“(1) The mayor for the area of a combined authority or combined county authority must take reasonable steps to ensure that information regarding the authority’s financial affairs, including its annual budget, significant expenditure, and financial performance, is made accessible to local communities in a clear and understandable manner.

(2) The mayor must publish a policy setting out how the combined authority or combined county authority will engage with local communities on its financial priorities and major spending decisions, and review this policy periodically.”—

This new clause requires mayors of CAs and CCAs to ensure that financial information is accessible and understandable to local communities.

Brought up, and read the First time.

I beg to move, That the Clause be read a Second time.

With this it will be convenient to discuss new Clause 15—Independent review of the adequacy of scrutiny and accountability of combined authorities and proposed strategic authorities—

“(1) Within six months of the passing of this Act, the Secretary of State must appoint an independent panel to review the adequacy of scrutiny and accountability of—

(a) mayoral combined authorities designated under section 106B of LDEDCA 2009,

(b) mayoral combined county authorities designated under section 25A of LURA 2023, and

(c) the Greater London Authority.

(2) The independent panel may request information from existing combined authorities and the Greater London Authority on the operation of their scrutiny and accountability arrangements.

(3) The independent panel must make a report to the Secretary of State on—

(a) the independence and effectiveness of scrutiny arrangements of combined authorities and the Greater London Authority;

(b) best and worst practice in scrutiny and accountability in combined authorities and the Greater London Authority;

(c) lessons for the future development of scrutiny and accountability for those bodies designated as strategic authorities; and

(d) lessons for the future development of strategic authorities under this Act.

(4) A Report under subsection (3) must be made within one year beginning on the day on which this Act is passed.”

This new clause would provide for a review on the adequacy of strategic authorities’ scrutiny and accountability arrangements and to report within one year of Royal Assent.

It is a pleasure to serve under your chairship, Dame Siobhain. The new Clause would place a legal duty on mayors of combined authorities and combined county authorities to be transparent about how public money is spent. It is a simple but powerful measure designed to build public trust in the devolved government that the Bill creates. The mayor would have a legal duty to ensure that their financial information is not just published, but accessible, clear and understandable to the public. The new clause would also require mayors to publish a policy explaining how their authority will engage with local communities on spending priorities and major financial decisions, and to review the policy regularly. That engagement could include citizens budget forums, public consultations, participatory budgeting sessions or even budget roadshows travelling around the authority area.

Lack of transparency in local finance can erode public trust and allow serious problems to build up unnoticed. In recent years, several councils and combined authorities have faced financial distress or even bankruptcy. Across the country, there is a sense that combined authorities are powerful but distant. They make big spending decisions, yet few people understand how the decisions are made. Transparency is the foundation of public confidence in local leadership. The new clause also aligns with the wider principle of good public finance management by supporting the work of all the committees and local auditors who depend on accessible financial information, while enforcing public sector accountability and ensuring that mayors and chief executives know that they must communicate clearly.

Some may argue that the new clause would place another duty on already busy mayors and combined authorities, but this is not about extra bureaucracy; it is about basic democratic accountability. Frankly, if a mayor’s office can manage hundreds of millions of pounds in its budgets, it can surely manage to explain where the money goes. Devolution should bring power closer to the people, and that must include the power to see, question and understand how public money is being used.

It is a pleasure to have you back in the Chair, Dame Siobhain. I will speak to my new Clause 15, which proposes an independent review of the adequacy of scrutiny and accountability arrangements within six months of commencement. We have had plenty of debate in Committee about scrutiny and accountability of new strategic authorities and the larger new unitary authorities, but new clause 15 is solely about the mayoral combined authorities.

Given the scale of the powers on offer, the Bill is relatively light on scrutiny and consultation requirements. There are duties carried over from existing legislation relating to strategic authorities taking on the functions of, for example, fire and rescue authorities, and to the appointment of commissioners to whom strategic mayors would delegate functions, but quite honestly, only one new measure in the Bill adds to scrutiny over the carried over measures. That is clause 9 and schedule 3, about the termination of the commissioner role and a role for the overview and scrutiny committee to recommend dismissal. In the rest of the Bill, the underpinning of the scrutiny arrangements for these powerful new combined authorities will be derived from local councils, as established by the Local Government Act 2000, but I am yet to be convinced that such an underpinning will provide enough scrutiny and challenge of these powerful new bodies.

