Draft Single Source Contract (Amendment) Regulations 2024
(2 months ago)
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The Minister for Defence Procurement (James Cartlidge)
I beg to move,
That the Committee has considered the draft Single Source Contract (Amendment) Regulations 2024.
It is a pleasure to see you in the Chair, Mrs Murray. There is a lot of tension in Westminster today—possibly not on this item, but it is very important none the less.
The Ministry of Defence’s preferred approach to procurement remains through open competition in the domestic and global markets, but we are often limited to a single supplier to provide the capabilities that our armed forces need, particularly when we have to procure equipment quickly, in the face of rapidly evolving threats. We also need to preserve key industrial and technological capabilities within the UK, for strategic reasons. The combination of those factors means that single source procurement amounts to about 50% of defence procurement spend on equipment and services, or some £13 billion per year.
Where there is a lack of competitive pressure, the MOD needs alternative ways of assuring value for money for the taxpayer, while ensuring that our suppliers are paid the fair returns required to preserve their long-term viability. Like many countries, the UK Government use a statutory framework, introduced through the Defence Reform Act 2014 and the attendant Single Source Contract Regulations 2014. These set out clear rules on pricing single source defence contracts, which place the onus on suppliers to demonstrate that their costs are appropriate, attributable and reasonable, and they define the level of profit that can be applied. Where there is a dispute about the price, either party can make a referral on the matter to the impartial Single Source Regulations Office for a legally binding decision.
Since their introduction in 2014, the single source contract regulations have generally worked well and have helped to ensure that the prices paid for single source contracts are reasonable. Under the regime, there are now some 575 contracts, with a total value of more than £90 billion. However, any set of regulations needs to adapt as the environment changes. In this case, we have found that the rules continue to work well for traditional defence procurement—for ships, submarines, aircraft and other platforms—but that they work less well for sectors such as software and digital. Moreover, the imperative to procure things more quickly means that we sometimes need to buy off-the-shelf items, without running a competition, either because we need compatibility with existing systems or because we do not have the time. To address that, we completed a detailed statutory review of the regime in 2022. That proposed a series of reforms in a Command Paper entitled “Defence and Security Industrial Strategy: reform of the Single Source Contract Regulations”, which was published for consultation in April 2022.
The changes made by these amendment regulations are the next stage in implementing the reforms. They will deliver improvements to the regime in three key ways. First, they will increase the flexibility on where the regime can be used, to ensure that more defence contracts can be single sourced without compromising assurance or value for money and fair prices. The amendment regulations introduce a number of alternative ways of pricing a single source defence contract, most significantly by allowing prices to be set with reference to market rates, rather than always having to use the bottom-up default pricing formula. Another example is where existing UK or overseas laws constrain the way in which prices are set, in a way that is inconsistent with the single source regime. In such circumstances, the amendments will allow the disapplication of the pricing formula, to the minimum extent necessary to comply with those other laws.
There are also cases in which it would be useful to disapply the pricing formula to part of a contract, particularly where a contract comes under the regulations significantly after it was signed. This will avoid the need to reopen the pricing of work that may have been completed and paid for years in the past and increase suppliers’ willingness to bring long-running contracts under the regime. The amendments will allow the pricing formula to be applied only to new elements of the contract.
Secondly, the reforms will speed up and simplify the way the regulations work in practice. The legislation currently states that for contracts that fall under the regulations, a single profit rate needs to be applied to the entirety of the contract when it is signed. For some larger single source contracts, it makes commercial sense to use different pricing types for different elements of the contract, meaning a single profit rate might be too high or too low for some elements. These amendment regulations will explicitly allow contracts to be split into different components where it makes sense to do so. They will also simplify the determination of an appropriate profit rate for a contract by reducing the number of steps in the profit rate calculation from six to four. The SSRO funding adjustment will be abolished, and the adjustment made to ensure that profit is only earned on a contract once will be removed from the profit calculation, to be considered as part of the assessment of allowable costs for contracts.
The regime also applies to single source contracts under which the Secretary of State procures goods, works and services for defence purposes. While the meaning of “defence purposes” is usually clear, there are some cross-Government contracts that are used by both the MOD and other Departments. The amendments clearly set out the circumstances under which such contracts will fall under the regime, striking a careful balance between the need to ensure that prices are fair and avoiding unnecessarily extending the scope of the regime.
Finally, the amendments will clarify and generally tidy up the regulations based on the experience of those who use them, removing ambiguities that have come to light and making them generally easier to apply. We have consulted extensively with our suppliers on the policy underpinning the amendments; I thank them for their contributions, which have led to some useful improvements.
Overall, the amendments are designed to make the regulations easier and quicker to apply in practice. To ease their initial implementation, we will be flexible in the application of the reforms, particularly with the first contracts that use them. For example, we will waive many of the reporting requirements on componentised contracts before the beginning of 2025. We will continue to work with industry to address its specific concerns.
Maria Eagle (Garston and Halewood) (Lab)
It is my understanding that the necessary changes in reporting will not come into effect until October, a few months after the rest of the regime, so the Minister has to delay reporting to 2025 anyway, does he not? The law is not going to change until October anyway.
James Cartlidge
The right hon. Lady makes a fair point. We are trying to be flexible in introducing these reforms. The regulations cover some incredibly important defence contracts, from nuclear submarines to procurement for urgent operational requirements and so on, so it is good to have that bedding-in period. I think it makes sense to take this approach.
Finally, I draw the Committee’s attention to the correction slip issued in relation to the draft regulations as they were originally laid. This corrects a minor error—no doubt spotted by all members of the Committee—to a cross-reference in regulation 31(d) in the first draft of the regulations. I hope that Members will join me in supporting the regulations, which I commend to the Committee.
Maria Eagle
It is a pleasure to serve under your chairmanship, Mrs Murray. I am sorry to have caused you a bit of fuss when you arrived in the Committee Room this morning.
I thank the Minister for putting forward the rationale behind what appear on paper to be fairly complicated changes to the single source regulations. The policy objectives set out by the Minister and referred to in the impact assessment seem sensible. The aim to increase the flexibility of the single source regime, making it simpler and quicker to use, seems like a good idea. The aim to increase assurance on value for money is certainly a good idea; as the Minister set out, we are talking about 575 contracts worth £90 billion, and parliamentarians need some assurance on value for money in respect of all that. Anything that seeks to improve and increase assurance on value for money by enabling contracts that currently have to be exempt to be brought under the scheme, and perhaps by introducing better reporting—although we are not dealing with the reporting aspects of the changes today—has to be a good thing. The compartmentalisation will mean that one can get assurance on individual parts of a contract in a way that perhaps is not possible under the current regime. It seems like good idea to aim for these improvements.
However, on reading through the regulations, there seems to be increasing complexity, in addition to their having taken quite a long time to get to this stage. The Minister is the fifth Minister for Defence Procurement in this Parliament and the original consultations on the regulations began in 2019 with his predecessor minus four, as it were, so the Department has been working on this for some time. Does he have anything to say about what appears to be increasing complexity when one of the aims is to try to increase simplicity? Notwithstanding the positive things that might come out of that increased complexity, it seems to me that the regime is more complex. Sometimes, increasing flexibility does mean increasing complexity; those are perhaps two sides of the same coin. I would be interested to hear the Minister say something about how the new regime will tackle the increasing complexity.
