Cities and Local Government Devolution Bill [HL] — Committee (1st Day)

– in the House of Lords at 3:01 pm on 22nd June 2015.

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Relevant document: 1st Report from the Delegated Powers Committee

Amendment 1

Moved by Lord McKenzie of Luton

1: Before Clause 1, insert the following new Clause—

“Devolution: report

Within three months of the passing of this Act, the Secretary of State must lay a report before both Houses of Parliament setting out a strategy to ensure that the devolution opportunities provided for in this Act are effectively available to all parts of England, including rural and coastal areas.”

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government) 3:08 pm, 22nd June 2015

My Lords, Amendment 1 is in my name and that of my noble friend Lord Beecham. I am also pleased to see that it has the support of the noble Lords, Lord Shipley and Lord Teverson. I will also speak to Amendment 2.

Amendment 1 calls for the Secretary of State to report to Parliament on a strategy to secure the implementation of the devolution opportunities provided for in this legislation and to ensure that it is effectively available to all parts of England, including rural and coastal areas.

I start by making it clear that we support devolution and have a strong track record to prove it. In government, we delivered the Scotland Act and the Government of Wales Act. Indeed, had things worked out somewhat differently in May, we would now be working on an English devolution Act. We want this Bill to succeed in helping to reverse a century of centralisation, although we have some reservations about how far and how fast this Government seek to go in practice. Too many decisions affecting local communities are made in Westminster, so people do not have enough influence on things that matter to them, from getting the right skills training and setting local bus routes to supporting local business. We are signed up to the potential benefits of devolution and the positive benefits it can bring for growth, more efficient services and the greater empowerment of local communities.

We recognise that devolution is not one size fits all. Different parts of the country may want different configurations of functions over different timescales. However, we are clear that devolution should not be limited to just some of our great northern cities—the city regions or metros—important though they are with the spur they can give to growth. We want to devolve powers to towns, smaller cities and counties, too. We want the Bill to be as relevant to Cornwall, Norwich, Bristol and south-east England councils—there is a southern powerhouse there, too—as it is to West Yorkshire, the east Midlands and Leicester.

As we all recognise, this is a framework Bill written in very broad terms. Indeed, the Delegated Powers Committee says it is too broad—we will perhaps return to that point on Wednesday. The Bill could enable the transfer of a whole range of unspecified local authority and public body functions to differing combined authorities, including mayoral authorities, over unspecified timescales with unspecified funding arrangements.

To the extent that the Bill builds on existing legislation, particularly the 2009 Act, there is of course an established process for the creation of combined authorities, but changes resulting from Clause 10 are much less clear in terms of process. It is accepted that ultimately any devolution deal must involve the agreement of participating authorities but when the Chancellor of the Exchequer comes visiting with the cheque book, we do not know how much of the negotiation will be a take-it-or-leave-it deal.

As it stands, there is a considerable lack of transparency in how the opportunities provided by this legislation are to be taken forward, or indeed how wide or narrow those opportunities are—hence the need to spell out the strategy for its implementation. It seems as though the process will continue like the city deals, with bespoke deals settled behind closed doors and with key powers resting with the Secretary of State. Key judgments of the Secretary of State about whether the effectiveness and efficiency of functions are improved will not, it seems, be subject to appeal. There is no timescale within which proposals for combined authorities must be considered and no indication of the order in which they will be considered. We know that the process of city deals tested the capacity of government departments, yet we have seen no impact assessment of how the implementation of the Bill might affect them in terms of their capacity to cope and their operating with the consequences of devolved functions and budgets.

Of course, much depends upon local authorities coming forward with proposals and upon the quality of the proposals, but what assessment has been made of the numbers of deals that the Government can handle in any one year and at any one time? What is their expectation in this regard? What is the plan to actively encourage authorities to bring forward devolution proposals, to share good practice and to build capacity? Will the Government publish guidance on how local authorities may bid for new powers and responsibilities and the criteria which will be taken into account when dealing with these applications? How will they prioritise which proposals they will work on first? Do they have a current work plan and, if so, which authorities are involved?

We know from the arrangement with Greater Manchester the scope of powers and responsibilities which the Government are potentially prepared to devolve and the funding streams which they will consider transferring. Can the Minister tell us whether they are to go further in any respect? What proposals, if any, are there for further fiscal devolution? What is the total funding that the Government expect or are prepared to devolve over the course of this Parliament?

At present, there are concerns that the process is being led by the Chancellor of the Exchequer, choosing which authorities to engage with and encourage. If that is the case, how does it fit into an overall strategy which genuinely opens up these opportunities to all authorities? Will the Minister tell us who is actually leading on this for the Government? The need to have a clear strategy is obvious. The offer to have conversations with those who show an interest may be a start but it is not good enough.

Amendment 2 sits alongside this and calls for an annual report about devolution for all areas within England undertaken pursuant to the Act. It calls for it to laid “as soon as practicable” each year, although it might reasonably be argued that there should be a little space for the first report. If comprehensive devolution is to be effective, we would expect to see a multiplicity of arrangements under way, not just one standard model. The notion of an annual report is not to constrain the process with lots of bureaucracy; there is a strong case, surely, for Parliament being regularly informed about how the wide scope which the Bill enables is actually being used. Are the Government delivering on the strategy?

The amendment is not prescriptive but the report should obviously itemise the local authorities and combined authorities with which devolution deals have been entered into and the broad shape of powers and budgets that are transferred, as well as what is in the pipeline. It should also deal with outcomes over time—how the devolution deals are impacting on growth, on services and on helping the public finances, and, crucially, whether fair funding is in operation to ensure that devolution is not accompanied by impoverishment. Such a report would clearly also have to be an indicator of the progress of the expressed policy of the Government that devolution deals should be available to counties and to rural as well as metropolitan areas. Accordingly, it should report on the orders and procedures arising from the Secretary of State’s decisions and requests for orders received from authorities, combined or otherwise. I beg to move.

