therefore, is that we need to enshrine in this legislation not powers for Whitehall but powers for people—powers for people to shape through their local leaders the community structures of service that deliver for them and the taxes that they pay. People are represented to exercise such powers. Enshrining the consent of local authorities is a small step in that direction.

[Miatta Fahnbulleh]

I will respond to amendments 30, 31 and 33 first, and then amendments to 266 to 280. I appreciate the intention of the Liberal Democrat amendments, and I reiterate that I think we are completely aligned in this Committee in our desire not just to push power down, but do so in a locally driven way. On the specifics of the lead amendment, the principal body affected by the designation that we are seeking will be the unitary council or the county council. The Bill already provides that no designation can be made without the consent of the relevant councils.

On amendment 31, the Secretary of State must already notify the proposed constituent councils, and any other persons that the Secretary of State considers appropriate, about a proposal to direct the establishment of a combined authority. The Secretary of State must consider the representations of that body. As my hon. Friend the Member for Mid Cheshire said, there is no shortage of representation and voice from individual town and parish councils. We think that the process of engagement is already there and that to impose additional requirements to consult every town and parish council in the proposed areas would be disproportionate and also risks conflating the distinct roles of town and parish councils, which, as I said at the evidence stage, we absolutely see having a role to play in the new architecture of strategic authorities.

Strategic authorities have been created to tackle regional issues and to capitalise on the opportunities that exist over a significant economic geography, such as pursuing, for example, integrated transport. Town and parish councils, meanwhile, will continue to represent their local communities, managing neighbourhood services and supporting initiatives that improve the day-to-day lives of their residents. Each tier of local government will be accountable to their local communities and should continue to represent their interests and to work in alignment.

[Lewis Cocking (Broxbourne) (Con)]

When areas go through this process—and they are being made to go through it—will the Minister consider making it easier for areas that are unparished to create town and parish councils? Otherwise she will create large unitary authorities and some areas will have town and parish councils and others will not. Will she make it easier to set up town and parish councils where there are not any?

[Miatta Fahnbulleh]

We will discuss neighbourhood governance and neighbourhood boards later in the Bill. When it comes to areas that do not have town and parish councils, we recognise there is an opportunity for us to create structures so that there is stronger community representation and a stronger community voice. There is an opportunity for us to design something that works in areas where town and parish councils do not exist or may not be appropriate. We want to create flexibility so that local areas can find the right structures for them, so that neighbourhoods and communities have the voice and representation that we want to see across the country.

I turn to amendments 266 to 280. As I have said before, we have been accused of compulsion, and all I can do as a new Minister is point to the feedback that I get from the local areas that we speak to. Our engagement to date suggests there is genuine enthusiasm and momentum, because areas can see the economic opportunity and what a strong Mayor can do for their area. The Government have been clear in our aims: we want to get universal coverage of strategic authorities across England, because we can see the benefits that places like Greater Manchester and Liverpool are experiencing. We want that for every single resident across the area.

[David Simmonds]

During the evidence sessions, we heard senior local government leaders describe “inconsistent and…unhelpful messaging” on the building blocks of the new authorities—I quote what I wrote down. When we heard from those who are intended to be part of the investment agenda, they described no “meaningful consultation” from the Government on the proposals. How does the Minister square that with the idea that this is strategic and locally led?

[Miatta Fahnbulleh]

That is not the feedback that I heard in that evidence session. At the moment the places in our devolution priority areas are going through a process of consultation. They are talking to their constituent councils, voting it through the council chamber and taking it to their residents to make the case.

What we are seeing is positivity and momentum. Our job as a Government is to build on that and support and enable that. I come back to the point that there is a backstop power that we do not expect to use. But in the instances where we have got a blockage, we want to be able to help create a strategic authority so that we do not have devolution deserts and parts of the country left behind. We are very clear that the powers will commence only at the point that they are needed, rather than on Royal Assent.

Finally, new clause 23 would impose disproportionate consent requirements for these processes, requiring strategic authorities to seek the consent of all district, parish and town councils in their area. As I have said, there are already provisions in place to ensure a level of consultation. A primary aim for us in this Bill is to make the process simpler, more streamlined, more effective and less expensive. That is the feedback that we have had from places that have gone through the process and the feedback that we are getting from places going through the process.

My worry is that the proposed amendments would undermine the principle of having a process of devolution that is far more streamlined and far easier for places. Again, the feedback we are getting from conversations is that there is enthusiasm, appetite and commitment to do this. We want to make it as easy as possible for places, which is why I hope that hon. Members will not press the amendments.

Question put, That the amendment be made.

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[Manuela Perteghella]

It is pointless to establish a strategic authority without appropriate financial support. Without support to build structurally, hire staff, co-ordinate partners and begin delivering on their devolved powers, new combined and strategic authorities risk becoming bodies with responsibilities but no real capacity to act. As the Minister will know, local authorities have been starved of funding by consecutive Governments. We need to ensure that these new unitaries—these new beginnings—have the best start in life, and that begins with fair funding so that devolution can be effective.

Amendment 39 is complemented by amendment 361, which would require the Government’s annual devolution report to include details of funding given to support new strategic authorities. Each year, when the Government report to Parliament on devolution, they would be required to explain how and why money has been spent to help to establish new devolved authorities.

As it stands, the Bill risks becoming a Trojan horse for centralisation, concentrating power in Whitehall rather than genuinely devolving it to local communities as promised. Amendment 361 would support true, locally led devolution by ensuring financial transparency and holding Ministers accountable for supporting local government reform. That is why we intend to divide the Committee on amendment 39, which is essential to ensure that new combined authorities and new strategic unitaries can operate effectively from the outset and deliver the powers and services they are intended to provide. Without adequate funding, the whole exercise of devolving powers and establishing new authorities will be meaningless.

For too long, my constituents, like so many across the country, have faced the consequences of under-resourced local authorities, with promises to their families and communities left unfulfilled. Our amendments would provide the vital financial support that this new era of local government requires, enabling us to deliver on the ambitions of devolution and achieve real, tangible results.

[Miatta Fahnbulleh]

I thank the hon. Member for Ruislip, Northwood and Pinner for highlighting the deep cuts that were imposed on local authorities during a decade and a half of Conservative government, which fundamentally weakened our civic infrastructure. We should never forget that. We absolutely appreciate that, as a result, local government is operating in a difficult context. I welcome the intent behind the amendments: it will be important for strategic authorities to ensure that they have the capacity funding so that they are established.

Amendment 38 concerns single foundation authorities. We do not anticipate that there will be transition costs for such authorities. When a unitary or county council is designated as a single foundation strategic authority, it will retain its existing voting and governance arrangements. The designation will sit alongside its status as a local authority. In other words, there will be no transition involved, so transitional funding is unnecessary.

We recognise that the mayoral strategic authorities that we are creating will need funding to support the transition and build capacity. All Members across the House want to see strong, capable authorities in their area, with the tools and capacity to deliver for their local communities. That is why in the English devolution White Paper we committed to provide new strategic authorities with capacity funding to kick-start their organisation. I am pleased to confirm that all areas on our devolution priority programme will receive £1 million in mayoral capacity funding this year to help establish new institutions, once the legislation has been laid before Parliament. They will also receive capacity funding in future years, so that they are ready and prepared to deliver the benefits that we believe devolution will unlock. As the Government are committed to providing funding for establishment expenses through the mechanism of mayoral capacity funding, we do not believe that amendment 39 is necessary, but we recognise the intent behind it, which is why are we are taking action.

Amendment 361 would require the Government to report on funding allocated to support the establishment of new strategic authorities. I am pleased to say that that is already established practice. Clause 19 amends the Cities and Local Government Devolution Act 2016 to ensure that all funding devolved to strategic authorities is reported. That will include any funds to support their establishment. Again, therefore, we agree with the intent behind the amendment but we do not believe that it is required.

[Vikki Slade]

Will funding be made available for areas that are not yet in a programme on the same footing as the areas that are already in one? It would be completely inappropriate if that funding was not committed to. I want to get that on record.

[Miatta Fahnbulleh]

We have established a principle that there should be mayoral capacity funding. We have established a principle that for places that are going through the transition, to ensure that any mayor that is created is able to hit the ground running, capacity building needs to be a core part of that. That applies to the places that are going through the devolution priority programme at the moment, but the same principle invariably will apply across the piece.

[The Chair]

Vikki Slade, do you wish to divide the Committee on amendments 38 and 39?

[Vikki Slade]

We were seeking to divide only on amendment 39, but given that we have had that assurance, I am happy not to do so. I beg to ask to leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Clause 4

Combined authorities and CCAs: establishment, expansion and functions

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

Clause 4 introduces schedule 1, which will streamline and simplify existing processes for establishing new combined authorities and combined county authorities, and for changing the arrangements of existing authorities. The Government have been clear that their goal is to achieve universal coverage of strategic authorities. We are therefore confident that clear and tangible benefits of devolution will be experienced across the country. We have also been clear that we want to create mechanisms that will ensure that the process is streamlined—that it is fast, and effective and efficient locally—and allows representation, but fundamentally allow us to move through the process that we see appetite and demand for across the country.

The powers introduced by the clause will be used as a backstop. They will be deployed only where we have devolution deserts and we want to work with areas to remove blockages, to the benefit of residents.

[David Simmonds]

We return to the theme that areas can have devolution provided it is in the form that Whitehall dictates. It remains a significant concern to the Opposition that we are proceeding in this manner, but that point is made and I suggest that we move on.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Schedule 1

Establishment, expansion and functions of combined authorities and CCAs

Amendment proposed: 266, in schedule 1, page 79, line 15, leave out subparagraph (b).—(David Simmonds.)

This amendment, and Amendments 267 to 273, remove the ability of the Secretary of State to create, or make certain changes to the governance or composition of, combined authorities without consent of the councils involved.

Question put, That the amendment be made.

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Division 5

Ayes: 6

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Conservative: 3
Liberal Democrat: 2
Green Party: 1

Noes: 11

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Labour: 11

[Miatta Fahnbulleh]

I beg to move amendment 62, in schedule 1, page 80, line 19, at end insert—

“5A After section 105B insert—

‘105C Non-mayoral combined authority: consent to budget

(1) A non-mayoral combined authority may only exercise the following functions with the consent of each constituent council—

(a) adopt or amend the authority’s budget;

(b) where it is not part of the budget, approve the total sum of the transport levy.

(2) In this section a reference to the “transport levy” is a reference to any levy issued by the combined authority relating to the exercise of its functions relating to transport in accordance with any regulations made from time to time under section 74(2) of the Local Government Finance Act 1988.”’

This requires that a non-mayoral combined authority must have consent from its constituent councils to the approval and amendment of the budget and to the approval of the transport levy (if separate).

[The Chair]

With this it will be convenient to discuss Government amendments 63 to 67.

[Miatta Fahnbulleh]

I will begin by talking to Government amendments 63 and 65. The Government recognise that the creation of a combined authority or combined county authority can cause some concern in prospective constituent councils. One of the main worries is that the new institution could create new financial burdens on existing councils.

Many existing combined authorities and combined county authorities already include provisions in their constitutions that enable constituent councils to veto decisions that could create a financial liability on them. We recognise that those provisions have helped to soothe concerns about establishing new combined authorities and combined county authorities. That is why the amendments will create a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of affected constituent councils before exercising their functions in a way that could create a financial liability on these councils. That will ensure that any future non-mayoral combined authorities or non-mayoral combined county authorities will need to comply with this requirement without the constituent councils needing to secure agreement to its inclusion in the individual authority’s constitution.

I turn to Government amendments 62 and 64. In the English devolution White Paper, the Government set out that in combined authorities and combined county authorities without a mayor, most decisions would require a simple majority vote. That is provided for in clause 6. However, in the White Paper, we also said that key strategic decisions would require unanimity in non-mayoral authorities. The budget for the authority is one of those decisions.

Similarly to amendments 63 and 65, amendments 62 and 64 introduce a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of all their constituent councils when adopting or amending their budget. That includes the direct contribution of those councils to transport expenditure.

Government amendments 66 and 67 are minor, technical amendments. They amend the terminology used in schedule 1 so that references to secondary legislation within the Levelling-up and Regeneration Act 2023 use the term “regulations” rather than “orders”.

[David Simmonds]

I have a couple of questions for the Minister. It feels as though these amendments are intended to bring some welcome consistency and clarity.

The Committee will know that local government finance is largely regulated by the Local Government Finance Act 1992, but that older legislation on council tax fixing and budget setting all essentially states that a local authority’s budget must balance in-year. A local authority is not the same as central Government—it cannot borrow to fund its day-to-day expenditure.

