Baroness Taylor of Stevenage:

Moved by Baroness Taylor of Stevenage

60: Clause 7, page 6, line 33, after “whole” insert “or part”Member's explanatory statementThis probing amendment means that a CCA can include part of a two-tier council area, rather than the whole area.

My Lords, as we start to examine those parts of the Bill which address local government and devolution powers, we might welcome the fact that the Bill addresses the long-standing asks of councils and their representative bodies for greater devolution, and that there is more flexibility in the proposed structure of combined county authorities than we might previously have envisaged. Nevertheless, we had hoped for a Bill that was far more ambitious and open to ideas when looking to address the imbalance of power in the UK.

As we have often heard in your Lordships’ House, the UK today is the most centralised state in Europe and there is too much in the Bill that seeks further powers for the Secretary of State to intervene. I welcome very much that the Secretary of State accepts that the national challenges require place-based solutions—at least, it appeared so from the White Paper. However, I feel strongly that Part 2 would better deliver this if accompanied by greater powers and fairer funding so that leaders can support the local economic recovery according to the needs of their own areas.

We have pointed out before in your Lordships’ House that, without a comprehensive and fair funding system across local government which would properly empower local authorities to deliver what is needed to support, sustain and develop their communities and economies, any steps taken towards devolution will have a hollow ring. Even worse, if funding mechanisms are driven by the current competitive bidding pots, which favour areas that are able to spend the most on shiny bids, they will run counter to the whole levelling-up agenda. I was grateful to the noble Earl, Lord Howe, for saying that the sheer number of funds have become onerous and that we certainly need to look at that. There is a further danger in this “bidding bingo” way of funding local areas: it is yet another way of imposing the Government’s policy on growth and infrastructure in local areas and does not make for true devolution in any sense of the word.

We may have wished that provisions for reorganising local government had been the subject of a separate devolution Bill, an issue I have raised before in your Lordships’ House. Given that this does not appear to be on the horizon, we will be seeking amendments to transfer greater powers to local areas. I welcome the implicit recognition that devolution can drive economic, social and environmental development in local areas, but questions remain over whether the specific model of combined county authorities is right for every area, and whether all the current constituent parts of local government will have their importance recognised and their voice heard as the new structures develop. Local residents and leaders will always know best their own areas and the powers they need to deliver on their ambitions. Amendments for this part of the Bill will aim to allow greater flexibility for towns, cities, counties and the people who live in them to determine their own future.

Amendment 60 is a probing amendment to discover what a CCA can include as part of a two-tier council area—will all or only part of it be allowed? The amendment is designed to help us understand whether the Government will prescribe the nature of a CCA area to include all constituent councils. This has been tabled because there has been significant confusion about the geography of CCAs and what is and is not in scope. For example, does the CCA have to include the whole of an upper-tier authority area? In the case of my home county, Hertfordshire, must it include the whole of the county? The Minister will know that this is complicated: in some areas, counties already include unitary areas, and some county areas have enormous populations and significantly diverse demographics.

In previous devolution rounds, we have seen a confusing spectrum of scope—from being instructed on what will be in and out geographically, to documentation saying that it is for local government to decide. The second option is clearly preferable to all of us, but even when that is the stated initial intent, the goalposts are often moved during the bidding rounds to be more prescriptive than was initially thought.

Amendment 99 probably belongs better with the group of amendments relating to consultation on CCAs. If consultation is needed for the formation of a CCA and/or its dissolution, as we contend in other amendments, should there not also be consultation when a CCA is to be amended? Later regulations could determine the qualifying parameters for this, so that extensive consultation is not necessary for minor changes. This and similar amendments seek to determine the principle of public engagement on local government structures. I beg to move.

My Lords, the noble Baroness, Lady Taylor of Stevenage, is quite right to table this amendment to explore the area that can be included in a combined county authority. As I understand it, a combined county authority is a bit of a misnomer. Last Wednesday, the noble Baroness, Lady Scott, said in response to an amendment that a CCA could include, for instance, the unitary authority of Wiltshire and the city unitary authority of Swindon. Equally, when I asked her what would happen in Devon, she said quite clearly that the county and district authorities of Devon and the unitary authority of Plymouth would be included. These are not necessarily combined county authorities: they are unitary and county and district combined authorities—if that is determined, we hope, by the people who live there and the councillors elected to represent them.

It is really important for us to get some clarity about how this will operate. In some parts of the Midlands, you can imagine there being concern about which parts of a county are to be included. For example, in Nottinghamshire and Derbyshire there is an overlap of travel-to-work areas, and they would try to form a combined authority that would not necessarily include the whole of Nottinghamshire or Derbyshire. For example, there was certainly some movement to try to get parts of North Derbyshire included in the West Yorkshire Combined Authority. There is a lot to consider, and I hope we will get clarity from the Minister on the Government’s thinking.