Photo of Lord Shipley Lord Shipley Liberal Democrat Lords Spokesperson (Communities, Decentralisation and the Northern Powerhouse) 3:15 pm, 22nd June 2015

My Lords, I support Amendments 1 and 2: indeed, my name has been attached to them on the Marshalled List. I declare at the outset my vice-presidency of the Local Government Association.

I made a number of very positive comments about the importance of devolution into England from Whitehall when we discussed the Bill at Second Reading. It remains an aim that we share with the Government. The amendments we have tabled for today and for the next two days in Committee are meant to improve the Bill and make it stronger.

These are two important amendments. As the noble Lord, Lord McKenzie, said, this is an enabling Bill. Therefore, it is important that it can enable and is not so restrictive that it prevents good proposals from local areas being approved because they do not fulfil over-strict criteria set out in the Bill.

The Bill needs to be able to meet the needs of areas as diverse as metropolitan areas, smaller cities and towns, rural areas and coastal areas. I said at Second Reading that one size could not fit all, so it matters that there is enough room for manoeuvre within the Bill to permit different sets of proposals to succeed. To this end, Amendment 1 would require the Secretary of State to lay a report to explain within three months how it is proposed to meet the diverse needs of all parts of England, and that is welcome. Amendment 2 would enable Parliament to review the success of the Act on an annual basis. It would enable us to learn how effective the Act was in enabling non-metropolitan areas, for example, to secure devolved powers and responsibilities.

I hope that the Minister will feel that these two amendments add to the Bill rather than detract from it, and that therefore they can be supported. From discussions that are going on outside the House, it is clear that guidance is required by local authorities and others on how councils can request new powers and responsibilities. Criteria need to be clearly stated—both the terms of devolution and the process by which it can be achieved.

I conclude by raising issues that have been brought to our attention by the Delegated Powers and Regulatory Reform Committee. It has given us a number of extremely important comments and it would be helpful to the Committee to know whether the Minister plans to bring forward amendments on Report to reflect those comments. I draw the Committee’s attention to three of them. One is in paragraph 10, which is very important in its context, in that it comments on the very wide powers to define the scope of functions that may be conferred on a combined authority and how they might be used. The committee points out, secondly, that there is no requirement in the Bill for anyone other than local authorities to be consulted on the effect of changes in the location of functions. I draw to the Committee’s attention, in particular, business organisations, which clearly would have an important stake in the decisions that were made. The third point is in the area of overview and scrutiny—the power to define membership and who, in particular, is to be chair. It is very important that we follow the affirmative procedure here, and we have tabled a number of amendments that we hope will assist in meeting the concerns expressed by the Delegated Powers and Regulatory Reform Committee.

That is all that I want to say at this stage of the debate but I hope that the Minister will feel in a position to agree that Amendments 1 and 2 enhance rather than detract from the Bill.

Photo of Lord Heseltine Lord Heseltine Conservative

My Lords, the one clear message from the two speeches that we have heard so far is the unanimous view that the direction of travel from central government back to local people is welcomed on all sides of the House. In the view of many of us, it is long overdue and much to be welcomed.

I have the privilege of acting as a special adviser to the Secretary of State for Communities and Local Government and, in that capacity, perhaps I see something of the response to the Government’s proposals in a way that persuades me that the questions asked by the two noble Lords are not pressing in the need to amend the legislation, because in the wide community affected by the Bill they already know the answers to the questions that are being posed.

The most important question, which the noble Lord, Lord McKenzie, raised, was about the generality of the application of this legislation throughout the whole of England. There is not the slightest doubt in any local authority—or business community—of which I have any knowledge that the door is open for all of them. Indeed, not only do they know, but I cannot remember a period in which there was such intense activity at every local level in the form of meetings, discussions, plans and ideas to prepare them to take advantage of this new opportunity. Without naming names, self-evidently the trail has been blazed by Manchester which, let us be frank, has been working on these ideas for decades. There are unitary counties in a very different part of England which are equally apprised of the opportunity. We can understand that the questions are not only being asked but answers are being positively sought. I would be very surprised if, over the course of the discussion and debate on this legislation, we do not see significant suggestions coming forward from local people about how to take advantage of the opportunities.

The second point that both noble Lords made reflects the diversity of opportunity from different parts of the English political scene. The fact that both noble Lords recognised this point clearly argues against the proposals that they wish to inject into the legislation. It is precisely because there are such different features that, were the Secretary of State to produce a strategy, it would either be so general as to have no real meaning or, in practice, it would be so prescriptive that it would prevent the very devolution that the House is trying to achieve. I listened to the noble Lord, Lord Shipley. He has a clear understanding of how these matters work, but if you ask for an impact study by a government department about how the devolution would work, what is that department going to do? It is going to do what government departments always do: it will lay out all the complexities which the department wants to see answered in a way that prescribes the solutions that Members of this House are unanimous in wishing to see emerge from the locality. The more you ask central government to set the pace, the more prescriptive you will become. I see many noble Lords who have spent their life in local government. We have been around this track before. We have been around it decade after decade, and the more you ask central government departments what they think, the more detailed the answers will be, and that is precisely what we do not want. What we want is to say to the communities that make up England, “You know best how you could administer the framework of local decision-making, you know the strengths and weaknesses that make up your community, and it is therefore for you to address the diversity and complexity in putting forward your proposals”.

My reading of the situation is that there are not clear answers in many cases. There are not clear answers about the boundaries of these areas, which is one of the reasons why we have overlapping boundaries for the LEPs. There are not clear answers about whether an authority should be committed to one unit or another or whether it could be associated with more than one. In making progress, the Government are right to say we should wait until we have the local plans before us before we try to model those plans into what conforms to central departmental thinking.