However, one implication of the Secretary of State’s allocation of all these new powers to mayors or combined authorities is that they may choose to incur expenditure that imposes a liability on an individual local authority without seeking that authority’s consent. For example, there would be a legislative conflict if the mayoral combined authority decided to increase spending, or to increase rights to services for social care, which a local authority has to pay for, without giving the local authority the opportunity to include that in its budget.

Will the Minister give us clarity, first, on accounting standards? The legislation mentions that local authorities should refer to guidance from the Chartered Institute of Public Finance and Accountancy. CIPFA is not the only accepted accounting standard in the public sector, although it is generally a reliable one. Given our previous discussions and the evidence we have heard about access to local audit and financial advice, can the Minister confirm that accounting standards other than CIPFA will be accepted, if a local authority relies on them? Or will they have to be reframed within CIPFA? That will let the Committee and member authorities know exactly where they stand.

Secondly, while this is a fairly catch-all provision, there will be areas—we have seen this in Greater Manchester most recently—where central Government fund the investment and set-up of a new transport network but the ongoing running costs must be met by trading that service to local residents, and a large deficit emerges; essentially, the service runs at a significant loss. Especially if the underlying authority is a transport authority that issues freedom passes, that can have a significant financial impact. Essentially, council tax payers of one authority subsidise the costs of service delivery by a mayor.

We see significant elements of that in London under Mayor Khan. I think that was one reason why the Labour leader of Manchester city council spoke about how Manchester works and London does not. It would be helpful to have clarity—if necessary, in writing to the Committee—about how those trade-offs will be managed effectively, so that the capital costs of mayoral projects are not subsidised by the revenue or capital budgets of individual local authorities. Particularly with larger projects, mayoral authorities do not always have to meet the same tight financial requirements, especially in respect of things like education. It would be useful to know how that will be managed so that local authorities do not suddenly go bust because something emerges from the financial accounting arrangements between the new structures.

[Miatta Fahnbulleh]

I thank the hon. Member for his detailed, complicated questions. We will write in response, particularly on the public accounting standards.

We have set what we think is a good baseline. There will obviously be some flexibility for constituent authorities. The hon. Member will remember from the evidence session that the accountability and financial framework across local government is a current challenge, so we are looking to drive improved standards across the piece. That will apply to strategic authorities as much as to local authorities, but we will write fully in response.

On the wider question about the balance and the trade-off, our judgment is that for non-mayoral combined authorities, where constituent authorities operate together, we should put in those safeguards. In essence, constituent authorities act in concert, collectively, to make decisions. Whether it is a question of financial liabilities or transport budgets, it is right that all the constituent authorities provide consent. In the case of the mayor, however, our view is that because the mayor has his or her own democratic mandate and the ability to direct, that is separate from what we see in non-mayoral combined authorities.

Inevitably, there will be safeguards. In the evidence session, we heard really powerful evidence that the mayoral model works well when the mayor works in lockstep with constituent authorities and the two are aligned, with a strategy that they work around. We have seen examples of where the model does not work well, and we have had to go in and support and remediate the process when the mayor works without their individual local authorities. The model drives that. However, we think that there is something specific in the mayor’s democratic mandate; we have a model where there is a majority vote, with the mayor on the side of the majority, in order to drive through big strategic decisions.

[David Simmonds]

I am grateful to the Minister for undertaking to provide that clarity in writing. She said that there are differences between a mayoral authority and a combined authority without a mayor. We have seen a good case study in the Mayor of London’s decision that he wished to be seen to fund free school meals in primary schools, but the budget that is provided is less than the cost. School budgets, which are determined by the Department for Education, are subsidising the shortfall in the money provided by the mayor. We see posters on the tube saying that the mayor is funding this, but in fact the amount he provides is less than the cost. Probably all London MPs have had representations from schools that have said, “We are having to make staff redundant because of this shortfall. It’s a significant burden. It is causing a real cost.”

That is an example of where accounting and legal decision making sit across several different authorities. Although it is not the only ringfenced local authority grant, it would be helpful to have clarity about how the dedicated schools grant will be managed in a mayoral combined authority, so that we do not see a repeat of what happened in London with school budgets being raided to cover up a shortfall in a mayoral policy proposal.

[Miatta Fahnbulleh]

I am happy to provide that clarity in writing.

[The Chair]

The Minister has courteously and helpfully said that she will write regarding those specific questions. May I ask that that is done within the period in which we are considering the Bill, and made available to all Committee members?

[Miatta Fahnbulleh]

Yes.

Amendment 62 agreed to.

Amendment made: 63, in schedule 1, page 80, line 19, at end insert—

“5A After section 105B insert—

‘105C Non-mayoral combined authority: functions imposing financial liability

(1) This section applies where a non-mayoral combined authority considers that the exercise of a function by the authority may result in a financial liability being incurred by one or more constituent council (each such council being a “relevant constituent council”).

(2) The function may only be exercised with the consent of each relevant constituent council.

(3) When deciding whether subsection (1) applies, the authority must have regard to the “Code of Practice on Local Authority Accounting in the United Kingdom” published by the Chartered Institute of Public Finance and Accountancy, as amended or reissued from time to time.’”—(Miatta Fahnbulleh.)

This restricts a non-mayoral combined authority from exercising a function that might impose a financial liability on any of its constituent councils unless those councils have given their consent.

Amendment proposed: 269, in schedule 1, page 80, line 20, leave out paragraph 6.—(David Simmonds.)

See explanatory statement for Amendment 266.

--- Later in debate ---

[Perran Moon]

I have had no commitments; I have had discussions with Ministers. We have had discussions about the difficulties with the proposals made here, with the potential for the Bill to become a hybrid Bill and the complications that that would bring. I am happy to keep talking to the Government in a spirit of openness, reflecting the views of every political party in Cornwall bar one. On that basis, I am content to keep talking. I cannot support the amendments because of the negative change that I think they would make to the nature of the Bill, so I will be voting against them.

[Miatta Fahnbulleh]

I put on record my thanks to hon. Members who are championing specific areas that have a unique identity, which the Government completely recognise. On amendments 43 and 44, I pay tribute to the hon. Members who have been championing the Isle of Wight and its proud history. The Government understand and support the intent behind the amendments, but we will not be taking them forward. Let me explain why.

Earlier this year, Isle of Wight council, Hampshire county council, Portsmouth city council and Southampton city council submitted a joint expression of interest in the Government’s devolution priority programme. They went through a consultation process, based on the proposed name of Hampshire and the Solent. This was not imposed by the Government; it came as a proposal from the local area, and on that basis a public consultation was conducted.

It is worth saying that of the 6,000 responses we received, only a small minority commented specifically on the name of the proposed combined authority area. The Government’s response to that consultation is online, if hon. Members want to look at it. It is important to say that once it is established, it is completely open to any combined authority or combined county authority to change its name by resolution, with the consent of its members and using existing powers. That is already in the Bill. The Liverpool city region combined authority and the South Yorkshire mayoral combined authority have both changed their names in the same way. There was no constraint from Government; the powers are there. It is within the gift of local areas to go ahead and do that.

[Lewis Cocking]

The Minister mentions that 6,000 people replied to the consultation on Hampshire and the Isle of Wight, but that only a small number of respondents actually mentioned the name. How many people from the Isle of Wight responded to that consultation, and how many of them mentioned the name?

[Miatta Fahnbulleh]

I do not have those figures, but we can write to the hon. Member with them. However, the principle remains that the power is there. It is within the gift of constituent authorities; it is not being imposed by Government. If there is a name change that the combined authority wants to take forward, it can take it forward. We have seen that in Liverpool and South Yorkshire. There is no constraint from us. It is a determination for, and with the consent of, the constituent authorities. It is within the gift of Hampshire and the Solent to make that change.

[Paul Holmes]

The Minister says that it is not the Government who are making sure that it happens. I accept that. However, having been in her position for only a short time—that is not her fault, as the fickle finger of fate has rested it on her shoulders—she may not know that the negotiation process that has taken place among the local authorities in Hampshire has not been smooth. There has been an overarching view that the county council, which has rushed towards accepting this devolution notwithstanding the impacts of the Government’s decision to push it forward, has not worked collaboratively. There is a wish for devolution, but in the minutiae it has been a very county council-dominated process.

As my hon. Friend the Member for Broxbourne says, the reason that there has not been a huge uptake in response to the consultation is the flawed nature of the decision-making process. I ask the Minister not to rest on the consultation responses, because as my hon. Friend says, a number of people on the Isle of Wight simply did not bother to respond. It is not about the make-up of a geographical devolution settlement; it is about a name. I ask her to listen to the elected representatives on the Isle of Wight who serve in this House, who have asked for it, and to consider it again.

--- Later in debate ---

[Mike Reader]

I declare that I am Hampshire born and bred, being from Romsey. I just ask: why are we so disrespectful of a place like Brownsea island? If it is called “Hampshire and the Isle of Wight”, what about the great Brownsea island, the home of our native red squirrels? Surely “Solent” is more inclusive for all the other islanders who live in the area beyond the Isle of Wight.

[Miatta Fahnbulleh]

I say gently to hon. Members that we absolutely recognise the desire. I have had multiple conversations with the leader of Isle of Wight council, who was enthusiastic about this devolution deal. It is within the gift of constituent authorities to change their name; it is not for Government to impose. I hope that there is now a constructive conversation and relationship among the leaders of all the different parties. The leader is an independent politician, and I hope that in that spirit they will move forward.

I recognise the uniqueness of the name, but what really matters is what devolution will deliver for residents and constituent authorities. I hope that as much energy and time will be put into the nuts and bolts, the bread and butter, and the impact of what we are trying to do through devolution as will be put into the name. However, I recognise the particular sensitivities in relation to the Isle of Wight.

My hon. Friend the Member for Camborne and Redruth spoke about the issue of Cornwall. He has been a long-standing champion of Cornwall and its distinct identity. He has prosecuted the case incredibly effectively, not just in the context of this debate but across the piece. He is a proud Cornishman and I know that he wants the best for his constituents. I have put it on record in Committee, and I do so again, that we recognise the uniqueness of Cornwall. We are keen to continue engaging not just with my hon. Friend, but with other Cornish MPs, to ensure that we recognise that uniqueness and status and, critically, that we are doing a set of things that can enable local leaders to respond to the challenges—

[The Chair]

Order.

English Devolution and Community Empowerment Bill (Fourth sitting)

Miatta Fahnbulleh Excerpts

Committee stage
Tuesday 14th October 2025 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing the following:

Amendment 305, in schedule 1, page 83, line 32, at end insert—

“(5A) The Secretary of State may not make an order under this section that has the effect of placing Cornwall in a combined authority with any other authority.”

This amendment would prevent the Secretary of State from making an order establishing a combined authority which would include Cornwall and any other area east of the Tamar in the same combined authority.

Amendment 43, in schedule 1, page 84, line 13, at end insert—

“(9A) If the order establishes a combined authority which contains the Isle of Wight, the authority’s name must include ‘the Isle of Wight.’”

Amendment 306, in schedule 1, page 86, line 18, at end insert—

“(5A) Neither the added local government area nor the existing area of a combined authority in the order includes Cornwall.”

This amendment would prevent the Secretary of State from adding a local government area to an existing area of a combined authority if either area includes Cornwall.

Amendment 44, in schedule 1, page 86, line 32, at end insert—

“(7A) If the proposal establishes a combined authority which contains the Isle of Wight, the authority’s name must include ‘the Isle of Wight.’”

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

The amendment would require the Secretary of State to publish a statement when directing the establishment of a new combined authority, setting out how the proposed combined authority would affect the physical geography, community identity and boundaries of other public services in the local area. I have no doubt that the intention of the hon. Member for Stratford-on-Avon is absolutely right and that such matters are important; as I have said, the examples of the Isle of Wight and Cornwall highlight that. In practice, however, such matters will already have been considered through the process set out in the Bill.

In deciding whether to establish a new combined authority, the Secretary of State will already be required to have regard to the likely effect on the exercise of functions in neighbouring local government areas. In addition, the Secretary of State is already subject to the statutory tests requiring them to have regard to the need to secure effective and convenient local government in relation to areas of competence. The proposal itself can be expected to cover those issues. There is therefore no need for a separate statement, and so I hope that the hon. Member will withdraw the amendment.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

In our consideration of the issue, the Minister is asking the Committee to give a great deal of weight to the meetings she has described having had with various local leaders and Members with particular concerns about the impact on their local areas in terms of national identity, heritage and geography. Will she share with the Committee a little more detail on the substance of those discussions, so that before we vote we can understand what exact assurances may have been given to local leaders and what their understanding of them is, so that we are all completely clear?

