Cities and Local Government Devolution Bill [HL] — Second Reading (Continued)

Part of the debate – in the House of Lords at 7:48 pm on 8th June 2015.

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Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice) 7:48 pm, 8th June 2015

My Lords, first, I refer to my local government interests in the register. By my count, we have had nine former council leaders addressing the House today, including the Minister. One of those is the noble Lord, Lord Shipley, and I am sure the House will join me in congratulating him on his new appointment as the Liberal Democrat spokesman on local government. He and I had several years of enjoyable confrontation in the Newcastle City Council chamber when I was leader of the council and he was leader of the opposition. He subsequently served also as leader of the council and had a very distinguished local government career. I imagine that in the noble Lord’s new post, he will not be one of the roughly 60 Liberal Democrat Peers who will no doubt be seeking leave of absence from the House, in accordance with their policy that representation in this House should reflect the percentage of the vote cast in the last election.

That would have a significant effect on the number of Liberal Democrat Peers—but obviously the noble Lord would be immune to his party’s policy in that respect.

My late wife Brenda was none too pleased when, for our summer holiday in Spain in 1969, I took along Maud—that is to say, the Maud report, the first of many such reports which, in the 48 years that I have served as a local councillor, have helped to shape successive reorganisations of local government. From that report’s recommendations were born the metropolitan county councils, which were referred to by the noble Lord, Lord Shipley, established by the Heath Government—no doubt under the influence of the noble Lord, Lord Heseltine—and abolished 12 years later by the Thatcher Government, alongside the Greater London Council, which had of course also been created by a previous Conservative Government. Since then, a variety of reorganisations, both structural and of governance, have followed at fairly regular intervals.

The present Bill needs to be seen in the context of this history, which in many respects cast an ironic light on its proposals and the philosophy which animates them. But let me be clear that I very much welcome moves to devolve decision-making, providing that they are accompanied by a respect for community identities, a needs-based system of local government finance and an effective partnership at local level across the public sector, involving government departments, agencies and the community itself.

It is ironic that some of the functions which feature in the Government’s thinking, and in the Greater Manchester Combined Authority agreement, were among the very same functions exercised by the metropolitan counties—notably, economic development and transport —although it will be recalled that the Thatcher Government eventually forced the sale of local authority-owned and managed bus services, except in London. Even now, the Tyneside Metro is run by Nexus, a local authority body involving the councils currently involved in the North East Combined Authority. Similarly, Newcastle Airport was developed and is still partly owned by local councils—and all this without an elected mayor.

As I reminded the House during the debate on the Queen’s Speech, the Local Government Association conceived the idea of Total Place, under which we had hoped to see much closer working at local level across the public sector to ensure a more integrated and cost-effective deployment of resources, both local and national. The concept was adopted by the Treasury and the Department for Communities and Local Government, but little enthusiasm was evinced, perhaps unsurprisingly, by other departments or agencies, secure in their Whitehall silos. Little progress has been made on that concept in the last five years.

Quite apart from other concerns raised in this debate, I do not believe that even the best intentioned Secretary of State—and I think that Mr Clark probably fits that description—will succeed in overcoming the institutional inertia and narrow vision of departments and their Ministers unless a very serious Minister, as the noble Lord, Lord Prescott, was when he was Deputy Prime Minister, is charged with oversight of the process.

I recall very clearly the meetings that we used to have in local government with the Central-Local Partnership, as it was then called, chaired by the noble Lord and involving other government departments and Ministers. That was a very useful mechanism.

In addition, I repeat my call for the reintroduction of government regional offices, which could help significantly in this and other respects. They would also help to meet the point made in this debate about having a central point of contact between the local authorities in a given area and government itself. It is much easier to do that through a regional office than by having to connect directly or indirectly with Whitehall, and it would apply whatever structures are operating at local level.

One of the major difficulties with the proposals in the Bill is the apparent insistence on the requirement of an elected mayor before significant powers can be granted, without any test of public opinion. The case for elected mayors is much overstated anyway, even from a democratic standpoint. Even in the London mayoral elections, with all their massive attendant media coverage, turnout is not significantly higher than in ordinary local elections. It was 38% in 2012. But there are also concerns about vesting so much power in a single pair of mayoral hands, as many of your Lordships have said, augmented under Clause 3 by the hands of the deputy who he or she appoints, or any “member or officer” he chooses—including, presumably the political adviser whose appointment the Bill prescribes, unless the Secretary of State orders otherwise.