I support the amendment in the name of the noble Baroness, Lady Taylor of Stevenage, on the ability of just part of a two-tier authority to join if that is what is wanted. You cannot expect all the district councils necessarily to want to go with their upper-tier county authorities into a new combined county authority if that does not work for them. For instance, a historic county boundary may no longer represent the travel-to-work areas of that geographic area.

I am also pleased that the noble Baroness, Lady Taylor, has tabled Amendment 99, on public consultations. The public should have a say on this issue, which will come up again in later groups. There has been too much of a top-down requirement for combined authorities, which depends on those currently in power in local areas making the decisions without proper decision-making—more than consultation—by local people. In the end, the public will have to be asked to pay the additional taxes to support the working of the combined authority. Clause 7 simply states:

“The Secretary of State may by regulations establish … a combined county authority”.

That is not good enough. Local people, who are going to pay the additional taxes required, should have a say in what happens.

After all, the combined authorities may or may not be of benefit to local communities. They will benefit the Government, because they will be doing their will: in my view, we currently have delegation from the Government, rather than devolution to local people. For instance, in the West Yorkshire Combined Authority where I live, we have delegation of transport funding and regeneration funding, but with all the strings attached that the Government apply to funding where the decision has been made in departments or in combined authorities’ mayoral offices.

Therefore, if combined authorities do not have prior public debate and prior consultation and approval, what we get is the creation of another remote institution making decisions for local areas without direct accountability for them. Can the Minister explain what policies and proposals of combined county authorities can be questioned and challenged before final decisions are made? Currently, scrutiny arrangements in combined authorities are of the implementation and outcomes of decisions. I am keen to hear from the Minister whether the Government support the idea of pre-decision scrutiny to help to improve outcomes and involve more elected representations. In that way, more local people—or, certainly, their elected representatives—will have a say in any policies and priorities that are set out by the combined authorities. I support these two amendments and look forward to the reply.

My Lords, this group of amendments relates to the area of a combined county authority, the new type of local government institution being provided for in Part 2 of this Bill. Provisions in this part support the delivery of the local leadership mission of the levelling-up White Paper, to enable by

“2030, every part of England that wants one” to

“ have a devolution deal with powers at or approaching the highest level of devolution and a simplified, long-term funding settlement.

I am sorry to interrupt so early in the Minister’s response, but could he define more clearly what the “highest level of devolution” actually means?

If the noble Baroness will bear with me, I shall do my best on that.

Noble Lords will be aware that 10 combined authorities have been established since 2011 in our city regions. However, we recognise that such authorities might not be so appropriate for non-metropolitan areas. The new model of combined county authorities is more appropriate for non-metropolitan areas, many of which have two-tier local government. It enables the establishment of a single institution covering a functional economic area, or whole county geography, which would be a suitable institution to provide effective leadership over an appropriate geography to qualify for a devolution deal.

I take on board the comments of the noble Baroness, Lady Taylor, about local government funding, but it might be helpful if I added a little to the information I gave the Committee in the last group of amendments. Our intention is to set out a plan for streamlining the funding landscape, as I mentioned, to provide greater flexibility for local authorities and make it easier to navigate opportunities for growth. This will include streamlining local growth funds, reducing inefficiency and bureaucracy and giving local government the flexibility it needs to deliver for local economies. As part of this work, we expect that there will be fewer small competitions. Where competitive funds do exist, we will look to streamline bidding and support greater alignment between revenue and capital sources. We will also consider the monitoring and evaluation requirements to ensure that places have robust, proportionate, ongoing monitoring and evaluation plans for the impact and delivery of investments and spending.

Amendment 60, tabled by the noble Baroness, Lady Taylor, seeks to allow part of a two-tier county council area to be included in a combined county authority, rather than the whole county council area. This would not be consistent with the policy we set out in the White Paper, whereby we will devolve to an institution covering a whole county geography or functional economic area. I will come on in a moment to the rationale for that model. In a combined county authority, such as the intended East Midlands CCA, the upper-tier councils within the area covered by a combined county authority are the constituent members of the CCA. There is no upper-tier council that covers part of a two-tier county council’s area; the only upper tier council is that two-tier county council, whose area covers a wider geography. As such, as the two-tier county council will be the constituent member of the combined county authority, the whole area that the council covers must be part of CCA’s area.