[Miatta Fahnbulleh]

On Hampshire and Solent, for example, our conversation was very candid. The leaders were clear about some of the debates that they had had within the council; as the Minister, I said what opportunities would be open to them, and I expressed the fact that in the context of the Isle of Wight, the name was completely down to the constituent authorities. We support constituent authorities working together collaboratively to ensure that all the constituent parts are happy with the deal and the proposal.

On Cornwall, I believe that the Secretary of State, my boss, had those conversations, but I have also had some with MPs. We absolutely recognise the uniqueness of Cornwall and its identity. There are clear things that we know Cornish MPs and the council want, such as protection for the Cornish language, which we are in discussion about. There are clearly opportunities to build on the existing devolution deal. The previous Government provided a devolution deal for Cornwall in recognition of that exception. Another issue might be housing, which is big in Cornwall, for example, and the area is especially exercised about that, in particular in the context of the impact of tourism. We are happy to have a conversation about continuing to support the local authority to make inroads on some of those issues.

Question put, That the amendment be made.

--- Later in debate ---

[Miatta Fahnbulleh]

Once the Bill comes into force, there will be various ways in which functions can be conferred on a combined authority or combined county authority that will be operating as strategic authorities. The clause makes the necessary amendment to existing legislation to clarify these wider options. It is a small but important clause that will ensure our new devolution framework can operate effectively.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I thank the Minister for that introduction. It is the implementation of this that is the subject of political contention, but a great deal has been said, and a vote has been taken. There is nothing further we can do on those issues at this stage, but I expect they will be the subject of great debate in the remaining stages of the Bill.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

Combined authorities and CCAs: decision-making and validity of proceedings

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Miatta Fahnbulleh]

Moving from devolution by deal to devolution by default is at the heart of the Bill. Clause 6 and schedule 2 are essential to achieving that. The Bill ensures that strategic authorities have a consistent set of functions, and these provisions standardise how they exercise those functions. Many existing strategic authorities have complex and varied arrangements for agreeing fundamentals such as budgets and transport plans. That makes it hard for the public to understand how decisions are made and, therefore, to hold the strategic authority to account.

The provisions in clause 6 and schedule 2 would create a transparent and consistent default voting arrangement—a simple majority. It would unblock decision making to ensure that the right decision, even if it is difficult, can be made. In mayoral strategic authorities, the mayor must be in the majority for a vote to pass. Mayors are directly accountable to all voters in their area, so it is right that decisions cannot be made if they disagree. The Government expect mayors and other strategic authority members to continue to work together to build consensus. We heard time and time again in the evidence sessions that the model works well when the mayor works in partnership with its constituent authorities, but it is important that one member cannot get in the way of the right decisions being made for the entire area. It is therefore imperative that clause 6 and schedule 2 remain within the Bill to ensure that mayoral strategic authorities can operate effectively, and to provide the public with clarity on how decisions are made, so they can hold these institutions to account.

[Siân Berry (Brighton Pavilion) (Green)]

I rise to speak to new clause 48, tabled in my name. I also want to raise another issue for consideration by the Minister at a future stage.

In clause 6, the new rules for mayoral combined authorities give simple majority voting for relevant decisions by bodies to adopt budgets or policies, such as spatial development strategies, local transport plans and other strategies set out elsewhere in the Bill. For example, schedule 2 outlines that

“a resolution to adopt the strategy is to be made by a simple majority of the constituent members present and voting”.

There are other rules to do with a tied vote.

I think that the Bill should also amend the Greater London Authority Act 1999 to give simple majority voting for decisions by the London Assembly on the budget and mayoral strategies of the Mayor of London. That is for consistency of decision making across the different authorities and bodies, and for fairness to London’s democracy. Along with many Opposition Members, this is something that I have wanted for some time now, as I was a member of the London Assembly in my previous job. In these Committee debates I will frequently bring up examples from my long experience of being part of an effective scrutiny body in a devolved authority at the strategic level—I feel that I have a good handle on how it works.

Using “a simple majority” is the right way to go about this. The Minister has talked about building consensus and working in partnership. I really value it when cross-party working can result in genuine dialogue, with mayors that will listen and make changes, and bodies scrutinising or working with them to put forward their own ideas and have them taken up. Those are all really healthy things for our democracy. New clause 48 would simply amend the parts of the 1999 Act that outline how the Assembly votes. Currently, the Act requires at least a two-thirds majority for any changes to be made, and the new clause would instead insert the words “a simple majority”. It is a very simple change, which the Minister should consider.

The second issue I want to raise relates to forward plans, which are incredibly useful for the general public, or anyone who wants to influence mayoral decisions and the decisions of combined authorities or local authorities. At the moment, only local authorities have this particular requirement written into law, under the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012, which clearly set out how key decisions are to be included in forward plans. I am not talking about planning decisions but key decisions, as set out in the schemes of delegation. Those forward plans are required to be published in advance, so that people who want to influence or scrutinise those decisions can bid to change them, or for things to be taken into account at the appropriate time.

Again, this certainly comes out of my experience in the London Assembly. It unanimously passed a motion in 2022 that was put forward by one of the Liberal Democrat members and me, which said that the Mayor of London should publish a forward plan. However, he did not agree to do that, as he said that he was complying with everything in legislation; so the answer seems to be for legislation to require both the Mayor of London and these new combined authority mayors to publish a forward plan along the same lines. Looking at the 2012 regulations, it would be very simple to change the current wording, “local authorities”, to “strategic and local authorities”, if the Minister wanted.

I also point the Committee to the excellent report published last month by the GLA oversight committee, a cross-party committee currently chaired by a Labour member of the London Assembly. It makes exactly the same request: for a forward plan of key mayoral decisions to be put into the 1999 Act. Because of the complexities of the different regulations, I have not tabled an amendment for such a change, but I hope the Minister would consider the question of effective scrutiny of these new bodies and the ability to influence them. I hope she could potentially come forward with a new clause at a later stage for us.

[David Simmonds]

The Opposition support the amendment; the principle of having a simple majority is sound. In oral evidence, we heard about why Manchester works and London does not, and there is a logic to implementing those measures consistently across the country. We support introducing that consistency.

There is a broader question, however. I understand what the Minister and the Government are trying to achieve; it would clearly be frustrating if one authority was effectively acting as a blocker. However, I asked the Minister earlier to give us some assurances about the treatment applied when financial impacts occur that affect one or more of the constituent authorities in a combined authority area. There will be cases—we have seen them in planning, for example—where an authority argues that to deliver its housing target, a site in another local authority’s area must be developed, because it does not have sufficient developable land to hit the target that it has been given; legally, it is not that authority’s decision. There will be other examples.

I am mindful of some of the Government’s amendments that introduce a lot more scope into this Bill for mayors and combined authorities to undertake their housing responsibilities. One of the main routes for funding is through borrowing against the housing revenue account, which is ringfenced. Each individual local authority has a legal duty to balance that account and the power to borrow against it; it also holds all of the legal housing duties and responsibilities. The purpose of the measures is to make mayors the vehicle for the delivery of asylum accommodation, as opposed to asylum hotels, as is the case now to some degree. Yesterday, on the Floor of the House, another Minister in the Department alluded to this in his response to a question about asylum accommodation.

Those decisions will have a significant impact on the legal obligations of the authorities that sit beneath the mayoral authority. There is a risk that being outvoted in a decision made at combined authority level would put an individual constituent authority in breach of its legal obligations to balance its dedicated schools grant, its housing revenue account or some other element of its council tax account. Will the Minister, either now or in writing, set out what arrangements will apply in the likely situation of a conflict between the legal obligations on a constituent authority to balance the budget and the strategic decisions put forward by the combined authority? How will the conflict be resolved without undue detriment to the constituent authority in particular, which is the one that will find itself in court?

[Miatta Fahnbulleh]

I will respond to the amendment to clause 48, and then I will pick up the specific questions from the hon. Member. The GLA has a different and long-established governance model. In London, the mayor is elected by the people of London to make decisions; the Assembly’s role is to scrutinise those decisions. As a London MP, I think that model has worked well for London for well over 25 years. It is tested and it strikes the right balance between the executive authority of the mayor and the scrutiny of the Assembly.

[Siân Berry]

It is notable that recently the London Assembly has, on a number of occasions, made constructive changes to the mayor’s budget at stage one of budget setting, which have simply been overturned at the second stage. This tendency, I think, is part of the growing need for a change in the threshold.

[Miatta Fahnbulleh]

We think that the model works well. We have heard representations from constituents, local authorities, Assembly members, and the mayor himself. Any model needs to evolve; as we think about how we expand the powers of the mayor, which we want to, we will also be thinking about reforming the GLA to make it fit for purpose in the 21st century. We will take into consideration some of the points that have been made in this Committee.

On the specific question about decisions at the strategic authority level putting an individual local authority in breach of its legal obligations or jeopardising its financial viability, all our experience of combined authorities is that they always operate within the legal duties of constituent authorities. I struggle to think of an example where constituent authorities have been put in such a position by their mayor and the decisions of the collective. There are sufficient safeguards in place to mitigate that risk.

I hope that majority working will benefit the collective area. This Government will make sure that clear legal obligations on constituent authorities are not breached. I am happy to write to the hon. Member to provide further reassurance on that point. I think we agree that we want clear and effective decision making with a democratic mandate, that will not jeopardise individual authorities by forcing them to breach their legal requirements and/or putting them in financial distress.

[David Simmonds]

Let me give a concrete example: the long-standing proposal for Heathrow expansion airport. The Chancellor of the Exchequer has set out her absolute determination to ensure that happens, because it is part of her Government’s growth agenda. It is likely to be directed under these powers and in the purview of the Mayor of London, who will ultimately have some planning role in the decision making. However, as well as being the planning authority, the London borough of Hillingdon, within which Heathrow sits entirely, has legal duties in respect of air quality. It is already breaching those duties, which it has no means of fulfilling, simply because of that external factor.

If the Treasury and the Mayor of London were say to the combined authority, “In pursuit of the growth agenda with which we have been tasked, we are determined to see this expansion take place,” immediately that local authority would be put in significant legal jeopardy. To give an indication of the scale, when the Localism Act 2011 was debated and there was also interaction with European Union standards, it equated to an annual fine of £150 million to be paid by the legally responsible local authority. That is a significant jeopardy, and it is by no means the only one—in the case of special educational needs and disabilities obligations, for example, there are significant duties to pay compensation in the event of failure.

We can all envisage situations where a mayor decides that, for the good of everybody, they want an individual place to take a hit, but through the judicial review process that places that individual local authority at significant moral and financial risk. If the Minister sets out how those very significant and real risks will be addressed, I will be grateful.

[Miatta Fahnbulleh]

I thank the hon. Member for that very detailed and specific example. The concerns he raised have been heard and noted. Both in practice and principle, ensuring that no constituent authority is put in either financial or legal jeopardy underwrites all of this. I will take the hon. Member’s points away and write to provide the relevant reassurances.

[The Chair]

As I said this morning, Minister, if you are going to write to the Member, I would be grateful if you did so in a timely fashion and made that correspondence available to all members of the Committee for consideration.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Schedule 2 agreed to.

Clause 7

Combined authorities and CCAs: powers not limited by other provision or

powers

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

Clause 7 is a small but important clause that supports the wiring of our new devolution framework. As hon. Members will know, the Bill introduces a systemic approach, ending one-off deals and creating a standardised devolution framework in which strategic authorities and mayors are given a clear and coherent set of functions. However, the Government recognise that it may, on very rare occasions, be necessary to tailor the exercise of specific functions to reflect local circumstances and to preserve the smooth running of public services. Clause 7 provides that existing powers that allow Ministers to modify how a function is exercised by an individual combined authority or county combined authority can continue. Exceptions will be rare, but this flexibility, where appropriate and necessary and where it reflects local circumstances, will be essential to ensure the smooth running of public services.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8

Combined authorities and CCAs: designation as established mayoral strategic authorities

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

The devolution White Paper set out our commitment to introduce a new category of established mayoral strategic authority, representing the highest level of devolution in England. The clause delivers on that commitment. It enables a mayoral strategic authority that meets the eligibility criteria set out in the English devolution White Paper to submit a written proposal to the Secretary of State for designation as an established mayoral strategic authority. Designation will provide a strategic authority with access to the highest level of powers and functions in the devolution framework, as well as the right to request additional devolved functions and eligibility to receive an integrated funding settlement.

