Committee (3rd Day)

Part of Cities and Local Government Devolution Bill [HL] – in the House of Lords at 3:45 pm on 29th June 2015.

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Photo of Lord Shipley Lord Shipley Liberal Democrat Lords Spokesperson (Communities, Decentralisation and the Northern Powerhouse) 3:45 pm, 29th June 2015

My Lords, I am grateful to the noble Lord, Lord Beecham, for clarifying the wording of Amendment 44A: that it is about the growth of business-rates revenue. I was slightly disappointed that these two amendments were degrouped from the two amendments moved a moment ago by my noble friend Lady Janke, because they are all in the same area. They all relate to the question of whether we are dealing with decentralisation or with devolution. I have heard the Minister say that this Bill is primarily to do with decentralisation, but there is an overall context that is to do with devolution. However, I do not think that fiscal powers are about decentralisation where they can be varied from a national norm, so we are talking here about fiscal devolution.

I agree with the noble Lord, Lord Beecham, that this is set in the context partly of multiyear financial settlements, which I think all parties would benefit from, but also, crucially, of fair funding. It is therefore in part about the level of cuts that have been imposed on poor authorities, but it is also about the absolute level of funding. The issue of needs-based allocation will not go away, however much fiscal devolution we have, because even with the powers that we have set out in Amendments 43 and 44, there would clearly need to be some needs-based reassessment of the total sums involved. That is why, of course, Amendments 43 and 44 use “may” rather than “shall” in relation to the powers of the Secretary of State, as clearly there would need to be significant flexibility in those powers.

I have talked previously in your Lordships’ House about the difference between powers and responsibilities. It is one thing to give local authorities and combined authorities increased powers, but this is about them using those powers to take on additional responsibilities. We have heard the suggestion a number of times in your Lordships’ House that there should be a local government finance commission. I have come to the conclusion that that is the right thing to do, because I do not think that we would get full agreement otherwise about what the devolved powers of combined authorities might be compared with those in other levels of local government. We also need to think about how we ensure that the money from central government is fairly distributed on a needs-based allocation, the basis of which everybody understands.

I hope very much that we will return to this issue on Report. Perhaps in the next two weeks we can look more broadly at this area to see what might be possible for all parties to agree on. I hope that it might be possible for the Government at least to think again about whether the issue of fiscal powers should be in the Bill. There is not much willingness to put things into the Bill. I think there should be something in relation to Amendments 43, 44, 44A and 44B in the Bill, and I hope it will be possible to enter into discussions to see how there might be agreement in all parts of your Lordships’ House to deliver that.