Baroness Hayman of Ullock:

Moved by Baroness Hayman of Ullock

51: After Clause 5, insert the following new Clause—“Levelling-up consultantsWithin 120 days of this Act being passed, a Minister of the Crown must publish an estimate of how much local authorities have spent on consultants in relation to this Part.”Member's explanatory statement This means that a Minister must publish an estimate of how much local authorities have spent on consultants in relation to Clauses 1 to 6 of the Bill.

My Lords, I will be moving these amendments in the name of my noble friend Lady Taylor of Stevenage. The first Amendment is Amendment 51, which is after Clause 5. It asks for the Minister to publish an estimate of how much local authorities have spent on consultants in relation to the first six clauses of the Bill. The reason for laying this amendment is that there has been quite a lot of discussion over the last few years about the amount of money being spent both by local and national government on consultants. We wanted to probe the Government on this and have a small discussion around this area.

Back in 2020, the Public Accounts Committee released a report which said that the Government were

“too quick to spend money on consultants to undertake work that could actually be better done by existing civil servants” and that this was being done rather than developing and retaining in-house skills. Since then, any restriction on spending controls on consultants have been ditched by the Government, allowing Whitehall departments to potentially spend millions more on these external consultants. The limits were introduced under a previous Prime Minister, David Cameron, in 2011, requiring central authorisation if contracts lasted more than nine months or exceeded £20,000. Our concern is that the value of contracts has been rising. The limit set earlier this year was £600,000, which is a huge jump. We are very concerned about this, because government spending is being tightened in other areas of public expenditure, particularly during the cost of living crisis. If the Government are increasing this extra cost of outside consultants, how can that be justified in the current crisis? However, obviously, one thing we appreciate is that during the pandemic there was additional spending in this area that could not be avoided.

In 2022, the UK public sector awarded £2.8 billion-worth of consulting contracts, according to data from the contract analyst Tussell Ltd which was published in the Financial Times. That figure was up by 75% from 2019, so even taking into consideration rising costs during the pandemic, that is still a huge jump in spending. Does the Minister agree with the Public Accounts Committee that the Government’s way forward on this should be to retain civil servants and develop their skills, and that that is a better use of government money?

I turn to the nub of the amendment, which is the published estimate of how much local authorities have spent on consultants in relation to Clauses 1 to 6. Last week in Committee, we discussed the thorny issue of competitive funding. Our concern is that this is not the best way to fund different local authorities in their bids for levelling-up pots of money. We know that local authorities have complained about the Government’s proliferation of these competitive funding pots. Alongside this, local authorities obviously have been using more consultants. It has recently been reported that consultancy firms have raked in around £26 million from councils which are clearly cash strapped. They have lost funding from central government over the last few years, so they really do not have this money to spend. The reason they are spending it is that they are trying to prepare high-quality levelling-up funding bids, and they no longer retain much of the necessary skill set for that in house.

Considering that many of those with successful bids have lost far more in local authority funding cuts than they are going to achieve, does the Minister agree with me that the only people who seem to be turning a profit here are the consultants? We believe that the Government should change the way the funding is assessed and granted. I would be grateful if the Minister, and the wider Government, could think about how we can return skills in house—both in national government and local authorities—to stop this huge amount of cash going on external consultants.

My noble friend’s Amendment 52 relates to the practicalities of implementing a levelling-up agenda. It proposes that a Minister must publish a statement of any levelling-up directors who have been appointed and their role in implementing the levelling-up missions. We have heard for some time from the Government about the levelling-up directors and their intended appointment, but we have had very little detail or further information.

Last year, my noble friend Lord Bassam of Brighton tabled a series of Questions about the government appointment of regional levelling-up directors, asking what their remuneration, role and responsibilities would be. The creation of these posts was announced not long after the white paper was published last spring. At that stage, it was said that they were to be paid £140,000 a year. Last December, my noble friend was told in response to his Question that at that stage, none had been appointed and that further details on what they might actually do were still being worked out. Put simply, the noble Baroness, Lady Scott, said in response to his Question:

“Further announcements will be made in due course.”