In the event that a Secretary of State decided not to designate an authority as an established mayoral strategic authority, they would be required to notify the authority in writing of the reasons for their decision. It would remain open to the authority to submit a fresh request at some future point. Importantly, once an authority has been designated as an established mayoral strategic authority, it will not be possible for Ministers to remove its status through secondary legislation. In that way, we will hardwire the powers and functions of established mayoral strategic authorities into our system of government, future-proofing arrangements against unnecessary change and ensuring permanent and enduring devolution.

[David Simmonds]

I draw the Committee’s attention to a topic to which we will return throughout our proceedings: the extent to which the devolution legislation is about the powers of the Secretary of State to designate this or direct that. Ironically, we are embarked on a course of action that started with us hearing about how it was going to be locally led, despite all evidence to the contrary, yet as we proceed, we have clause after clause and paragraph after paragraph referring to new powers for the Government to make local authorities do this or to direct them to do that. It is clearly not in the spirit of devolution.

[Miatta Fahnbulleh]

The clause does two things. The proposal to become an established mayoral strategic authority will come up from the locality. The power is about the ability of the Secretary of State to designate it as such at its request; it is not about the Secretary of State imposing the status on any area. Critically, it will lock in the established mayoral authority for good, and will, in fact, contain and curtail the power of future Secretaries of State to decide that they will change the status of an established mayoral authority, therefore locking in devolution for the long term.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Appointment of commissioners by mayors

[Miatta Fahnbulleh]

I beg to move amendment 68, in clause 9, page 11, line 19, leave out from “function” to “, or” in line 20.

This would omit this wording is because of its replacement by the new section 30A(2) of LURA 2023 (see Amendment 220).

[The Chair]

With this it will be convenient to discuss Government amendment 69.

[Miatta Fahnbulleh]

Government amendments 68 and 69 are consequential to Government amendment 220, which we will discuss later. Government amendment 220 will ensure that responsibility for fire and rescue functions sits directly with the elected mayor, who can delegate them only to a public safety commissioner and not to deputies or officers, thereby strengthening accountability. Government amendments 68 and 69 simply remove wording that will be superseded should Government amendment 220 be accepted.

Amendment 68 agreed to.

Amendment made: 69, in clause 9, page 12, line 7, leave out from “function” to “, or” in line 8.—(Miatta Fahnbulleh.)

This would omit this wording is because of its replacement by the new section 107DZA(2) of LDEDCA 2009 (see Amendment 220).

Question proposed, That the clause, as amended, stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

New clause 2—Policy delivery in areas of competence—

“(1) Any function of a mayoral combined authority or mayoral combined county authority which—

(a) relates to an area of competence, and

(b) is not a mayoral function exercisable solely by the mayor

must be exercised by or under the direct authority of the constituent members of that authority.

(2) No person may be appointed to exercise any function that relates to making or delivering policy relating to an area of competence unless that person is an elected member of—

(a) the relevant strategic authority, or

(b) a constituent council within the relevant strategic authority.

(3) Nothing in this section is to be taking as preventing the appointment of staff by the strategic authority or its elected members for the purposes of administrative, advisory or technical support for the exercise of its functions.

(4) For the purposes of this section, ‘constituent members’ means any elected representative who is—

(a) appointed by a constituent council to be a member of the mayoral combined authority or mayoral combined county authority;

(b) any person acting in the place of a person appointed under paragraph (a).”

This new clause provides that any policy delivery or development relating to an area of competence in a strategic authority is carried out by an elected representative.

New clause 21—Power to provide for an elected mayor to appoint a deputy mayor—

“(1) The Local Democracy, Economic Development and Construction Act 2009 (section 107C) is amended as follows.

(2) In subsection (1), leave out ‘one of the members of the authority to be the mayor’s deputy’ and substitute ‘a deputy mayor’.

(3) In subsection (3)(c), leave out ‘the person ceases to be a member of the combined authority’ and insert ‘the person ceases to be a councillor of a constituent council of the authority’

(4) In subsection (4), leave out ‘another member of the combined authority’ and substitute ‘another councillor of a constituent council’.”

This new clause would amend section 107C of the Local Democracy, Economic Development and Construction Act 2009 so that a mayor is no longer restricted to appointing a deputy mayor from among the leaders of the constituent local authority members of the Combined Authority.

New clause 22—Mayoral special advisers—

“(1) The Constitutional Reform and Governance Act 2010 (section 15) is amended as follows.

(2) After section 15 (Definition of ‘special adviser’ insert—

‘15A Mayoral special advisers

(1) A mayor may appoint one mayoral special adviser.

(2) A mayoral special adviser is a person who holds a position within a mayoral strategic authority and whose appointment to that position meets the requirements in subsection (3).

(3) The requirements are—

(a) the mayoral special adviser is appointed to assist the Mayor after being selected by the Mayor personally;

(b) the appointment will end not later than—

(i) the day on which the Mayor ceases to hold office, or

(ii) if earlier, the end of the day after the day of the poll at the election following the appointment.

(4) The Secretary of State must publish a code of conduct for mayoral special advisers (“the code”).

(5) Before publishing the code (or any revision of it) the Secretary of State must consult the Council of Nations and Regions.

(6) The code must provide that a mayoral special adviser may not—

(a) authorise the expenditure of public funds; or

(b) exercise any power in relation to the management of any part of the mayoral or strategic authority.

(7) The code must provide that a mayoral special adviser may—

(a) engage in political activity; and

(b) provide party-political advice to the Mayor.

(8) The code must form part of the terms and conditions of service of any mayoral special adviser.

(9) A person appointed under this section is not to be regarded, for the purposes of Part I of the Local Government and Housing Act 1989 (political restriction of officers and staff), as holding a politically restricted post under a local authority.’”

This new clause would insert a new section into the Constitutional Reform and Governance Act 2010 to establish a statutory framework for the appointment of “mayoral special advisers”. It makes provision about appointment, function, code of conduct, and exemption from political restrictions.

[Miatta Fahnbulleh]

The public rightly expect that mayoral strategic authorities will have access to the expertise they need, that they will work with businesses and other stakeholders, and that mayors will work full time to deliver for their communities. Mayoral strategic authorities will undertake critical new functions, including a stronger set of planning, transport and skills powers and, increasingly, police, fire and public health duties. The authorities will also represent their region in engagement with national bodies, and undertake joint working with partners. It is simply not realistic to expect a single mayor to do all that on their own.

The appointment of commissioners will be a local decision and no additional funding will be provided. I will gladly take Members’ questions now, but when we discuss schedule 3 in four groups’ time, I will expand on some of the checks and balances we are introducing to ensure that commissioners add real value to local decision making. I commend clause 9 to the Committee.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

The name of the Bill promises devolution and community empowerment, yet a number of its clauses cause the Liberal Democrats some concern, and this is one. A key principle of democracy, local or national, is to have elected people—Ministers, Members of Parliament or councillors—delivering for the people who elect them. It makes little sense that a mayor of a combined county authority or combined authority, with dozens or scores of skilled constituent councillors and council leaders beneath them, might instead choose to appoint a commissioner to such an important role.

We heard in oral evidence from Councillor Bev Craig about the model used in Manchester, where the leaders of the constituent councils perform one of the portfolios. That strikes me as much more appropriate in a large strategic authority, where each of those individuals has skin in the game. There is no reason why a mayoral authority should not operate in the same way as large unitary authorities do. Mine represents more than 400,000 people and does not require a commissioner to look at planning, although it does have a head of planning—a paid member of staff. Policy decisions have in the English system traditionally been made by politicians, so I struggle to see why creating a new layer of authorities, further away from people, should take away the principle that such decisions should be made by elected people.

Some have suggested that there are not enough constituent council leaders in some areas—perhaps areas that have only three or four council leaders. There are some incredible deputy leaders and portfolio holders. There may be a case for drawing from a broader pool, but suggesting that those people are not sufficiently qualified in understanding their area or area of expertise could damage the respect that council leaders have in their area, as well as the connection between a constituent council and the strategic authority that sits above it. If we want constituent councils to drive better strategic decisions and better strategic outcomes for all residents, it would be much more sensible to give those individuals a real role in the authority. Given the way that additional responsibility allowances are scheduled, that can be a lot cheaper, because the Bill does not provide for people to have the double allowances that we already have in other parts of the system.

If we bring in external individuals as commissioners, there will be few checks and balances; they are not democratically accountable. The mayor may well be able to remove them, as is detailed in the Bill, but the public cannot remove them. Fundamentally, the people who are making policy decisions should be able to be removed by the public. They should also be held to the standards regime, as well as the other elements of conflicts of interest and financial declarations that councillors must follow.

I think that is all I want to say, but I feel really strongly that a model is there, such as the one in Manchester. We have heard about London evolving over time, but we have some great models running in the country. To me, it seems a sensible way forward to look at what they are doing in Greater Manchester, which is already incredibly successful.

--- Later in debate ---

[Siân Berry]

I am attempting in my speech not to be too biased towards what I am used to, because that is a failing as well. We should discuss this in a very open way. Other new clauses I have tabled contain proposals for things such as a citizens assembly. We should look at international examples as well. When there are proposals to spend a significant amount of money on the commissioners, there is value in spending an appropriate amount on decent scrutiny and elected representatives. Again, I am biased—I am an elected representative. I think we are good value, but that is a case to be made.

Finally, I cannot find any mention in schedule 3 about guidance that the Secretary of State may issue to commissioners about conduct, standards and transparency. I would like some reassurance from the Minister about guidance on those aspects of the job. Even if they are not elected, they are accountable to the public and must be given a process and regime of standards, and potentially be brought into existing standards systems. Without scrutiny, standards and regulations to govern their behaviour, I worry about this in the same way as several other Members today have.

[Miatta Fahnbulleh]

Commissioners can and will support mayors in getting the job done for their communities. They are not compulsory. There is no obligation on a mayor to appoint commissioners, but it gives the mayor the option of increasing capacity and expertise to do that. The hon. Member for Brighton Pavilion talked about the example of Greater Manchester, where they have council leaders who are portfolio leads. It is worth pointing out that Manchester also uses commissioners—for example, on active travel—so it can be complementary or can supplement. It is just giving them an additional set of levers in order to respond.

It is also worth pointing out that there will be some roles that the mayor has accountability for that they simply cannot delegate to councillors—for example, strategic planning powers, where direct delegation to a commissioner might expand the mayor’s capacity to dispense with that responsibility. However, to the point about checks and balances, which has been made time and again, it is important to be clear that we completely agree on the need for accountability for commissioners. They will be accountable to the mayor for their performance, who has the power to terminate their appointment, and the combined authority or combined county authority must also agree before any non-mayoral functions are delegated to the commissioner. Critically, the combined authority or combined county authority overview and scrutiny committee will also have the power to recommend the termination of commissioners if they think the commissioner is not performing or delivering. A two-thirds majority of members of the authority is required to accept that recommendation.

[Siân Berry]

Does the Minister believe that the people who are able to recommend that the commissioner be terminated have sufficient ways to discover whether or not they should be?

[Miatta Fahnbulleh]

The hon. Member made the point about the scrutiny of commissioners, which is a fair and valid point, and my hon. Friend the Member for North West Cambridgeshire made the point about flexibility in different contexts, particularly for smaller strategic authorities. We have come at this in such a way as to allow local areas as much flexibility as possible, but these are valid points about making sure that the model is flexible enough to respond to specific contexts. We will provide further detail in statutory guidance on the selection and appointment of commissioners, as well as other operational matters that the combined authority or combined county authority will need to consider, and we will take some of the points that have been raised as we do that in due course.

[Lewis Cocking (Broxbourne) (Con)]

The Minister talks about our scrutiny committees being able to recommend the termination of commissioners. Has she given any thought to their involvement in the appointment of commissioners? For example, currently, those appointed as deputy police and crime commissioners have to appear before the police and crime panel, which makes a recommendation to the police and crime commissioner about their suitability for the role. Has the Minister given any thought to how scrutiny committees can get involved before someone takes on the commissioner role, rather than waiting to see if they are good or not and then making a recommendation to the mayor?

[Miatta Fahnbulleh]

We have done this through the constituent members of the combined authority, so that before an appointment can be made, the full combined authority will need to agree to that appointment. We think that provides sufficient safeguards and the ability to scrutinise; however, the point about how we ensure ongoing scrutiny of the work being done and the performance by more than the mayor and the combined authority is a fair point, and we will take it away.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

The commissioners are not accountable to the public; they are accountable to the mayor, who will of course be elected. The Minister talks about scrutiny, but what about holding them to account on public standards? What kind of framework is there to ensure trust in these commissioners?

[Miatta Fahnbulleh]

All holders of public office have to adhere to public standards; that is as true for national Government as it is for regional and local government. We expect those standards to apply, and the safeguards we are putting in place by enabling the mayor to terminate based on performance or poor conduct will ensure that they are upheld.

