Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) (Amendment) Regulations 2024

Monday 25th March 2024 Lords Chamber

Motion to Approve

17:42

Moved by

[Baroness Swinburne]

That the draft Regulations laid before the House on 19 February be approved.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Swinburne) (Con)]

The draft regulations, which were laid before the House on 19 February, will, if approved by Parliament, complete the legislative framework for overview and scrutiny committees, and audit committees, of combined county authorities. They make provision about the membership and proceedings of these committees and in relation to allowances for committee members. The regulations also provide for allowances for members of a combined authority’s overview and scrutiny and audit committees.

The wider context of these regulations is that these committees are essential components of the architecture of accountability in combined authorities and combined county authorities. As more powers and resources are devolved to these important bodies and their mayors, the responsibility to ensure sound governance and effective decision-making in the interests of local people becomes ever more important.

Through these regulations we are ensuring that the new combined county authorities have strong and effective overview and scrutiny committees, and we are pursuing a number of further initiatives to develop this architecture of accountability. In particular, we have published the English Devolution Accountability Framework and a scrutiny protocol, and we intend shortly to issue revised statutory guidance on overview and scrutiny.

It may be helpful to say a little more about these initiatives. The English Devolution Accountability Framework sets out how institutions with devolved powers, such as combined county authorities,

“will be scrutinised and held to account … by the residents and voters of their area”,

by local leaders and businesses and, as appropriate, by central government. As part of this framework, the scrutiny protocol in particular sets out how a combined county authority’s or a combined authority’s overview and scrutiny and audit committees hold the institution—and, where there is one, the mayor or directly elected leader—to account.

17:45

We intend shortly to issue revised statutory guidance for overview and scrutiny, aimed at local authorities, combined authorities and combined county authorities, to help them carry out their overview and scrutiny functions effectively. The guidance provides advice for senior leaders, members of the overview and scrutiny committees, scrutiny officers and officers with a role in supporting these scrutiny committees. The regulations which we are considering today provide the foundation for these initiatives in their application to combined county authorities.

I turn to the detail of the regulations. They provide for the membership and proceedings of overview and scrutiny committees and audit committees of combined county authorities. They do so by extending the Combined Authorities (Mayoral Elections) Order 2017 so that it applies to combined county authorities as well as to combined authorities. This approach ensures parity between the two types of authority. The regulations also enable the payment of allowances to members of constituent councils of combined authorities and combined county authorities who are appointed to the overview and scrutiny and audit committees.

We have made a few minor changes to the drafting of the 2017 order to reflect the inclusion of non-constituent members and their nominating bodies in the constitutional arrangements for both combined authorities and combined county authorities, and to ensure that the provisions work for both types of authority.

The regulations also accommodate the constitutional difference between combined authorities and combined county authorities. In particular, if the provisions of the 2017 order were simply applied without modification, there would be no duty on a combined county authority to enable, for example, a district council that is within its area but which does not nominate a non-constituent member to refer a matter to the overview and scrutiny committee.

The regulations recognise the legitimate interest of such district councils in certain decisions which could be made by the combined county authority. They do so by extending the referrals provision to include such councils where the matter relates to the council’s area. This extension also applies to the supply by the combined county authority of related documents to a council making a referral.

I turn to the new allowances provisions. These were included in the Levelling-up and Regeneration Act 2023 at the request of some of the existing combined authorities, to aid quoracy at meetings of overview and scrutiny committees. The regulations enable both combined authorities and combined county authorities to pay an allowance to members of their constituent councils who are appointed to overview and scrutiny, and audit, committees.

The provision is enabling only; if an authority does not wish to make such a payment, it is not obliged to do so. However, where a payment is made, it must be in accordance with a recommendation from an independent remuneration panel. The regulations also include consequential amendments to existing combined authority orders to ensure that the new allowances provisions may have effect in those authorities.

The Government undertook extensive consultation ahead of the 2017 order for combined authorities. The regulations before us today apply the 2017 order provisions to combined county authorities. They make only essential changes to reflect the constitutional provisions in the 2023 Act and to add the provisions enabling payment of allowances. That said, throughout the drafting process, we have engaged officers from the existing combined authorities and from constituent councils of the East Midlands Combined County Authority, as well as the Chartered Institute of Public Finance and Accountancy and the Centre for Governance and Scrutiny. The approach we adopted has been welcomed and the consequential amendments to existing combined authority orders were agreed with each area.

Under the 2023 Act, we hope to see the establishment of more combined county authorities, which, like combined authorities, will have increasing decision-making powers and budgets. The regulations provide that with these powers comes robust, transparent local accountability. This ensures that the public can have confidence in decisions that these new authorities and their elected mayors make.