This is a new concept. Noble Lords will know all too well that we have told local authorities and imposed upon them every manner of solution over decades, and many of us have played a part in trying to achieve just that. This is a new approach. In a sense, if you are to trust people with responsibility, you have to trust them with the opportunity to make mistakes—that goes with the new freedoms we are talking about. Therefore, I hope that noble Lords in this House will not seek to be prescriptive from the very start, because that would frustrate the very purpose for which this legislation is designed.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour 3:30 pm, 22nd June 2015

My Lords, I was not sure whether to speak on this first group of amendments or on the second. However, the comments of the noble Lord, Lord Heseltine, have encouraged me to speak on this amendment. I agreed with everything he said, apart from his conclusion that the reports are not necessary. The point of this amendment, as I understand it, is to open up the debate and the issue about the variety and possibility of many forms of devolution, and I am sure that in that respect we are on the same side as the noble Lord, Lord Heseltine. However, there are problems, and it would be very helpful if, as early as possible, we could get a steer from the Secretary of State and his Minister in this House as to the Government’s thinking.

Mid-sized cities outside the north are driving economic growth, but many face barriers to their full potential. They may have tight boundaries, as the noble Lord, Lord Heseltine, said; they may have rural neighbours; and they may also be shire districts without the full range of unitary powers. My local authority, Norwich, has artificially tight boundaries of 137,000 people within a built-up area of 270,000 people, and services

1 million people for professional services, shopping, administration and leisure. Boundary extension has naturally been resisted by our rural neighbours, who enjoy our services and a lower council tax, but who gain from the overspill business development generated by the city but located outside it because of those boundaries. Partnership arrangements, such as the city deal based on the greater Norwich area, are and have been our way forward.

So devolution, as all your Lordships have said, will differ not only within and among the north but among mid-sized cities. The unitaries—Southampton and Portsmouth, Bristol and Plymouth, and Luton—have far greater powers and resources than cities such as Cambridge, Oxford, Exeter, and Norwich, which are trapped in two-tier shire structures. So the Secretary of State and the noble Lord, Lord Heseltine, are both absolutely right to want bottom-up proposals that will fit the needs, potential and geography of our inconveniently untidy country. Combined authorities will make sense for most of us, but with whom we will combine—with other towns and cities, adjacent rural districts, and perhaps with a chunk of county involvement as well—and with what additional powers, responsibilities and finance, will all vary from place to place, and rightly so.

I do not doubt—again, as the noble Lord, Lord Heseltine, said—that the Treasury may try to tidy it all up, indulge its obsession with size, and seek in the long term to superimpose unitary, uniform shire counties or some such at some point, much as the Colonial Office parcelled up Africa along tidy lines after the First World War, with disastrous effects. I hope that the Secretary of State will ask—we certainly will—for a more respectful attitude to the history and identity of our country if that is the Treasury’s future route.

However, as many of us in the House will remember, we have been here before. Before 1974 I served in a very different local government. Norfolk stretches some 70 miles from Great Yarmouth to Wisbech, and 50 miles from Cromer south to Diss, and in Norfolk then we had a unitary county borough—Norwich—the boroughs of Great Yarmouth, Kings Lynn and Thetford, and urban and rural district councils, as well as parishes. Although each tier had certain statutory responsibilities and powers, partnership between the two counties, the county of Norfolk and the county borough, founded the University of East Anglia, and Norfolk bought into Norwich’s international airport and its FE college. Education, however, was devolved to one large borough, Great Yarmouth, and agency powers were devolved to other boroughs—other UDCs—reflecting local knowledge of what worked best.

Function, in other words, was shared, bought, devolved, delegated or delivered according to the individual service, local geography and the wishes of local people. It worked well. Large swathes of our services were better then than now. With more powers, we focused on city needs and our business rates were reinvested in our local economy. Of course it was untidy and offended Whitehall—but then Norfolk is and sometimes does. It was local, it was government—and every reorganisation since has made local government less local and less government, so we have bigger and bigger authorities but with the authority to do less and less.

I am not suggesting that we return to the pre-1974 patchwork; this is not meant to be an exercise in nostalgia but to show that patterns of partnered, combined, devolved and delegated arrangements have a long history and can be a flexible, sensible and well-tested response to our varying geography. We want and need devolution that fits our sense of place.

Can the Minister say how devolution might work now in two-tier shire authorities such as Norwich, Cambridge, Exeter and many others? We have in place a city deal, delivered for example through the Greater Norwich area partnership, bringing together Norwich, its two adjacent districts which share in the gain from our economic growth, and the county council. Norwich already pools its community infrastructure levy receipts to help fund economic investment in the Greater Norwich area. Cambridge City, I understand, similarly partners South Cambs and Cambridge County Council. Exeter, I learnt today, is working with East Devon and Teignbridge district councils towards a combined authority or possibly an economic prosperity board.

What might work for us are combined authorities—as we are not unitaries—within larger combined authorities: not a hierarchy with big authorities supervising smaller ones, but concentric rings of combined partnerships, with a recognition that different services need different geographic scale and therefore a different combination of authorities. We do not want to overlap. We want to pool and to work in partnership. In my patch there could be three combined authorities: an inner ring with the combined authority of the Greater Norwich area could nest within a wider combined authority of the county—and that, in turn, would be part of an East Anglian combined authority of Norfolk, Suffolk and Cambridge.

The smallest combined authority of the partnership would handle economic development, housing and local transport, with one team advising the joint programmes of the four authorities, building on city deals. The Norfolk-wide combined authority would look at transport links with Cambridge or the A47 route to the Midlands, or at health and its interface with social care, or education, skills and training and so on. The three counties as a combined authority would become an expanded LEP—local economic partnership—where business especially is strongly represented. Like the former East Anglia Economic Planning Council on which I sat, it could shape our strategic regional choices.

In health, for example, every county needs its district general hospital but only one regional burns centre—a regional decision. When Aviva in the last few months was determining its UK future, it worked not with the combined authority or the county of Norfolk but with the LEP. It chose that level of strategic responsibility. Added into the LEP could be blue-light services and digital infrastructure—and I would like to see integrated into that regional structure more democratic accountability of our regional quangos. There would be a combined authority around a mid-tier city, within a combined, wider county partnership, which in turn would form a combined regional authority. That would work for us, combining both local and strategic initiatives and value for money.