Certainly there were concerns expressed by those who responded to the Government’s consultation on the regulations. Although there were only 10 responses, two of them were from industry bodies and so might be thought to represent a broad range of the industry that has to deal with this regime. One was from the Single Source Regulations Office, which—whatever one might say about it—knows its stuff in this regard. Only seven were from supplier companies directly.
On looking at the Government’s response to the consultation, there are a lot of concerns about complexity and lack of clarity, particularly in respect of the new ways of dealing with pricing. The Minister is moving from one pricing mechanism to seven different pricing mechanisms, so that is by definition increasing complexity. If flexibility means one can get better value for money, that is all well and good, but I am slightly concerned about the increasing complexity.
Stakeholders who responded to the consultation asked for greater clarity. They seemed to be asking, “How are these things going to work in practice?” In the Government’s response to the consultation, they rely a lot on the statutory guidance. The response states:
“It is likely that the Statutory Guidance will develop further,”
and that “additional clarity” will be in statutory guidance. It states the same in respect of a number of the concerns raised by consultees. For instance,
“Additional clarity will be provided in the SSRO’s statutory guidance”
and
“any necessary additional clarity on its practical application”
will be
“provided through Statutory Guidance.”
But we do not have the statutory guidance in front of us. Those of us in Parliament who are looking at the regulations and trying to scrutinise them cannot see the statutory guidance or even draft statutory guidance.
It is now 6 March and the Minister has set out that the regulations are going to come into force from April—a mere three weeks from now. I commend him for his ambition. Given that the consultations have been going on since 2019 and there have been three Prime Ministers and five Ministers for Defence Procurement in that time, at least he has got there and produced the regulations, but we cannot see the statutory guidance. Can he tell us when we will see it? I do not blame the Minister personally for this, but there has been a trend during this Parliament, which I think started with some of the Brexit and covid statutory instruments, of parliamentarians being expected to scrutinise things without having all the relevant documentation—in this case, the statutory guidance, which will be a big part of how well this regime works—to hand, or without its having even been written.
Certainly, given the Government’s response to the consultation, it seems likely that the statutory guidance will be heavily relied upon by those trying to use these regulations on both sides, in the Department and in industry, to understand how these concepts are to be applied. I would be interested to know when we will see the statutory guidance. I see references in the explanatory memorandum and the impact assessment to the SSRO hoping to produce it in parallel with these regulations going through Parliament, but that really is not satisfactory for those parliamentarians seeking to scrutinise the regulations to see whether they will work or whether, to begin with, there will be a big problem in implementing these proposals and the rules within them. I do not blame the Minister personally for that, but it is undesirable that we do not have sight of the statutory guidance, at least in draft form.
I accept that the impact assessment suggests that on average there were only around 60 qualifying defence contracts between 2016-17 and 2022-23, and that 10 qualifying subcontracts a year made use of the regulations. However, as the Minister said in his opening remarks, we are talking about £90 billion, 575 contracts and 50% of the Department’s spend, so it is important from a value for money point of view that the Department and the Minister get this right. Can he say any more about how much of the Department’s spend and how many contracts he now expects to come under these regulations, given that they are being made more flexible? The impact assessment suggests that the number will be very small—it kind of assumes that there will be only 10 extra—but is that realistic, given that the aims of the regulations are to increase flexibility and make things easier to use, to get rid of some exemptions and to increase compartmentalisation in a way that ought to bring more potential contracts under these regulations? I would like to hear a little more about what the Minister expects the impact of these changes will be.
The SSRO has a statutory obligation to review these things over time. It has done so since it was established, and there have been previous changes to the regulations as a consequence of those reviews. I think this is the third review, and I know that the implementation is to be reviewed through to 2027, so whoever might form the next Government will have to deal with the consequences and the outcome of all this. However, I would say that the changes to the regulations that the Minister has put forward are the most extensive since they were introduced. Does he agree with that?
Does the Minister think that everything will be ready by 1 April? Does he anticipate any confusion, which might cause its own problems, when the new regime is introduced but people do not have statutory guidance and do not really know how to operate it, and are concerned about which pricing arrangement to use? Does he expect a blockage to start with? Changes to the reporting obligations will not even be legislated for until October, so will sufficient reporting mechanisms be available to parliamentarians and the general public, as taxpayers whose money is being used in these contracts, to assure themselves of the value for money of any contracts that might be signed between April and October?
Having read all this, I think the SSRO will have a bigger job to do than it does currently. There are more references to it arbitrating disputes as a consequence of these regulations, and obviously it has to continue doing the job it has been doing. Does the Minister anticipate any extra pressure on the SSRO as a result of the changes in these regulations? Will it be able to cope with the extra burdens that they will put on it? Is it to have extra resource, either monetary or in the form of personnel, to enable it to do so?
I wonder why, having taken two years to consult—that is a positive interpretation; it is two years since publication of the consultation document, but perhaps four years since some of the consultation started—the Minister is rushing to implement the regulations by 1 April, without the statutory guidance having appeared. He is a man in a rush. I noticed that in the House last week, when he set out his integrated procurement model in respect of the other procurement that the Department does. He is introducing that in April, too. Is he sure that his Department and the officials who have to implement all this will be capable of making these big changes to single source procurement and introducing his new integrated procurement model at the same time?
The last thing that I want to raise with the Minister is the idea of sharing inflation risk, which has not been in the regulations previously. It is interesting that he has acknowledged that it can sometimes make commercial sense for the MOD to share inflation risk, whereas in the past it has generally sought to pass it all on to its suppliers and contractors. Under the current regime, have any contracts been delayed or, indeed, not placed because they have become unaffordable in the 18 months or so since the right hon. Member for South West Norfolk (Elizabeth Truss) crashed the economy and sent inflation through the roof? I wonder whether the situation changed as a result of our suddenly getting a lot of inflation and the Minister was therefore encountering problems under the current regime, or whether it just led him intellectually to think, “In these circumstances, perhaps we ought to have such arrangements.” I would be interested to hear what prompted the change.
Having made all those points, I do not intend to divide the Committee. The underlying aims of the regulations are good, but I hope the Minister understands that there are some questions about them. I hope he will be able to reassure us about the practical implications of implementing them in the way and at the speed that he has set out—starting from April, in the absence of the statutory guidance—and that he has satisfied himself fully that it will go smoothly.
James Cartlidge
Thank you, Mrs Murray. My apologies—I have not done one of these Committees for quite a while, because there do not tend to be too many relating to the MOD, so I had forgotten the form.
I am grateful to the right hon. Member for Garston and Halewood, who asked some very good questions. I am more than happy to provide clarification. First, she asked a perfectly valid question about the balance between complexity and flexibility. In such cases I think one should always use a metaphor or a happy comparison. My first ever Adjournment debate as an MP was on part-time season tickets. That was before the pandemic, and I would argue personally that they have now become quite popular. One could argue that we should have a single rail ticket all around the country, but I do not think it would work in practice. The flexibility is a choice, and I think it is welcome to many people, with off-peak tickets and so on. I think that applies here, too. We could try to have a completely uniform regime, but it is a complex business; these contracts cover areas of procurement that are mind-bogglingly complicated, such as nuclear submarines and all the ancillary items that come with them through the supply chain. However, the right hon. Lady makes a fair point.
On the statutory guidance, let me placate the right hon. Lady. Again, she asked a very fair question; we are talking about parliamentary accountability, after all. Draft statutory guidance has been shared extensively with industry, and the formal statutory guidance will be published in four weeks’ time.