I want to drill down into the perceived lack of scrutiny of the new combined authorities. The hon. Lady just said that they would essentially follow the current arrangements in local authorities. Is she saying that she is unhappy with the existing level of scrutiny in local authorities, or does she just want the added safety her new Clause offers?

I will cover some of those issues, but yes, I am not completely happy with how many local councils work. Some carry out the bare minimum. I think we need more minimum guarantees built into this new process, and the Bill is the right place to introduce them.

As I said, the current model is basically an expanded local authority model, based on the idea, I think, that a combined authority is a collection of local authorities so the underlying scrutiny arrangements are sufficient. However, that has already been stretched by the more powerful mayors, and it will be stretched further when the new authorities are set up.

The new powers in particular need more scrutiny. For example, public bodies in every area will need to have regard to the growth plan. Growth plan objectives will be decided by the central authority, but how will they be developed and scrutinised? A strategic authority will be the local transport authority for its region, so it will gain a key route network of roads and can instruct the traffic authorities in its area on the management of the network. These are additional powers, so there is a role for additional scrutiny. Local plans and planning decisions will need to conform to the strategic authority’s plan—that is set out in the Planning and Infrastructure Bill—but how the powers are used deserves scrutiny, challenge, questions and accountability. These authorities are also taking on land assembly and housing powers. They can make mayoral development orders, and set up many huge budgets within mayoral development corporations. I do not think the local authority scrutiny model can cover the questions that might need to be asked in those circumstances.

There is a process for giving the new strategic authorities even greater powers in the future, but there is no associated process in the Bill for reviewing the scrutiny arrangements as those powers increase. New Clause 15 would require a review of the scrutiny arrangements to match the new powers given to strategic authorities, which they may request as the Government devolve further. A safety net for scrutiny is needed somewhere in the Bill. I am aiming to fix a genuine problem.

Many existing strategic authorities have struggled to establish a truly collaborative approach between the local authorities and the members of the committees that exist to scrutinise those authorities. Quite often, the members feel that they should represent their own local authority and do not necessarily take a collective approach to scrutiny in the committee. I believe that problem will increase, particularly where we establish authorities that may lack a strong collective identity like that Greater London or Greater Manchester, where people automatically feel that they will be standing up for that area. In these new invented areas, we need legislation to ensure that scrutiny will reflect a common identity and collective approach.

This issue is a reflection of quite a lot of existing problems with scrutiny in councils. I will cite some of the conclusions in the Housing, Communities and Local Government Committee’s 2017 report. It looked at the effectiveness of local authority scrutiny committees and concluded that scrutiny was marginalised in too many authorities, which could contribute to service failures. The Committee also found evidence that scrutiny committee chairs often did not challenge their leaders, picking instead safe, less controversial topics, and that the fact that the committee chairs are appointed meant that they were more likely to keep quiet and use their role as a way to prepare for a future Cabinet position. In the local authority model, the leaders can choose their cabinet, and we have already discussed many times in this Committee how the new mayors will be able to choose their commissioners. I am sure that Members can see how the same dynamic might occur.

Neither the current model of overview and scrutiny committees in local councils nor the arrangements in combined authorities really encourages public input. I will not labour that point right now, because I have more to say on that under new clauses 30 and 45. The proposed review of scrutiny could look at the extent of public involvement.

We also need to consider the resourcing of scrutiny in the new strategic authorities. The Select Committee heard evidence of combined authority scrutiny committees being under-resourced, and that problem has not gone away. We know how pressed local authorities are; what priority will scrutiny resourcing take in the new combined authorities if there is a budget squeeze? We need some safeguards and a safety net.

I will try not to go on about this too much, but I cannot help but think that lessons could be drawn from London and the directly elected London Assembly. Members from the same party as the elected Mayor nevertheless take part in independent and collective scrutiny of the Mayor, and often make sure that the right questions are asked. Members from different parties often work together and they all take part in investigations in subject-specific committees, which is valuable.

