draft Tees Valley Combined Authority (Functions) order 2017

Teresa Pearce Excerpts

Tuesday 21st February 2017 General Committees

[Teresa Pearce (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. I am standing in for my hon. Friend the Member for Oldham West and Royton (Jim McMahon), who leads on devolution for the Opposition. I would like to put on the record my thanks to him for his valuable work in scrutinising the devolution deals.

Today’s draft order is the next step in the process towards implementing the Tees Valley devolution deal. The Tees Valley combined authority has been created, and I look forward to supporting Sue Jeffrey in her bid to become the first female metro Mayor in the country.

The order gives the Tees Valley combined authority the functions it needs to execute the powers handed down by central Government in the devolution deal. That includes devolved responsibility for transport; the creation of a mayoral development corporation to examine what strategic sites should be developed; and the creation of a Tees Valley investment fund. Local leaders are supportive of devolution to Tees Valley, but their support is caveated. Local leaders did not welcome the imposition of a Mayor for the Tees Valley combined authority, but they have accepted it. In evidence to the Select Committee on Communities and Local Government, Councillor Sue Jeffrey, the leader of Redcar and Cleveland Borough Council, said:

“It is a price we are having to have, so we will make it work...We have to take what is on offer and do what we can with it.”

That smart and pragmatic approach has been adopted by all five councils and shows how people in local government operate best: taking what they can get to defend local communities even when the conditions are set by others. The imposition of a directly elected Mayor has been a barrier for a lot of other devolution deals that have not made it through.

On this side of the House, we support devolution, but it needs to be real and meaningful. We would do things differently. We believe that devolution should be bottom-up, not top-down. Forcing totally different parts of the country to adopt a one-size-fits-all, top-down approach contradicts the essence of true devolution. We are not opposed to the concept of Mayors where a well-run mayoralty can provide visible leadership and accountability, but we do not support imposing rigid governance arrangements, such as Mayors, as a prerequisite for the devolution of powers.

Devolution should mean that people and communities are free to choose the most appropriate model for their community. These devolution deals should be an opportunity to bring powers and decision-making closer to the people. However, the imposition of Mayors contradicts that and risks undermining public confidence in devolution. Does the Minister accept that different areas require different governance models, and that true devolution supports them to create their own suitable models?

People feel that the proposed devolution process is being done to them rather than being done with them. We have serious concerns about how that devolution process has been handled and the lack of buy-in from the public. We need to get that buy-in and to get them on side, but at the moment they are not a meaningful part of the debate. People do not feel remotely connected to the current devolution process, and because the public have not been brought on the journey, voter turnout in lots of areas could be very low. The Communities and Local Government Committee has warned the Government that such a disconnected, remote system, which has led to low turnout, will have implications for the democratic legitimacy of some elected Mayors.

The fledgling proposals could be undermined from day one, and mayoral positions could be tainted going forward. The Government must consider that possibility when designing the devolution deals. What are they doing to ensure greater public engagement and community buy-in for future devolution deals?

If we believe in devolution and in power being distributed closer to the communities that we serve, we need to let go of that power; we must not put unnecessary requirements on local areas to receive that power. Although Tees Valley has accepted the conditions of the devolution deal, we want to see progress made in places where a Mayor is not an acceptable option. Concerns have been expressed about the creation of a fourth or even a fifth tier of local government that could create a complex, over-bureaucratic, costly system of representation that does not reflect an area’s needs. It is wrong, however, that some areas are not being given devolved powers because of that. If the principle behind the order is about getting devolution going, at some point we will have to come forward with a devolution framework for all of England—one that does not pick off one area against another.

I hope that the Government will ensure that every area will get the type of devolution currently available only in some areas. Devolution should not mean excluding some places or leaving communities behind. What will the Department for Communities and Local Government do to ensure that those areas that did not accept a directly elected Mayor will still enjoy the benefits of devolution?

On Brexit funds, we need an assurance from the Minister about the implications for future EU funding. A key benefit of the Tees Valley deal was control over EU structural funds; the Tees Valley has been a long-term beneficiary of European funding and has secured a commitment worth £169.8 million over the current EU funding period. The combined authority was going to control that funding, and that control was an essential part of the devolution deal. In the light of the Brexit vote, Tees Valley needs clarification in view of the current instability about inward investment. Can the Minister offer reassurance to the Tees Valley combined authority that expected levels of funding, including those expected from the EU, will be maintained—not just until 2020, but after that? Will there be local control of those funds?

I appreciate that I have asked the Minister a number of questions; if he cannot answer them today, I would like him to commit to answer me in writing in the near future.

We share concerns about regional investment in the light of the gross disparities between infrastructure spending in the capital compared with the regions, so we are glad that the Tees Valley devolution deal includes control of the new £15 million a year funding commitment over 30 years; a comprehensive review and redesign of the education, skills and employment support system in the region; and responsibility for business support. That is key to the Tees Valley, given the importance of the chemical industries cluster and associated manufacturing industry.

I commend the work of the five councils in the Tees Valley combined authority and their efforts to secure the best possible deal for their area and community despite the constraints placed on them. However, the £15 million devolution deal over 30 years does not come close to compensating for the cuts that those councils have already seen to their budget—the Tees Valley area has seen cuts in excess of £240 million per year since 2010, which is a huge sum to lose from local authority budgets. Local authorities as a whole are facing a £5.8 billion funding gap by 2020.

One of our major criticisms of the Government’s approach to devolution is how they expect communities to flourish when they have systematically underfunded local councils and run down public services. I think the Minister would accept that we cannot empower local government by impoverishing it. The Labour party, in Parliament and in local government, is committed to supporting local areas to secure the deals that best suit local need and will best help them to meet the challenges they face in supporting their local communities. It is absolutely right that we continue the devolution journey.

The order is an important step if people believe in devolution and in taking power away from the centre and giving it to communities. Members on this side of the Committee welcome the order but we caution against this type of top-down devolution in the future, and express serious concerns about future funding. Nevertheless, we accept that this is another step on the journey to devolution across England.