Maria Eagle
Given that the Minister has shared it with industry, might it not have been an idea to share it with the Committee, so that we could determine whether we are relatively happy with it?
James Cartlidge
That is a fair point, which I will reflect on. I shall ensure that the right hon. Lady and all colleagues on the Committee receive copies of the draft guidance as soon as possible, but to be clear, we think that this approach to statutory guidance is a fair one. On a subject of such complexity, if we did not do this, the legislation itself would have to be far more complicated in terms of definitions to ensure clarity for industry, which after all has to implement these relatively complex contracts.
There were some good questions about the SSRO. I have had lots of engagement with the office, which is a highly competent and focused, very professional, relatively small organisation compared with some of those we have in the MOD. It does excellent work and we are always engaging with it on what more we can do together, because this is such an important area. As the right hon. Lady rightly said, arguably it covers 50% of equipment spend and contracts. There is a good reason for that, given the monetary value of some of the big submarine or ship builds. As for resources, the SSRO has made some efficiency savings and has an efficiency target, which I have discussed with it. Those have enabled the office to absorb some extra pressure, which is the best way to deal with it without having to have recourse to further injections of funding. Obviously, we always keep that under review.
The right hon. Lady asked about value for money. Frankly, we could spend all day talking about that, but as we have the Budget later and that will be the theme today, I will not detain colleagues long. I just make the point that the single source procurement regime exists to protect sovereign capability, but that is not its only role. For example, we may be purchasing something at very short notice and there is only one supplier. If we were to competitively let contracts in very sensitive areas, such as nuclear or some of our key naval contracts, there is of course a risk that they would be won by a company that we did not want to win them, so there is no point starting the process in the first place. I think there is a broad consensus on that point. That is why the regime exists and why it has become much more relevant.
The right hon. Lady made some interesting comments about speed, implying that I am a man in a hurry, but I seem to recall that when responding to my statement on acquisition reform she said that we were not going fast enough. We appear to be seeing one of those Leader of the Opposition-style flip-flopping processes under way, which is rather confusing to behold. She did ask a fair question, though: how does this reform fit in with wider reform of procurement? As I announced the other day, our new integrated procurement model is all about the threat we face as a country. We need to procure more quickly, because our competitors in military terms are moving at a frightening pace on some quite extraordinary capabilities that will pose a threat to the United Kingdom.
The purpose of our reforms is to ensure that we have the most effective procurement model, but this will never be completely straightforward, simple or swift; it is a highly complex area of procurement. Were we to undermine the single source regime and make it unfit for purpose, fewer companies would come forward and we would reduce the potentially available supply even further, not only from the big primes but right through the supply chain.
I engage constantly with industry. I had a small and medium-sized enterprise forum in Rosyth last week with Scottish SMEs. The week before I had one of our first engagements with industry at “Secret” in MOD Main Building. For me, that is a critical example of the new system. What it means is that industry is in the room, hearing military secrets of the most sensitive kind—obviously subject to the usual security, which we follow as closely as possible on this side of Europe—ensuring that firms understand what is coming down the track, what our plans are and what the likely security requirements are. That is moving much more quickly than before.
We talk about a three-week implementation time. At the moment, we have got companies in Ukraine that are spiralling capability within days. In that sort of context and with the need for speed because of the military scenario, we should not be afraid of acting swiftly. It is in the national interest.
I take on board the points that the right hon. Lady made. We want to make the regulations effective because they cover arguably the most critical procurements this country makes, in relation particularly to the deterrent, so I am grateful for her support.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
This is not an area that I am that familiar with, but I would like to understand how equivalent this approach is to that of our allies in Europe and the US.
James Cartlidge
That is an excellent question, and it is something I have looked into in considerable detail. We want to be confident that our regime is comparable or stands up to scrutiny at least, compared to peers. We are talking about the awarding of enormous amounts of public money without competition, so it is important to get it right. I would say it is arguably more common in Europe than in the UK to have the dominance of one or two nationalised or semi-nationalised defence companies in each country. The area of comparison I looked at was the profit rates. What we would not want is a sense that the profit rate we allowed on a contract was significantly higher. It is very difficult to compare, and the initial information I have seen is difficult to track. As the Committee can imagine, getting data on this sort of sensitive information is difficult, but we are looking at it. It shows, I think, that we are in the same ballpark, broadly, as our European peers.
We are talking about value for money and speed, and those important issues come together. Single source procurement can be an important instrument that is available at the moment in other contexts, and will become increasingly necessary, for example, for very fast procurement into Ukraine or situations in which we feel a supply chain needs to become more resilient because the military threat has heightened. From the MOD’s point of view, this is a really important tool to have available. It covers an enormous amount of very sensitive procurement. I am confident that the regulations will improve the system, but we will constantly engage with industry and colleagues. I will ensure that the right hon. Member for Garston and Halewood receives a copy of the draft statutory guidance and that we issue the full biftas as soon as possible. I am grateful for colleagues’ support.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Single Source Contract (Amendment) Regulations 2024.
Draft South Yorkshire Mayoral Combined Authority (Election of Mayor and Transfer of Police and Crime Commissioner Functions) Order 2024
(2 months ago)
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The Minister for Crime, Policing and Fire (Chris Philp)
I beg to move,
That the Committee has considered the draft South Yorkshire Mayoral Combined Authority (Election of Mayor and Transfer of Police and Crime Commissioner Functions) Order 2024.
As always, Mr Dowd, it is a pleasure to serve under your chairmanship. The draft order was laid before the House on 7 February. If approved, it will transfer the police and crime commissioner functions from the South Yorkshire police and crime commissioner to the Mayor of South Yorkshire. It will also bring forward the next scheduled mayoral election in South Yorkshire from 2026 to 2024, with elections then taking place every four years thereafter, so that the South Yorkshire mayoral election cycle is aligned to the existing PCC election cycle across the rest of the country.
I am grateful to incumbent Mayor, Oliver Coppard, for providing his consent to the transfer and to the amendment of his current mayoral electoral term to enable alignment. The PCC for South Yorkshire will continue to exercise the functions until the end of his elected term of office in a few weeks’ time. From the point of taking office on 7 May this year, following the mayoral election, the Mayor will then act as the single directly elected individual responsible for exercising PCC powers, which include the duty to hold the chief constable and police force to account. Of course, the Mayor will be accountable to the people of South Yorkshire through the ballot box.
The functions of the PCC will include, as they do elsewhere, the issuing of a police and crime plan; the setting of the police budget, including the PCC council tax precept; the appointment and, if necessary, suspension or dismissal of the chief constable; and the addressing of complaints about policing services that are non-criminal in nature.
Keir Mather (Selby and Ainsty) (Lab)
Will the Minister speak a bit more about the role that a Mayor with the new powers will be able to play in co-ordinating between police forces in the region? In the village of Kirk Smeaton in my constituency, offences can happen on either side of the border between North Yorkshire and South Yorkshire, and police forces will often not answer calls if the incident is in the wrong field, making for a bit of a ridiculous situation. Does the Minister think that a Mayor with the new powers will better be able to address such cross-border issues?
Chris Philp
Operationally, cross-border co-ordination is a matter for the chief constable, but ensuring join-up is something that a Mayor exercising PCC powers could and should do, so I agree with the hon. Gentleman’s point.