Moreover, allowing part of a two-tier county council’s area to be part of a combined county authority would not be consistent with the levelling-up White Paper’s principle of devolution being to institutions covering functional economic areas or whole county geographies, over which a number of functions should be exercised for maximum effect. Splitting the responsibility for such functions could also lead to discrepancies—

Can the Minister explain, then, where the geographies of a county area do not coincide with the geographies of an economic or travel-to-work area? Often, they do not. What I have heard is that you can either have a functioning geography of a county and its two tiers, or the alternative, but not a mixture of the two.

I am pleased that the Minister has raised the East Midlands. On the northern tip of the East Midlands there is Chesterfield and north Derbyshire. Most businesses in that area would look into the South Yorkshire Combined Authority in terms of their business, and not into the county combined authority. It seems to be an administrative boundary designed down here in Whitehall rather than a true travel-to-work area. How would the north Nottinghamshires and Chesterfields be affected by this when, in reality, the economic performance and activity is actually into the South Yorkshire Combined Authority?

May I add to what my noble colleagues have said? This goes to the heart of this amendment. We struggle to say how you can have a county with more than one functioning economic area included in that county. To take my county as an example, the south of the county largely relates to London, because some of the boroughs almost are London boroughs, whereas the north of the county relates much more to Cambridge and Bedfordshire. There are definitely two distinct, functioning economic areas within one shire county. The shire counties go back centuries: their economic geographies have changed very considerably since then. If you take the economic geography of my noble friend Lady Hayman’s area, people in Cumbria may even relate to an economic area that includes parts of Scotland. This is not a simple picture around the country.

Some extremely sensible and logical points have just been made. Perhaps I could address them by pointing out the contrast to what we have seen up to now. Devolution deals, up to now, have typically been put in place in city regions, where they cover the functional geographies in which people travel, commute, work and live.

The Government absolutely recognise that functional economic geographies are far less clear-cut in rural and semi-urban areas, and that the strategic scale and cultural and political resonance of county identities can act as a useful proxy. One can work only on the basis of best endeavours when trying to decide what a sensible area looks like. On a best endeavours basis, deals should be agreed over a sensible geography of a functional economic area, with a single institution in place across that geographic footprint to access more powers. That is the aim.

We absolutely recognise that in some areas it will not be a straightforward case of drawing a line around a particular geographic area but, where there is a will to make progress, it ought to be possible to find a way through. The department will do its best to assist areas in their thinking if that is of help. We will prioritise establishing deals where they cover a strategic geography, either a functional economic area or a whole-county geography.

The noble Baroness, Lady Pinnock, asked me to provide some clarification on the various tiers of a devolution package. The most comprehensive devolution package, level 3, is on offer to areas that have or are able to put in place a single institution over a sensible geography, with the strongest and most accountable leadership, such as a mayoral combined authority, a mayoral combined county authority or a single unitary authority, or a county council covering the whole county area, with a directly elected mayor or leader. If the structures are in place for that kind of powerful leadership, it is likely that the area will qualify for the highest tier of package.

I have a lot to say in response to the noble Baroness’s points about local consultation but, if she will allow, we can cover that issue more fully in the debate on the next group of amendments, which are all about local accountability.

To get back to the amendment, I suggest that splitting the responsibility for functions currently vested in local authorities could lead to discrepancies in the delivery of important services, such as transport or adult education, within areas of a county council. I think it would introduce unnecessary complexity.

I am sorry to interrupt the Minister, but he keeps talking about complexity. This is complexity of boundary, not of reality. I will give him a situation where complexity may hold back the levelling-up agenda. Let us again take the top end of the east Midlands and South Yorkshire. If both the South Yorkshire combined authority and the Derbyshire and Nottinghamshire combined authority have control of the skills money, the fact that probably about half the people from the north end of the east Midlands come up into South Yorkshire means that the skills required should be funded for jobs available in the South Yorkshire combined authority. If the Derbyshire and Nottinghamshire combined authority decides not to invest in that type of skill, the issue is that the flow of labour will not be there for South Yorkshire businesses. How does that kind of problem get solved? It is not an administrative issue but the reality of having the skills where real people and businesses travel and work together.

I take the noble Lord’s point. The experience we have had with combined authorities is that local authorities’ natural tendency is to co-operate with each other. We have seen this all over the place: they do not want to operate in silos and they look outside their boundaries. Yes, there may well be cases where at the beginning there would seem not to be a particularly good fit, but that does not preclude two authorities, such as those he mentioned, getting together and finding a way through, if they possibly can, to address the mismatches of the kind he mentioned.

Amendment 99 seeks to amend Clause 23 to require a public consultation before any proposal to change the area of an existing combined county authority. We agree that those with an interest in the area should be consulted before a combined county authority is changed. As I said, we will have more to say about this in the debate on the next group of amendments.

