English Devolution and Community Empowerment Bill (Third sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 14th October 2025
(1 day, 17 hours ago)
Public Bill CommitteesEnglish Devolution and Community Empowerment Bill 2024-26 View all English Devolution and Community Empowerment Bill 2024-26 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 14 October 2025 - (14 Oct 2025)
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 11 - Question accordingly negatived.
The Chair
With this it will be convenient to consider new clause 35—Standardisation of definitions—
“(1) Within six months beginning on the day on which this Act is passed, the Secretary of State must by regulations standardise the definition in legislation of—
(a) ‘national’,
(b) ‘strategic’,
(c) ‘local’ and
(d) ‘community’
for the purposes of ensuring each refers consistently to the appropriate level of local government across all legislation.
(2) Regulations under this section are subject to the affirmative resolution procedure.
(3) In exercising this power, the Secretary of State must have due regard to the need to ensure consistent use of the words listed in subsection (1), to facilitate public understanding of devolution.
(4) Within six months of a statutory instrument under subsection (2) being made, the Secretary of State must lay before Parliament a report setting out how the power under this section has been used this power, including any reasons for failure to exercise it where there is inconsistent usage of the words listed in subsection (1).”
This new clause would ensure that words like “strategic” and “local”, where they relate to a level of government, have consistent meaning across statute.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)
It is a pleasure to serve with you in the Chair, Sir John. Before I speak to the first group of amendments, I put on the record my thanks to the witnesses who gave up their time in September to give evidence to the Committee. Their comments were insightful and will inform our scrutiny over the remainder of Committee stage.
The English devolution White Paper committed to introduce in law the concept of strategic authorities, which sits at the heart of our new devolution architecture for England. The clause makes good on that commitment and establishes a more consistent and simple model of devolution. The clause sets out the three levels of strategic authority: the single foundational strategic authority, the combined foundational strategic authority and the mayoral strategic authority. Each category will have access to a consistent set of devolved powers and functions.
Mayoral strategic authorities that meet specified eligibility criteria may be designated by secondary legislation as established mayoral strategic authorities, unlocking further devolution. We believe that that will deliver a permanent shift in power from Whitehall to all parts of the country, with consistent powers at the right level across all of England, so that empowered mayors can drive growth, unlock house building and infrastructure, and deliver the change that our communities want.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I echo the Minister’s welcome, Sir John. It is a pleasure to serve with you in the Chair.
We will refer to a good deal of evidence on all parts of the Bill, but it is important to set out briefly—in terms equivalent to those used by the Minister—the concerns that the Opposition continue to have about the significant democratic deficit that arises from the measures in the Bill; the risk of losing the efficiency and local insight that come from many of our local government structures; and, in the context of a country that already has fewer elected representatives per voter than any other developed democracy in the world, the impact of stripping out, by some estimates, up to 90% of elected representation. I therefore echo your comments, Sir John, on the importance of scrutiny of the Bill. Local authorities are the means by which our voters, our residents, exercise control over what happens in their neighbourhoods and communities. It is critical that the legislation gets that right.
Miatta Fahnbulleh
We absolutely recognise the hon. Member’s point about democracy. Directly elected mayors can play a powerful strategic role. They are a key new part of the devolution architecture that we have seen work well across the country. I point to Greater Manchester, which has delivered the fastest growth of any local economy. They sit alongside strong democratic structures that we will have in local government. The Bill is complementary to that and does not cut across or undermine those structures.
Siân Berry (Brighton Pavilion) (Green)
It is a pleasure to serve under your chairmanship, Sir John. This is not my first Public Bill Committee, but I have had the whole summer to forget how these things work, so I look forward to being firmly guided by you if I stray from good practice.
I will speak to new clause 35. In that context, I emphasise how friendly, constructive and helpful the new clause is intended to be as a way of getting the Committee started on a good note. I ask Ministers to take the need for it on board, although I will not press it to a vote. I tabled the new clause to ensure that, more broadly, words such as “strategic” and “local”, where they relate to a level of government or a level of area of policy, have a consistent meaning for strategic authorities, constituent authorities and community-level groups.