More widely than that, because a Mayor exercises quite a wide range of powers—although that depends on the exact mayoralty—they are typically better able to co-ordinate with other bits of the public sector in their area than a regular police and crime commissioner can. We discussed that just a few days ago, perhaps even in this very room, in relation to the West Midlands, and the Mayors in London, Greater Manchester and elsewhere already exercise PCC powers. Because the Mayor tends to have a higher profile, typically has a bigger budget and can reach into other bits of the public sector, they are able to deal with issues such as reoffending and better co-ordinate with local authorities than a PCC acting alone.
As I was saying, as well as the things that I listed before that intervention, the PCC also commissions services for victims and vulnerable people and does partnership working across the whole criminal justice system in the way that I described. There is, then, a general direction of travel not just in South Yorkshire but throughout the country to try, where the boundaries are coterminous and where directly elected Mayors exist, to have the directly elected Mayor also exercise PCC powers. That already happens in a number of large cities.
Part 1 of the Government’s review of the role of PCCs cemented the Government’s view that, as I just set out, bringing public safety functions together under the leadership of a directly elected combined authority Mayor brings together levers in one set of hands and enables a joined-up approach to the prevention of crime. The levelling-up White Paper published a couple of years ago set out the Government’s aspiration to have combined authority Mayors taking on that PCC role where feasible, as I just set out.
As required by section 113 of the Local Democracy, Economic Development and Construction Act 2009, the Home Secretary launched a public consultation on the proposed South Yorkshire police and crime function transfers, which ran for six weeks from 20 December 2023 until 31 January. It is worth saying that, prior to that, I think the consent to this transfer was obtained from the potentially outgoing police and crime commissioner, the directly elected Mayor and all of the local authorities in the area concerned, but we also consulted the public, as we were legally obliged to do. Some 3,000 responses were received, and they were carefully considered prior to the decision on whether to lay this order.
Alexander Stafford (Rother Valley) (Con)
The Minister says that the responses were carefully considered. If so, they were carefully considered and ignored—65% of respondents did not want this to happen. What is the point of the consultation, given that the overwhelming majority of people in South Yorkshire do not want this, yet the Minister is ignoring them? How is that democracy? What was the point of the public consultation? It was a vast waste of money if we are just going to ignore the residents.
Chris Philp
I thank my hon. Friend for his intervention but, as he will know, when a Government Department or other public body conducts a consultation, that is not done as a sort of referendum in which the responses are added up and the view with the biggest percentage of responses prevails.
First, it is worth saying that 3,000 responses is a small proportion of the population of South Yorkshire; it is a tiny fraction of 1%. But as I say, when a consultation is conducted—not just in this context, but in any across Government—it is not a case of adding up the results and whoever gets the most responses winning, as it were. The responses are considered substantively on their merits. The point is the quality of the argument, not simply the number. I am not saying that the number is disregarded, but it is not determinative. It is not a referendum, obviously.
Nick Fletcher (Don Valley) (Con)
I have just looked at the consultation principles laid out in 2018, which say:
“Do not consult for the sake of it.”
If we do not take account of a majority of 65%, we are just consulting for the sake of it.
The Minister has just replied by saying that a consultation is about what the responses are and not just a numbers game, but many people expressed concerns about the breadth of the Mayor’s existing portfolio and whether one individual could devote the necessary time to it. A proportion of people felt that the transfer could divert resources away from policing and towards non-policing activities within the combined authority, and a significant number of respondents referred to the closure of Doncaster Sheffield airport. Additionally, some respondents expressed concerns that the Mayor devotes considerable time and interest to matters that primarily impact Sheffield.
The Chair
Order. The hon. Member is asking the Minister a question rather than making a statement, so can he bring his comments to a close, please?
Nick Fletcher
Thank you, Mr Dowd. The Mayor in Sheffield has a huge number of responsibilities at the moment, and, as far as many people who responded are concerned, he is not fulfilling those duties to the benefit of Sheffield. Adding even more responsibilities at this moment will be the wrong thing to do.
Chris Philp
I thank my hon. Friend for his intervention. I know that he is a steadfast champion for his constituents, always speaks his mind and says what he thinks is right for his neighbourhood, exactly as he should. I have every respect for him for doing so in such clear and forthright terms.
I will try to address the two points that my hon. Friend raised. First, the consultation was not done just for the sake of it; it was done, as all consultations are, to genuinely test the arguments. However, it is not the case that any Government Department—the Home Office or any other—is simply bound to take the majority response by number. It is about the quality of the arguments. That applies across all Departments. It is not a referendum.
On the number of responses, which was 3,000, I had the opportunity to look up the population of South Yorkshire while my hon. Friend was speaking. According to Wikipedia, to the extent that that can be considered reliable—I am sure my colleagues will correct me if this is wrong—the population is 1.4 million. Does that sound about right?
Chris Philp
Three-thousand responses out of 1.4 million is 0.2%. I do not think it is possible to say that that is a representative sample; but even if it was, a consultation is not a referendum and we look at the substance of the arguments.
My hon. Friend’s second point was that the Mayor has a lot of responsibilities. Obviously, my colleagues are sceptical about whether the Mayor is doing a particularly good job in other areas; transport has been mentioned. As with any elected office—a Member of Parliament, a local council leader, a PCC on a stand-alone basis or a Mayor—it all comes down to the individual. Some Mayors are effective and others are not. I am sure we all agree that Andy Street and Ben Houchen do a fantastic—[Interruption.] Is the shadow Minister rolling his eyes? They do a fantastic job as directly elected Mayors. I am an MP in London where, unfortunately, Sadiq Khan does not, but that is about the individual, not the structure of the office. Our view is that structurally combining the powers—it is not about the individual—allows them to be exercised more effectively because the Mayor exercising them has access to multiple levers. Should the right person be elected, they will be more effective.
My hon. Friends the Members for Rother Valley (Alexander Stafford) and for Don Valley (Nick Fletcher) have serious concerns about the incumbent Mayor, but the source of redress is the ballot box. That is why I was out in the rain in Croydon on Saturday delivering leaflets and exposing Sadiq Khan’s appalling record.
Chris Philp
If the hon. Gentleman would like to defend Sadiq Khan’s appalling record, please have a go.
Mr Mahmood
I thank the Minister for giving way. We are here to discuss a statutory instrument. Bringing politics and individuals’ names into it is beyond the call of what we are trying to do. We should stay away from party politics and deal with the sentiments of the order.
Chris Philp
I thank the hon. Gentleman for his advice. I am, as always, extremely grateful.
I have already drawn attention to the general policy direction of the Government and other mayoral authorities where PCC powers are exercised by the Mayor. I know there are strong feelings and I have every respect for my colleagues who are speaking up, but I commend the order to the Committee for the reasons that I have set out.
Alex Norris (Nottingham North) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Mr Dowd. It is vital that we have an effective arrangement for the leadership of police and crime commissioners. The leaders are the voice of the local community and the link to the community. They are at the core of the important work ahead in restoring public confidence in policing. It is safe to say that police and crime commissioner roles are not always well understood or even to some degree valued, even perhaps by this place. That is wrong. They are crucial roles and we should give thanks to those who fill them and who stand for election.
What we encounter with this instrument, and in general in our regional policy, is an asymmetric devolved settlement: for every community, there seems to be a different configuration of the powers held locally. How leaders are selected to exercise those powers is different as well. That makes for a very complicated landscape that does not often serve the public’s engagement in the political process. Explaining our devolved settlement to a dispassionate observer is very difficult. Why would certain things be the case in the City of London, the Liverpool city region or, in my case, Nottingham? There are three very different models in three not so different places. However, we work with the world that we have rather than the one we might wish to have.