Question put and agreed to.

Clause 9, as amended, ordered to stand part of the Bill.

Schedule 3

Commissioners

[Miatta Fahnbulleh]

I beg to move amendment 70, in schedule 3, page 111, line 33, at end insert—

“(d) excepted fire and rescue functions.”

This would prevent a commissioner appointed by the mayor of a CCA from exercising “excepted fire and rescue functions” (defined in Amendment 71).

[The Chair]

With this it will be convenient to discuss Government amendments 71, 73 and 74.

[Miatta Fahnbulleh]

The amendments will prevent a commissioner from exercising certain fire and rescue functions that should be reserved as functions of the mayor, as head of the fire and rescue authority in the area. The effective delegation of fire and rescue functions to a commissioner can ease capacity constraints on the mayor, by ensuring that there is a dedicated individual with the time and expertise to focus on executing those functions. Fire and rescue functions are already delegated successfully to deputy mayors for policing and crime in Greater Manchester and in York and North Yorkshire. The ability to delegate to a commissioner, without the need for secondary legislation, simplifies that process. If they wish, mayors will be able to make an existing deputy mayor for policing and crime the public safety commissioner, meaning that individual could lead on both policing and fire.

However, certain functions should be the sole responsibility of an elected mayor, as head of the fire and rescue authority. The retained functions are those with the most significant bearing on the strategic direction of the fire service, such as its budget, its risk plan, and the appointment or dismissal of the chief fire officer. It is important that these decisions are taken right at the top, and that the person taking them is accountable at the ballot box.

These amendments provide for the effective delegation of fire and rescue functions. They ensure that decisions are taken at the right level and support the Government’s commitment to ensure that our communities are safe.

Amendment 70 agreed to.

Amendment made: 71, in schedule 3, page 112, line 3, at end insert—

“(6) In this paragraph “excepted fire and rescue functions” means—

(a) functions under the following provisions of the FRSA 2004—

(i) section 13 (reinforcement schemes);

(ii) section 15 (arrangements with other employers of fire-fighters);

(iii) section 16 (arrangements for discharge of functions by others);

(b) the functions of—

(i) appointing, suspending or dismissing the chief fire officer;

(ii) approving the terms of appointment of the chief fire officer;

(iii) holding the chief fire officer to account for managing the fire and rescue service;

(c) approving—

(i) the community risk management plan;

(ii) the fire and rescue declaration;

(d) approving plans, modifications to plans and additions to plans for the purpose of ensuring that—

(i) as far as reasonably practicable, the CCA is able to perform its fire and rescue functions if an emergency occurs, and

(ii) the CCA is able to perform its functions so far as is necessary or desirable for the purpose of preventing an emergency or reducing, controlling or mitigating the effects of an emergency, or taking other action in connection with it;

(e) approving any arrangements for the co-operation of the CCA in relation to its fire and rescue functions with other Category 1 responders and Category 2 responders in respect of—

(i) the performance of the CCA’s duty as a fire and rescue authority under section 2 of the Civil Contingencies Act 2004 (duty to assess, plan and advise);

(ii) any duties under subordinate legislation made in exercise of powers under that Act.

(7) In sub-paragraph (6) and this sub-paragraph—

“Category 1 responder” and “Category 2 responder” have the meanings given in section 3 of the Civil Contingencies Act 2004 (section 2: supplemental);

“chief fire officer” means the person with responsibility for managing the fire and rescue service;

“community risk management plan” means a plan which—

(a) is prepared and published by the combined authority in accordance with the Fire and Rescue National Framework, and

(b) sets out for the period covered by the document in accordance with the requirements of the Framework—

(i) the combined authority’s priorities and objectives, and

(ii) an assessment of all foreseeable fire and rescue related risks that could affect its community, in accordance with the discharge of the combined authority’s fire and rescue functions;

“emergency” has the meaning given in section 1 of the Civil Contingencies Act 2004 (meaning of “emergency”);

“fire and rescue authority” means a fire and rescue authority under the FRSA 2004;

“fire and rescue declaration” means a document which—

(a) is prepared and published by the combined authority in accordance with the Fire and Rescue National Framework, and

(b) contains a statement of the way in which the combined authority has had regard, in the period covered by the document, to the Framework and to any community risk management plan prepared by the combined authority for that period;

“fire and rescue functions” means—

(a) functions of a fire and rescue authority which the combined authority has by virtue of an order under section 105A, or

(b) functions which the combined authority has as a fire and rescue authority by virtue of section 1(2)(f) or (g) of the FRSA 2004;

“Fire and Rescue National Framework” means the document prepared by the Secretary of State under section 21 of the FRSA 2004;

“fire and rescue service” means the personnel, services and equipment secured for the purposes of carrying out the functions of a fire and rescue authority under—

(a) section 6 of the FRSA 2004 (fire safety);

(b) section 7 of the FRSA 2004 (fire-fighting);

(c) section 8 of the FRSA 2004 (road traffic accidents);

(d) any applicable order under section 9 of the FRSA 2004 Act (emergencies);

(e) section 2 of the Civil Contingencies Act 2004 (duty to assess, plan and advise) and any applicable subordinate legislation made under that Act;

(f) any other provision of, or made under, an enactment which confers functions on a fire and rescue authority;

“FRSA 2004” means the Fire and Rescue Services Act 2004.”—(Miatta Fahnbulleh.)

This would define the “excepted fire and rescue functions” which a commissioner appointed by the mayor of a CCA would be prevented from exercising by Amendment 70.

[David Simmonds]

I beg to move amendment 293, in schedule 3, page 112, line 16, at end insert—

“(2A) The relevant remuneration panel may not recommend allowances which exceed the amount paid in salary to a person employed at director level within the relevant authority.”.

This amendment ensures that Commissioners cannot be paid more than Directors working for the authority.

--- Later in debate ---

[David Simmonds]

I understand the issue that the hon. Member is highlighting. One thing that emerged from the debate about councillor pensions was that they were essentially taken away by a decision of Parliament, without the process of legislation. One of the risks here is that statutory guidance, robust as it can be and coming with a duty to “have regard”, can be changed quite quickly. Therefore, if this is not clearly set out on the face of the Bill, the ability of this Parliament and of local communities, as we are observing, to exercise the degree of accountability and scrutiny that they might wish is undermined. That is why we have proposed these amendments.

[Miatta Fahnbulleh]

I thank the hon. Member for his thoughtful contribution on this critical question of how to ensure value for money in the remuneration of commissioners. It is important that allowances paid to commissioners accurately reflect the work they do but also represent value for money. We completely agree with that principle. That is why the Bill, as drafted, has a clear process for setting the allowances of commissioners. The relevant authority must consider a report by a relevant remuneration panel, and payments cannot exceed the amount specified in that report.

Ultimately, what commissioners are paid is a local decision, and we have crafted the measures for that, but it is a decision that needs to be made in alignment with recommendations, as is the practice across local government. Adding a further requirement that commissioners cannot be paid more than directors would reduce local autonomy in decision making and would pre-emptively undermine the relevant remuneration panel. The Bill is about empowering places, but what we can and will consider is how we set up statutory guidance to provide clarity about what is possible and to deal with some of the potential pitfalls that the hon. Member has raised.

Amendment 292 seeks to place a duty on remuneration panels to consider and make recommendations about the local government pension scheme. Again, I understand the intent behind the amendment and the importance of ensuring that public officials in local government are properly remunerated and incentivised. However, I do not believe the amendment necessarily advances that.

We value the work that remuneration panels do to make considered recommendations about allowances that should be paid locally. However, overall access and eligibility to the local government pension scheme is dealt with at national level. It is therefore not clear what value the amendment would add, which is why I ask the shadow Minister to withdraw it.

[David Simmonds]

I have listened intently to what the Minister has said. I think the risk is that, if things are delegated to statutory guidance, what emerges later on will not meet the expectations set out in the debate. I will therefore push for a vote on these amendments.

Question put, That the amendment be made.

--- Later in debate ---

[Miatta Fahnbulleh]

I beg to move amendment 72, in schedule 3, page 112, line 23, leave out from beginning to end of line 27 and insert—

“Ending of appointment

8A The appointment of a person as a commissioner ends if—

(a) the appointment ceases to have effect in accordance with paragraph 2(2), 4(3) or 5,

(b) the appointment ends—

(i) in accordance with the terms and conditions included by virtue of paragraph 6(1), or

(ii) in accordance with paragraph 6(2),

(c) the appointment is terminated in accordance with its terms and conditions—

(i) by the mayor for the area of the CCA (whether that is the person who made the appointment or a successor), or

(ii) by the commissioner,

(d) the appointment ceases to have effect in accordance with paragraph 10(4), or

(e) the commissioner dies.”

This would state the ways in which the appointment of a commissioner can end.

[The Chair]

With this it will be convenient to discuss Government amendment 75.

[Miatta Fahnbulleh]

Simply, these amendments set out the ways in which a commissioner’s appointment can end. Specifically, it can end if the appointment is invalid, if the person becomes ineligible, if the term of the appointment ends, if the appointment is terminated in accordance with the terms and conditions, if a recommendation to terminate the commissioner’s appointment is accepted, or if the commissioner passes away.

We have talked about the accountability mechanisms that we are putting in place to ensure that commissioners play the role they should play, but they are accountable to the mayor. We have also talked about the role of the scrutiny committee in providing oversight and recommendations about termination.

Amendment 72 agreed to.

Amendments made: 73, in schedule 3, page 116, line 40, at end insert—

“(d) excepted fire and rescue functions.”

This would prevent a commissioner appointed by the mayor of a combined authority from exercising “excepted fire and rescue functions” (defined in Amendment 74).

Amendment 74, in schedule 3, page 117, line 10, at end insert—

“(6) In this paragraph ‘excepted fire and rescue functions’ means—

(a) functions under the following provisions of the FRSA 2004—

(i) section 13 (reinforcement schemes);

(ii) section 15 (arrangements with other employers of fire-fighters);

(iii) section 16 (arrangements for discharge of functions by others);

(b) the functions of—

(i) appointing, suspending or dismissing the chief fire officer;

(ii) approving the terms of appointment of the chief fire officer;

(iii) holding the chief fire officer to account for managing the fire and rescue service;

(c) approving—

(i) the community risk management plan;

(ii) the fire and rescue declaration;

(d) approving plans, modifications to plans and additions to plans for the purpose of ensuring that—

(i) as far as reasonably practicable, the CCA is able to perform its fire and rescue functions if an emergency occurs, and

(ii) the CCA is able to perform its functions so far as is necessary or desirable for the purpose of preventing an emergency or reducing, controlling or mitigating the effects of an emergency, or taking other action in connection with it;

(e) approving any arrangements for the co-operation of the CCA in relation to its fire and rescue functions with other Category 1 responders and Category 2 responders in respect of—

(i) the performance of the CCA’s duty as a fire and rescue authority under section 2 of the Civil Contingencies Act 2004 (duty to assess, plan and advise);

(ii) any duties under subordinate legislation made in exercise of powers under that Act.

(7) In sub-paragraph (6) and this sub-paragraph—

‘Category 1 responder’ and ‘Category 2 responder’ have the meanings given in section 3 of the Civil Contingencies Act 2004 (section 2: supplemental);

‘chief fire officer’ means the person with responsibility for managing the fire and rescue service;

‘community risk management plan’ means a plan which—

(a) is prepared and published by the combined authority in accordance with the Fire and Rescue National Framework, and

(b) sets out for the period covered by the document in accordance with the requirements of the Framework—

(i) the CCA’s priorities and objectives, and

(ii) an assessment of all foreseeable fire and rescue related risks that could affect its community, in accordance with the discharge of the CCA’s fire and rescue functions;

‘emergency’ has the meaning given in section 1 of the Civil Contingencies Act 2004 (meaning of ‘emergency’);

‘fire and rescue authority’ means a fire and rescue authority under the FRSA 2004;

‘fire and rescue declaration’ means a document which—

(a) is prepared and published by the CCA in accordance with the Fire and Rescue National Framework, and

(b) contains a statement of the way in which the CCA has had regard, in the period covered by the document, to the Framework and to any community risk management plan prepared by the CCA for that period;

‘fire and rescue functions’ means—

(a) functions of a fire and rescue authority which the CCA has by virtue of regulations under section 19, or

(b) functions which the CCA has as a fire and rescue authority by virtue of section 1(2)(f) or (g) of the FRSA 2004;

‘Fire and Rescue National Framework’ means the document prepared by the Secretary of State under section 21 of the FRSA 2004;

‘fire and rescue service’ means the personnel, services and equipment secured for the purposes of carrying out the functions of a fire and rescue authority under—

(a) section 6 of the FRSA 2004 (fire safety);

(b) section 7 of the FRSA 2004 (fire-fighting);

(c) section 8 of the FRSA 2004 (road traffic accidents);

(d) any applicable order under section 9 of the FRSA 2004 Act (emergencies);

(e) section 2 of the Civil Contingencies Act 2004 (duty to assess, plan and advise) and any applicable subordinate legislation made under that Act;

(f) any other provision of, or made under, an enactment which confers functions on a fire and rescue authority;

‘FRSA 2004’ means the Fire and Rescue Services Act 2004.”

