Clause 68 : Leaders' Boards

Amendment 160C

Moved by Lord Hanningfield

160C: Clause 68, page 51, line 17, leave out subsection (8)

My Lords, I shall speak also to Amendments 160E, 164B, 164D, 164F and 164J. First, however, I must declare my interest as leader of Essex County Council and past vice-chairman of the LGA.

We do not want to rerun the arguments that we put forward in Committee. These amendments are intended to get from the Government further information on how the leaders' boards will work and what role the Secretary of State will play in scrutinising or, indeed, controlling them.

Clause 68(8) gives the Secretary of State the power to disband a leaders' board if it is not thought to be working. In paragraph 16 of its report on RDAs and this legislation, the House of Commons Business and Enterprise Committee concluded that it was,

"concerned about a lack of clarity about how LALBs will operate. We believe that the effectiveness of some LALBs might be limited due to the size and diversity of their membership or the number of two tier authorities within the region".

On these Benches, we share both these concerns.

There is huge uncertainty about how the leaders' boards will work, about whether they can work and the lack of clear guidance on their role. It would be incredibly naive of us to leave it entirely up to any Secretary of State to decide how they will operate. We need more clarity about this now. What criteria will the Secretary of State use to assess whether they are working? If the Secretary of State takes a dislike to them because they are of the wrong political party, could he or she disband them?

That brings me to the second amendment in this group. If the leaders' board is disbanded, it will be entirely up to the RDA quango to decide the regional strategy. In this scenario, the Government would have removed all democratic accountability in the structure. It would be not so much a democratic deficit as a democratic absence if there were no leaders' boards. Unless a leaders' board—the only democratic element in any new regional structure—is established, unelected bureaucrats will decide the regional strategy. People know my feelings about regional government; but if we are going to have some of it, it must have a democratic element. I would like the Government to be clearer on how that might work. There should be no circumstances in which the RDA takes decisions without democratic accountability. That is what leaders' boards are supposed to provide. How long will it take for the system to be sorted out? The Government want to square the circle by showing that there is some democratic choice, but it seems that the Secretary of State will have tremendous powers.

The Bill is also silent on the scrutiny process. It might be assumed that the new regional select committees will perform this function. They are not very democratic at the moment, because they have only one party on them. I am not sure that they will work very well anyway.

Without Amendments 164B, 164D and 164F, the Secretary of State would have power to amend any regional strategy that he or she felt did not fit in with their own ideas, which again would remove democratic accountability. There have been several recent disagreements between the regional assemblies and the Government. The Government might feel that by setting up this new process, they can remove any opposition to the government policy on area strategy. Again, I would like more clarity on that.

All in all, we need to know a lot more about the leaders' boards, about what they are going to do, the Secretary of State's power over them and how they are going to operate in an integrated democratic system within each region. I beg to move.

My Lords, my party's views on devolution and decentralisation have been consistent and well known for a long time. In view of the hour of the night, perhaps I do not need to rehearse them now, but I have some sympathy with the noble Lord, Lord Hanningfield, in his amendments. I would have had the same sympathy in the years 1979 to 1997.

Amendment 171A in this group relates to Clause 144 at the end of the Bill, the commencement clause. Subsection (10)(a) refers to,

"power to appoint different days for different purposes".

Our amendment would add, "or for different areas". It may be that "different purposes" includes different areas, but that is far from clear. If the words were in the Bill, they would make it crystal clear; as it is, the Minister has the opportunity to say that, even though that is not what it says, it is what it means.

My Lords, I wish to speak about Clause 75, which Amendment 164J would remove. I read with disbelief subsection (6) of the clause, which says:

"If the Secretary of State thinks it necessary or expedient to do so the Secretary of State may at any time revoke all or any part of a regional strategy".

I can understand—although I do not think it necessary—the Government wanting to change part of a regional strategy. For example, the regional strategy might say that we want four airports in our region, which does not fit in with government policy. I can understand that type of issue, but exactly what circumstances would have to occur for the Secretary of State to think that they had to revoke all of a regional strategy? It makes a complete nonsense of the Bill and all the talk about localism if the Secretary of State has that power. I cannot envisage the circumstances in which that would be true.

My Lords, noble Lords have been very patient in waiting for our turn to debate this Bill. I tried to cut down my speaking notes, but the questions raised in the debate require me to go into a bit more detail than I envisaged.