Given that levelling-up directors are, in theory, supposed to be driving the agenda nationally and regionally, and getting both councils and government working together and with all the relevant agencies, charities, businesses and so on that can help deliver this agenda, I would be grateful if the Minister could tell us what progress has been made with these posts. I have heard a rumour that somebody might actually have been appointed; maybe I have missed the confirmation of that. It would be helpful to know about progress on the posts, or whether the Government have had a rethink about this and how it is going to be structured. Have the Government perhaps pulled the plug on this way forward? It would be helpful to have a better understanding. The reason why this is so important is that it strikes me that they are supposed to be the glue between the department, local councils and local communities, and to start to make things happen. So, we consider a proper understanding of their role in implementing the levelling-up missions to be critical. If the Minister can give us any further information on this, it would be gladly received. If he cannot, it would be helpful to know when we are likely to have an update.

My Lords, I rise to speak to Amendments 51 and 52 in the name of the noble Baroness, Lady Taylor of Stevenage. As the noble Baroness, Lady Hayman of Ullock, just pointed out, these amendments relate to consultant spend by councils and regional director spends, and their roles in the Government’s levelling-up agenda.

Amendment 51 is important, as the noble Baroness just pointed out. A freedom of information request showed that in the 245 upper and lower-tier councils, £26.9 million has been spent on levelling-up bids. That is £26.9 million taken away from social care, housing, cleaning, street cleaning and bin collection at a time when councils are finding things particularly difficult. Of that money, the vast Majority went to external consultants. Does the Minister think it right that £26.9 million should be used on a lottery process pitting town against town and city against city to bid for levelling-up funds, only for the Government to move the goalposts at the last second by changing the criteria against which councils are bidding, which means not only that this money could have been spent on other services but that it has been wasted?

On Amendment 52, I wish to start with a general point, and here I do not necessarily share the sentiments of the noble Baroness, Lady Hayman of Ullock. The concept of 12 regional directors controlled out of Whitehall somehow being the panacea for devolution is ludicrous. Let us be clear: what this will turn out to be is a system of crude decentralisation. Those of us who have been around for quite a while in local government know that when we had something similar in the past, the regional directors of the department dispersed to work with local area partnership boards came with “We are here to help and support you” as their mantra. However, they were used as government enforcers and the eyes and ears of government, going back to the department and saying which areas were in the good books and who should be put on the naughty step because they were not carrying out the Government’s agenda.

Reports back from such regional directors decided who got money and what sticks or carrots were deployed. I know that the noble Earl will pour out soothing words from the Dispatch Box, saying that is not the role, but history shows that it is. Look at the job advert issued in November 2022—it kind of gives the game away. It says that they will report progress to the newly established committee for levelling-up, which is exactly the same as the previous directors in the department did.

We are now told that these regional directors are on hold, but that they could be answerable and accountable to the mayors. Let us take Yorkshire as a region, as these are regional directors. We could have four mayors in Yorkshire with different agendas and from different political persuasions. To which mayor will the regional director be accountable—one of them or all of them? It is clear that these roles have not been thought through from a regional perspective but from an office in Whitehall, with a very Londoncentric view of how they can be used as government enforcers.

Talking of Yorkshire, we are a little perplexed—not that we are from Yorkshire, but perhaps the Minister can help with this. Civil Service World on 17 February had an interesting headline, stating that the department

“hires former … No. 10 official as levelling-up director.”

Ed Whiting, David Cameron’s former deputy private secretary has been hired, and he very helpfully tweeted that he has been recruited to the role of levelling-up director in the north, based in and working out of Leeds:

“I’ll be based in Leeds, hoping to be travelling round North”,

working with local councils and others on innovation. He also expects to travel to London often too—ah, yes, that newly established Cabinet committee for levelling-up has to be informed. He goes on, quite incredibly—he has been hired on a six-figure salary—to say that “details” of the new role are “tbc”.