This would define the “excepted fire and rescue functions” which a commissioner appointed by the mayor of a combined authority would be prevented from exercising by Amendment 73.

Amendment 75, in schedule 3, page 117, line 31, leave out from beginning to end of line 36 and insert—

“Ending of appointment

8A The appointment of a person as a commissioner ends if—

(a) the appointment ceases to have effect in accordance with paragraph 2(2), 4(3) or 5,

(b) the appointment ends—

(i) in accordance with the terms and conditions included by virtue of paragraph 6(1), or

(ii) in accordance with paragraph 6(2),

(c) the appointment is terminated in accordance with its terms and conditions—

(i) by the mayor for the area of the combined authority (whether that is the person who made the appointment or a successor), or

(ii) by the commissioner,

(d) the appointment ceases to have effect in accordance with paragraph 10(4), or

(e) the commissioner dies.”—(Miatta Fahnbulleh.)

This would state the ways in which the appointment of a commissioner can end.

Schedule 3, as amended, agreed to.

Clause 10

Combined authorities and CCAs: allowances for members with special responsibilities

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

The clause will ensure that all combined authorities and combined county authorities can pay their members an allowance where they take on special responsibility for the combined authority or the combined county authority. Constituent council members regularly take on important additional responsibilities, particularly leading on policy portfolios such as housing or transport. We heard from the leader of Manchester city council about the important role she plays for that combined authority. They are crucial in driving forward local policy, ensuring that it meets the needs and aspirations of our communities. Indeed, their role will grow in importance as we increase the powers and functions available to combined authorities and combined county authorities.

However, currently, constituent council members can be paid for such special responsibilities only by their council, not the combined authority or combined county authority. This simply is not right; members should not be expected to do important work for free, and constituent councils should not foot the bill for work done in service of another body. Ensuring that the combined authority or combined county authority can pay its members creates a fairer system, allowing areas to recognise and reward hard work that delivers for communities. To ensure transparency and accountability, pay will be determined following a report by an independent remuneration panel.

[David Simmonds]

I draw the Minister’s attention to the existing arrangements for independent remuneration panels. She has referenced the proposals for how this kind of situation will be handled. However, we can envisage circumstances such as those that we heard about in Greater Manchester, where the mayoral commissioners are effectively drawn from the leadership of those local authorities.

There is a degree of ambiguity in proposed new sections 52A(6) and 113E(6), which refer to allowances paid

“in respect of the same special responsibilities”.

For example, I think of a situation where someone is a cabinet member with responsibility for transport in a constituent authority and also undertakes a strategic transport role as part of the combined authority. We as politicians would recognise that those are two different things, in the same way that a Minister undertaking duties in the Government is paid separately from their role as a Member of Parliament because those two things are distinct.

Transparency and clarity are important to retaining public confidence. Clearly, we do not want to create a situation where there is a degree of dispute, such as where a mayoral combined authority expects the constituent council to pay, or vice versa, and where an individual who wishes to take up those duties is inhibited from doing so. It would be helpful if the Minister could set out how the statutory guidance will address that issue so the Committee can be confident that we will not see this act as a barrier to participation in the governance of these new authorities.

[Sam Carling]

I have some more thrilling financial commentary, so I hope the Committee will forgive me. First, I welcome what the Minister has just said. Exactly this situation happened in Cambridgeshire and Peterborough, where our mayor went on medical leave for some time. His deputy, Councillor Anna Smith, who is a good friend of mine, ended up taking on the deputy mayoral role, so she had to drop hours at work and faced a significant loss of income. Our council took the decision to pay her as essentially a cabinet member, but it was not ideal. Clause 10 will resolve so many issues.

I want to highlight a discrepancy in that, at present, there is usually no allowance for members who sit on the combined authority board. A lot of the time, it is the leader of the council who does so, and it is often considered to be part of their portfolio, but it is not always leaders who sit on the board. That can lead to people taking on a very significant commitment without any financial support, despite potentially having to reduce hours at work and the like, if the councillor in question has a job, as many do. That is not conducive to having a diverse range of elected representatives to do these jobs.

Following local government reorganisation, if we have fewer leaders on boards and more holders of other portfolios and councillors, we may see this problem increase. I encourage the Minister to consider either altering the clause or making other provisions as the Bill progresses to allow combined authorities, if they wish, to pay an allowance to their board members for that role.

[Miatta Fahnbulleh]

I understand the concerns expressed by the hon. Member for Ruislip, Northwood and Pinner and the context in which that could arise. Our judgment is that if the independent remuneration committee does its job, we can mitigate around that. There is always a balance. We are trying to live the spirit of the Bill and to create as much autonomy, space and power for the mayor and constituent authorities to make such decisions, rather than us specifying nationally. As we get representations from strategic authorities going through the process, we will reflect that in statutory guidance, but we think we have the right balance. The important role that the remuneration committee will play will help to mitigate some of the risks the hon. Member mentioned.

On the specific example raised by my hon. Friend the Member for North West Cambridgeshire, we are not prohibiting elected members from sitting on the combined authority. It is within the gift of the combined authority. Again, we are giving as much flexibility as possible for an authority to come up with measures that work for a particular local area.

Question put and agreed to.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Mayoral combined authorities and CCAs: precepts

[Miatta Fahnbulleh]

I beg to move amendment 82, in clause 11, page 14, leave out from line 35 to line 13 on page 15 and insert—

“(a) omit subsection (11)(a);

(b) in subsection (11)(b), for ‘that section’ substitute ‘section 107G of the Local Democracy, Economic Development and Construction Act 2009’;

(c) omit subsection (12)(a);

(d) in subection 12(b), for ‘that section’ substitute ‘section 41 of the Levelling-up and Regeneration Act 2023’.”

This removes the restriction on mayoral combined authorities and mayoral CCAs only being able to issue a precept in connection with mayoral functions.

[The Chair]

With this it will be convenient to discuss Government amendments 76 and 79.

[Miatta Fahnbulleh]

The amendment updates the clause to ensure that mayors have the power to precept across all their functions. It replaces the provisions added to the Local Government Finance Act 1992 by the Bill, which needed clarification. The amendment will mean that, by virtue of being major precepting authorities, combined authorities and combined county authorities will have the power to precept across all their functions. It repeals provisions that previously restricted that precepting power to specific functions. The amendment more effectively meets the policy intention to allow mayors to precept for everything that they are required to do. That will give mayors more flexibility in how to fund mayoral priorities to create growth and improve local services.

Government amendments 76 and 79 provide that the issuing of precepts under the Local Government Finance Act is a function exercisable only by the mayor, and that that is the case for mayoral and non-mayoral functions. By removing restrictions from the existing legislation, the amendments will establish that precepting is a function of the mayor for expenditure relating to mayoral and non-mayoral functions, meeting the original policy intention. It has always been the intention of the Government that issuing a mayoral council tax precept should be a function of the mayor alone. The amendments will ensure that that will be the case and will ensure that mayors can precept across all their functions.

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Further, let us consider our recent debates following last year’s Budget and local government finance settlement, and the consultations that are going on for local authorities around the country at the moment. Ministers have now admitted that baked into that settlement is an assumption of the maximum possible rises in council tax, before Government provide any additional resource. Clearly, this provision opens the door to using the mayoral precept to extract further local taxes to fund central Government priorities, rather than central Government shouldering that responsibility. That should concern every citizen and resident in this country, especially given the risk of a lack of accountability that comes with it.

[Miatta Fahnbulleh]

I would just point out to the hon. Gentleman that the mayoral precept was introduced in 2017 by a Conservative Government, and that mayors are directly elected. Like Members of Parliament, mayors are not immune to political pressures around tax rises, and examples across the country show that mayors are as thoughtful about the right balance between investing in their services and managing tax increases as national politicians—in fact, when we think about the record of the last Government, perhaps more so.

[David Simmonds]

That was a fairly shameless political pitch, but we should just reflect on the debates that took place across the Dispatch Boxes yesterday during Housing, Communities and Local Government questions, when it was highlighted that we have a Mayor of London who is quite happy to issue precepts to indulge his personal political priorities but is an abject failure in discharging his mayoral functions around housing. Thousands of people are unable to find homes in the capital because the mayor is failing to build out more than 300,000 planning permissions that have already been granted by the local authorities. That is an injustice that is being inflicted on the citizens of our capital, and this provision, as envisaged by this Labour Government, potentially inflicts the same, or an even greater, injustice on other areas of the country. For those reasons, we remain deeply concerned about it.

Particularly in an environment where, as we heard earlier, local authorities were left £1.5 billion worse off—net—by the Government’s decision to introduce additional taxes on their employees, the temptation will be for the mayoral precept to be seen as the catch-all or safety valve through which additional taxes can be extracted to meet whatever demand central Government choose to impose, without central Government being accountable for it. That is why we oppose the measures.

[Vikki Slade]

I have no principled objection to the mayor setting a precept. I found it confusing when I heard Mayor Houchen explain how he had a zero precept. How does anything get done? Where does the money come from? [Interruption.] I am sure he has a salary, and I am sure he has an extensive office that is paid for by someone. I accept that the principle of a precept is, in some respects, self-limiting, but what bothers me is that the combined authority mayors have no referendum cap, unlike upper-tier, lower-tier, police and crime or fire authorities.

It is fire authorities I particularly want to speak to, because although some Government amendments have been tabled on the role of the mayor in terms of fire and rescue, there is almost silence in the Bill about the role of the fire and rescue service, while embracing it completely and almost making the whole service disappear. I am really concerned that fire authorities are already desperately under-resourced. Dorset and Wiltshire Fire and Rescue Service gets £1.76 a week per household. It has desperately been trying to get a 20p per week increase, but has been told, “No, you can’t have that.” There is nothing in the Bill that protects and ringfences any money for fire services, whereas there is more talk about police services. I am looking for some reassurance and commitment about how fire services funding will be properly resourced and ringfenced to make sure that no area suffers as when we had those horrendous wildfires, where fire services had to beg, borrow and steal equipment.

[Miatta Fahnbulleh]

We are all hugely sympathetic to the funding of fire and rescue—as we see climate change, the imperative of fire and rescue services is key—but it is outside the scope of the Bill. We believe that we have the balance right between allowing precepting powers for mayors and allowing democratic accountability by which the electorate can hold any mayor and politician to account.

Question put, That the amendment be made.

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This provides that the issuing of precepts under the Local Government Finance Act 1992 in respect of expenditure relating to the functions of a mayoral combined authority is a function exercisable by the mayor acting on behalf of the authority.

[Miatta Fahnbulleh]

I beg to move amendment 77, in clause 11, page 15, line 15, at end insert—

“(b) in subsection (4)(a), for the words from “consists” to the end of that paragraph substitute “includes a separate component in respect of the mayor’s PCC functions,”.”

This provides for flexibility where the mayor of a mayoral combined authority has PCC functions as to how the components of the authority’s council tax calculation which relate to the authority’s other functions (both mayoral and non-mayoral) are to be set out.

[The Chair]

With this it will be convenient to discuss Government amendments 78, 80 and 81.

[Miatta Fahnbulleh]

The amendment relates to where a mayor has police and crime commissioner functions: secondary legislation about the arrangements for setting the precept must provide that the police and crime commissioner component is ringfenced. Where a mayor has police and crime functions for more than one police and crime commissioner area, secondary legislation must provide that there is a separate police and crime component for each area. The legislation currently provides that there must be separate components for police and crime administrative functions and for mayoral general functions.

The amendments mean that Ministers have the flexibility to provide for either one component for non-police and crime functions, or multiple separate components for different types of non-police and crime functions. I hope Members are following. This gives Ministers the option to direct how precept spending on non-police and crime functions is accounted for, by setting this out clearly in secondary legislation. In doing so, they will be able to ensure that the precept is accounted for in ways that best reflect how the precept should be spent—whether that means allowing for full flexibility across the non-police and crime component, or ringfencing money to be used for certain functions.