One way of creating greater simplicity and coherence in decision making is for elected Mayors to hold the powers and office of police and crime commissioner. Our belief is that such important governance decisions should be in the gift of local communities rather than Westminster. We have seen too much top-down imposition of local structures. That does not serve democracy or buy-in in local communities. The Minister said that there is local political consensus in South Yorkshire on the transfer of PCC powers to the South Yorkshire Mayor, so we do not oppose this instrument.
I led for the Opposition—in fact, my hon. Friend the Member for Coventry North East sat in the Whip’s seat then, as well—during the passage of the Levelling-up and Regeneration Act 2023. The order is in line with section 33, which allows for the transfer of the powers of the police and crime commissioner to the elected Mayor provided that there is coterminosity of the two footprints.
It is interesting to hear the Minister talk of the Government’s belief that the combined model, with the powers of the PCC resting with the elected Mayor, is in and of itself an advantageous model. That case was clearly made and that is a problem for us going forward, as huge parts of England will be locked out of being able to do that. My own community is entering into an arrangement for what is called the East Midlands Mayor—in reality, one for Nottinghamshire and Derbyshire—in May, and we cannot do the thing that the Minister says is most optimal. I am not sure that I wholly agree with him that it is, but in the Government’s eyes it is the most optimal arrangement. We cannot have that, because we do not have coterminosity. There is a challenge there, because we are essentially saying that we have baked into the system that some communities can have more effective arrangements than others.
Alexander Stafford
My understanding is that Labour supports the order and the transfer of police and crime commissioner powers to the Mayor. Can the hon. Gentleman explain why the West Midlands, with a Labour police and crime commissioner, is judicially reviewing the Government to try to stop the same powers being transferred to that Mayor? It does not make sense.
Alex Norris
It does make sense. I will make it very clear why I think that is different—[Interruption.] The hon. Gentleman can laugh, but he ought to at least hear me out—he is welcome to laugh afterwards.
As I said, I led for the Opposition on the Levelling-up and Regeneration Bill, which introduces these powers. I tried to amend the relevant clause and voted against it—the hon. Gentleman, of course, voted for the clause in the Commons, as did other South Yorkshire colleagues. We do not have that in common: I wanted to amend the Bill so that there was a lock on the provision and an elected Mayor could not, essentially, take out another political office for themselves without consent from anyone other than the Secretary of State. My amendment said that there ought to be unanimity among the constituent councils of the combined authority. That test is passed in South Yorkshire and not in the West Midlands. That is the reason for my party’s different approach.
As I say, the hon. Member for Rother Valley voted for these provisions. The moment he cast that vote, he must have known that they could operate in South Yorkshire. I find it difficult to see how he can say that this is in some way unacceptable.
Alexander Stafford
One of the reasons why I oppose the order is that, of the 3,000 people who responded to the public consultation, 65% of people were against. If we have learned nothing else from Brexit, it is that we should listen to the voice of the people. The people of South Yorkshire said no.
Alex Norris
The hon. Gentleman will have the chance to make that case. As I say, if he and enough of his colleagues had supported my proposal, there would have been a safeguard that protected local voices—[Interruption.] He is not listening to what I am saying, so I am not sure why I have replied.
I did not propose to amend the provision because I thought that Mayors could not exercise PCC functions effectively—in fact, we know that they can, and colleagues in West Yorkshire show that very well—but because I do not think that important decisions about local democracy should be in the gift of an individual. As I say, I do not think, in relation to the counterpart instrument governing the West Midlands, that politicians of one party ought to be able unilaterally to dissolve a political opponent’s role and absorb their powers. That issue was debated at length and sadly the Government did not agree.
A combined authority lock on the power would have put us in more satisfactory circumstances. The Government were not minded to accept it. The Minister might want to contradict me—of course I will accept that—but I fear that the Government’s approach to the provision in that Act that leads us here today was born of a preoccupation with the West Midlands. As a result, the system was designed around a particular case rather than the effectiveness of the legislation.
There is an eccentric typo in paragraph 7.2 of the explanatory memorandum that is perhaps a little revealing. It states:
“It is Government’s view that the exercise of PCC functions by the Mayor of the West Midlands has the potential to realise a more collaborative, holistic approach to public safety in South Yorkshire”.
That is a bold claim, but it possibly tells us where the Government’s mind really is. Nevertheless, that is not a reason to oppose this statutory instrument.
The instrument will end the stand-alone role of PCC for South Yorkshire. I want to put on the record our thanks to Commissioner Dr Alan Billings. He has served Sheffield and South Yorkshire for decades—as the police and crime commissioner and as deputy leader of Sheffield City Council, as well as by filling a huge range of non-elected roles for the Government, through the Department for Education, the Home Office and the Ministry of Justice, and outside Government, with the national lottery and much more. That has been a political career of extraordinary commitment to his community. We are very grateful for all he has done and we look forward to seeing the contribution that he makes in the future.
I will conclude by saying that there is much to be concerned about with regard to the Government’s approach to local democracy, and it is right that we in this place seek to hold high standards in this regard, but clearly there is local political support in South Yorkshire, and that is where the determination should be made. Therefore we do not oppose this order.
Miriam Cates (Penistone and Stocksbridge) (Con)
It is a pleasure to serve under your chairmanship, Mr Dowd. I want to speak briefly in opposition to this order. Although it is tempting to speak about individual Mayors and PCCs involved—all of us will have different opinions on their effectiveness or otherwise—I want to stick to the roles that are involved and whether it is appropriate to extend the role of Mayor to include that of police and crime commissioner.
I support devolution in principle, but I feel strongly that the current model of combined mayoral authorities does not really work, because I believe that the Mayors have insufficient accountability, in the sense that they have significant spending powers but, without having tax-raising responsibilities, they do not have to account for their spending to the electorate. Mayors can go to Whitehall—as we have all experienced—and demand more money and complain to their electorate if they do not have enough money, without facing the consequences of having to raise taxes if they want to spend more money and facing the electorate. Of course, that is what we have to do in central Government. It is what local authorities have to do in our regions. If we want to spend more money, we will have to raise taxes and we will have to be accountable to our electorate for that.
Unfortunately, the Mayors just do not have that level of accountability. They have become, sometimes, just middlemen. They are able to blame Whitehall when they do not get enough money and blame Whitehall when they do not spend the money effectively; and there is a disincentive to be wise with the money they do have. Unfortunately, there is a temptation, which is a natural part of human nature, to use the role to build a personal profile and accumulate power, without the cost of that accountability with the finances.
Alexander Stafford
My hon. Friend is making a very apposite point about the waste of money. For instance, in my constituency in South Yorkshire, the Mayor wants to put a bike lane between Maltby and Rotherham town centre, at a cost of £12.2 million. The people of Maltby do not want that. It is going to cause absolute chaos and it is a waste of money. Does my hon. Friend agree with me that it is one of many examples in South Yorkshire of how money is being wasted against the will of the people?
Miriam Cates
I do, and as fellow South Yorkshire MPs, we see the current obsession with the franchising model for buses, which at the end of the day will not actually deliver more money for buses—it is just a different model of delivering—yet huge amounts of money are being wasted on consultants pursuing the idea, with no accountability to the public for the money that is spent.
