My Lords, the draft regulations that we are considering, if approved, would enable Cambridgeshire and Peterborough Combined Authority to collect appropriate levies from its constituent councils to meet the costs of carrying out their transport functions. As only the upper-tier authorities—Cambridgeshire County Council and Peterborough City Council—have transport functions, the levy will fall solely on these authorities.
The seven constituent councils of the Cambridgeshire and Peterborough Combined Authority—the administrative areas of Cambridgeshire County Council, the city councils for Cambridge and Peterborough, and the district councils for East Cambridgeshire, Fenland, Huntingdonshire and South Cambridgeshire—have led a local process to improve their governance arrangements, which culminated in this House and the other place agreeing orders that saw the establishment of the Cambridgeshire and Peterborough Combined Authority in March 2017. This order gave effect to the desire of the local authorities in these areas to improve their joint working, including on transport matters.
An order has since been made that provided for a mayor to be elected in May 2017 for the Cambridgeshire and Peterborough Combined Authority. The elected mayor is the chair of the combined authority.
Combined authorities are designated as levying bodies under the Local Government Finance Act 1988. Under that Act, the Secretary of State is able to make regulations relating to the expenses of combined authorities that are reasonably attributable to the exercise of its functions, including those relating to transport.
The draft regulations before the House would amend the Transport Levying Bodies Regulations 1992 to take account of the creation of the Cambridgeshire and Peterborough Combined Authority. They have been drafted to reflect the proposed approach of these local areas and have been agreed by the combined authority. The levy could fund any of the transport functions that sit with the combined authority.
The functions of the combined authority are set out in its establishment order, and any subsequent order that confers transport functions will be clearly identified. These include developing a local transport plan, as well as a range of passenger transport related functions. It will be for the combined authority to decide how to fund these in accordance with the establishment order and any subsequent orders.
The upper-tier authorities—Cambridgeshire County Council and Peterborough City Council—will need to consider how they fund any levy issued by the combined authority as part of their budget process, whether by council tax, government grants or other sources of revenue. They will need to take into account the impact of council tax levels in their area, including when determining whether any council tax increase is excessive.
The regulations have to establish how any transport levy would be apportioned between the upper-tier authorities if the combined authority could not reach agreement. In the event that they cannot agree, the combined authority will apportion the levy by taking into account previous levels of transport expenditure by those authorities.
The regulations help to facilitate the provision of transport arrangements as part of the combined authority’s wider governance changes. I commend them to the House.
My Lords, I thank the Minister for her comments. The regulations come after a period when there has been, not surprisingly, a lot of local discussion and debate about the formation of the combined authority. Having been through a period of change in local council formation in Wales about 20 years ago, I still bear the scars; it is never an easy or happy situation. As I knew that there had been debate about this matter and some discussion about the plans for transport in the area, I took a look at the mayor’s transport delivery plan. There are local concerns about an overemphasis in that plan on Cambridge city and on roads.
I applaud the ambition of the mayor, because his ideas include a Cambridge underground—the Cambridge autonomous metro with underground electric buses. It is ground-breaking stuff and a very good idea in many ways, because Cambridge as an historic city with a dense population has a huge traffic problem to solve. However, undergrounds involve tunnelling, which is very expensive. It is therefore not surprising that the amount of money that would be sucked into the Cambridge area has alarmed people in Peterborough, who believe—I think quite rightly, being familiar with Peterborough—that much needs to be done to improve their bus network, such as the introduction of bus lanes and encouragement of ultra-low emission buses, as well as to improve cycling and walking infrastructure and the uptake of rail. Those are much less expensive options.
Then there is a wider picture, because Peterborough and Cambridge are two cities in the midst of a large rural area. I strongly welcome devolution of powers over railways, but, in that wider area, people are campaigning for the reopening of Wisbech station, which was a casualty of the Beeching era, and of the line from there to March. They are isolated communities that desperately need investment. People are also campaigning for the electrification of the Peterborough to Ely and Cambridge line to encourage freight from the east coast ports to the Midlands on to the rail. Of course, there are always demands for better rural bus services, with people emphasising the importance of sustainability and tackling congestion and air quality problems. I am simply trying to set the issues that have been put forward in this debate in the context of these regulations, and I have some questions for the Minister.
First, taking devolution fully into account, infrastructure development is of course an essential part of co-ordinated transport planning. So how does the Department for Transport monitor the way that levying bodies, not just this one but others as well, spend the money they raise? How does the department ensure that transport plans treat the whole area affected by this fairly? How does it ensure that there is co-operation and co-ordination—this is a key point—from one local authority area to another? Because there are certain aspects of transport provision, such as local buses, which are rightly an issue for that area alone, but when you are looking at railways you are almost always linking from one local authority area to another, and the same with road provision. So you have a transport plan from here to somewhere; you cannot just stop it at the border. I am interested in how the Government can ensure that the levy, which is after all a levy on the people of that area, is spent wisely.
My Lords, I can set the Minister’s mind at rest that we are not going to have a constitutional crisis: this will be one of the thousands of affirmative instruments that will go through without a Division. Nevertheless, I have some mild misgivings.