I will give some examples of possible confusion growing in the areas cited in new clause 35. We have a strategic road network, which is in fact a national network managed by National Highways. We have new strategic authorities, which will have to manage a key route network, analogous to the Transport for London route network. We also have local roads managed by local authorities. In the Bill, however, we have strategic authorities being asked to make a local transport plan. That could be more helpfully named a strategic transport plan.
Another area of policy I am very familiar with is the community infrastructure levy. In later clauses, we will discuss new applications of the mayoral community infrastructure levies. I have experience of how, more locally, spending on what most local councils call strategic community infrastructure levies is done by local authorities. Decisions on local CIL spending, which is what councils normally call is, are made closer to the community, often by ward councillors or neighbourhood forums.
We are slightly better off in planning, where there is a national basis for decisions on nationally significant infrastructure, and where strategic planning applications may be called in by regional strategic level mayors under current or new structures. However I do think that we lack rigour, sometimes logic, and often clarity in all these terms now. More thought about making things more standardised and easier to understand would be very welcome. I am not proposing a vote on this new clause, but what I would like to hear from the Minister today is that she will take this away, ask for at least a report on the current range of terminology we have ended up with in different areas of policy, and consider potential further amendments and the fuller review the new clause calls for.
The Chair
As a point of advice, if people want to contribute after I have called the Minister to sum up then just let me know in advance and I will call the Minister at the end, so she can respond to a variety of points that have been made. I do not want the Minister to have to keep getting up and responding to every speech. I know people are new to Committee, but it helps the Minister be able to sum up her consideration of all the points that have been made.
Miatta Fahnbulleh
I am sympathetic to the intentions behind the new clause, and the hon. Member for Brighton Pavilion makes a good point regarding the tapestry of terms that we have in a very complicated local government structure; however, the Bill already includes defined terms relevant to interpreting local government structures. For example, clause 1 defines exactly what strategic authorities are. My concern is that taking a one-size-fits-all approach might have unintended consequences by altering existing definitions that have been deliberately tailored to work in specific legislative contexts. My view is that as we go through this process of standardising the new structure, with strategic authorities now established in legislation working alongside local government and community structures, the roles and the definitions of different structures of government will become much clearer. I hope the hon. Member will not press the new clause.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Functions of Strategic Authorities and Mayors
Siân Berry
I beg to move amendment 261, in clause 2, page 2, line 21, after “economic development”, insert “, poverty and socio-economic inequality,”
This amendment would make poverty and socio-economic inequality an area of competence for devolved authorities, ensuring they can take action to address the root causes of disadvantage in their areas.
David Simmonds
The Opposition have some sympathy with the amendment, but we spent time reflecting on its implications and appropriateness for the Bill. I suspect that, to a degree, the Minister and I agree on this point. If we reflect on the legislative framework around our local authorities from their earliest origins, the relief of poverty and addressing inequalities—the duties that the amendment refers to—have been enshrined. It goes back as far as the Poor Laws, but in more recent years the National Assistance Act 1948 compelled all local authorities to support those destitute in their areas, and the Localism Act 2011 gives scope for local authorities to use their economic powers through activities such as procurement in ways that specifically benefit the local area.
The Levelling-up and Regeneration Act 2023, which was much debated and broadly had cross-party support, is reflected in a lot of this Bill. It was specifically about local authorities using their powers to support the economy of their local area. Just a short time ago, some of the members of the Committee were in this room debating the Planning and Infrastructure Bill, in which the Government set out a vision—contested to some extent—about how those measures affecting local authorities will address persistent issues of inequality. We recognise that sometimes that is about legislation, but sometimes it is about Government action.
Mention has been made of food banks, which were rolled out under the last Labour Government as a means of addressing persistent issues of poverty. I remember them being opened during my time as a local authority councillor, and Gordon Brown visiting and saying, “This is an example of how we expect local authorities to address some of these persistent issues.” Local authorities already have these duties at both the strategic and the micro level. I question whether it is necessary to add an amendment that, in essence, reflects existing duties throughout all the different tiers of local government in England.
Miatta Fahnbulleh
I shall start by setting out the purpose of clause 2, then turn to amendment 261. The clause provides some broad thematic policy areas under which functions and powers of strategic authorities are arranged in the Bill. Defining those areas on the face of the Bill will bring clarity and purpose to the role of strategic authorities, which all parties agree we need to do. We want to empower mayors, who know who their areas best, to respond to local needs, so they can be the ones driving change and improvements in economic prospects and living standards and poverty. These thematic policy areas are deliberately broad, to allow for a wide range of activities.