I conclude with some questions—and they are not rhetorical. Does the Secretary of State agree—indeed, does the Minister agree—that the clustering of specialist knowledge and skills in mid-sized cities is vital for our economic growth? If so, will he accept those mid-sized cities, as in these amendments, need devolved economic powers and associated budgets for business support, employment and housing and transport connectivity? Would he agree that this requires fiscal powers, devolved skills money, retained business rates, power to CPO land and grant ourselves planning consent so that the gain from that land is further reinvested in economic growth and not privately appropriated, transport money to enhance site development, and wider planning powers?

More specifically, would he consider allowing such combined authorities to have urban development corporation powers—new town powers, if you like—allowing us those additional powers to acquire land and finance development? If he would, and given that quite a number of mid-sized cities on which economic regeneration in this country will depend are not unitary, would he therefore consider new models of combined authorities, including combined authorities within combined authorities in concentric rings? At the very least, would he support pilot schemes that build on our existing collaborative models? Would he welcome proposals from us to that effect?

We really want to work with the Secretary of State and I hope and believe that he wants to work with us—he has shown every sign of wishing to do so. Our local Norfolk maxim is, “Do different”. I paraphrase that as “Making a real difference”. We really could transform life chances as we work in partnership to promote the economic growth that our city, county and country need. I hope that the noble Baroness will move this agenda forward on our behalf.

Photo of Lord Maxton Lord Maxton Labour

My Lords, I rise to speak very reluctantly, because I live in Scotland, not down here, and therefore the local authorities that I am concerned with are those in Scotland. But I think that there are lessons to be learned, not for this Bill, oddly enough, but for Scotland from this Bill and the amendments that we have tabled. The fact is that what we have in Scotland, where the first example of devolution arguably began, is a centralisation of power in Edinburgh rather than the genuine devolution of power downwards from the Scottish Parliament. That is something that we have to be very wary of. We have seen one police force for the whole of Scotland, one fire service for the whole of Scotland and one ambulance service for the whole of Scotland. We have also, however, seen local authorities curtailed because they have little or no control of their own finances. As somebody said to me very authoritatively, Glasgow and South Lanarkshire, where I live, are having problems finding the money to buy jotters for school kids next year because local authorities have been so hidebound in the money that they have available to spend.

As I said, I am reluctant to speak on this, but it is a very strange anomaly that a Conservative Government are introducing a Bill that extends democracy in England, whereas a so-called left-wing Government in Scotland are curtailing consistently the powers and democracy in that country.

Photo of Lord Bichard Lord Bichard Deputy Chairman of Committees

My Lords, I had not intended to speak in this debate but am encouraged to do so by the contribution from the noble Lord, Lord Heseltine, because I agree with it.

If you give my former colleagues in Whitehall and their political masters an opportunity to be more specific, they will do so by being more prescriptive and will constrain—we should avoid that. However, my former colleagues are a touch cleverer than that, as the noble Lord, Lord Heseltine, and I well know, because they will also be looking to win back some of the powers that they are in danger of losing by including in other legislation greater constraints and more prescriptive requirements. If I look at some of the draft legislation that is about to make its way through this House, I can see evidence of that already happening. I am concerned about that, partly because I have not seen, over the last 20 or 30 years, that the Department for Communities and Local Government—or for the environment, or whatever it has been called—has been very good at ensuring that, in other parts of government, devolution happens. I fear that on this occasion, too, that will be the case and we will debate this Bill at great length, but other Bills and other parts of government will seek to prevent real devolution from happening.

If we are going to monitor what is happening on devolution, let us do it not only in respect of this Bill but across the legislative piece. Let us ask those questions about every Bill that comes to this House. We were talking earlier in Questions about having a family test. Let us start thinking about having a devolution test, which we apply to every single piece of legislation that comes before the House.

Photo of Lord Liddle Lord Liddle Labour 3:45 pm, 22nd June 2015

My Lords, I support the amendment and I am a strong supporter of the Bill: I believe in the thrust of this measure. The Secretary of State, Greg Clark, ably assisted by his special adviser the noble Lord, Lord Heseltine, have a unique opportunity to establish the consensus that we need much more devolution in England, and we have the means through this Bill to enable it to happen in the flexible way that is necessary.

However, in supporting the amendment—the main thrust of which, as I read it, is to say, “Don’t just focus on the big cities but focus on the whole of England”— I make two points that relate to interests that I should declare. I am pro-chancellor of Lancaster University and a member of Cumbria County Council. I will deal with my points on the basis of my interests, which might be the simplest way.

Lancaster University scores very highly in the ratings of the top 10 universities in many of the league tables, as do other universities in the north such as York and Durham. But there is an issue about whether the focus on cities and universities as a source of economic regeneration, which they undoubtedly are, will disadvantage some of the excellent universities we have in the north in favour of the big metropolitan institutions in Liverpool, Manchester and Leeds. That is a real concern. For instance, the catapult centres, which Vince Cable sponsored when he was Secretary of State for trade and industry, tend to be based in the big city universities, so there is an issue. I am sure there is no intention to discriminate against the universities that are not in the big cities, but there is an issue that needs to be addressed.

My second point concerns Cumbria. Cumbria is a complex county of only 500,000 people, and has a two-tier local government structure. My noble friend Lady Hollis is nodding vigorously, but she may not agree with what I am about to say. There is no obvious city driver in the whole of Cumbria. My home town of Carlisle was a great county borough, and I remember being terribly upset when the county boroughs were abolished in the 1970s, but as a city of some 70,000 people, it is too small to build a city region around. The other main population centre is Barrow-in-Furness, right at the other end of the county. The economic geography of Cumbria is very diverse, with a strong tourism industry in the east of the county and the home of the British nuclear industry in the west, in and around Barrow in what used to be called West Cumberland. It is a question of how to bring these two diverse interests together.

