New Clause 1 — Local Government Constitutional Convention

Part of Cities and Local Government Devolution Bill [Lords] – in the House of Commons at 7:30 pm on 7 December 2015.

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Photo of Steve Reed Steve Reed Shadow Minister (Communities and Local Government) 7:30, 7 December 2015

The hon. Gentleman seems to support my case for a fair equalisation mechanism, which I am pleased to hear.

Secondly, on greater local control over tax rates and discounts, England has one of the most centralised funding arrangements anywhere in the world. Whitehall takes the key decisions on council tax, which means that it is barely local at all. The previous Secretary of State capped rises, while the Chancellor is now encouraging councils to push up council tax to make up for his cuts. Labour wants the Government to publish plans to introduce greater local freedom over tax rates, banding, valuation and discounts.

Thirdly, on multi-year finance settlements, every successful organisation needs to be able to plan for the future, and local authorities cannot plan complex services without knowing what level of funding is available to pay for them. As powers are devolved away from Westminster, local authorities need to know that they have the resources to exercise those powers properly. Local enterprise partnerships could operate more effectively if they had longer-term funding streams. Indeed, the regional development agencies, which LEPs replaced, could make single, three-year funding agreements, while LEPs have access to a smaller budget, with too many small funding pots and with constraints on their use. We want to make sure that combined authorities do not suffer from the same problem. Our new clause 13 calls on the Secretary of State to publish plans to allow for multi-year funding agreements, which would give combined authorities the resources and time to ensure financial stability, and allow them to make better long-term decisions about local services.

On new clause 14, we welcomed in Committee the proposal that new sub-national transport bodies must consult adjoining authorities before taking decisions. On transport, the Government have recognised that the devolution of powers to combined authorities concerns neighbouring authorities that do not wish to, or cannot, join a combined authority. That is an important principle, but it extends to other areas beyond transport, and the Minister’s response to our amendment in Committee was disappointing. The Minister said it was not “necessary or appropriate”, so perhaps he will reconsider and support this new clause. For example, local authorities on the periphery of the Greater Manchester combined authority have concerns about health service decisions that will affect them, but which they are unable to influence. We want to give them the right simply to be consulted. If the Government are prepared to concede that such authorities should be consulted on transport, then why not on health or other key services?

Whatever the Government say, they are imposing mayors by making them a non-negotiable condition of devolution for metropolitan areas. We believe that the spirit of devolution demands that local areas should choose their own model of governance instead of having it imposed from the centre. If areas want a mayor, that is fine, but it should also be fine if they do not want a mayor. Government amendment 7 and related amendments are disappointing. They will allow the Secretary of State to impose a mayor on a combined authority even if one or more constituent councils do not want one. It is no surprise that the Local Government Chronicle wrote about amendment 7 under the headline, “Boost to government powers to impose elected mayors”. The Government are acting in opposition to their own claims to support local decision making in that respect.

If the powers are agreed to this evening, they must be used with extreme caution. Where a potential combined authority is divided on the details of a deal, which it may well be, local co-operation must be the preferred way forward. I would welcome a statement by the Minister or the Secretary of State to that effect. Our amendment 58 would reintroduce the change made in the Lords, stipulating that devolution deals cannot be made dependent on having a mayor. That view has support from Members on both sides of the House, as we have heard again this evening.

On amendment 59, we discussed the general power of competence earlier. The Localism Act 2011 introduced the general power of competence, which was intended to give local authorities more power and freedom to innovate. That is a good idea, but LGA research shows that the power is

“limited by significant constraints set by central government”,

and that local government needs far more independence from interference by central Government. The constraints the LGA identifies are financial, structural and regulatory. Our amendment encourages the Secretary of State simply to review the power of general competence to learn how to make it more effective and to encourage greater take-up than the disappointing level so far.

Finally, on Government amendment 27 and associated amendments, amendment 27 would allow districts to join combined authorities without the consent of their county authority and vice versa. Our general approach to the Bill is that decisions should be in the hands of the local area and the local people affected. That has shaped our view on models of governance and on the amendment. Districts or counties should be free to join combined authorities if that is their preference.

We want the Secretary of State to confirm that he is aware of and understands the risks and will build in appropriate safeguards, especially in relation to manuscript amendment (a) to amendment 56, by which the Secretary of State will take the power to impose a decision. That seems a little draconian, and we need to hear that it would be used only in extreme circumstances. Authorities outside the arrangements need protection to ensure that they can remain viable after any change is made. We would welcome assurances from the Secretary of State that the powers will be used only in exceptional circumstances, and that seeking consensus will always be the priority. Will the Minister also confirm that where districts that are part of a county choose to participate in a neighbouring combined authority, their electors will still have a vote in elections for the county council, the authority in which the district lies?

I look forward to hearing the Minister’s response on those points. I give notice of our intention to test the will of the House on amendment 58, which would allow devolution deals to be agreed without the pre-condition of accepting an elected mayor, and on new clause 10, which seeks to lower the voting age for local elections to 16. In our view, these changes would greatly strengthen the Bill, and I hope that they will succeed.