Clause 75 sets out two reserved powers of the Secretary of State: first, the power for the Secretary of State to prepare a regional strategy if the responsible regional authorities fail to do so; and, secondly—these are the same powers as presently exist for regional spatial strategies—the power to revoke all or part of the regional strategy if that is considered necessary or expedient. I mention that in relation to what the noble Baroness, Lady Maddock, has just said. Without such a power, the strategy could be revoked only through a further revision and there may well be circumstances in which a revision might not be appropriate and a revocation would be the only choice. For example—this may meet the point that the noble Baroness raised, but if it is not sufficient I shall have to write to her, because it is a somewhat hypothetical situation—if a reference in the strategy to a nationally significant infrastructure proposal became factually incorrect in the light of new policy, set out in a national policy statement on infrastructure, it might be important to revoke that part of the strategy to avoid any doubt. Whether there would be such circumstances that required the revocation of all the strategy is unlikely; I suspect that the provision is there as a safeguard. If the noble Baroness will allow, I shall think about that and write to her, because it is a perfectly reasonable question.

On the leaders' boards, I briefly restate the commitment that we have made on the joint role of the regional authorities and the extent of their competence. The noble Lord will know that we are committed to the joint role of the leaders' boards. It is very much to the credit of all those who have prepared the White Paper and responded to the consultation that we have ended up with such an equal partnership. Certainly, we see joint working as the most effective way of delivering the regional strategy. That is why the legislation provides such a flexible framework for the responsible regional authorities to operate within. It is very much our expectation that the partnership arrangements will anticipate and deal with problems as they arise, but there must be a fallback position and it is important that the Secretary of State should have powers in reserve.

The amendments tabled by the noble Lord in relation to leaders' boards would remove the power of the Secretary of State to withdraw approval for the scheme. The noble Lord asked how we envisaged the leaders' boards working. In terms of the regional patterns that are emerging, each of the leaders' boards is looking at a different political geography—indeed, a different physical geography—and they are coming to a determination of what they need in their regions to deliver the sort of representation, competence and scope that they want to achieve. It is up to the leaders' boards themselves to settle those problems and to determine their own ways of working.

We have certainly not laid down any prescription. Noble Lords often ask us why we do not trust the local authorities. This is very much a case of trusting the experience of strategy making in the regions that those local authorities have developed over the years. Certainly, the Local Government Association has always emphasised, and rightly so, that local authorities are capable of making decisions and working together. How they create a process to make that regional strategy work will be up to them.

We are happy to provide guidance. We will be taking advice from local authorities and the LGA on the nature of the guidance and what would be most helpful, but we expect that local authorities will build up their working practices on their knowledge of what already works. We are all agreed that local authorities in the region are perfectly capable of establishing an effective leaders' board that reflects regional circumstances.

The noble Lord asked about the role of the Secretary of State. It is simple. We must be prepared for the unlikely and extreme circumstances when the leaders' board arrangements fall apart or where discussions in the region do not lead to that sort of fruition. It is very much a reserve power. For example, if an intractable dispute means that a leaders' board has effectively ceased to function, it is important that the Secretary of State can step in. It is important that we are not left without any safeguards, but we do not expect to have to use these powers.

Amendment 160E would remove the provision whereby the RDA would act on its own when there was no leaders' board in a region. I have some sympathy with the concerns behind this amendment because I appreciate that there is an underlying anxiety that the Secretary of State might use this provision to delay approval of leaders' boards indefinitely and instead require the RDAs to lead the strategy work alone. That was the loophole that the noble Baroness, Lady Warsi, referred to in Committee. It is inconceivable that the Government should wish to prevent the establishment of the leaders' boards in these regions but I am taking that concern seriously. My officials are currently considering that risk and looking to clarify in guidance both our commitment to setting up leaders' boards and how that will be realised. I hope that that will reassure the noble Lord in relation to both those amendments.

Amendments 164B, 164D and 164F deal with the final stages of preparing strategy under Clause 74. In the policy document on regional strategies that we issued in January, we set up the roles of both the responsible regional authorities and the Secretary of State in signing off the strategy. The policy document dealt with the circumstances in which the Secretary of State wishes to make further modifications to a draft regional strategy on top of any changes already made by the regional authorities in response to the examination in the public panel recommendation.

On the publication of the report, I dealt with some concerns by tabling amendments to reinforce the idea of ownership resting with the joint authorities, which were welcomed. However, it is important that the Secretary of State should reserve the right to make further modifications in addition to any changes proposed by the regional authorities. For example, one could envisage a situation where the regional authorities did not take on board clear recommendations of the independent panel that the Government considered to be important, or where the revised draft still did not reflect clear national policy on changing imperatives or evidence, such as the need to allocate enough capacity for renewable energy to meet our climate change obligations.

It is also important that the Secretary of State should have the power to arbitrate if the RDA and the leaders' board cannot agree on the changes arising from an EiP. As we have said, we would expect the RDA and leaders' board to make the Government aware as soon as possible of any aspects of the strategy where they are likely to disagree with the panel report, or where their proposed draft may contain policies that are contrary to key government policy expectations. We would also want to be aware of any issues where the regional parties disagreed among themselves. That would help to avoid any unnecessary intervention by the Secretary of State later in the process, which we want to avoid.