A strong case can be made on efficiency grounds for the creation of a unitary council for Cumbria, or possibly two unitary councils, one for the south and one for the north. This is what the county council thinks, but I am afraid to say that so far we have not been able to establish a consensus on it with our district colleagues. This is quite a major issue because in terms of economic development it is very difficult when basically all the planning powers rest with the district councils, not with the main strategic authority. There is also a huge cost issue. We all know that large savings will have to be made in local government over the next few years. Cumbria estimates that it will have to cut around £80 million from a budget of approximately £500 million. If we had a unitary council, experts have estimated that a quarter to a third of those savings could be achieved through streamlining local government—that is, getting rid of the duplication of chief officers and reducing the number of councillors. Cumbria, with its population of half a million, has more than 350 county and district councillors. That is not a sensible model, and we have to find a way of bringing together these diverse interests.

One way that would not be good for bringing them together—it is in fact a polarising move—would be to impose an elected mayor on the county. An elected mayor would inevitably result in one part of the county, the rural or the industrial part, feeling that it was unrepresented. We must have a more consensual form of governance in such a diverse area.

I turn to the need for better health services because in NHS terms, Cumbria is one of the three real crisis areas. The Government, through the initiative of Simon Stevens, are putting in a team from on high in the NHS to try and sort out the difficulties there. But that necessary reconfiguration of health services in the county will not work without a very close partnership with and integration of social care. We need a new structure to deal with the new challenges.

My view is that while, yes, the Bill represents a great opportunity, and yes, Cumbria should seize it, if we find that there are vested interests in local government that will not come together to actually sort the area out, there is a responsibility on central government of some sort to look at what can be done. I agree completely with the noble Lord, Lord Heseltine, when he says that if you ask Whitehall to do things you get uniform solutions. His experience is vast, but this is how things have gone in my experience as well. I will be proposing an amendment to Clause 10 when the time comes, but we need to see whether we can resolve this issue. For counties such as my own, we need decisive action to sort out what is at present a really messy situation.

Photo of Lord Scriven Lord Scriven Liberal Democrat

My Lords, first, I apologise to the House for not speaking at Second Reading. I was unable to get here for the start of the debate, but I have listened to the speeches so far on this amendment. I kind of want to change the perception of looking at this purely through the prism of Whitehall. As a council leader and someone who started the city deal in Sheffield during my time as leader of Sheffield City Council, I know what it is like to deal with Whitehall and civil servants. Believe me, no matter how wide or broad the legislation or the aims and aspirations of Ministers in Whitehall, civil servants have a knack of closing you in. I saw that in city deals and I also saw it when I was helping rural councils in Staffordshire on their city deals. Civil servants started with a broad aim for what that city deal was about and narrowed it to one or two issues. There is always the hand, or the steel fist, of Whitehall trying to dictate what happens.

That is why I support the amendment. The amendment makes it a categorical principle of the legislation, and of the enabling legislation, that all parts of England should be able to take up such powers. Based on my experience at the sharp end as a leader of a council and negotiating with Whitehall, I can foresee what will happen if this is not written in as a principle: rural areas will be forced to coalesce around cities. Most Ministers talking about devolution talk about the metro cities, not even just the big cities. It is a really important principle that the freedom and the opportunities will be available to all areas in England. If that is so, there is nothing wrong with the amendment prescribing that. It will not stop anything but it would make it clear that civil servants have an obligation through this Bill to make sure that all areas of England have that right.

I have seen from the other side that whatever the intentions of Ministers, or of the Bill, unless this is written into the Bill rural and coastal areas will be forced to go with large cities. In certain areas, some people may wish to do that and may win, but in other areas it would be completely inappropriate. I see nothing that would stop or restrict in the amendment; it is just a matter of principle that will make sure that if I were an elector, a business, a councillor or council leader in a rural or coastal area, my rights would be enshrined and protected rather than trampled on by the heavy feet of certain civil servants.

Photo of Lord Grocott Lord Grocott Labour 4:00 pm, 22nd June 2015

My Lords, this is a brand new Bill, starting in this House and in its first day of Committee. Pretty well everyone in the House will recognise that the arguments and points that have been made so far are very old arguments from discussions that have been had in local government and related matters for as long as any one of us in this House has been involved in such matters. That is not to be disparaging at all, because they are extremely difficult questions about local authorities’ powers and boundaries, and about the balance between central and local government. There will never be a neat, easy solution to these issues, and to that extent I very much agree with what the noble Lord, Lord Heseltine, said: we cannot be too prescriptive.

My two noble friends seem to have been arguing in diametrically opposed directions, although I am sure they will find a way to finesse those arguments. I have more sympathy with the view of my noble friend Lady Hollis. I am not sure that I would want to see concentric circles, but I can certainly see the case for a focus on a city region with substantial powers. The other view from my noble friend Lord Liddle was more of a wider, unitary local authority. The scope for discussion in Committee will be pretty wide-ranging.

I am here to make a very simple point at this stage. I broadly support the Bill’s intentions, as everyone else who has spoken does, but the odd thing about it is that although it is in many respects very generous to local communities in devising and determining their own proposals for what form devolution should take, the one respect in which it is extremely prescriptive and in no way allows any local diversity or difference in circumstance whatever is in the first phrase of the Bill’s title: that whether you like it or not, mate, you will have a directly elected mayor. Surely there is a choice to be made here. I make no bones about it and it is an argument that I will develop at the appropriate point. I do not like the idea of directly elected mayors. I am happy to say that whenever the people of Britain have been asked to express their views on these matters in local referendums, they have been more inclined towards my view than that of those who wish to prescribe directly elected mayors.

I put this simple question to the Minister: why, for most of the contents of the Bill, is there is an acknowledgement—entirely in line with what most speakers, but in particular the noble Lord, Lord Heseltine, have said—that different circumstances apply in different parts of the country and that you will never quite be able to determine from Whitehall precisely what form devolution should take, except in this crucial respect? I am not randomly picking out one particular aspect; the Bill is largely about providing for directly elected mayors. It is the first part of the Bill; it is there in the title. Why on earth can there not be a lack of prescription in this area, particularly in view of the repeated expression of view from people, when they are asked, that they are not at all keen on this form of local government?