We are perplexed, Minister, and some clarification would be helpful. Is Mr Whiting a regional director for levelling up and, if not, what is his role and how does it fit with the regional directors? When was he recruited, where was the job advert and who sat on the recruitment panel? Why have local authorities in the north not been informed officially who he is and how he is there to help them? Why has someone been recruited on a six-figure salary when their role is still to be confirmed?

That is why Amendment 52 is important. We need transparency and clarity on who the department is using in the regions and what roles they have, to ensure the Government do not establish an expensive decentralized bureaucracy, costing the taxpayers millions, trying to enforce their agenda in local areas.

My Lords, as we have heard, this group of amendments is related to consultants and the Government’s appointment of levelling-up directors. Specifically, Amendment 51, in the name of Baroness Taylor of Stevenage, would require the Government to publish an estimate of how much local authorities have spent on consultants in relation to Part 1 of the Bill. I fear that requiring local authorities to report in this way would be disproportionate and unnecessary, but let me explain why.

The new burdens doctrine, established and maintained by successive Governments, requires all Whitehall departments to justify why new duties, powers, targets and other bureaucratic burdens should be placed on local authorities, as well as how much these policies and initiatives will cost and where the money will come from to pay for them. This provision already ensures that the Government must properly consider the impact of their policies, legislation and programmes on local government and fully fund any new burdens arising.

Further, local authorities are already bound by the Local Government Transparency Code, which mandates local authorities to publish data on all expenditure over £500 in open and accessible formats. I will come back to that point in a second, but I have a great deal of sympathy with the points made by the noble Baroness about expenditure by central government on consultants.

Will the Minister clarify something? When he says that the Government fully fund any new burdens, does that mean that the Government are reimbursing local authorities for the cost of creating their bids?

It would depend on the circumstances. It would depend on whether the expenditure on consultants was classified as a truly new burden or not, and that is an arcane science on which I do not pretend to be expert. Perhaps I may provide the noble Baroness with clarification in writing on that point, because I recognise that it is of relevance.

As I was saying, I have a great deal of sympathy with the noble Baroness’s points on expenditure by central government on consultants. As a matter of principle, I think all Secretaries of State across government would agree that they should impose a self-denying ordinance on their departments where skills can be developed in-house. Where that can happen, it should. The problem is, I suggest, twofold. First, the skills needed are very often highly specialised; secondly, if one looks across government as a whole, it is very difficult to make general statements about the needs of individual departments. However, I think the noble Baroness and I are aligned in our antipathy to expenditure that may turn out to be unnecessary—certainly expenditure that turns out to be wasteful. No department wants to go down that road.

On expenditure, transparency, as so often, is key. I note the comments of the noble Lord, Lord Scriven, about consultancy expenditure by local authorities in preparing their bids. I would just say to him that the decision by some local authorities to appoint consultants in their bidding process was a decision for them, and such decisions will doubtless have reflected in part the point that I just made: that the necessary skills are not always on tap locally. I think that is all I can say about that, but I will write on his questions about Mr Whiting, as I do not have the necessary briefing on that in front of me.

I want to ask a specific question, which I think the noble Baroness, Lady Hayman of Ullock, also asked. Has any regional director been appointed? That is the key question, particularly about Mr Whiting.

I am coming to Amendment 52 in a second. It might be helpful if I added a few comments about local government funding more generally, because we recognise that the sheer number of different funds has become onerous for some councils to navigate and deliver. We have taken initial steps to address this complexity in the funding landscape. For example, the levelling-up fund provides cross-departmental capital investment in local infrastructure, and the UK shared prosperity fund provides resource-focused investment to support people, boost pride in place and strengthen communities. However, the levelling-up white paper made it clear that we can do more, and we will set out a plan on funding simplification shortly.