The draft regulations give authority to the Cambridgeshire and Peterborough Combined Authority to levy the upper-tier authorities, as far as I can see without constraint. They give this authority to set a levy in respect of transport. I did not know until I heard the speech of the noble Baroness that they were considering digging holes underground. My experience of digging holes underground is that they cost about £250 million per kilometre and they have a dreadful habit of not coming out at anything like the figure you thought they should. Therefore, this levy, if there is overambition, could be a very significant drag on the upper-tier authorities.
I cannot see in the legislation how that is limited. I saw some words about having regard for the ability of the upper-tier authority to pay, but that seemed to be all, so my first question is: are the upper-tier authorities consulted on the level of this levy? There is a general principle that there should be no taxation without representation. There should surely be some process with proper checks and balances in it.
In researching this order, I went back to the Explanatory Memorandum to the Cambridgeshire and Peterborough Combined Authority Order 2017, which says on page 5, at paragraph 7.13:
“To give effect to the contents of the deal to devolve powers to the proposed Cambridgeshire and Peterborough Combined Authority, the Order confers local authority functions for public transport on the proposed CPCA, to be exercised by the Mayor. It also enables the Mayor to produce and publish a Local Transport Plan for the CPCA area”.
My second question, therefore, is: has the mayor produced a local transport plan? Has he costed it? Has he explained the criteria for how the decisions on expenditure are made? Surely this transport plan should create a budget which the upper-tier authorities are able to have sight of and have some say about whether or not they are getting value for money for their levy.
The next paragraph says:
“The Devolution Deal includes provisions for the Mayor to have responsibility for an identified Key Route Network of local authority roads that will be managed and maintained by the Combined Authority on behalf of the Mayor. The Order confers the related local authority functions under the Highways Act 1980, Road Traffic Regulation Act 1984, New Roads and Street Works Act 1991, Traffic Management Act 2004, and relevant regulations, onto the proposed CPCA, to be exercised by the Mayor, concurrently with the highways authorities for the area (these being Cambridgeshire County Council and Peterborough City Council)”.
What does “concurrently” mean? It seems absolutely essential in this arrangement for there to be a clear division between the authorities concerning who does what. Has that clear division been agreed? When it comes to railways, are there clear divisions of authority between the combined authority and Network Rail or the franchise authorities?
I hope the Minister can convince me that the considerable power in the order has a proper democratic decision-making process. If not, it is a step back from democracy.
My Lords, I thank noble Lords for their general welcome—I think—for these regulations. The noble Baroness, Lady Randerson, mentioned the differing views on transport needs in the area. Of course, that will be the case in any combined authority covering different cities and, indeed, rural areas. The noble Baroness spoke about the challenges there. That is the point of having a local transport plan drawn up by the combined authority, which will be responsible for ensuring that the plans are co-ordinated across all the areas it represents.
On the monitoring of the levy by the department, of course we engage with the combined authorities regularly to monitor their transport spending. As with local authorities, they are required to justify their spending as part of the budgetary process.
On whether the levy amount is constrained, it will provide the funding as agreed in the devolution deal and as conferred by Parliament. The levy is set in agreement with the local authorities, so they are consulted as part of the budget-setting process. It provides a fallback in the event of disagreement to ensure that the combined authority can continue to deliver transport functions in the future.
On the local transport plan, which will take into account the differing needs—and the innovative ideas of the mayor—the combined authority will produce and publish a local transport plan in accordance with its devolution scheme. It has not done so yet but, as an interim measure, in June last year the combined authority board agreed to adopt the previous local transport plans of Cambridgeshire County Council and Peterborough City Council as a single local transport plan. In addition, the combined authority has taken over the role of local transport authority from all its different constituent authorities to determine, manage and deliver the mayor’s strategic transport plans, as well as integrated public transport networks for the region. All the constituent councils that I spoke about in my introduction are represented on the board of the combined authority.
On working with strategic partners, be it Highways England or Network Rail, the combined authority has not yet set out a transport plan but if it is part of the strategic roads network, for example, Highways England will work closely with the combined authority and the mayor, as Network Rail and the train operating companies will do in the case of rail.
On the concern about democratic accountability, it might be helpful if I set out how that accountability will work. The combined authority requires a two-thirds majority vote to agree the levy, subject to the majority votes of Cambridgeshire County Council and Peterborough City Council. There is of course direct democratic accountability with its directly elected mayor, who will be held accountable, and the elected leaders of the constituent councils, who all sit on the board. The levy will fall only on the two upper-tier authorities and this proposed approach was agreed by the combined authority in November 2017, so there is democratic oversight of the funding requirement that the combined authority will seek. I hope I have reassured the noble Lord on that point.
The provision of these powers to the Cambridgeshire and Peterborough Combined Authority is an example of our commitment to devolving powers to metropolitan mayors, which will result in the improved delivery of local transport. They will of course be democratically accountable to those people who use that local transport. By placing the funding stream from its two constituent authorities into statute, the combined authority and its elected mayor will have its ability to raise a levy strengthened and can use this funding to take strategic decisions on transport investments across the region. I thank noble Lords for their contributions.