I fear that the amendments would introduce an additional stage to the process, where the Secretary of State decided that further modifications were required and would then be required to ask the regional authorities to make those further changes. That would be a recipe for confusion. We have learnt from the regional strategies to the extent that, compared with the RSS, we have already improved the process. The Government will provide clearer up-front guidance, for example, about regional strategy outcomes. Crucially, the regional authorities—not the Secretary of State, as with the regional spatial strategies—will be primarily responsible for considering the recommendations made by the EiP panel and for amending the strategy accordingly. Although I hope that the amendment has prompted a useful debate, I do not think that in practice it would add value; it would serve to complicate and confuse, and even delay, the system. I hope that the noble Lord feels that that has helped to address some of the issues.

The problem with Amendment 171A—I know why noble Lords have raised this issue—is that it affects the whole Bill, not just Part 5. It seeks a wider commencement power in relation to provisions of the Bill that come into force on a day appointed by the Secretary of State. As the noble Lord said, it would give the Secretary of State or Welsh Ministers the power to appoint different days of commencement for different areas. This would be an unusual power, neither necessary nor helpful.

I recognise what the noble Lord is trying to address and the issues around it. We recognise the variation in progress in shaping new arrangements in the regions. However, I assure the noble Lord that Part 5 serves the purpose that he wants to achieve. The Bill does not require any particular timetable, nor does it set deadlines either for establishing leaders' boards or for revising strategies. It therefore already recognises that pace is different in different regions and will enable regions to proceed at slightly different times in making the arrangements. We need to allow for that, while promoting an early move to the joint working arrangements. If we were to accept the amendment, we could be creating all sorts of complications.

Part of the complication is that, in addition to Part 5, Amendment 171A would apply to other provisions in the Bill where there is power to commence provisions on an appointed day. In the interests of clarity and simplicity, we would want to commence the different changes—whether that relates to the promotion of democracy, the petition clauses or whatever—in the simplest, clearest way possible. That would not include providing for different commencement dates for different areas of the country, which would be a recipe for confusion. I hope that it helps the noble Lord to have that on the record and that he will feel able to withdraw his amendment.

My Lords, I thank the noble Baroness for those comments. I also thank her for her offer to clarify the Government's thinking on this issue. I should be grateful if that clarification could be made available before Third Reading. This is a crucial part of the legislation. The leaders' boards are the democratic element of the new regional strategy and they will play a very important role. I am grateful to the noble Baroness for stressing the partnership that will exist between the RDAs and the leaders' boards. However, we still have to consider exactly how they will work. I will read what the noble Baroness has said. I am sure that we shall return to this discussion at Third Reading because, as I say, this is a crucial part of the legislation. I beg leave to withdraw the amendment.

Amendment 160C withdrawn.

Amendment 160D

Moved by Baroness Andrews

160D: Clause 68, page 51, line 20, at end insert—

"(9) The Secretary of State must by regulations make provision for Part 5A of the Local Government Act 1972 (c. 70) (public admission to meetings of principal councils, public access to documents, etc) to apply in relation to Leaders' Boards as it applies in relation to principal councils (within the meaning of that Part).

(10) The application referred to in subsection (9) may be with such modifications as the Secretary of State considers necessary or expedient."

My Lords, the issue in this group is one that we discussed in Committee and concerns the openness of the proceedings of leaders' boards and RDAs, including their joint activities in preparing regional strategies.

I shall speak first to my amendment and then respond to the noble Baroness's amendments. The noble Baroness, Lady Hamwee, has tabled three amendments in this group. In speaking to my Amendment 160D, I will also address Amendment 161 as it is so closely tied to it.

By their nature, leaders' boards will be comprised of local authorities and I can certainly see the logic of applying the provisions of the Local Government Act to their activities. It is a very important principle and the noble Baroness mounted a very powerful case for it. Therefore, I am proposing Amendment 160D, which applies Part 5A of the Local Government Act 1972 to leaders' boards only, and would allow for it to be applied through regulations with such modifications as the Secretary of State considers necessary or expedient. This is based on legal advice that the provisions of Part 5A will not work properly if they are simply applied without modification in the manner proposed by Amendment 161. Some aspects of Part 5A are specific to local authorities and cannot sensibly be applied to leaders' boards.

I have tabled Amendment 160D because I think it provides an appropriate way to proceed and is preferable, as I say, to the approach in Amendment 161, which might lead to unworkable provisions. I will happily respond to Amendments 162 and 163 after the noble Baroness, Lady Hamwee, has spoken.

My Lords, I am grateful to the Minister for taking the matter on board and for her generous comments. I am happy to see Amendment 160D. I take it that the words "necessary or expedient" are benign and merely ensure that the arrangements work appropriately. They could be read differently but I shall choose not to do so.