Then to add to the powers of a position—I am not commenting on a particular individual here—that I believe already has insufficient accountability, by increasing those powers and adding on the role of police and crime commissioner, is unwise, for all the reasons I have given. We all know that, in reality, all that will happen is that the Mayor will have to delegate the powers of police and crime commissioner to an unelected official, who may be very competent and very experienced but has even less accountability to the public than the directly elected Mayor or even the police and crime commissioner, who at least is directly elected.
My hon. Friends the Members for Rother Valley (Alexander Stafford) and for Don Valley (Nick Fletcher) have referred to the consultation. I completely agree with the Minister. It was a very tiny number of people who responded, but I am afraid that that is indicative of how highly people value these roles. I believe that the turnout for the last mayoral election in South Yorkshire, in 2022, was just 24% and the turnout for the police and crime commissioner was just 19%. These roles do not have high accountability with the public. People just do not see the point of these roles. That is why I oppose giving the current Mayor more powers to become the police and crime commissioner as well.
I will end by saying that this is a very important moment, politically, to have impartial policing. We are seeing on the streets of many of our cities how important it is for the police to be impartial. There is greater reason than ever to maintain some sort of separation of powers within and between political leaders, so I have to oppose this order today. I do not think it will work out well for South Yorkshire and I do think it throws light on the issues that we have with our devolution model in general.
Alexander Stafford
It is a pleasure to serve under your chairmanship, Mr Dowd. First, I would like to apologise to all colleagues in the room. We all do DLs from time to time and no one likes it when people speak, but the fact that the three Conservative MPs for South Yorkshire want to do so on this issue shows the depth of feeling. It is worth noting that the only South Yorkshire representatives who have turned up to this debate are Conservative MPs, and we are all united in our opposition to the proposal. I ask all members of the Committee to vote against it. The South Yorkshire MPs who have turned up and spoken do not want this measure. That is absolutely clear.
There are many reasons why we oppose the measure. I will not take up too much time, but I think we should dwell on a particular group of reasons. First, until recently we were not called the South Yorkshire area; we were the Sheffield city region. The focus of the previous Mayor, Dan Jarvis, was on Sheffield and the city region. Even though the mayoralty now applies to South Yorkshire, the attitudes and opinions have not changed: it is still a Sheffield-first mayoralty. Areas such as Rother Valley are neglected and ignored. We often get the scrapings of the barrel. For instance, the South Yorkshire Mayor is putting £500 million on brand-new trams for Sheffield. That is very good and wonderful, but what does it do for Rother Valley and Don Valley? Where is the resource? Where is the support? My concern is that if more power is going to the Mayor, the same will happen with policing, with a focus on big cities and the neglect of smaller areas such as Rother Valley. That is just not good enough.
On top of this, the current Mayor has a huge range of problems on his doorstep, not least Doncaster Sheffield airport. My hon. Friend the Member for Don Valley (Nick Fletcher) has worked tirelessly to get the airport reopened. It is great news that the Mayor has realised recently that it is in his power and gift to reopen it, but he should have known that when it closed 18 months ago. Perhaps it is because, if this order passes, he will be looking down the barrel of the gun of an election that he is getting himself in gear and focusing on the powers. Instead of giving the Mayor more policing powers, we want him to focus more on the issues that matter, such as Doncaster Sheffield airport and buses in Rother Valley.
South Yorkshire faces issues under this Mayor. For instance, in my constituency the incredibly important bus from Aston and Swallownest to Crystal Peaks—it was a lifeline—has been cut under this Mayor. I said to the Mayor, “You must reopen the bus route,” but he said, “Well, it’s not in my power or my gift to reopen it.” Yet after a campaign, we managed to get him to change another bus route so that it goes into Swallownest—though it should be going all the way to Aston. That is one example of him not using his full powers for the benefit of Rother Valley and South Yorkshire, so how on earth can we have faith that he is going to use new powers for their benefit?
This is not just about the three of us sitting in this room. It is also about the people of South Yorkshire. As has been said, 65% of respondents did not want the powers to be changed. That is an absolutely astronomic majority. As my hon. Friend the Member for Penistone and Stocksbridge said, only 24% of people voted in the mayoralty election, and only 19% voted in the police and crime commissioner election. People do not want this.
One of the big issues is how the measure will work in practice. At the moment, we have an elected police and crime commissioner, who is nominally accountable. If that power is given to the Mayor, he will then give an unelected appointee of his own choice the power to run the police service. Therefore, that man or a woman would be accountable only to the Mayor, not to the public. That is deeply concerning. This is very upsetting for me. There is already a lack of accountability in our current system. For instance, it is projected by the Rotherham Advertiser that the current police and crime commissioner is going to underspend his budget by up to £3.5 million. That money could have been spent in Rother Valley, Don Valley and Penistone and Stockbridge. For instance, we desperately need the police stations on my high street to be reopened. If the responsibility goes to a political appointee, there will be no recompense. There will be no one saying, “Why are you not spending that projected £3.5 million?” Where is the accountability?
That makes me incredibly worried about what is going on. I will not use the word cronyism, but this lack of accountability is one of the main points that comes out of the consultation document. The Government response to the consultation notes:
“Concerns were raised about the nature of these appointments”—
that is, for deputy Mayor—
“with some respondents noting that the appointment process does not guarantee previous experience and expertise in policing.”
Respondents also said that it was
“fundamentally undemocratic and that this would result in a lack of accountability.”
The Government’s response is that
“the mayor cannot delegate certain key strategic functions, such as issuing the police and crime plan, or appointing, suspending, or calling upon the chief constable to resign or retire,”
but in every other aspect it is down to an unelected, unaccountable person who is not going to benefit South Yorkshire. That is a huge concern.
To me, the budget underspend is very important. Even since I was elected, £3.5 million has gone unspent by the police and crime commissioner, and there was another underspend a few years ago, which means millions more not being spent in South Yorkshire. If that were to happen under a Mayor with these powers, where would the money go? Could the Mayor use it for other projects? Would it go back into the general mayoral budget, would it roll over, or would it be kept in a separate policing fund so that we could use it for police stations?
I am also concerned about the wider budget. Even if there is a ringfenced policing budget, which I presume there is, what is there to say that the Mayor will not use his political influence with the deputy Mayor for policing to ensure that the money is spent on something that is not exactly what it should be spent on? Where is the accountability? For instance, if the Mayor wants to spend the money on roads or trams or something, where is the accountability to ensure that it is kept for policing?
This is the nub of the issue: there is no accountability and the people do not want this change. The hon. Member for Nottingham North talked about the West Midlands. It is concerning that what is not good enough for the West Midlands apparently is good enough for South Yorkshire. I find that difference in opinion very concerning. It should be the same. He mentioned unity, but there is no unity here. The three Conservative MPs of South Yorkshire—100% of us—do not want this. There is no unity.
Keir Mather
The hon. Member has raised quite a few points about accountability. First, there will be accountability through the ballot box for an elected Mayor. Secondly, is it not the responsibility of South Yorkshire MPs to work in a spirit of pragmatic co-operation with the Mayor to allow this change to happen? If they will not, I can think of a fantastic candidate—Jake Richards in Rother Valley—who would be very happy to do so.
Alexander Stafford
I thank the hon. Member for his intervention, but if we are talking about accountability, only 24% of people voted for the last Mayor. That is a fundamentally undemocratic part of it. We have accountability in this place. For instance, I had a public meeting only last Thursday with the current police and crime commissioner, and he told us, “Nobody wants police stations on the high street.” I took a vote among the 50 or 60 people in the room, and 100% of them wanted the police station open on their high street. But can we, as Rother Valley, force the police and crime commissioner? No, because in the wider Sheffield, the focus is on Sheffield. The pork barrel nature of funding for Sheffield means that we are all neglected. That is deeply concerning.