Photo of Lord Woolmer of Leeds Lord Woolmer of Leeds Labour

My Lords, I, too, welcome the Bill. I listened with great interest in particular to my noble friend Lady Hollis about concentric circles. The Bill is prescriptive in some important respects. It refers very early on to “a combined authority” and a mayor of a combined authority, which appears not to allow for a more complex arrangement of functions between local authorities that might wish to be part of more than one combined authority. That appears to be inconsistent, first, with the Bill and, secondly, with having a mayor of a combined authority. Those are matters that no doubt we will turn to again later on.

I wish to comment briefly on the position in Yorkshire with regard to rural and coastal areas and the complexity of the arrangements. A noble Lord is present who is a former leader of Sheffield City Council. I am sure that he will contribute during the Bill’s passage. There is a very strong case for making the two conurbations of South Yorkshire and West Yorkshire into a combined authority, leaving North Yorkshire, the East Riding and Hull Humber to decide separately what they want to do. There is a case for the two metropolitan areas of West Yorkshire and South Yorkshire to combine together to rival the strength of Greater Manchester.

Of course, the truth is that in Yorkshire, as in many parts of the country, the strength certainly of West Yorkshire is that it has North Yorkshire to its north and South Yorkshire to its south. Without them it would be a much diminished conurbation. Therefore, of enormous importance to the future development of West and South Yorkshire are the arrangements for North Yorkshire, East Riding and Hull. It would be enormously damaging to the Yorkshire region if North Yorkshire, East Riding and Hull did not have strong combined-authority or local-authority powers—many of the powers that the conurbations seek.

There is an understandable temptation for rural areas such as North Yorkshire to want to remain independent, but noble Lords may be surprised to hear that there is a lot of discussion in North Yorkshire about the merits of coming much closer to West Yorkshire, East Riding and Hull. One of my concerns about the Bill is that the understandable haste to have mayors alongside these strengthened devolved authorities will make more difficult the gradual bringing together of parts of Yorkshire. Once you have a mayor of South Yorkshire and a mayor of West Yorkshire, they are not likely to want to go in with North Yorkshire. If North Yorkshire had a mayor, it would be much more reluctant to give that up and combine with West Yorkshire. Therefore, in our later discussions on the Bill I will counsel that there is a disconnection between granting more, genuine devolution to parts of our local areas and necessarily divorcing that for a while from mayoralties, not because mayoralties will not come about but because once you establish a combined authority with a mayor it will make bringing authorities closer together all the more difficult. It will depend on working together, not being part of a community together.

My view from the conurbation of Leeds and West Yorkshire is to recognise wholeheartedly the importance of strong devolution in our rural and coastal areas, but Yorkshire without its coastline or its dales and moors would be greatly belittled. I would like to feel that the Bill will enable all parts of my region to be strengthened and even, although this will probably strike terror into the hearts of people at the Treasury, offer the possibility of moving towards a Yorkshire region, because that makes enormous sense. If we can countenance, as we have, a semi-independent Scotland, why should we resist a strong Yorkshire? Just because regional devolution was originally a Labour idea and got kicked into touch, I hope that it will not necessarily be kicked into touch on ideological grounds. There would be an enormous amount to be said if it was. To secure that would require statesmanship and long-term strategic thinking but would result in a devolution to that part of England that would, in my view, be greatly welcomed in large parts of that great county but would also lead to a viable, vibrant and strong economic and social community.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I thank all noble Lords for the points they have made, particularly my noble friend Lord Heseltine, who appears to have answered most of them right at the beginning.

Amendments 1 and 2 would insert two new clauses placing statutory duties on the Secretary of State to provide reports to Parliament setting out his strategy for ensuring devolution opportunities are available across England, and annual progress updates. I agree that there are merits in the Government being clear about what the devolution offer is to all areas and about future devolution agreements between local areas and the Government following local areas developing their proposals.

We have set out, not least at Second Reading, our broad strategy for devolution in England. Our intention is to ensure that there are devolution opportunities available to all parts of England, including rural and coastal areas, counties, towns and, indeed, cities. Many noble Lords have alluded to this. We also want to ensure—and I can give noble Lords this commitment—that no one place will be prioritised over another. Rural, city, coastal—we want to hear from all areas with their proposals. We want to hear from Norwich just as much as Nottingham, and we want them to tell us how it might work. We are not going to prescribe. I should have perhaps asked between Second Reading and now whether noble Lords who are making suggestions about certain areas speak for those areas—I do not know, and I am not assuming anything—but we want to hear from those areas about how they see devolution working. I cannot stress that enough, really.

As some noble Lords have said, some of the existing city regions include large rural and coastal communities; for example, as the noble Lord, Lord Scriven, said, the Sheffield city region has rural communities within and around it, including the Peak District; and the North East Combined Authority includes Northumberland. The noble Lord, Lord Scriven, also made a point about areas being forced into hooking on to other areas. The Bill does not force anybody to do anything; it enables areas to do what their ambitions are. We have been clear that our approach is for areas to come forward with proposals that address their specific issues and opportunities. The noble Baroness, Lady Hollis, mentioned business clustering, which is vital for growth. Clustering is what leads to growth and supply chain enablement. The Bill is enabling legislation which will provide the legislative framework to give effect to the different aspects of devolution deals—and they are different—and we are listening carefully to debates on the Bill to ensure that it does this.

Turning back to the specific amendments, I agree that it is important that Parliament should be able to question and hold the Government to account, both on their pursuit of devolution and decentralisation and on the progress being made in those areas that have agreed devolution deals. There are already mechanisms, such as Parliamentary Questions and debates, by which Parliament can ask Ministers to account for anything within their remit. These are opportunities that both noble Lords and Members of the other place rightly take regularly.