Amendments 78 and 81 will give the Secretary of State the ability to make an order about the preparation of budgets for all an authority’s functions. The provision in the Bill currently only provides that power in relation to the mayor’s general functions. This needs to be updated to align with the expanded mayoral precepting powers introduced by the Bill. This allows Ministers to set out the procedures that should be followed in the preparation and calculation of a budget.

By enabling Ministers to set clear direction on the preparation of budgets and the calculation of precepts, these amendments allow for consistent processes to be set across the sector, to give full effect to the expanded precepting powers.

[David Simmonds]

I have two questions for the Minister. First, given that these budgets, and the precepts that the amendments relate to, will sit within that bit of the Local Government Finance Act 1992, will the requirement for budgets to be balanced in-year apply to all the accounts that the Secretary of State will be giving direction to?

The second question—the Minister may wish to write to the Committee on this—is, will the consistency that she referred to be introduced by giving the Secretary of State individual, and in effect case-by-case, power to issue these directions for different authorities? Clearly, our concern is that if the door has been opened to, in effect, unlimited precept rises, and these were to be used by the Secretary of State to bail out a significant amount of debt in one of these reorganised local authorities—which I know is a significant concern of many of the local authorities that are proposing reorganisation—that would not apply everywhere.

There are certain parts of the country where there are very high levels of debt, and others where those levels of debt do not exist at all. It would be, in effect, a condition of those constituent authorities’ doing the devolution at all that they were not asked to bear that cost. Yet this Bill introduces a back-door power for the Secretary of State to direct that they would go down that route. How do the Government propose to ensure that that is forestalled, so that they can have the assurances that they would need as a necessary minimum?

[Miatta Fahnbulleh]

There are two processes that I, as the Minister for devolution, as opposed to the Minister for local government reorganisation, am constantly keen to emphasise. There is a devolution process and there is a local government reorganisation process, which my colleague the Minister for Local Government and Homelessness, my hon. Friend the Member for Birkenhead (Alison McGovern), is taking forward. We know that some authorities are in a difficult financial position as part of that, and we are having a conversation with those authorities in the context of the proposals they are putting forward. That is still very distinct from what we are trying to do through the devolution process, and it is important that colleagues do not conflate the two.

What I would say on the wider questions that the hon. Gentleman raised is that there is nothing that we are proposing to do through the Bill that denudes or undermines the standards for financial prudence and financial accountability that sit across the local government landscape.

[David Simmonds]

Turning to the question of how a mayoral precept will be used under this group of amendments that the Government have tabled, if we think of the reorganisation in Thurrock or Surrey, both those local authority areas contain a single authority that has a very high level of capital borrowing, or a high level of debt. Those authorities have been assured that there will be three years’ worth of revenue support; in effect, there will be a Government grant to cover the revenue cost of the borrowing for three years. However, the borrowing cost is extended over 40 or 50 years, so there will be a very long period of time where, as things currently stand, that local authority will be expected to meet that cost, when it comes into being.

Clearly, one way of doing that is for the Secretary to State to say, “You will raise your precept, and that is how we will deal with the debt,” but that runs contrary to the proposals for devolution where those authorities have said, “We will do this, but it is simply not fair or ethical for us to accept those debts on to our books.” I am just seeking an assurance from the Minister that either the existing provisions that require the in-year balancing will apply, in which case the Government will deal with this prior to the devolution arrangement coming into existence, or the provisions will not apply, in which case those authorities need to be mindful that the likely consequence of devolution will be a massive increase in the precept levy purely for the purpose of paying off someone else’s debt.

[Miatta Fahnbulleh]

To answer the specific question, yes, in-year balancing will apply. The purpose of the precepting function is to allow the mayor to invest in key things that will drive the economic prosperity of the area and the core functions that we have set out in the Bill. It would be a very brave mayor who chose to raise the precept not to deliver on that. In the end, they are democratically elected, and it will be for their residents and constituents to show them the consequences of that at the ballot box.

Amendment 77 agreed to.

Amendments made: 78, in clause 11, page 15, line 15, at end insert—

“(b) in subsection (5)(b), after ‘functions,’ insert ‘or the other functions of the authority (other than any PCC functions that are exercisable by the mayor), or both’.”

This enables the Secretary of State to require the mayor of a combined authority to prepare an annual budget in relation to the authority’s functions, excluding any mayoral PCC functions, either separately to or in combination with the budget relating to the mayor’s general functions.

Amendment 79, in clause 11, page 15, line 17, at end insert—

“(b) in subsection (2), omit ‘in respect of mayoral functions’.”

This provides that the issuing of precepts under the Local Government Finance Act 1992 in respect of expenditure relating to the functions of a mayoral CCA is a function exercisable by the mayor acting on behalf of the CCA.

Amendment 80, in clause 11, page 15, line 17, at end insert—

“(b) in subsection (4)(a), for the words from ‘consists’ to the end of that paragraph substitute ‘includes a separate component in respect of the mayor’s PCC functions,’.”

This provides for flexibility where the mayor of a mayoral CCA has PCC functions as to how the components of the CCA’s council tax calculation which relate to the CCA’s other functions (both mayoral and non-mayoral) are to be set out.

Amendment 81, in clause 11, page 15, line 17, at end insert—

“(b) in subsection (5)(b), after ‘functions,’ insert ‘or the other functions of the CCA (other than any PCC functions that are exercisable by the mayor), or both’.”—(Miatta Fahnbulleh.)

This enables the Secretary of State to require the mayor of a CCA to prepare an annual budget in relation to the CCA functions, excluding any mayoral PCC functions, either separately to or in combination with the budget relating to the mayor’s general functions.

Clause 11, as amended, ordered to stand part of the Bill.

Clause 12

Power to borrow

[Manuela Perteghella]

I beg to move amendment 20, in clause 12, page 16, line 24, at end insert—

“(9AA) A combined authority or CCA must provide a report to the Secretary of State to lay before both Houses of Parliament a report detailing the reasons for which they are seeking consent to exercise the power conferred by section 1.”

This amendment would require the combined authority or CCA to lay a report before Parliament detailing the reasons for which they are seeking the Secretary of State’s consent for exercise of the powers conferred by section 1 on mayoral combined authority or mayoral CCA.

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[Manuela Perteghella]

No, the amendment is not kicking anything into the long grass. We have to get the Bill—this devolution—right. It is all about accountability, as I said when we were discussing the commissioners. This is a big change. Some of the Committee will already have unitary authorities and I will talk later about devolved Administrations, but for my constituency, that will be new. We need to get it right. Going back to the cost, that will be smaller compared with the cost of what could go wrong.

[Miatta Fahnbulleh]

I will speak to clause stand part and amendment 83 before responding directly to amendment 20. On the clause, all existing mayoral combined authorities and mayoral combined county authorities have powers to borrow for all their functions. That allows them to invest in economically productive infrastructure. Unlike for local authorities, the existing process for confirming the power to borrow money on mayoral combined and mayoral combined county authorities is by making a bespoke statutory instrument after an institution has been established. To confirm such powers by bespoke statutory instrument is highly inefficient and slow. The clause streamlines the process by giving the power to borrow to mayoral combined authorities and county authorities for purposes relevant to all their functions. It preserves existing safeguards by requiring them to obtain the Secretary of State’s consent before they exercise the power for the first time in respect of functions other than transport, policing, and fire and rescue. I commend the clause to the Committee.

Government amendment 83 is minor and technical. It simply clarifies that the reference to section 12 coming into force relates to clause 12 of the Bill. Amendment 20 would require a combined authority or combined county authority to produce a report, to be laid before the House by the Secretary of State, detailing the reasons for which they are seeking consent to exercise borrowing powers. As my hon. Friend the Member for Banbury and Opposition Members have pointed out, this would be an onerous, costly and time-consuming process. The amendment is well-intentioned, but we do not think it necessary.

Like the rest of local government, combined authorities and combined county authorities must operate within the prudential framework, which comprises statutory duties and codes that are intended to ensure that all borrowing and investment is prudent, affordable and sustainable. The framework already provides robust mechanisms of oversight and accountability. In addition, the exercise of borrowing powers by mayoral combined authorities and county authorities to date has not raised issues. Amendment 20 also contradicts the Bill’s aim of furthering devolution and increasing financial autonomy for these authorities. For this reason, I hope that the hon. Member for Stratford-on-Avon will withdraw it.

[David Simmonds]

I want to make sure that I can reconcile the Minister’s observations and the import of the amendments with her reply to me earlier, when she said that the requirement to balance in-year will apply. Clearly, the provisions essentially state that the Secretary of State can give consent for a substantial degree of borrowing, but it is not at all clear in the clause or the amendments what the purpose of the borrowing would be.

Manchester’s improvements to its transport system are fantastic, but they were funded by central Government as part of the devolution deal, and they are now creating a significant ongoing deficit in the mayoral budget, which has to be covered, essentially, through precepting—by levying those in the local area to cover the cost. There is clearly a concern with that. If the borrowing is for capital purposes there is a clear strategy for its repayment, and it must be for the purposes of capital investment. However, if borrowing is undertaken to cover shortfalls between revenue and the mayor’s expenditure on day-to-day costs, this House would have significant concerns about it in relation to our national accounts. Can the Minister tell the Committee how that decision making will sufficiently constrain a mayor or combined authority from undertaking borrowing that is for the purposes of day-to-day revenue expenditure, so that we do not find a large debt bubble growing underneath these new bodies?

[The Chair]

Minister, do you want to comment on that particular point?

[Miatta Fahnbulleh]

Yes, I will answer that question. There is a contradiction in the hon. Member’s position. He has spent much of today talking about the need for us to take a more local approach and to give local leaders and communities control, yet he is talking about restricting that very power. Everything that the strategic authority and mayoral combined authority will do will have to operate within the prudential framework. There are robust mechanisms to ensure that all their financial mechanisms adhere to the standards that we expect across local government and national Government.

The shadow Minister gave the example of Greater Manchester. That was a combination of a grant—a lot of devolved areas have an investment fund—borrowing and precepting. That is what we would expect for big capital projects. My experience suggests that mayors across the country have the aptitude and ability to make the right economic decisions on how they balance investment in things that will unlock the economic potential of their areas. We should trust them to do so, as the hon. Member has been saying all day.

[Lewis Cocking]

Will the Minister give way?

[The Chair]

Have you finished, Minister?

[Miatta Fahnbulleh]

I have.

[Manuela Perteghella]

As I said, the amendment would give Parliament the opportunity to assess whether devolution requests are handled with consistency and fairness across the regions, because at the moment they are not. I therefore wish to press it to a vote.

Question put, That the amendment be made.

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[The Chair]

We have a number of clauses on which I feel we can make some progress. My proposal is that we get to either the end of clause 19 or 5 pm, whichever comes first. I will not sit here in the cold for much longer than that.

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

As the local transport authority, combined authorities and combined county authorities deliver a range of local transport functions across their area. Each combined authority or combined county authority agrees its own transport budget for the year and, in many cases, constituent councils contribute to this through a transport levy. This is because constituent councils receive funding for some transport functions directly from Government.

The clause standardises the power for combined authorities and combined county authorities to levy such funding from their constituent councils to cover the cost of their transport functions, where they are not otherwise met. This power has proved effective in supporting transport delivery in local areas. For example, each of the seven councils of the West Midlands combined authority pays a levy based on its population figures, which goes on to fund a range of functions from subsidised bus services to the English national concessionary travel scheme, which provides free bus travel for eligible older and disabled people.

This power complements clause 39, which provides combined authorities and combined county authorities with the power to pay grants to constituent councils. Together, these powers support partnership working between combined authorities and combined county authorities and their constituent members.

[David Simmonds]

Again, I seek a point of clarification from the Minister. I understand the purpose of the clause, but clearly there is a distinction between a levy, where it is the constituent authority that is required to pay, and a precept, where it is the taxpayer who is paying for it through their council tax bill. I would be grateful if the Minister could clarify, if necessary in writing, how it will work where there is a dispute about the payment.

If we take London as an example, we have a London-wide concessionary travel scheme, but it is has very different application in different boroughs. It is easy to foresee a situation where, particularly if the purpose of the overall transport levy does not benefit the whole of the mayoral combined authority area, there will be a dispute about whether that is an appropriate way forward. Particularly if the levy is large, it would have a significant impact on the budget of the constituent local authority. Can the Minister set out how that type of process will be addressed in practice?

[Miatta Fahnbulleh]

I have agreed that I will write on the specifics; I think this question comes back to the same theme of how we mitigate collective decision making and agreement across constituent authorities that put at risk their financial viability, or cut across the legal obligation of a particular constituent authority, and I will capture that in writing. However, I would say that we cannot legislate for every eventuality. Indeed, I do not think that is the purpose of legislation. What we can draw on is the practice that we see across the country. Broadly, it is not in the interests of a mayor, who has been democratically elected by the residents and constituents of any of their constituent authorities, to make decisions that will be fundamentally detrimental to those constituents.