It is very upsetting that we are in a situation where more money and resources are being pumped into a South Yorkshire Mayor who then does not spend them on what we want. We are spending £12.2 million on a bike lane between Maltby and Rotherham. We are getting £6.5 million to put in the roundabouts. Who wants that? We do not want that. What we want is the bus route between Swallownest and Aston and Crystal Peaks restored, and he is not even doing that, even though he has the power. We want Doncaster Sheffield airport reopened, but he has not done that. What faith do we have in the whole system working for the people of South Yorkshire?
I have taken up enough time, but I beg colleagues in the room: we do not want this in South Yorkshire. The people in South Yorkshire do not want it. The Members of Parliament who are here—those who bothered to turn up and to represent their constituents and give them a voice—do not want it. The MPs who did not turn up today clearly do not care about this. They must be among the many thousands of people who did not respond to the consultation. They do not care about it. The people who care about the community—the people who care about South Yorkshire—are the people who bothered to turn up today to speak for South Yorkshire, for the people of South Yorkshire, for responsibility in South Yorkshire and for good spending in South Yorkshire. This SI goes against all of that. I beg you all: please, vote it down.
Nick Fletcher
I want to reiterate exactly what my hon. Friends the Members for Penistone and Stocksbridge and for Rother Valley (Alexander Stafford) have said. I note for the record that all MPs are welcome to join these meetings, yet there are only three here from South Yorkshire. That says something about the other Members of Parliament from South Yorkshire, who have taken the vote for granted for so long. That is why we live in what many people call the socialist state of South Yorkshire. That is why it is so dangerous to hand these powers over; we are pretty much handing them over to a dictatorship. The hon. Member for Birmingham, Perry Barr said that we should not make this political, but these are political positions, and this is what it is for. People need to know and to look back at what has happened since we became a combined authority. One of the biggest problems that we have had is that money has been wasted hand over fist, and we have lost our airport. That has caused huge economic damage to South Yorkshire for the last two years, and it will continue to do so until that airport is open.
This is important because we are going to be handing over further, really important powers on police and crime commissioning. We all know the place that we are in at the moment, and the police need real backing behind this. Unfortunately, with the leadership that the current Mayor is showing at this moment in time, we have not got that. It is extremely dangerous to hand these powers over without really thinking about that. Like my hon. Friend the Member for Rother Valley, I urge all Members to vote against this. This is not the right time for this to happen.
Alexander Stafford
Does my hon. Friend and the Committee realise that the current Mayor has responsibility for business growth and recovery; education, skills and employment; transport and active travel; housing, infrastructure and net zero; and health, as the chair of the integrated care partnership? Does my hon. Friend believe that giving even more powers to that very extensive brief will serve the people of South Yorkshire? I do not believe that it will.
Nick Fletcher
I completely agree with my hon. Friend. Doncaster, Barnsley and Rotherham will all be left behind. We have seen the way in which moneys have been given to the Mayor—it is literally hundreds of millions of pounds, running into billions of pounds. That is not being divided up equally between the four councils. Unfortunately, because all the council leaders are Labour, no one is actually challenging it. We continually see videos of what is actually happening at those council meetings, and the Doncaster Mayor never sits up and actually challenges any decision that is made. The scrutiny panels are extremely small and they are again filled with people from his own party. Unfortunately, if we continue on this trajectory, South Yorkshire is going to be left behind. Other combined authorities, where we have Conservative members and Mayors, continue to move forward.
Mrs Elphicke
I have to say, my Yorkshire colleagues are making a very compelling case for their concerns. Would my hon. Friend expand on how the structure should be changed to sort out the functions going forward?
Nick Fletcher
At this moment in time, considering the place that South Yorkshire is in, if we are going to have PCCs and Mayors, which is not serving South Yorkshire well, both of those positions should continue to be elected separately, rather than giving all the power to a Mayor who can then appoint somebody who, as my hon. Friend the Member for Rother Valley has said, will not be elected. The measure gives too much power to an individual whose record so far has been appalling for South Yorkshire. As I have said, I urge all Members to vote against this, because it is not the right thing to do. Once again, we have three Members of Parliament here who have given up the time of day to attend, as opposed to those Opposition Members who have failed to turn up, and we need to ensure that our voice is heard.
Keir Mather
We have heard a lot from Government Members about democratic accountability, even the risk of dictatorship, and how nobody wants this and the will of the people needs to be respected. This provision was in the manifesto for the current South Yorkshire Mayor who, I remind Government Members, received 71% of the vote in his mayoral election. Does that not equal democratic accountability?
Nick Fletcher
This is why we are living in a dictatorship. I need to take this moment to encourage all the people in South Yorkshire, if this goes forward today—[Interruption.]
The Chair
Order. I completely understand how passionately Members feel, but can we get the febrile tone down a little bit?
Nick Fletcher
Thank you, Mr Dowd. I feel extremely passionately, because the people of Doncaster, Rotherham, Barnsley and Sheffield have suffered long enough. The people need to know that they can actually bring about change. If this goes forward, the Conservative candidate who has just been put up today, Nick Allen, is definitely where that vote needs to go.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
Does my hon. Friend think that his constituents in South Yorkshire might want to have a close look at what is happening in Tees Valley, an area that was once totally dominated by Labour, but where Ben Houchen is now delivering for the people there? He got a similar level of support in his election, and has saved the airport at Tees Valley.
Nick Fletcher
I thank my right hon. Friend for his intervention. That is the same message that I have been giving out for the last 19 months. The Conservative Mayor in Teesside, Ben Houchen, used the gainshare powers, which the Mayor of Sheffield unfortunately said he could not use—but now, all of a sudden, he can use them. Ben Houchen bought the airport with half the gainshare money available to our Mayor, and is making a real success of it.
Alexander Stafford
My hon. Friend once again mentions the key point, which is that the Mayor of South Yorkshire keeps saying he cannot do something, and then suddenly it turns out that he can. My hon. Friend mentioned Doncaster Sheffield Airport—suddenly our Mayor can save it, when he had claimed he could not. The same thing happened for my bus routes in Rother Valley. The Mayor said he could not change the bus routes or make things work, and suddenly he has changed them a little bit. The Mayor clearly does not understand what powers he already has. If we give him even more powers, what faith can we have that he will exercise them responsibly for the people of South Yorkshire?
Nick Fletcher
I could not agree more. I just want to reference something that was said about working together to move forward. I have to mention one more time that not one single Labour South Yorkshire Member of Parliament has turned up to this debate. With the way the combined authorities are being put out at this time, there is a huge amount of power, money and responsibility there, and I would have thought that Labour Members would have at least been able to turn up to this Committee.
I think we have all said enough, and I know that colleagues obviously have busy days as well. However, I encourage everybody to vote against this order, because it is the wrong thing for South Yorkshire.
Chris Philp
I will be brief in my concluding remarks. I thank Members on both sides of the Committee for their contributions, and I fully understand that strong feelings are engaged. I will just make one or two points in response to the issues raised in this debate.
First, on the question of funding, I can confirm to the Committee that the police element of the budget is ringfenced. That is made clear in the order; it is a separate account. Money given to either the police and crime commissioner or the Mayor exercising those powers by the Government in the form of the block grant or raised by the police precept is ringfenced to be spent only on policing. That ringfence is legally in place.