I was asked about our response to the Delegated Powers and Regulatory Reform Committee. We intend to respond in full before the end of Committee stage. But as that committee recognised, the Bill is an enabling Bill providing the primary legislative framework needed to deliver the Government’s manifesto commitments in full. It also made a point about ensuring that the overview of scrutiny—something which I know that the noble Lord, Lord Shipley, is keen on—is effective, independent from any majority group on a combined authority and transparent. The Bill provides powers for us to make provision about all these matters and we are very interested in hearing views from all concerned about how the scrutiny could be as effective as possible.

On the devolution deals, the secondary legislation to complement each deal will be scrutinised through the affirmative process by both Houses and approved by them. This process involves an Explanatory Memorandum describing the deal in some detail being laid before Parliament. A process for evaluating the progress on deals will be discussed with each area on a case-by-case basis. For example, as part of the devolution deal in Greater Manchester, there will be a requirement to put in place an extensive programme of evaluation agreed by the Treasury. I am very pleased to see the noble Lord, Lord Smith of Leigh, in his place and I am sure that he will contradict me if I say anything wrong about Greater Manchester. Those evaluations will be public documents, available to all Members of the House, as well as to those with an interest in the area and the progress it is making. Accordingly, I do not believe that it is necessary to place statutory duties as sought by these amendments on the Secretary of State to report to Parliament on these matters. This would be a duplication of a well-tried process.

Let me turn to other points made by noble Lords. The noble Lord, Lord McKenzie, asked who is leading on the deals across government. The Secretary of State for Communities, the right honourable Greg Clark, and the Chancellor of the Exchequer are working closely together to discuss deals with areas and Ministers—including myself—have met interested councils. On the question of capacity, this has been progressed with support from the Department for Business, Innovation and Skills, building on the progress made on devolution in the last Parliament.

The noble Lord, Lord McKenzie, also asked what bids we are receiving. We do not see these devolutionary requests as bids but as a two-way process between government and groups of local authorities. It is important to make it clear at this stage that it is not a bidding process and therefore, as I have said, there are no priorities and no areas come second to others.

The noble Baroness, Lady Hollis, asked about having combined authorities within combined authorities—the concentric circles—to manage different services. You cannot have a combined authority within another combined authority, but two or more combined authorities can of course work in partnership. There can be unitaries or two-tiers within a combined authority, but you cannot have a combined authority within a combined authority.

The noble Lord, Lord Liddle, asked whether Lancaster University would be secondary to some bigger universities in bigger cities. If Cumbria feels that the university and skills and jobs should be a priority aspect within the deal, the Government would welcome its proposals and would want to hear from it. The noble Lord also talked about the economic geography of Cumbria being very different. We fully recognise that every place is unique and different from every other place; that is why the Bill is an enabling Bill so that those differences can be reflected and come forward. He also said that there is perhaps not a consensus on the issue in his part of the world; of course, consensus is crucial, as is leadership and agreement.

I have some more explanations. The noble Lord, Lord Grocott, asked why the Bill prescribes for a mayor. Elected mayors can provide an effective single point of accountability where major powers are devolved to cities. However, this offer certainly does not limit in any way the devolution proposals that areas can make, and we will consider any and all proposals. I think that I have made that point previously.

The noble Lord, Lord McKenzie, talked about fiscal devolution. We have already agreed with Greater Manchester about the retention of 100% of additional business rates, providing a very powerful incentive to drive local growth, but we are not ruling anything in or out at this stage. We are very interested to hear from all areas how they see fiscal devolution working. With those assurances—

Photo of Lord Tyler Lord Tyler Liberal Democrat Lords Spokesperson (Constitutional and Political Reform) 4:15 pm, 22nd June 2015

Before the Minister sits down, I wonder whether I might take her back to the comments that she made about the report from the Delegated Powers and Regulatory Reform Committee, on which I sit. I think she said that your Lordships’ House would have an opportunity to see the Government’s response to the important recommendations from that committee before the end of Committee stage; perhaps she would confirm that. I draw her attention particularly to the recommendation in paragraph 29—it is rather different from the others, which are very detailed—in which the committee says:

“In line with our conclusions in paragraph 22 above, we consider that, if the Government believe that the negative procedure is the appropriate level of scrutiny for particular categories of modifications of primary legislation, they should specify those categories in clause 55”.

There is a wider issue here, which the committee draws attention to: in parallel with the consideration of the full Bill, we also have an LRO on some specific powers, which I understand was prepared before the general election—certainly before the Bill was being prepared by the current Government. I wonder if the Minister can give some assurance to your Lordships’ House that these two quite separate exercises will at some point be brought together. Otherwise, the lack of co-ordination is a matter of concern to the committee and, I think, will be a matter of concern to Members of the House.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I can confirm just what the noble Lord thought he heard, which was that we would be responding before the end of Committee stage and that the LRO would be incorporated into the Bill.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, as we are in Committee we have ample opportunity to extend the discussion on this. Did I hear the Minister correctly when she said that you could not have combined authorities within combined authorities?

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

In that case, I suggest that she is wiping out the possibility of effective devolution over half of shire England. Only if you are a fairly large unitary, possibly in combination with some adjacent districts, can you offer the full range of services, from the very local to the very large. With the two-tier structures that we have—and no one is suggesting a complete overhaul of local government—you cannot do that. Therefore, you have to have appropriate partnerships or appropriate combined authorities for different issues, requiring a different sense of scale. Perhaps you will need a smaller one for local housing, local transport, local skills training and connectivity issues, but a bigger one for the interface between health and social care, for example, and a still bigger one for major transport and planning issues, as with a LEP. If the Minister is saying that you cannot have combined authorities within combined authorities, that strategy of having services appropriate to size and scale of partnership is denied us. Counties are perhaps too large for personal services but probably too small now for strategic services. I sympathise with my noble friend on Yorkshire, for example; we could do the same in East Anglia.