[The Chair]

I am grateful to the Minister for saying that she will include that in her correspondence, which we look forward to with enthusiasm.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.

Clause 14

Combined authorities and CCAs: minor amendments

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

Committee members will recall that clause 1 introduced the established mayoral strategic authority as a specific type of strategic authority. It drew a distinction between combined authorities and combined county authorities led by a mayor, and those operating without one. Clause 14 inserts the formal definitions of an established mayoral strategic authority, a non-mayoral combined authority and a non-mayoral combined county authority into the relevant existing legislation. These are minor but necessary provisions intended to give clear meaning to the existing legislation.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

Clause 15

Additional functions of the GLA

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

It is vital that the devolution framework works for the unique circumstances of London’s governance, which we have talked about in this Committee. That is why the Bill will enable Government to confer functions on the Mayor of London, the Greater London Authority and its functional bodies. Previously, the Government could change the powers of the Greater London Authority only via primary legislation. This clause brings London into line with other strategic authorities by enabling the Government to change its powers via secondary legislation. This will ensure that the Greater London Authority benefits from the devolution framework and can deepen its powers over time.

[David Simmonds]

Again, I have a question of clarification; can the Minister tell the Committee whether these powers apply to a transfer of functions, as opposed to the conferral of functions? We know there have been situations, and we can certainly envisage some within the overall package of the Bill, where the statutory duties of the constituent authorities could be transferred over to the mayor, either en bloc or in part. Indeed, there might be times when it might be a sensible approach; if there is an example of a significant failure in one authority, that could be looked after by the mayoral office while the situation is turned around—that goes to the point raised about South Northamptonshire. However, can the Minister clarify whether this refers solely to new powers that are conferred, or opens up the door to the transfer of functions that are currently statutory duties of constituent authorities?

[Miatta Fahnbulleh]

This clause relates to functions and powers that sit underneath the devolution framework that we have talked about and are putting on the face of the Bill, and the seven areas of competencies that this measure applies to.

We currently have a situation where, for example, certain powers will go to Greater Manchester that currently would not necessarily go to the Mayor of London and the GLA, and that does not feel right. Clause 15 allows a mechanism and a process to make sure that there is consistency across the piece, and that we can achieve that without having to go through primary legislation.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Clause 16

Members of legislatures disqualified for being a mayor of a strategic authority

Question proposed, That the clause stand part of the Bill.

[Miatta Fahnbulleh]

Clause 16 will prevent individuals from being a Member of Parliament, or of the devolved legislatures in Scotland, Wales or Northern Ireland, and a mayor of a strategic authority at the same time.

The Government are clear that mayors are central to delivering the growth, economic prosperity and change that local communities want. Already, the impact of our mayors, from West Yorkshire to the North East, from Greater London to the West Midlands, is being felt clearly. However, their responsibilities will only increase once this Bill is in law.

It is right that the role of mayor receives the officeholder’s full time and attention. Both MPs and mayors have a duty to represent the constituents that elected them. Fulfilling two different democratic roles could lead to conflicts of interest, given the differences in public expectations for each role and the differing responsibilities of a mayor and an MP. Clause 16 prevents that conflict and will ensure that regions benefit from their mayor’s full time and attention.

[Siân Berry]

I agree with the principle of not having too many people able to do double-hatting, but it is a fact that there have been overlapping periods when mayors of different combined authorities and London have also been MPs, either at the beginning or end of their term. That has been dealt with in a pragmatic way, with nobody overextending those kinds of double-hatted jobs.

As I understand it, and I would like the Minister to clarify this, writing this rule into statute would mean that, while nobody would be prevented from campaigning to be a mayor or an MP while in either of these jobs, at the moment they are elected, the situation then becomes illegal. An instant resignation takes place on that day. There would be immense disruption across a wide area—perhaps not so much for one constituency, as we have got used to having by-elections for various reasons, but in holding a mayoral by-election.

I wanted to check whether the Government’s intentions here, in making that resignation statutory and instant, are not a bit too much, when these issues have been previously worked out. Does there need to be more detail in the clause to allow for a transition period?

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[Paul Holmes]

I am not sure that I can beat the excellent oratory of my hon. Friend the shadow Minister, but I want to add some context in my own style on why this clause is a bit of a sledgehammer to crack a nut.

The hon. Member for Brighton Pavilion has adequately and expertly addressed why there may be need for overlap in different local situations. She is absolutely correct to say that there have been instances where that overlap has been dealt with in an orderly manner and has been sorted within the usual confines of the democratic mechanisms we currently have.

All the way through the Bill, which I think has admirable aims, the Minister and the Government have said, “Let local people decide.” Now, local people presumably have elected those mayors or those MPs who now might want to be a mayor; I declare an interest here, as this clause will stop me running for the Hampshire and the Solent mayoralty. I will not cry in front of the Minister, but it will mean that my hon. Friends here would have to listen to some of my more mundane speeches for the next three or four years.

Local people have elected their MPs and they should have the right to determine whether those MPs are the people they want to be the mayors. The hon. Member for Barnsley North (Dan Jarvis), served as a mayor from 2018 to 2022. At no point did anybody on the Labour side of the House say that he was not good enough to do both jobs at the same time. Ken Livingstone was a mayor and a Member of Parliament from 2000 to 2001. I do not think anybody who was on the Labour side of the House at the time—I grant that many of the Members on that side of the Committee Room were not in the House at the time—was saying that he could not do two jobs at the same time.

This clause just seems very restrictive. If an election is going ahead and a city or region says, “Actually, we do not want you to be our mayor—we want you to remain an MP”, that person will not win the election. The Minister has said many times today that, on elections and democracy, local people should have their say. I find it strange that we seem to be taking quite a restrictive measure on who can and cannot stand in a democratic event, decided democratically by local people, for candidates who, presumably, are local too. I have some concern that this is overreach.

I also think that MPs are generally sensible—I do not want to create breaking news here, but they are generally sensible and, as the Minister said in the context of mayors setting council tax precepts, they are also not immune to the moods and feelings of the local people that they serve. If a local MP wants to stand for election as mayor, they have the right to say that to their constituents. If they get a massive kickback from their constituents, they either will not win the mayoralty or they will not stand.

Local MPs should have the right to make that decision. Local people in that constituency or that region should have the right to say that they do not want that person; or that they might want that person, and allow that person to stand down from Parliament at a time of their choosing, if they are allowed to stand for the mayoralty, and resist the cost of a sudden burst of by-elections to this House. Let local people decide. Let local politicians be local. If they are not wanted, they will not be voted in.

[Miatta Fahnbulleh]

I thank hon. Members for their comments, and I have some sympathy with the arguments made. However, in a world where we are giving greater powers to mayors, which is the process we are going through with this devolution Bill, the idea that someone can exercise those functions to the best of their ability alongside the very important role we all do as MPs is a stretch. It is right for residents and constituents that we say, “If you are elected as a mayor, you ought to be doing that job full time.”

[Several hon. Members rose—]

[Miatta Fahnbulleh]

If I may finish, I will give way to hon. Members. The point about transition is a fair one. To clarify, we are setting out in legislation that, at the point someone is elected as a mayor, they resign as an MP, and vice versa. It is at the point of gaining office that this comes into effect. In response to the hon. Member for Brighton Pavilion’s example of the transition period when campaigning, there are flexibilities within that.

[Siân Berry]

I appreciate that, but these are two things in different directions. A sitting mayor who becomes an MP would need to resign as mayor that day, given what the Minister has just outlined for us. A mayoral by-election across a large area is a much bigger thing than a parliamentary by-election, and I am not sure that making it instantly statutorily illegal has been properly thought through.

[Miatta Fahnbulleh]

I will take the other interventions.

[David Simmonds]

I ask the Minister to reflect that it used to be the practice of this House that any MP appointed as a Minister had to resign and fight a by-election, because they were undertaking a function different from that for which their constituents had originally elected them. That practice was abandoned because of the extent of the disruption it caused to the work of government and of the House, as well as the cost of those by-elections, so I ask the Government to reflect. We have learned from experience, cross-party, that having these types of requirements is not conducive to good democracy. Perhaps the Minister will undertake to reflect on that.

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[The Chair]

Now the Minister can deal with all of you.

[Miatta Fahnbulleh]

We are trying to create empowered mayors with huge responsibility over transport, housing, infrastructure and skills. That is a full-time job—bigger even, candidly, than that of an individual Minister. It is absolutely right that they should, if elected to do that job, be doing that job. Hon. Members have made important points about how we get the transition right in order not to have disruption. I thank the hon. Member for Ruislip, Northwood and Pinner for his encyclopaedic knowledge of the history of local and national government and the precedent that Ministers used to resign their seats. We will reflect on that and think about how we get the transition right.

[Paul Holmes]

My intervention will be very brief. I am slightly burnt by my experience on the Planning and Infrastructure Bill Committee, where the Minister constantly said that they would reflect, and we never heard back from them until after the Committee had finished. May I seek assurance from the Minister—she does not need to give an answer today—that, on the point of the immediacy of the vacation of the office, she will come back to us in writing to give us the steer of her reflections and what actions she will take in regard to these concerns, if any? Will she commit to doing that before the Committee rises?

[The Chair]

I can see the Minister is nodding already.

[Miatta Fahnbulleh]

I am happy to make that commitment.

Question put, That the clause stand part of the Bill.

--- Later in debate ---

[The Chair]

With this it will be convenient to consider clause 18 stand part.

[Miatta Fahnbulleh]

Clauses 17 and 18 make technical but necessary changes to existing legislation. As hon. Members will know, some functions conferred on combined authorities or combined county authorities are exercisable only by a mayor acting on behalf of the authority.

Clause 17 clarifies that, where a function is conferred on a mayor, it should be taken to be a function of the underlying authority that is exercisable only by the mayor acting on behalf of the combined authority or combined county authority. This is because mayors of strategic authorities are not corporate entities in themselves; therefore, all functions must be conferred on the underlying authority.

Clause 18 clarifies the meaning and extent of the “general functions” of mayors in combined authorities and combined county authorities. The term “general functions” here refers to non-police and crime functions. It is appropriate for the mayor alone to be able to exercise their judgment in certain cases, and to be held fully accountable for those decisions and ultimately to the public. I commend these clauses to the Committee.

Question put and agreed to.

Clause 17 accordingly ordered to stand part of the Bill.

Clause 18 ordered to stand part of the Bill.

Clause 19

Report under section 1 of the Cities and Local Government Devolution Act 2016

[The Chair]

We now come to amendment 361 in the name of Manuela Perteghella. Do you wish to press this to a vote?

--- Later in debate ---

[David Simmonds]

The Opposition have sympathy with the points the hon. Member made. We can rarely have too much transparency, but we are conscious that these new bodies and devolution arrangements will be subject to a degree of political oversight. There will be manifestos, on which the public will have a vote. There will be the element of scrutiny, which we have not heard enough about yet but which we would like to think will be built into the new arrangements for these authorities. There will also be a regular process of elections, which will determine who provides the necessary level of leadership. Layered over that, there will be both the political priorities of the devolved authority and those things that are more part of the administrative function. Local authorities have historically had council plans and forward plans that set out decision making, all of which are part of this arrangement. Although the points have been well made, the Opposition are therefore not convinced that what the amendment would add is sufficient to justify its inclusion in the Bill.

[Miatta Fahnbulleh]

I will respond to amendment 363 and new clause 46 before discussing clause 19.

In the English devolution White Paper, the Government set out clearly our ambition to have universal coverage of strategic authorities in England. That direction of travel is clear. It is also important that the process is led locally, and that areas can submit proposals for devolution that reflect their unique circumstances at a time that makes sense for them. A centrally mandated strategy would cut across that principle, requiring areas to work to a timeline set by Government. That would not only be challenging, but go against the grain of what we are trying to do. The new clause is therefore not necessary. We have set the ambition, and we will work with areas to enable them to come forward with proposals at the appropriate time.

Clause 19 amends existing requirements for the annual report on devolution to ensure that it reflects the introduction of strategic authorities as a category in law. To indicate how the report will look should the Bill receive Royal Assent in its current form, this year’s report was laid before this House and the other place earlier today, so Members can spend their evening reading the report with a glass of wine if they wish. It covers strategic authorities that were established and details of the new devolution framework as set out in the English devolution White Paper.

I commend the clause to the Committee, and ask the hon. Member for Stratford-on-Avon to withdraw the amendment and not to press the new clause.