[Lord Scriven (LD)]

My Lords, I thank the Minister for presenting this and I see some logic in some of the provisions within the regulations. However, paragraph 10.1 of the Explanatory Memorandum raised my eyebrows. It asks:

“What is the approach to monitoring and reviewing this legislation?”


It then states that:

“The Government has no plans actively to monitor this legislation; the majority of provisions are already in operation without problems for combined authorities”.


Tell that to people who have sat on the Tees Valley Combined Authority’s overview and scrutiny committee. They would tell you that things were not working properly. It got to such a point that the dysfunctionality of that combined authority and the poor or lack of oversight of what was happening led to the Tees Valley Review, which was produced by an independent panel and made some quite interesting observations on what was happening there. The report said that:

“The former monitoring officer advised TVCA oversight and Scrutiny Committee they had no remit to scrutinise”


South Tees Development Corporation decisions. That was quite interesting because Tees Valley Combined Authority had given over £200 million-worth of loans to the South Tees Development Corporation and therefore there was a direct link to why overview and scrutiny needed to take place.

In the report, previous members of the Tees Valley Combined Authority’s overview and scrutiny committee

“expressed frustration at the lack of information provided which they felt undermined their ability to scrutinise the activity of STDC and TWL”—

Teesworks Limited—which is now a privately owned company, 90%-owned by the private sector. Two businessmen with a 90% stake are making super profits on the back of £500 million-worth of public sector investment and again, the overview and scrutiny committee has not been able to scrutinise most of that money.

Recommendations 6 and 7 of the Tees Valley Review report relate directly to overview and scrutiny and show why it was not working, what the deficiencies are and how things need to be improved. The Minister pointed out that new guidance is coming forward, but if the Government are not going to monitor actively the legislation, how will they know whether another Tees Valley Combined Authority issue could happen or is happening? What mechanisms do the Government have in place to ensure that this kind of dysfunctionality can never happen at a combined authority again? It is an important question that the Minister needs to answer, especially since this new legislation will not be monitored. If arrangements are not in place centrally to determine whether there is this kind of dysfunctionality, what arrangements will be put in place to ensure that this could not happen again in any of the existing combined authorities or the new combined county authorities?

[Lord Shipley (LD)]

My Lords, I will wait for the Minister to reply to the points raised by my noble friend Lord Scriven. In her introduction, she talked about the review that is taking place but not the timescale. It would help the House to know when the Government expect the response, which we all expect, to be produced.

I understand that this instrument maintains parity between combined authorities and combined county authorities and that it is necessary. However, I was concerned to read in paragraph 7.4 of the Explanatory Notes that

“several of the combined authorities with whom the draft legislation was discussed asked if provision could be included enabling committees to meet virtually or to reduce the quoracy requirement for the transaction of committee business from its current level of two thirds of committee members”.

I am very pleased that the Government concluded

“that face-to-face attendance of meetings”

of overview and scrutiny, and of audit, is important. It is and, having worked on the levelling-up Bill and moved amendments in relation to overview and scrutiny, and audit, I think that the Government’s position is correct.

It is very easy for those who are running overview and scrutiny, and audit, to want to reduce the workload and so suggest “Can we meet virtually?”—that means that, rather than all the conversations that take place before or after a meeting, people are only discussing these matters online—and, “Can committees have a lower turnout/attendance rate?” When we moved these matters in previous legislation, the figure of two-thirds mattered because overview and scrutiny, and audit, must be taken very seriously. I hope that the Government understand this.

We will see when we get the report that the Government are due to present to your Lordships’ House, but, as my noble friend Lord Scriven said, my eyes lit upon the words at paragraph 10.1 of the Explanatory Notes saying that:

“The Government has no plans actively to monitor this legislation”.


I think that this means relating only to whether people take up the option of allowances—it may mean that; however, it may mean something else. I hope that the Government do not mean the wider definition of “legislation”, because all the evidence suggests that the Government need to keep a very close eye on overview and scrutiny and audit, and how it is being carried out.

[Lord Khan of Burnley (Lab)]

My Lords, I thank the Minister for introducing these regulations. It is a pleasure to follow the noble Lords, Lord Scriven and Lord Shipley, who have asked some very important questions.

The Levelling-up and Regeneration Act 2023 provides for the establishment of combined county authorities, which typically cover more rural areas; the existing combined authorities typically cover cities. The purpose of these regulation is to ensure that the same membership and proceedings provisions apply to the overview and scrutiny committees and audit committees of combined county authorities as apply to the same committees in combined authorities.

