Greater Manchester Combined Authority (Amendment) Order 2018

Tuesday 20th March 2018 Grand Committee

Considered in Grand Committee

17:18

Moved by

[Lord Bourne of Aberystwyth]

That the Grand Committee do consider the Greater Manchester Combined Authority (Amendment) Order 2018

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the draft order that we are considering was laid before the House on Monday 5 February 2018. If approved and made today, it will support Greater Manchester’s programme of public sector reform, promoting growth and productivity and continuing the implementation of the devolution deals.

There have been five devolution deals with Greater Manchester, including most recently at the Autumn Budget 2017. Noble Lords will be aware that, since passing the Cities and Local Government Devolution Act 2016, there have been seven further orders in relation to the Greater Manchester Combined Authority. The orders provided for the introduction of a mayor, and give the mayor the role and functions of the police and crime commissioner. They have also given the combined authority powers on housing, planning, transport, public health, fire and rescue, and education and skills. Some of those powers are to be undertaken by the mayor individually and others by the members of the combined authority collectively.

I turn to today’s draft order. It makes provisions about the housing investment fund, allowances for committee and sub-committee members, and setting the police and crime commissioner component of the mayoral precept.

A housing investment fund was agreed as part of the initial devolution deal with Greater Manchester in 2014. It is a loan of £300 million from the Government that has enabled the combined authority to lend over £420 million to local developers to help fund quicker housing delivery in the Greater Manchester area. It has committed funding to build more than 5,800 homes at 23 sites across Greater Manchester. This order will amend the constitution so that, in addition to a simple majority of combined authority members, the mayor must also be on the winning side of any votes relating to the housing investment fund for the decision to be carried.

The order also refines certain aspects of the combined authority’s remuneration powers. This will allow it to pay travel and subsistence allowances to all members of its committees and sub-committees, such as the fire committee, as well as to members of the combined authority. It also enables the independent remuneration panel to make recommendations on the remuneration of all members of committees and sub-committees and provides for the combined authority to pay an allowance to committee members who are not elected members of a council in Greater Manchester. The draft order also changes a date within the process for setting the police and crime commissioner component of the mayoral precept for the Greater Manchester mayor. This has been requested by the combined authority to ensure that the scrutiny process is complete before the precept must be issued.

There have been two consultations undertaken by the combined authority in relation to proposals contained in schemes that are relevant to this order. The first consultation ran for eight weeks from 21 March to 18 May 2016. The scheme included the proposal that the mayor should control the Greater Manchester housing investment fund, in addition to the combined authority taking on a range of housing powers. The second consultation ran for six weeks from 4 July to 15 August 2016. This scheme made a number of proposals relating to committees that have now been legislated for, which is relevant to this order, as it is for members of these committees and sub-committees that the combined authority would be able to pay travel and subsistence and also refer to an independent remuneration panel for a recommendation on allowances.

There was general support for the powers consulted on, but few directly commented on these technical issues. The amendment to the process for setting the PCC component was requested by the combined authority to ensure that the statutory timetables for both components of the precept are properly integrated. As statute requires, the combined authority provided to the Secretary of State summaries of the responses to each of the consultations. Before laying this draft order before Parliament, the Secretary of State considered the statutory requirements in the 2009 Act.

The Secretary of State considers that making these constitutional changes on the Greater Manchester Combined Authority would be likely to lead to an improvement in the exercise of the statutory functions in the area of the combined authority. The Secretary of State has also had regard to the impact on local government and communities and the need to secure effective and convenient local government, as he is required to do. Also as required by statute, the constituent councils and the combined authority have consented to the making of this order.

In conclusion, implementation of the five devolution agreements made with Greater Manchester continues to progress at an impressive pace. We will continue to work and devolve more powers to Greater Manchester, contributing to greater prosperity and a more balanced economy, and economic success across Greater Manchester, the northern powerhouse and the country. I commend this draft order to the House.

[Baroness Pinnock (LD)]

My Lords, I remind the Committee of my registered interests as a councillor on Kirklees council—the proper side of the Pennines—and a vice-president of the Local Government Association. I apologise for my deepening voice and croakiness: I am sure I will last through the sitting.

The three amendments proposed in this statutory order all relate to governance. It is very important that any amendments retain public trust and confidence in the system and create an open and transparent process of decision-making so that residents feel that their voices are not only heard but listened to, acknowledged and—crucially—seen to significantly influence outcomes.

That is my starting point for assessing the changes proposed. The proposal regarding amending the process for agreeing the police precept is eminently sensible. I have no problem with what is written in the statutory instrument. The second change is the one proposing allowances for those involved in the combined authority. As far as I am concerned, that is a matter for local decision-making and the amendment enables a decision to be made. However, I always have an addendum to that: anybody who receives funding from the council tax payer will need to be answerable to them for any allowances they receive. I am not always sure that non-elected members appreciate the importance of that relationship.