My first amendment in the group covers leaders' boards. I accept that the Local Government Act needs tweaking to apply to the leaders' boards arrangements. My second and third amendments in the group would apply the same provisions on access to meetings, documents and information to responsible regional authorities—that is, the leaders' boards and RDAs acting together—and to RDAs separately. I have no doubt that regional development agencies are not homogenous and do not all operate in precisely the same manner. However, I found it difficult to accept fully the comments that the noble Baroness made in Committee on 9 February at col. GC 312 of the Official Report. She assured the Committee that the process applied by RDAs was "inclusive and transparent", and she also said:

"That approach has worked well in the past in involving communities. If we went further, I believe that we would end up with more bureaucracy. We would have inflexibility and not necessarily greater transparency".—[Official Report, 9/2/09; col. GC 312.]

I simply disagree with her on that point. It seems to me from my observation of some of the RDAs that there is a presumption of confidentiality rather than a presumption of openness, and it is hard not to feel that the role of the RDAs, in the way that matters are dealt with, is growing. Transparency and the perception of propriety—I am not making allegations of impropriety—are hugely important. I had little expectation that we would convince the Government of this. Indeed, RDAs are not bodies that now fall within the department of the noble Baroness, and I dare say that there is a different culture in different departments in government.

The "responsible regional authority" seems to me to be a distinct entity in the way in which it is described—RDAs and local leaders' boards acting jointly—and it should follow the local authority model, or the local authority model as applied through the Minister's amendment, rather than the model applied by the regional development agency. That was why I tabled that amendment, which comes perhaps somewhere in the middle of the other two.

My Lords, from what she has said, I do not think that I am going to persuade the noble Baroness. I shall have to repeat a little of what I said in Committee about the RDAs.

The RDAs are committed to openness. They are subject to freedom of information and the model publication scheme for NDPBs, which has been produced by the Information Commissioner. That means that they make public the roles and responsibilities of senior staff, minutes of meetings, details of major policy proposals and decisions, as well as information on many other matters. They consult on their corporate plans, which are published. A considerable amount of material is available on their websites. We believe that all this creates a high level of public access to RDA matters without compromising their actions and decisions. RDAs regularly deal with commercially confidential and sensitive information, and there is a different set of considerations in relation to the interests that they are providing for.

Amendment 163 addresses joint working, and I am sympathetic to the challenge. This is not straightforward, because leaders' boards and RDAs are very different bodies, as the noble Baroness agreed. Not only that, but their joint working arrangements, as the responsible regional authorities, are yet to be agreed and will vary between regions. Inventing a blanket provision on access to information that was not intended for these circumstances carries a risk of, at least, being inappropriate and, at worst, having unintended consequences for RDAs.

However, the noble Baroness raised some important points on joint working, and I have not been able to come back with a solution. I will consider the process further with a view to a possible amendment in the other place. I would wish to be satisfied that provisions such as public access to meetings set out in Part 5A could usefully also be applied to joint meetings that the leaders' boards have with RDAs, while safeguarding the particular interests of the RDAs.

My Lords, I thank the Minister for giving way. When she is considering that, will she also consider another point about joint boards? Local authority members are subject to the local authority code of conduct and, if they fail to meet the standards, it is looked at by the local standards board or the national standards board. I am not sure that applies to the RDAs. It is one of the things that local authority members feel strongly about. If the noble Baroness is looking at openness and transparency, it might be worth looking at a code of conduct as well.

My Lords, I do not have an answer to that. There may be something like a code of conduct, but I simply do not know. I am afraid that I will have to write to the noble Baroness, although it will be on the record that she would appreciate further work on a code of conduct.

I hope that with that promise the noble Baroness, Lady Hamwee, will feel that she has at least reached two-thirds of the way towards the goal she set herself—or perhaps half way.

Amendment 160D agreed.

Clause 69 : Responsible regional authorities

Amendment 160E not moved.

Amendments 161 to 163 not moved.

Clause 70 : Review and revision by responsible regional authorities

Amendment 164 not moved.

Clause 71 : Community involvement

Amendment 164A not moved.

Clause 74 : Approval of revision by Secretary of State

Amendments 164B to 164F not moved.

Amendment 164G

Moved by Baroness Andrews

164G: Clause 74, page 54, line 14, leave out "Secretary of State" and insert "responsible regional authorities"

Amendment 164G agreed.

Amendment 164H not moved.

Clause 75 : Reserve powers of Secretary of State

Amendment 164J not moved.

Clause 77 : Implementation

Amendments 164K to 165 not moved.

Amendment 165A not moved.