Members bring in the voices of people who are under-represented in the city. The voices of renters, estate residents, older people with concerns about toilet provision and young people concerned about youth services have all been heard by the cross-party committees on the assembly, and pressure has been put on the Mayor to improve policies.

New clause 15 would mandate an independent review that could usefully speak to people in London and the London Assembly about lessons that could be learned, particularly about structure and resourcing. The question is, why legislate, rather than just leave these matters to guidance or for mayors to decide, to go along with very broad goals around scrutiny and accountability?

A real safety net should be put into the Bill. I do not think that we can pass the Bill without adding scrutiny and accountability provisions. The new clause is a very friendly way of ensuring that Ministers look again at scrutiny. I would hate the Bill to leave Committee without an assurance from the Minister that that will be looked at again and that something will be put into the Bill to match the increase in powers with an increase in scrutiny in the future.

I acknowledge the intent behind new clauses 3 and 15. We all agree that transparency, accountability and greater scrutiny are needed, and that there is room for improvement in our system.

On the specifics of new Clause 3, all local authorities must publish annual accounts along with an annual governance statement. The local government transparency code 2015 requires local authorities and combined authorities to publish regularly on their websites information about spending and assets, including, as a minimum, all spending over £500, which must be published quarterly, and all land and building assets held.

All mayoral strategic authorities are expected to follow the principles and processes described in the English devolution accountability framework. That sets out how mayors will be held to account by central Government, at local level, and by the public. As part of the local assurance framework, mayoral strategic authorities must describe their arrangements for enabling effective and meaningful engagement with local partners and the public. My argument is that we have the legislative framework, and that this is now a question of practice.

Everyone wants information about public spending and Government accounts to be as accessible as possible. It is as much a problem for central Government as it is for local government and lots of bodies and institutions. I would argue it is a question of practice and of improving the way we do things. Through digital technology and the ability to use different methods, we can make this information far more accessible. I do not think we need further legislation. We need to improve our practice and innovate and modernise so the public can better hold all of us to account. That is an endeavour across all levels of government and all public institutions, so the new clauses duplicate existing arrangements and do not really get to the heart of the issue that we all recognise we need to resolve.

I absolutely agree with the intent behind new clause 15. We have stated on the record that we understand the need to strengthen the accountability and the scrutiny mechanism for strategic authorities. We said this in the English devolution white paper, my colleague said it in the House, and we are committed to that. I assure the Cttee we will consider how to strengthen the scrutiny of strategic authorities, because I completely agree that as they acquire more powers, it is right we have accountability and scrutiny frameworks that are robust and fit for purpose, to ensure they are held to account for how they use the powers we confer on them.

The challenge I have with the new clause from the hon. Member for Brighton Pavilion is that the independent panel she is recommending would mean we have to wait over a year after Royal Assent to respond to this critical issue, because we would not want to pre-empt the recommendations of the panel. In some respects, the very thing that the hon. Lady is trying to force us to do may well end up slowing our ability to do.

Is the Minister honestly saying that if there was a call from Parliament to review scrutiny within one year of Royal Assent, she would not be telling us that was too soon? The reason one year is written into the new Clause is that is a very reasonable deadline.

We acknowledge this is an area we want to strengthen. As I said in the last debate, we are working to make sure that we are taking in view the scrutiny models that we apply, including local public accounts committees and the models proposed by think-tanks and other organisations, in the context of the big reforms to the local audit and assurance framework we are driving through. I ask the Committee to give us time to do the work properly, so that we design something that is fit for purpose and aligned with the big reforms we are driving through. There is no resiling from the belief that we need to strengthen the arrangements. I put that on record and am happy to give those reassurances. Let us get on with the work of figuring out how we do that in the best possible way, by engaging with strategic authorities and critical stakeholders, rather than put in the Bill a requirement that may, in fact, slow the pace at which we are able to develop proposals. On that basis, I ask the hon. Member for Stratford-on-Avon to withdraw her new Clause.

I beg to ask leave to withdraw the Clause.

Clause, by leave, withdrawn.