I have a bit more to say about the third proposal, which contains what I regard—that is, read and interpreted—as a mayoral veto. The proposal enables any decision relating to the housing investment fund to be made by a simple majority vote of the combined authority—in other words, the leaders of the 10 councils in the Greater Manchester area—provided that the Mayor is on the winning side. So nine of the council leaders could decide that the proposal was not good and the Mayor could stop them. That seems to require further thought. The explanatory memorandum attached to the statutory instrument suggests that this implements a commitment made in the devolution agreement and links to that element of the agreement with the combined authority in Manchester. I wonder whether the Minister can provide us with the text and source of that commitment. I have read through every single word of that and nowhere does it say anything about enabling a mayoral veto. It says, under planning and housing, that the Mayor will receive strategic planning powers. This will give the Mayor the power to create a statutory spatial framework for the city region, which will need to be approved by a unanimous vote of the Mayor’s cabinet. This will be in line with the strategy currently being developed by the Greater Manchester Combined Authority, or GMCA. Of course, there is a catch-all phrase in that list about any further powers we can give; perhaps it comes under that.

However, I cannot think that the members of the combined authority had envisaged, when this was agreed and consulted on, that democracy would be undermined in this way. Our democracy is precious and has developed on the basis of collective decision-making. It has served us well. People respect it, understand it and will not be content with its degradation. I hope that the Government will rethink this element of the statutory instrument.

[Lord Smith of Leigh (Lab)]

My Lords, I declare my interest as a member of the Greater Manchester Combined Authority and leader of Wigan Council. I must also declare that, in 2014, I was part of the team discussing the devolution deal with the then Chancellor of the Exchequer, George Osborne, which ended up being the deal we got.

I remember that, as part of the deal we signed up to, we were not exactly enamoured of having an elected Mayor at the time but we realised that we would get significantly increased powers if we agreed to it. One of the powers, in terms of the Housing Investment Fund, was a substantial amount of money. The Minister described how it has been used—largely, at the moment, to fund schemes that return into the Housing Investment Fund so that we can spread it out even further.

I do not think we discussed at the time whether a simple majority could depend on one person—actually, it could be 10:1, never mind 9:1. I assure noble Lords that within the unofficial governance of Greater Manchester we would ensure that things were decided in a proper manner. We would not allow any individual to hold up what would be a significant investment in Greater Manchester.

17:30

Ironically, before I came down, I was involved in a meeting of leaders of Greater Manchester this morning. We talked about provision for the payment of allowances for the various committees. When you start up a combined authority, you inherit some work done previously and there are some new committees, such as the fire committee, which is very different from the fire authority. We need to understand exactly what the committees are, what their responsibilities are and to what extent we should pay allowances. In principle, we would be reluctant to pay many allowances; we would pay expenses but not additional allowances for the work being done on behalf of Greater Manchester. The minor change to the precept rule for police is helpful for local authorities in setting their budgets; we now have to add on the precept from both the police commissioner, or the mayor wearing his police commissioner hat, and the mayor wearing his mayoral hat, because he is allowed a precept too. It is sensible that we can get in our council tax bills early and get the money coming in.

The Minister will probably say, “This is nothing to do with me”, but what is missing from the order is what got us to sign up to the 2014 agreement in the first place: the powers we were going to get through the Bus Services Act. I realise that it is a different departmental responsibility, but there seems to be no progress on that. Franchising buses is complex and we need to understand the bus market well, but we need to know the framework under which we are allowed to operate. I ask the noble Lord to press his ministerial colleagues to get their finger out and get on with it so that we can understand this important part of what we would like to do.

[Lord Beecham (Lab)]

My Lords, I declare my interest as yet another vice-president of the Local Government Association and as a member of Newcastle City Council. Although it is good to hear from my noble friend Lord Smith that they are satisfied with the setup in Manchester and can rely on the current elected Mayor of Manchester not to exercise what is in effect a power of veto, which may not always be the case. Heaven forfend, but we might even get a Conservative or Liberal Democrat Mayor of Manchester elected separately from the constituent councils, in which case one can conceive of certain circumstances which might lead to conflict. So I share the reservations raised about that as a general principle. If Manchester is satisfied with it, so be it, but I should be wary of seeing that provision made in any other authority, and any members who are approached in that light should look carefully at that.

On remuneration, I wonder whether it is intended that this should simply come into force now with no retrospection. It would seem rather unfair if people had devoted considerable time up to now with no remuneration. If possible, it should be open to the authority to pay them, if it thought it reasonable. It would not be a duty to do so in any case, but it is invidious if those who have served already are not to be compensated to some extent as, presumably, they may well be in future.