Amendment 166

Moved by Lord Hanningfield

166: After Clause 79, insert the following new Clause—

"Delegation by regional development agencies

After section 6A of the Regional Development Agencies Act 1998 (c. 45) (delegation of functions to the Mayor of London and the London Development Agency) insert—

"6B Delegation of functions by regional development agencies

(1) Subject to the provisions of this section, a regional development agency shall have power to arrange for the discharge of any of their functions by a local authority within their area, or jointly by a group of local authorities within that area.

(2) For the purposes of this section, a "function" shall include any part of a function, or any function or part of a function which is exercisable only in relation to part of the area of a local authority.

(3) For the purposes specified in section 4(1) of this Act, the functions to which subsection (1) refers include, but are not limited to, the responsibilities of a regional development agency for—

(a) the determination of the allocation of funding to other persons or bodies, whether by grant, loan or other means, within a local or sub-regional area;

(b) the making of expenditure under an expenditure programme in relation to a local or sub-regional area;

(c) the prioritisation and delivery of investments at local or sub-regional level;

(d) the management of an expenditure programme forming part of the single programme budget of the agency, in relation to a local or sub-regional area, in accordance with any overall strategy determined by the agency.

(4) The power to make a delegation under subsection (1) includes, but is not limited to, power to make such a delegation to a local authority or authorities in accordance with one or more of the following expenditure models (or with a variant of such a model, or a combination of such models)—

(a) the allocation of funds to a partnership, of which the agency is a member, and delegation of the power by agreement to make, and implement, decisions on behalf of the partnership as to the expenditure of those funds, or their allocation to a third party;

(b) the allocation of funds, and delegation of the power to make and implement decisions as to their expenditure, to one or more local authorities, or to a partnership of one of more such authorities with one or more other persons or bodies, in accordance with a service level agreement or contract made by the agency with the authority or authorities, or partnership, as the case may be;

(c) the transfer to one or more local authorities, or to a partnership of one or more such authorities with one or more other persons or bodies, of funds for the purpose of implementing a programme of investment agreed with the agency; and the delegation of the power to make expenditure of those funds, and to vire the funds between different elements of the programme in order to secure the most efficient use of resources;

(d) the transfer to one or more local authorities, or to a partnership of one or more such authorities with one or more other persons of bodies, of funds for the purpose of implementing a programme of investment agreed with the agency; and the delegation of the power to make expenditure of those funds, and to manage the programme by altering the phasing of any development to which it relates in order to secure the most efficient use of resources.

(5) A regional development agency shall, within three months of the coming into force of this section and thereafter at such intervals as the Secretary of State may determine, propose such delegations under this section as it considers appropriate, having regard to its view of the capacity of any local authority in its area to discharge any function concerned, and the desirability of maximising the delegation of functions of the types referred to in subsection (3) to local authorities.

(6) Whether or not a regional development agency has made proposals under subsection (5), the Secretary of State shall have power to direct an agency to make such delegations as he may determine, after taking into account any representations made to him by any local authority in the area concerned, or by the agency.

(7) Two or more local authorities to which any function has been delegated under this section may arrange for it to be discharged by them jointly.

(8) A local authority to which a function has been delegated under this section may arrange for it to be discharged by a committee or sub-committee, or by an officer of the authority.

(9) Any enactment relating to a function which has been delegated under this section, or to the authority or authorities by whom, or to any area in respect of which, it is to be discharged, shall have effect subject to all necessary modifications in its application in relation to that function and to the authority or authorities by whom, or to any area in respect of which, it is to be discharged.

(10) References in this section to the discharge of any of the functions of a regional development agency include references to the doing of anything which is expedient for the purposes specified in section 4(1) of this Act, or for purposes incidental thereto.""

My Lords, we discussed this amendment in Committee. It is supported by the Local Government Association and members of all parties and I feel very strongly that it should be part of this legislation. When the White Paper was published, there was much that we did not see as democratic in the proposed legislation. The White Paper suggested that RDAs could delegate money to local authorities for particular projects.

I do not like to mention my own county, which I often do. Noble Lords may laugh, but as I live in it every day, it is useful to give examples from it. We have three development areas. Two major ones are the Thames Gateway and the Haven Gateway and we have a development area in the M11 corridor. As everyone will know, because I am always talking about it, I like to see things done, rather than to have lots of meetings and bureaucracy. With development areas, RDAs and all sorts of other groupings, you can meet and talk about things for ever, but not do anything. That is a part of governance that I dislike intensely. I want to improve the lot of the people in my county and in the country. I want things to happen with money that is there.

The noble Baroness will know, because she has been there, that Jaywick is a very deprived area in Essex, which is a wealthy county. Jaywick in Tendring is adjacent to Clacton and is one of the most deprived areas of the UK. The new chief executive of the RDA is a very positive lady and we worked very much together on whether she might delegate some money to the projects that we are developing there. It might have gone to Thames Gateway, but we want to move on this project. A joint committee involving Tendring District Council and the county council is working together to try to improve the lot of the people living in that very deprived area. Money that came directly from the RDA could facilitate that and get things done. The RDA, a development board and everyone else, including the county council, might then have to look at the project but I just want to see the lot of those people improved.