These concerns are, in my submission, substantially augmented by the possible transfer of the police and crime commissioner role, established with such a fanfare by the Government three years ago and treated by the electorate with unparalleled indifference when it came to voting for them at the ballot box. Such a concentration of power in this sensitive area is highly questionable. The very suggestion underlines the concern that many of us share about the degree to which this single individual could be accountable, especially in areas which are not natural entities but which comprise distinctive communities. It is not for me to comment on other areas but, as the person who suggested the formation of the Northern Regional Councils Association, now the Association of North East Councils, in the 1980s, I have some experience of the sensitivities. To progress the idea, I circulated a paper anonymously through the medium of the then leader of Northumberland County Council, knowing that if the idea had been seen to be conceived in Newcastle, other significant councils in the area would be much less likely to support it. This, after all, was the area where the leader of Gateshead Council in the 1960s said of the prospect of local radio being established in Newcastle that nobody in Gateshead would be interested in listening to it.

Happily, such extreme manifestations of tribalism are now much rarer. However, the North East Combined Authority extends from Berwick on the borders to the boundaries of Darlington and Teesside—a distance of approximately 85 miles—and from just east of Carlisle, in the west of the region, to the North Sea coast. It comprises five metropolitan districts and two counties— one of them, as we have heard, led by the very able son of the noble Baroness, Lady Henig—with substantial rural areas. It has a population the size of that of Northern Ireland and two-thirds the size of that of Wales. The notion of accountability vesting in a single pair of hands for such an area is unreal and unacceptable. One wonders whether the siren voice of Nick Boles, who proclaimed that elected mayors were the only route back for the Tories in Manchester, has influenced the Government’s approach, especially in the light of the rejection of the concept in all but one of the cities which, as we have been reminded several times today, were subjected to referendums only three years ago.

There is no reason why the mechanism of combined authorities, backed up by well-resourced scrutiny and the active participation of public sector partners and their private and community sector counterparts in appropriate policy areas, should not operate effectively and accountably. They should have their own audit committee, or public accounts committee, independently chaired. I must say in parenthesis that I regret even more in this context the abolition of the Audit Commission, an egregious act of spite by the former Secretary of State.

Mention of the Audit Commission brings me to the contribution of the noble Lord, Lord Heseltine. It is such a great pleasure to see him in his place today. Neither of us may be too happy to admit it but we go back a long way. Newcastle under my leadership was one of the first councils to be penalised by the Conservative Government, within weeks of the 1979 general election, but that did not prevent our working with that Government when it could benefit the city—notably during the noble Lord’s two terms as Secretary of State for the Environment. On two occasions, I received invitations from him. The first was when he invited me to join the Audit Commission as a member. I declined because I did not think that this was compatible with my position as the then chair of the Association of Metropolitan Authorities. The invitation was useful, however, in helping me rebut charges of profligacy by Conservative members of Newcastle City Council. The second invitation I accepted with, I must confess, some trepidation. It was for dinner in the Tower of London. It was not held in the Beauchamp Tower but it included the noble Lord, Lord Levene, and the late and much lamented Sir Peter Hall. I remember that it was a very useful discussion about local government.

The noble Lord, Lord Heseltine, has of course long had a serious and constructive interest in local government and the problems and potential of our cities in particular. He was, as we have been reminded today, much moved by the plight of Liverpool in the early 1980s. He engaged with the inner-city partnership programme and launched City Challenge in the 1990s. More recently, he produced the seminal report on cities, which again has been mentioned several times today.

There is perhaps one lesson, at least, that we can learn from City Challenge—a programme which, in Newcastle, brought about £30 million to the city in its six-year life—which is that extra one-off resources, although welcome, will never be adequate if at the same time financial support for existing services is cut. The city lost more in grant during that period than we gained from that useful programme, welcome though it was. My noble friend Lady Donaghy made precisely the point that we cannot look at structures and financing without looking at the position not merely of capital investment and the like but of the revenue requirements of authorities, and the degree to which they are fairly funded by government.

This matter of a needs-based local government finance system is critical if the Government’s proclaimed aspirations are to be realised. I repeat that devolving tax- raising powers of itself is insufficient, given the variability, and vulnerability, of the local tax base. By all means devolve those powers, but recognise that there is still a need, in addition to the fiscal devolution—to which a number of Members have referred, including in particular the noble Lord, Lord Shipley—to have ample financial resources available. Fiscal devolution, like patriotism of itself, is not enough. I was very taken with the suggestion from the noble Baroness, Lady Wheatcroft, about municipal bonds, an idea that has been floated from time to time. No Government have yet reacted positively, but it is time to reconsider that, particularly in the context of strategic authorities, whatever their precise mode of government may be.

I conclude by joining others in urging the Government not to make a fetish of the mayoral system as a condition of empowering and working in partnership with combined authorities, or with other authorities and groups of authorities, because we are not, as the Minister made clear earlier, just talking about combined authorities. There may be opportunities in particular for counties and others to have some form of involvement with the provisions of the Bill. At the very least, any structures should be backed by public support and secured by argument and debate, and not by the threat of withholding much-needed investment and the advantages of joint working. With that qualification, I and the Opposition welcome the Bill. We will seek to try and improve it and we look forward to local government and government together being able to go forward in a mutually respectful partnership which enhances and retains local accountability in a system in which, as I say, on the financial side in particular, the whole basis is one of need.