Alexander Stafford
I hear what the Minister is saying about the ringfencing. I will quote from the consultation responses of people against this order:
“A minority felt that a transfer could divert resources away from policing and towards non-policing activities within the combined authority.”
I hear that the money is ringfenced, but we need safeguards in place so that the Mayor cannot use some of the money on something that he may define as policing, but which, to someone else, might not be related to policing, and cannot bung it towards groups, people or activities that are not actually in the best interests of South Yorkshire. What safeguards will be in place? What guarantees are there?
Chris Philp
There is a hard-edged legal requirement—the breach of which would be unlawful—to spend the Home Office block grant and the money raised by the precept only on police and crime activity. A failure to do that would be unlawful. That is just a black and white legal requirement.
Mrs Elphicke
I am somewhat concerned by some of the comments made by colleagues who are most affected. I would be grateful if the Minister explained whether the responsibilities could be delegated to another person in the way that has been described, and if he could say who, in that situation, would make the decision on an increase to the precept.
Chris Philp
That brings me to the matter of accountability and blaming the Government, which I was going to mention. When a Mayor exercises police and crime commissioner powers, as Sadiq Khan does in London, they set the element of the precept that funds the police in the same way as a police and crime commissioner. That is a decision for the Mayor when they exercise PCC powers, in the same way that Sadiq Khan—I use that example because I am a London MP—sets the police precept in London. In Kent, of course, it will be Matthew Scott, my hon. Friend’s police and crime commissioner. If this change is agreed, the Mayor of South Yorkshire would set the police precept in South Yorkshire, the money raised from which would be strictly and legally ringfenced to be spent on policing purposes.
Mayors are entitled to appoint a deputy Mayor for policing—Sadiq Khan does that in London—but the Mayor is still ultimately responsible. For example, the Mayor personally sets the precept and exercises the power to hire and fire the chief constable. The Mayor personally exercises a number of powers, and they can appoint a deputy Mayor for policing, as Sadiq Khan has in London—he has appointed Sophie Linden. However, the Mayor ultimately takes the key decisions. The Mayor is accountable at the ballot box, and ultimately the people—the public—can kick out the Mayor if they think they are doing a bad job.
Some slightly contradictory arguments have been advanced about election turnouts. On the one hand, it has been said that the 19% turnout for the PCC election and the 24% turnout for the mayoral election were low. On the other hand, the Committee is being invited to give significant weight to 0.2% in the consultation. Obviously it is internally contradictory to say that 0.2% is significant but 24% is not significant.
Nick Fletcher
Can the Minister tell me how widely advertised the consultation was? Unfortunately, I genuinely do not believe that it was. As a Member of Parliament, I put a lot of effort into letting people know. Everybody knows that there will be an election in May, because the country and the Government will be putting it out there, so it is slightly unfair to compare those two.
Chris Philp
My hon. Friend has made his point.
In a sense, the fact that the turnout in the PCC election was lower than the turnout in the mayoral election by five percentage points suggests that combining the two would give the person who exercises those powers the highest possible profile and real authority over these issues, such as transport, housing and policing in London. Indeed, that is why it is done across the country, in London and Manchester, and why we are in the process of seeking to do it in the West Midlands. No one would dispute that, for example, the Mayor of London, the Mayor of the West Midlands or the Mayor of Greater Manchester, Andy Burnham, have a significant profile, because they exercise significant powers.
If we are concerned, as my hon. Friends are—and as I am, to some extent—that the turnout in PCC elections is not as high as we would like, then giving the person who holds those powers, in this case the Mayor, as many powers as possible would give them a higher public profile and motivate more people to turn out and vote. The turnout in the mayoral election in London is likely to be getting on for 50%, or maybe 40%—who knows exactly, but it will be quite high—because the Mayor of London exercises such significant powers, and I think that improves democratic accountability.
My last point is that Members have been very decent in not being too personal to the current incumbent of the South Yorkshire mayoralty, and I will not be either. I know that there are some concerns about the way in which that individual has done their job, and I understand that people have strong feelings about that, but we need to legislate for the right structure—a structure that makes sense—and not vote one way or the other because there is an individual who might not be doing a very good job. Where Mayors do a good job, such as Ben Houchen or Andy Street—there might also be some Labour ones, although I cannot immediately think of one; the hon. Member for Nottingham North is free to intervene and suggest one—we know that they can be really effective.
As parliamentarians, we have to legislate for the right structures—ones that are right in perpetuity, regardless of the individual—and trust the electorate to make the right choice. It is our view, and my view, that this is the right structure. Consolidating the role, so that the Mayor can exercise a wide range of powers and co-ordinate with partners, is the right structure. That is why we have done it in London and Greater Manchester, and why we are in the process of doing it in the West Midlands, which covers Birmingham as well. Obviously the four local authorities, the current PCC and the current Mayor agree with this. Taking a sober step back, I just think that this structure is one that works, regardless of some of the problems that might exist with the current personality.
Alexander Stafford
The Minister is being incredibly generous with his time, and I appreciate it. I have two different points, so will make two interventions if he will allow me. First, the Minister keeps mentioning the profile of Andy Street and the great job he is doing in the West Midlands, which he is—there is no question about that. However, the Mayor does not have PCC powers there, so the job can be done without PCC powers. In fact, the Government are going through a battle with the PCC in the West Midlands to try and stop that happening, and there is a judicial review. What is good for the goose is good for the gander. How is that possible? This structure is clearly not working.
Chris Philp
First of all, Mayors with a very high profile—particularly Andy Burnham and Sadiq Khan—do exercise PCC powers. Andy Street has asked for the PCC powers in the West Midlands. He believes, I think rightly, that exercising those powers will enable him to do a better job. We agree with Andy Street.
Alex Norris
The Minister again makes the case that those structures are better in and of themselves. Our view is that that should be for local determination. However, if that is true in the Minister’s view, what does that mean for those communities that can never have that structure, and the calibre of their leadership and decision making?
Chris Philp
We are trying to implement those structures where there is coterminosity. That is not physically possible in all places. For example, the shadow Minister mentioned the proposed combined authority across Derbyshire and Nottinghamshire. At the moment, those are two separate police forces. Unless the police forces are merged, it is impossible to do that. We cannot have the same solution across the whole country unless we start merging police forces or changing police force boundaries. We can do the best possible given the current boundaries. If Nottinghamshire and Derbyshire want to come forward and propose a merger of their police forces, obviously they are free to do that.
Chris Philp
The shadow Minister is shaking his head. I suspect there would be a lot of local opposition to doing that. It is impossible to have the combined Mayor of the east midlands exercising PCC powers, because there are two different police forces. We just physically cannot do it there, but we can do it in other places. Just because we cannot do it everywhere—
Chris Philp
I am going to finish up now.
We should do it where we can. Where it is done—in London and Greater Manchester—it is working. Andy Street wants it in the West Midlands. I know there are issues with the individual concerned in this case, which we do not need to talk about any further, but we should vote for the right structure and the right principle. While I completely respect the views that my colleagues are advancing, the Government think this is the structure that is right in perpetuity.
The Chair
Before I put the Question, I remind Members that the only people who are entitled to vote are those who have been appointed to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft South Yorkshire Mayoral Combined Authority (Election of Mayor and Transfer of Police and Crime Commissioner Functions) Order 2024.