There are defects in the legislation but there was a piece of it that I liked because I could see things happening. However, that has now been removed and RDAs cannot delegate money to local authorities. Local authorities are democratic bodies, and the amendment refers to the allocation of funds to partnerships of local authorities. In Committee, the noble Baroness said that that could happen, but I am assured that the RDA has to be accountable for the money that it spends and therefore will have to spend that money itself. Because of that, I can see some projects not happening or being delayed. Although there is never enough of it, I like to see the money that the Government make available spent at the coal-face. The noble Lord, Lord Bassam, has just walked in. He will know Jaywick very well because he originated not very far from there. I beg to move.

My Lords, my noble friend and I had added our names to what I might describe as the predecessor amendment, which was shorter and possibly sweeter than this one. Following the comments about possible differences between government departments, my noble friend Lord Tope said:

"Long years in your Lordships' House have taught me that it is conceptually impossible for two government departments to make contradictory comments".—[Official Report, 24/2/09; col. GC 81.]

My noble friend, by definition, is slightly older, but in any event I do not think that his wisdom can be improved on.

During the exchange on the earlier amendment concerning delegation, the Minister made a number of comments that it is worth picking up on briefly. She said that the best outcomes,

"do not need new powers or new legislation", but delegation is different. She talked about a,

"regional structure of joint responsibility".

However, as I understand it, that is a responsibility for the strategy. I was puzzled by a comment from the Minister shortly after that. She talked about the RDAs',

"joint responsibility for delivery of regional strategy".

I am not entirely clear how the different functions fit together here. The delegation concerns RDA functions more widely than under this Bill. The Minister also talked about preserving the flexibility of RDA budgets so that they can,

"if necessary, be flexed to address economic imperatives".—[Official Report, 24/2/09; cols. GC 83-84.]

That sentence worries me quite a lot. I believe that RDAs have budgets on a year-by-year basis. I may be wrong about that but I think that, if they do not spend by the end of the year what they were planning to spend, they lose the opportunity to do so. However, what worries me slightly is the distinction that seems to be inherent in that comment between the RDAs and local authorities.

Having said that, I have written in quite a number of places next to the amendment the word "How". How are regulations needed? How will this operate, and so on? I think that there would be a need for regulations if this amendment or anything like it were agreed. However, the general underlying point is one with which we absolutely agree. Delegation can be a delicate and difficult matter but local authorities have their fingers on the pulse. They have a wider remit than the RDAs, and that is an advantage. They have a more holistic approach and, above all, they are elected. Although I could pick holes in the amendment, we support the principle. If the noble Lord takes this through the Lobbies this evening, we will support him.

My Lords, despite the lateness of the hour and the fact that tonight England is playing football, which I would rather be watching, I might as well make a contribution, particularly in view of my intervention in Grand Committee. That was on EPBs but the principle is the same.

I need to remind noble Lords of my interest. I am now a member of the Northwest Regional Development Agency as well as being leader of Wigan and of the Association of Greater Manchester Authorities. I certainly believe that devolution is important and, if the Government are to achieve what they want in Parts 5 and 6 of the Bill, there needs to be devolution from government departments and agencies. I was intrigued to hear what was said about the amendment to see whether it would achieve what the noble Lord thought.

We ought to apply a number of key tests. Obviously we are not just pepper-potting money around. Would the amendment allow for a contribution to a regional strategy, which is agreed between local authorities and the RDA, so that they did not simply give money away? Do local authorities have the capacity to deal with some of the issues? That is not always the case; it is obviously not the case in the county of the noble Lord, Lord Hanningfield, but small district authorities may not have the capacity to deal with some of these bigger issues. Would the amendment promote partnership working between local authorities and other agencies? That is important. The delegation from the north-west—before my time—to Liverpool helped to achieve all the objectives around the Capital of Culture year.

I am struggling with this. If the noble Lord, Lord Greaves, were in his place, I would ask how the NWDA would prioritise. As has been said, there is never enough money to go round everywhere. How would it prioritise between a project in Pendle and one in Wigan? There is no guidance in the amendment. How would local authorities be accountable for the money? We must ask those questions.

I noticed today that PwC produced a report on RDAs showing that, for every pound that the RDAs spend, £4.50 is generated within the regional economy. They are doing a good job and we need to make sure that that continues. I did not get enough clear answers from the noble Lord. I want greater clarity on devolution, but I do not think that the amendment hits the mark.