Amendment 52, also in the name of the noble Baroness, Lady Taylor, sets out that we must publish a statement of any levelling-up directors who have been appointed and their role in relation to the implementation of the levelling-up missions. It might be helpful if I gave a little bit of background on our approach to levelling up. It is clearly a long-term programme. Levelling-up directors are but one part of a wide suite of activity across government to deliver the 12 missions and the objectives of the levelling-up White Paper. I am afraid that I can give the noble Baroness only a brief update on where we are. I can tell her and the noble Lord, Lord Scriven, that no appointments have yet been made. We are reviewing the recruitment process for levelling-up directors internally, as well as our wider approach to working with places across the country. It is obviously key that we get this right and that we join up effectively across government. I or my ministerial colleague, my noble friend Lady Scott, will be happy to update noble Lords further on this in due course.

To bring us back to the specific amendments, Civil Service appointments are already subject to the requirements of the Constitutional Reform and Governance Act 2010, so it is unnecessary to seek to create further statutory processes around this. Legislating in this way with regard to Civil Service roles would be disproportionate and unnecessary. Therefore, I ask the noble Baroness to withdraw Amendment 51. I hope that what I have said has been reasonably helpful and that she will not feel that she must move Amendment 52.

My Lords, I have listened to this debate very carefully. The noble Lord, Lord Scriven, talked about Yorkshire, which he clearly knows well. Apparently, this new director will be based in Leeds. Several times “the north” was referred to—but does “the north” include west of the Pennines or is that a different area? What is the geographical boundary of these things, or is it still fluctuating?

It is open for decision. We want to see local areas taking the initiative themselves. Where there is a functioning economic hub, for example, or a whole county, they may wish to apply for CCA status, but it is up to them to make those decisions. One can talk in general terms of “the north”, but until we know that the appetite is in those northern areas for taking advantage of the opportunities that we are trying to create, I cannot be more specific.

For clarity, the issue with Mr Whiting, to whom I referred, is that, as the Minister helpfully said, no regional director has been appointed so far. However, Mr Whiting describes himself as a regional director for the north and not for a particular region. Therefore, it is important that, when the Minister writes to me, he clarifies exactly what Mr Whiting’s role is and how it fits with the regional directors.

My Lords, can he also clarify the geographical area for which he is responsible?

My Lords, I agree that it would be very helpful, because it is a bit confusing at the moment to know exactly what is what. I would appreciate that.

I thank the noble Lord, Lord Scriven, for his support of Amendment 51. On Amendment 52, I am not entirely sure that I agree with the appointment of directors. The point of the amendment is to get a better understanding of exactly what is happening, what the timescales are and what is expected of them, then to be able to make a proper assessment of exactly what we think about this policy of directors. It is quite difficult to have a proper position on it if you do not know what is going on and what sort of people are likely to be getting the jobs. It would be extremely helpful if the Minister could write to us around any appointments that might be in the pipeline to give us a better understanding of how it is all working and what the timescales are.

While we are on Amendment 52, the Minister said that the recruitment process was being reviewed. When he writes, it would be good to understand what that means. Has there been any process so far? Are they liaising with the sector on how recruitment might best be done and on the timescales? I know that the Minister cannot give us any further information on that today, and he may not have a lot to put in his letter, but if he could give us as much as he possibly can, so we know where we are as we move forward through the scrutiny of the Bill, it would be extremely helpful.

On Amendment 51, again I thank the Minister for agreeing to write to me with more clarification around these matters. It is extremely helpful to have that. I am pleased that he agrees with us that developing skills in-house is important and that we must not have wasteful expenditure in departments. Again, the way forward is to stop it happening and to invest more in people. I thank him for his response, and thank the noble Lord, Lord Scriven, and my noble friend Lord Berkeley, for their contributions. I beg leave to withdraw my amendment.

Amendment 51 withdrawn.

Amendments 52 to 57 not moved.

Clause 6: Interpretation of Part 1

Amendments 58 and 59 not moved.

Clause 6 agreed.

Clause 7: Combined county authorities and their areas