The regulations aim to create uniformity across both types of local authority in terms of committees that scrutinise the spending of public money and enable their members to be paid. We on these Benches would like to raise some specific issues. The measures mirror powers given to local authorities and the current combined authorities. We must be careful that we do not create legislation that allows combined authorities to create overview and scrutiny functions and audit functions if they do not have the specialist teams that are needed to support them properly.

This is a point my honourable friend Jim McMahon MP raised in the other place; he had no satisfactory response. We all know that when local government excels in scrutiny, it is because it has a well-resourced team that enables it to do proper, deep-dive reviews and investigations, to call in expert witnesses and to really go through things. I do not see that provision of finance in these regulations, so I would welcome a response on that.

Will overview and scrutiny committees have the power to conduct a “best value” review? Will remuneration for members of the committees reflect the type of members the committees want to attract? For instance, getting a specialised accountancy perspective may cost more than getting a residential view; will remuneration for each be the same or different? Have overview and scrutiny committees been reviewed yet? How effective have they been so far at ensuring that there are checks and balances in place on local authority spending? Who will pay for the provisions of these regulations? Will the cost come out of already-stretched local authority budgets?

18:00

To conclude, we must also recognise that the more powers we give out, the more robust the checks and balances need to be. We are concerned that 14 years of Conservative economic mismanagement, compounded by spiralling inflation and the failure to grow our economy, have hit councils hard. We are keen to ensure that local councils are supported where the Government have failed. We will not expect councils to live hand to mouth, with short-term financial settlements year on year—I think we are now on our sixth single-year financial settlement—which make it difficult for councils to plan. Labour will give councils long-term, multiyear funding settlements so that they can plan ahead, as well as the tools they need to get on with the job. I look forward to the Minister’s response.

[Baroness Swinburne (Con)]

I thank Members for their contributions. There were some questions that I may need to come back to in more detail. With regard to the questions that in particular the noble Lord, Lord Scriven, asked about the situation in Teesdale—

[Lord Scriven (LD)]

Teesside.

[Baroness Swinburne (Con)]

Teesside—apologies; a lot of briefings have gone on in the three weeks since I joined this department.

As noble Lords will know, the mayor has accepted all the recommendations that the independent panel made in its review. They are in many cases substantial and therefore will take time to implement. But they are sensible recommendations and are in line with the frameworks that we have put in place and are putting in place with regard to the scrutiny protocol. From that point of view, the mayor in that region now needs time to put this into place, and the overview and scrutiny committee needs to step up to make the changes required.

[Lord Scriven (LD)]

There are two points to that. My question is not really about what is happening in Teesside; it is about what mechanism the Government now have in place to ensure that the things that led to the Teesside review do not happen again. In the explanatory framework, the Government state that they are not going to “actively” monitor the legislation. Secondly, the protocol is welcome but it is non-statutory, so bodies do not have to apply it to their own overview and scrutiny committee. That is the case, is it not?

[Baroness Swinburne (Con)]

We expect that all combined authorities and combined county authorities, where there is a significant amount of power being devolved, will adopt the best practice that we can possibly put before them. The English Devolution Accountability Framework pulls together all the existing policies and best practice, and indeed we will go further with the scrutiny protocol, plain English guidance and new published outcomes and metrics for areas to be measured by. There will be a new framework, and they will be held to account.

The intention is that this accountability framework will empower local residents and provide them with confidence that devolution is leading to improvements in their area overall. Ultimately, the mayors are accountable to the public, but we believe that the mechanisms need to be there for them to be accountable on a more frequent basis. The Government retain the ability to intervene in exceptional circumstances, but scrutiny and accountability should be led locally. Those are the principles we are applying to this—not just for one authority but for all these authorities, as we devolve the power.

I do not have an exact timetable for the scrutiny protocol; I will write to noble Lords as to when that will become operational. A lot of the work has already been done. Certainly, the scrutiny protocol will apply to all the activities and arrangements of the overview and scrutiny committees in all English institutions with devolved power, including combined authorities, both mayoral and non-mayoral, and combined county authorities—again, mayoral and non-mayoral—and with regard to all devolved powers in county councils and unitary authorities that have agreed to devolution deals. It is very comprehensive; they will all be covered by it.

With regard to the payments of allowances and the differences that may be deemed necessary in order to get good-quality people, any payment may be made only in accordance with a recommendation from an independent remuneration panel at that authority. Therefore, we would expect that panel to take the lead on this. The other side of the coin, of course, is that if an existing combined authority does not wish to make any payments, it is not required to do so, but if in the future it should change its mind, it will not need to seek further fresh legislation in order to do so.

In conclusion, these regulations are essential to ensure a robust local accountability framework for the exercise of devolved power by combined county authorities and their mayors.

Motion agreed.