My Lords, I have a great deal of sympathy with the reasons for the amendment, but there is a problem. My noble friend asked what RDAs do at the end of the year when they have money. I can tell her; they say to the council, "If you do X, you can have this money". That has happened to us, although I should say that the interest that I declared at the beginning of the Bill's passage is no longer the case. As of midnight last night I am no longer a Berwick borough councillor because the council has been abolished. However, in my experience on that council, that was precisely what happened. There is an issue that we all recognise about how RDAs and local councils work together, how we get accountability and how the RDAs delegate some of their money down to local authorities. I do not necessarily think that the amendment has it quite right, but this is something that we must consider seriously. It is not terribly satisfactory for the money available at the end of the year to be spent in that way.

My Lords, I greatly like and appreciate the theme of this amendment. One of the issues in the south-west has been decisions for European funding, which, for Cornwall and the Isles of Scilly, used to be taken by the government offices, which were based in Plymouth, outside the area. They are now taken primarily by the RDA, which is based in Exeter. That is not a good principle and it does not reflect properly how these funds were meant to be administered, although the last programme was successful.

That is one area where a joint delegation to Cornwall and the Council of the Isles of Scilly would be positive, and, as I understand it, enabled by the amendment. As my noble friend Lady Maddock said, perhaps this is an area where we can, at last, start to get some democracy, some accountability and some answers to communities and people through a democratic method about how those budgets are spent.

I am not totally critical of the RDAs, but there are issues, one of which is democratic accountability. By bringing funds that relate to specific local government areas down to those areas, that has greatly improved. The work and budgets of the RDAs will be much enhanced by that legitimacy. In some of those programmes, particularly European ones, such delegation would be particularly appropriate.

My Lords, I appreciate the way in which the noble Lord introduced the amendment, because I understand that he wants to get things done. I shall address the specific instance that he raised in the context of my general argument. I am very grateful to my noble friend for joining the debate and raising what I thought were very pertinent questions.

The amendment provides for each RDA to delegate any of its functions to a local authority or group of local authorities in the region. It is an expanded version of a similar amendment tabled in Committee. I do not think that it comes as any surprise when I say that were it to be carried, it would create major and, I think, unforeseen contradictions and difficulties. For that reason, I hope that noble Lords will think very hard before supporting it.

The most important point I want to reiterate is that this part is based on one fundamental principle: joint working between equal partners demonstrated across the single regional strategy, bringing together the RDAs and the elected boards and doing away with the dysfunctional notion of "them and us" when it comes to thinking through and planning and delivering policy. Just as the RDAs and local authorities will be working together on the regional strategies, we need them to work as part of the same team on the implementation and delivery of strategy. All that is contained in the argument that I began to develop in Committee in telling noble Lords about the principle and practice of joint investment planning, which can be done within existing frameworks. That form of joint planning will deliver the optimum outcomes at local level.

The Government's response to the consultation on the SNR proposed that approach to enable local authorities to take on a large degree of responsibility for delivery of the programmes and projects in their area, but it is also right that the RDAs should retain final accountability for the funds that pass through them. First, I say again to the noble Baroness, Lady Hamwee, that that would help to ensure that the money is strongly focused on economic development that is of strategic value to region as a whole and is therefore good value for the money in relation to what the RDAs are about.

Secondly, we need at this time to be swift and innovative to respond to changing and challenging situations. It is important that the RDAs can maintain flexibility in their budgets at this time. The key point is that the RDAs and local authorities will now jointly agree, as a result of this new opportunity, what programmes of intervention will be undertaken in particular areas. Any funding from RDAs to local authorities in any circumstances will have to follow the usual rules that apply to the RDAs. They will have to be used within the same overall financial framework that applies to RDAs. RDAs and local authorities will now jointly agree how projects within the programme will be appraised, monitored and evaluated. If appraisal systems are aligned, all parties work together. The requirements for the RDAs to ensure that accountability considerations are met should not be onerous. The virtues of investment-led planning are to focus on what will work, which should commend itself to the noble Lord, with flexibility but not bureaucracy.

We have been working with colleagues from the LGA, local authorities and RDAs to develop guidance for joint investment planning. The principle that we are following is that it should be light-touch and partnership-based. The guidance will make it clear that Ministers want RDAs to allow projects and programmes to be planned and delivered through local authorities and other sub-regional partnerships: whatever, frankly, will be most effective. It will also enable RDAs to ensure that interventions across different areas are consistent with the agreed regional strategy and its priorities and reflect different economic scenarios. That is, as I say, very important.

As I said in Committee, these amendments are unnecessary for achieving what we all want and what was at the heart of the SNR proposals—interventions at the right level that will align with and strengthen effective partnerships.

The noble Lord described the situation in Jaywick; he had warned me a little that he would but not sufficiently. We did some rapid research in the extended interval before the debate, and I am very grateful to my officials for being very efficient and speedy. I understand that the specific project is part of the larger Haven Gateway programme, which forms part of the regional funding advice submitted by EEDA and the regional assembly for government consideration, so it appears that this work is already considered to be a priority.