Clauses 45 and 46 set out a requirement for a public consultation on any proposals from the local area on changes to the area of a CCA. Where a combined county authority has been established and subsequently seeks to change its boundary, Clause 23 enables the Secretary of State to make regulations for areas to achieve that. The Secretary of State may make regulations changing the area of a CCA if that is something the area consents to, the Secretary of State agrees and Parliament approves the necessary secondary legislation.

We fully recognise the crucial importance of residents in the local area having a say; that is common ground between us. That is why any CCA or local authority seeking to submit a proposal to the Secretary of State to change the area of a CCA must carry out a public consultation, as set out in Clause 45(3). This consultation must take place in the area covered by the CCA. This enables local residents, businesses and other interested parties to have a strong input into any such proposals. A summary of consultation responses is then to be submitted to the Secretary of State alongside the proposal.

Clause 46 provides an additional safeguard to ensure that there is sufficient public consultation. This enables the Secretary of State to undertake a consultation prior to making any regulations to enact these changes if they feel that there has been insufficient public involvement in their development.

We completely agree with the sentiment of Amendment 99, but I suggest that we already have provisions later in the Bill to address this; we will debate some of these in a few moments. I therefore hope that the noble Baroness feels able to withdraw Amendment 60 and not to move Amendment 99 when it is reached.

My Lords, I am pleased we tabled these probing amendments, because they have brought out some of the discussion we needed to have in these areas. I am grateful to the noble Baroness, Lady Pinnock, for her comments. She said that “combined county authority” is a misnomer, and I think she is absolutely correct.

Previous responses indicate that we could include unitaries and counties all within a two-tier area. It is not clear in the Bill what that might mean. In the example of Nottinghamshire and Derbyshire, with the overlap of economic areas and travel-to-work areas, et cetera, the geography is far more complicated than back in whatever century it was when the county shire boundaries were devised. The purpose of my amendment was to determine whether parts of a two-tier area would be required to join a CCA if it did not work for them. It is really important that we do some more probing around this and think about it more.

We did not get on to the subject of population, which I will come to in a minute. My concern with this is that we have the phrase that the Secretary of State can determine “by regulation” what a combined county authority will look like. That does not seem to me to be in the spirit of devolution in any way whatever. If it is for the Secretary of State to determine that by regulation, I would be interested to know the noble Earl’s view on how that would be conducted in relation to the partners in the local area.

I am grateful for the noble Earl’s extensive response on this, which is an indication that we are moving the debate forward somewhat. I will come back to the issue of the functional economic area. These are not neatly contained now within county council areas. We have heard a few examples of that. We need to focus on that and think about how we might amend the Bill to recognise that.

The noble Earl spoke about streamlining funding. I was grateful for those comments and I am sure they will be welcomed across local government, but when will we see the detail of how that streamlining of funding will work? If he has any more information on that, it would be helpful.

I have a lot of sympathy with what the noble Earl said about city regions. They make a lot more sense—I spent quite a lot of time with colleagues in the city region in Manchester looking at how that works. However, that does not mean that that model can be lifted and put down in areas that are very different in this country. The difficulties that we have set out underline exactly why there must be flexibility for local areas to consider for themselves what the appropriate geography might be for them.

I return to the issue of population size. In previous iterations of these bids for devolution, we were told that any bid under 600,000 population would not be considered. My county of Hertfordshire has a population of 1.2 billion—sorry, 1.2 million; I am exaggerating—which is a very different issue from a rural county that might have a population of only 300,000. That is why this is much more complicated in shire areas. Will the noble Earl comment on whether population issues will be taken into consideration in relation to the size and constitution of combined county authority areas?

It may be helpful to the noble Baroness if I comment on that specific question. We expect upper tier local authorities with a population of less than 500,000 to collaborate with their neighbouring authorities to agree a sensible geography for a devolution deal. Where neighbouring local authorities wish to join a deal which has been negotiated and have the same level of ambition, we will expect other authorities to take this seriously in order to secure devolution and to avoid areas being stranded. Once again, I come back to the point I made earlier that our experience with combined authorities has shown that this kind of co-operation takes place quite readily. That is the position we have taken currently.

I am grateful to the noble Earl for his clarification. It covers one side of the picture with the smaller county areas. However, larger county areas, where the population may not lean towards a single county authority, should still be a subject for discussion.

I agree that we have several amendments relating to consultation processes and that the other amendment in this group probably sits better with those, so I am happy to postpone discussion of that until the future group. However, the principle of consultation, and recognising the importance of local areas having a say, seems to be enshrined for all the other issues around the setting up and dissolution of a CCA. If it is right for those, it must be right for a change of boundaries too. That is the point we were trying to make with Amendment 99. That said, we have had a useful discussion and I am happy to withdraw Amendment 60 at this stage.

Amendment 60 withdrawn.