I ask the Minister to reconsider. Whether she uses the phrase “combined authorities within combined authorities” or says that there is an “economic prosperity board” here, a “combined authority” there and a “consortium” somewhere else—I really do not care what the nomenclature is—what matters is that we have the capacity to deliver services at the size and scale appropriate for the services that they are, working in partnership. If she says that we cannot have combined authorities within combined authorities, we can say goodbye to effective devolution for two-tier shire county England.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I am afraid that I do not agree with the noble Baroness. We have mechanisms to deliver services of different scale. The whole point, for example, of the Greater Manchester devolution deal is that devolution delivers what is not possible at a very small level. That is why the local authorities came together: first, to form the combined authority and, secondly, to do the devolution deal with government. But it does not preclude districts from being involved in, say, shire deals. There has to be agreement.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

Forgive me, but can I just pursue this point? This will not work. I am sure that other noble Lords have experience of shire county England. For example, in my county of Norfolk, with seven districts, three of us are working together around the big city to deliver more than 50% of the jobs in Norfolk—the focus around the city, the former county borough of Norwich, is perhaps the main difference between us and Cumbria. Some other districts, such as King’s Lynn and West Norfolk, look towards Cambridge, Cambridgeshire and Peterborough. They do not wish to be involved in such a strategy even if they could be.

However, there are other, countywide issues in which the greater Norwich partnership would play its part along with others to try to benefit the whole county in delivering peripatetic, rural-focused services. Beyond that, there are bigger decisions, such as those relating to Aviva and major transport issues, which can only be delivered at LEP level. This means that we must have flexibility. If this Bill means anything, it is about having flexibility to suit the localities and the geographies of different parts of the country.

The Minister must take each proposal on its merits. If there is something wrong with our proposal, fine, let us discuss it and negotiate it. I am perfectly content with that. But what she cannot surely do at this stage is rule out a possible structure that reflects the needs of many two-tier districts—as far as I am aware, Cambridge and Exeter may well be in the same situation, and Norwich certainly is. She is saying to us, “You cannot do, with your knowledge, with consent and in partnership, what makes the best sense for your greater area, for your county and for your region”.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I think we agree but have perhaps got our wires crossed. It is an entirely flexible process. If Norwich and the surrounding areas want to come up with what they see as the best proposal for that area, the Government are here and listening. I am saying that there cannot be combined authorities within combined authorities under the law, but the whole purpose of this enabling Bill is to allow areas to come forward with the proposals that they see as the best. There has to be agreement across the piece.

Photo of Lord Warner Lord Warner Labour

My Lords, can the Minister clarify one of her remarks? She talked about the Chancellor and the Secretary of State for Communities and Local Government being the accountable Ministers for these local deals. One of the great attractions of the Greater Manchester deal is that £6 billion is being transferred from the health budget to work within the Greater Manchester scheme. Where does the Health Secretary sit in the accountabilities for some of these schemes?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, as I understand the health and social care aspect, Greater Manchester has agreed a memorandum of understanding with NHS England. The Secretary of State for Health runs the relevant department.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government)

My Lords, I thank the Minister for her reply, which I will come back to in a moment, and I thank all other noble Lords who have spoken in the debate, which has been very well informed.

First, I thank the noble Lord, Lord Shipley, for his support for these amendments. I think we were in agreement that this is not about one size fits all. That was not a point of difference between anyone who spoke today. He made reference to the Delegated Powers Committee and we will doubtless come on to debate that later.

The noble Lord, Lord Heseltine, said that the direction of travel is right and that we are agreed about that; indeed we are. He said that the country already knows what is on offer. With great respect, is that universally the case? I am certain it is for some councils and authorities, but does everyone really know what is available or what the process is? I would question that. He made reference to Manchester blazing a trail. What it has done has been illustrative of what can be achieved.

On the question of prescription, the only prescriptive thing in my amendment was referred to by the noble Lord, Lord Scriven. It is about seeking to ensure that these opportunities are effectively available to all parts of England, whether rural or coastal. That is the only prescription. Yes, I suppose you could say there is prescription in the need for a report, but that was the level we talked about. We cannot just assume in all this that the Government are passive, lying back while whatever local authorities want just happens. Clearly, the Government have a responsibility in relation to funding and to understanding the consequences of devolution Bills that take power and budgets away from them. We cannot just say that central government does not count, which I think was part of the tenor of the noble Lord’s contribution.

My noble friend Lady Hollis, as ever, made a powerful case for mid-sized cities and combined authorities within combined authorities. I am sure that that issue has not gone away. My noble friend Lord Maxton referred to the fact that in Scotland a seemingly left-wing Government are restraining support for devolution to local people, but the Conservative Government in England are seeking to do the reverse. That is an interesting state of affairs. The noble Lord, Lord Bichard, made a very interesting point. He talked about being beware of central government pulling back on this and asked about a devolution test for every part of policy developed. That seems to have some merit. My noble friend Lord Liddle talked about the disadvantage for some universities that are not in our great cities and, where you have unitary councils, the difficulty of getting a consensus to take advantage of what is effectively Clause 10. My noble friend Lord Grocott reminded us that we have been here before but said that the Bill is extremely prescriptive on the matter of elected mayors. Indeed, that point was continued by my noble friend Lord Woolmer, who talked about it being prescriptive around mayors and the challenges in moving towards a Yorkshire region.

The noble Baroness, Lady Williams, did not say much about the issue of capacity. There is a danger that we brush aside the prospect of government departments dealing with a whole range of inquiries that could—if the noble Lord, Lord Heseltine, is right—start flooding in. How will the Government handle that? Presumably, they do not have a whole raft of civil servants sitting around just waiting for these things to hit their desks. There is a constraint, and there must be some form of prioritisation in dealing with these matters. I accept that that prioritisation will not necessarily push rural communities to the back of the queue, but there must be some basis on which to handle this.

The noble Baroness said that we do not need a regular report as there is always the prospect of parliamentary Questions and the alternative of parliamentary debates. However, I say to her that I have tried that in the past and it does not really work. An authoritative report, available to Parliament, is the proper way to go on what we are all agreed is a fantastic opportunity. Parliament should have the chance to evaluate this as it progresses. As I said, this has been a good debate but for the moment I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2 not moved.

House resumed.