All of what the noble Lord wants can be accomplished under existing powers. He has asked how the investment planning arrangements could apply to a specific local project, but if it has been agreed as a priority for the region, funding should be made available under the investment planning process that I have described. Where this comes from the RDA's budget, the RDA agrees the delivery arrangements and releases the money on that basis. The RDA retains ultimate accountability for the expenditure, but it would also retain it if they had the power to delegate which the noble Lord seeks in his amendment. That would not change.

My Lords, will the Minister clarify whether the RDA could give the money to the joint committee as it is a regional priority—everyone has agreed that—so that it can get on with the project rather than having two lots of management people managing the project? Is that what she is saying?

My Lords, that is certainly my understanding. I was going to suggest to the noble Lord that we facilitate a meeting between him and some relevant officials from the joint departments, so that he can discuss some of these issues with them. He will appreciate that it is quite difficult to make a very precise judgment, but that is certainly my understanding. I obviously cannot make any commitments about particular projects, but I am happy to ensure that there is such a meeting.

The amendment has very serious implications, I am afraid. First—my noble friend referred to this—it would allow any RDA function, even something that is manifestly regional, to be delegated to a local authority or group of authorities. Perversely, there could easily be functions that actually undermined the principles of the regional joint working arrangements or even contradicted them. There is also no clear link between the activities that would be delegated and the regional strategy, which is the linchpin of everything that we are trying to do. Delegation was never intended to be considered separately from the regional strategy and the investment planning process that we have described.

Secondly, the amendment would be a recipe for chaos. Proposed new subsection (5) would place a requirement on the RDAs to propose suitable delegations within three months of this proposed new clause coming into force. However, it is not clear to whom the proposals would be made, and there is no apparent requirement for the RDA to delegate functions even if it makes proposals. As I have said, we also have an issue with the definition of the functions themselves.

Thirdly—I find this particularly puzzling, given the resistance of the party opposite to any powers of the Secretary of State—proposed new subsection (6) would give the Secretary of State the power to direct an RDA to make such delegations as may be determined. That would give the Secretary of State more powers over the RDAs, and it would undermine the principle of joint decisions and joint working.

While we are on the subject of uncontained powers, I have concerns about proposed new subsection (9), which seems designed to provide that existing legislation can be modified in any way necessary to give effect to the new power. These are very wide powers, which are unprecedented. They certainly would have been challenged by noble Lords opposite should I have proposed them. I am surprised to see that there is also a wish for the joint working between the RDAs and local authorities to be subject to the RDA's view of the capacity of the local authorities concerned. Under this, the RDAs would be trying to put in place new assessments. I had been under the impression that noble Lords opposite favoured dispensing with inspections of councils.

Finally, there is another contradiction in terms of the way in which the law should be expected to work. Amendment 167, which would apply to Schedule 5, would allow functions that are delegated by RDAs to local authorities to be exercised by the local authorities even if this means that they operate in a way that is not lawful for the RDAs themselves. Again, I think that there is a genuine confusion.

I have enormous respect for the noble Lord opposite, for his intentions and his experience. I hope, certainly in relation to the fatal flaws of the amendment, that he will not press it to a Division this evening.

My Lords, I thank the noble Baroness for her answer and noble Lords on this side of the House for their support. I accept that this is not a perfect amendment. Rather than debating the amendment, we are debating the principle of how the money that the RDAs have can be spent to best effect and the principle that there should be democratic accountability.

In reply to the noble Lord, Lord Smith, I do not know how his RDA works, but the RDA for the eastern region tries to allocate the money reasonably fairly among the constituent authorities—the counties—in that region. Essex would therefore get its share. We are talking about how that money would be spent in Essex. The case that I have described—I hate to keep going back to it—is already a regional priority.

There needs to be further clarity. The noble Baroness has suggested a meeting specifically on this issue but there is also a general principle about whether local authorities will work with RDAs generally to spend the limited sums they have to spend. I shall not press the amendment to a vote now although I know that I have quite a lot of support. However, I hope that there will be some clarity between now and Third Reading. It is a major issue. I do not want to argue with the Government. I want to get value for money out of the limited sums available and involve the local people who know best how that money should be spent. With that, I beg leave to withdraw my amendment.

Some Lords objected to the request for leave to withdraw the amendment, so it was not granted.

Division on Amendment 166.

Contents 33; Not-Contents 69.

Amendment 166 disagreed.

Clause 80 : Sustainable development

Amendment 166A not moved.

Schedule 5 : Regional strategy: amendments

Amendments 167 and 168 not moved.

Consideration on Report adjourned.

House adjourned at 10.03 pm.