My other question is whether any of these changes should be generalised and applied to all the combined authorities. If not, there will be a differential pattern up and down the country, particularly in relation to the remuneration of councillors. It would be helpful to know whether the Government will look at that, rather than bringing a succession of individual pieces of secondary legislation to give the power across the piece. I would be interested to know whether the Government have considered that or will consider it. If not, I suspect that we will spend time in this Room on a number of occasions simply repeating debates on the provision of a power that might be better conferred at the outset. It would not be a requirement, but I believe that the process of conferring the power should be simplified. Perhaps the Minister will think about that and get back to me and others in due course.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I draw to the attention of the Committee my relevant registered interests as a councillor and a vice-president of the Local Government Association.

I have read the order and the Explanatory Memorandum. As the noble Baroness, Lady Pinnock, said, the proposal that the mayor has to be on the winning side for a vote to be carried means that the mayor has a veto. I hear what my noble friend Lord Smith of Leigh says. He is a member of the combined authority, so I accept his expertise on these matters. If Manchester is happy with it, then so be it, but it is an odd way of working—it seems a bit cumbersome. As I say, if that is how it wants to work, we are fine with it. It means that, in effect, the mayor has a veto. Another way of operating would be to let the mayor take the decision.

A couple of points have come out of the debate. My noble friend Lord Smith of Leigh mentioned the Bus Services Act. I remember that, during the debates on the Bill, the Government were insistent that you had to have a mayor in order to get the bus franchising powers automatically. That was a big issue. Many of us could not understand why you had to have a mayor, but the Government were insistent. It is regrettable that, although the Act has been on the statute book for about a year, we have not moved forward on this. This is not a good place to be. Perhaps the Minister can come back to us on that, because I believe that it is important for authorities outside London to have powers to control their bus services—the fares, the routes and the timetables. Those powers exist in London, where we have a good bus service, and are very attractive to combined authorities.

My noble friend Lord Beecham referred to the differential pattern in the combined authorities. Manchester seems to have the most powers. Others are different, but can evolve over time. I believe that local government in England has a problem. It is a bit of a mess. We have all sorts of tiers of local government. Buckinghamshire is going to become two unitaries and there will also be two unitaries in Northamptonshire. I recall in one debate the noble Lord, Lord Lansley, listing the five authorities that potentially regulate where he lives in Cambridgeshire. It looks to me to be a bit of a mess now. At some point, we will have to look at what we want for local government in England outside London. This patchwork is not necessarily the right way to go.

I am happy with both parts of the order. The proposal for the remuneration of independent members seems sensible and I agree with it.

[Lord Bourne of Aberystwyth]

I thank those noble Lords who have participated in the debate on the Manchester powers. I will respond to their contributions in the order that they were made, so I turn first to the noble Baroness, Lady Pinnock. She was very much in Wars of the Roses mode as she entered the fray and she may have carried that through into thinking that the mayor and the council will always be at daggers drawn. She will know that that is generally not the reality of how councils work, so this idea of the mayor being on the winning side, as it were, is very much that he—as it is in this case; it could also be “she”—has the democratic mandate, which is likely to develop into a consensus rather than a battle between two factions. I take the point that in general it provides a check—or a balance, as I prefer to see it—rather than a cause for concern. I note in particular what the noble Lord, Lord Smith of Leigh, said in that regard. I thank the noble Baroness for her general support for the police precept point and the allowances point.

Picking up on points made by the noble Lord, Lord Beecham, I will go away and look at whether it would be helpful to have a more generalised provision for allowances. I suspect the answer is possibly not, because as has just been said by the noble Lord, Lord Kennedy, all of these deals are somewhat different. They are bespoke deals. They may not be visually or aesthetically pleasing but the question is whether they are appropriate for and work for the given area. I am not sure that, in the end, the provision would be that helpful. I am pleased to see that that seems to be the correct answer. It was not a punt—I thought it was the correct answer, but I am gratified that it indeed appears to be the case.

Moving on, I thank the noble Lord, Lord Smith of Leigh, for his general support for funds that were given in relation to the housing deal. This is part of an ongoing process. If I could pick up on the point made by various noble Lords on the bus position, I will investigate it further but the Bus Services Act provides the powers for bus franchising. That is absolutely right. It is intended that we will have a further order consolidating Greater Manchester transport powers. Believe me, a string of these things is coming through. Of course, they are extremely important.

In relation to the points made by noble Lords on allowances, the legislation prevents their being retrospective. Obviously, we want the relevant combined authorities and their independent remuneration panels to be able to act on this as quickly as possible so that they can get this right. I should say that when the independent remuneration panel makes its recommendations, the council cannot go above those recommendations. It can go below but not above, so there is a very sensible check there.

With that, I will write further on the points that have been made, particularly on buses. I thank noble Lords for their general support for a very sensible move forward for the Greater Manchester area. I wish it and the noble Lord, Lord Smith of Leigh—as a member of that authority—all the best in moving things forward.

Motion agreed.