I have a lot of sympathy with the intention behind amendment 261. Alleviation of poverty and tackling socioeconomic inequality should be a core part of what we do and a core metric of economic success. However, as the hon. Member for Ruislip, Northwood and Pinner set out, those duties are already baked into the very function and purpose of local authorities and, critically, they cut across all the thematic areas that we have set out.
Manuela Perteghella (Stratford-on-Avon) (LD)
It is a pleasure to serve under your chairmanship, Sir John. Amendments 4, 28 and 29 would make English devolution genuinely local by ensuring that local consent and public consultation come first. Amendment 4 would change clause 3 so that local authorities must apply to the Secretary of State themselves to become a single foundation strategic authority, rather than Whitehall imposing devolution on local councils. Amendments 28 and 29 would remove the parts of schedule 1 that would allow the Secretary of State to prepare a proposal for there to be a mayor in an existing combined authority area, and for the establishment of a combined county authority, without public consultation.
One of the greatest criticisms of the Bill is that it proposes a top-down, Whitehall-led devolution, which is not really devolution at all. In my county of Warwickshire, the choice of which strategic authority we create, form or join must come from local elected representatives who are closer to their communities and understand better the needs of our constituents. Such an important shaping of future governance must have grassroots support and should not end up being imposed by central Government, especially if we want to decentralise powers to tackle socioeconomic inequalities, address regional disparities and promote real autonomy.
Without the amendment, local people will lose the right to decide their own governance arrangements. Whitehall will be able to impose devolved powers, force mayoral models on to areas that have not asked for them, and redraw local governance boundaries behind closed doors. Community involvement and local consent are essential to ensure transparency and accountability in devolution decision making.
Amendment 4 reaches the heart of the issue at hand. It would ensure that devolution is locally led, not imposed. It would ensure that a council that wishes to become a single foundation strategic authority must initiate the process itself, rather than wait for the Secretary of State to decree it. If devolution is to have legitimacy, it must be built on local consent, local ambition and local accountability. Without that, we risk the Bill becoming an exercise in central control and a top-down approach dressed up as devolution. We would like to push amendment 4 to a vote.
Miatta Fahnbulleh
Both the policy intent and the practice with places going through the devolution process are locally led. The impetus is coming from local leaders and local authorities that are working with their communities to drive the process.
On amendment 4, the Government have been clear that we will consider non-mayoral devolution arrangements for single local authorities on an exceptional basis where certain criteria are met. Designation is not intended as the end point; it is a stepping stone towards deeper devolution, which is what we hope will be the journey for all parts of the country. It is therefore most appropriate for the process to be initiated by the Secretary of State rather than the local authority. However, to be clear, the Secretary of State will not be able to designate a council as a foundation strategic authority unless the council itself consents to that designation. That is a robust safeguard that will protect the interests of the single local authority concerned. I agree with the sentiment behind the amendment to ensure that the Secretary of State has regard to the need to secure effective and convenient local government. I am pleased that those criteria are already embedded in the Bill when conferring functions on a single foundation strategic authority.
Amendment 28 seeks to remove the Secretary of State’s proposed power to direct for there to be a mayor for an existing combined authority without local consent. The Government have been clear about the benefits of mayoral devolution; we are seeing it across the country. For example, South Yorkshire mayoral combined authority brought the Supertram network back into public control after 27 years, and there are already drops in fare evasion, increases in usage, ticketing apps and improved clearing. Greater Manchester authority has taken control of its bus service, resulting in increased punctuality and ridership and cheaper fares. The North East combined authority has secured a £450 million development for one of the largest film studios in Europe, with the potential to create over 8,000 jobs.
We know the impact of this devolution model. We are seeing it across the country and we want to see it in more areas. We are clear that mayors with skin in the game are best placed to drive forward growth, reform public services and deliver the change that their communities want. Every resident in England should be able to benefit from deeper mayoral devolution in their area.
David Simmonds
There is, perhaps, a risk of the Committee being inadvertently misled, in that all these points are being described as locally led. The Committee needs to be clear: local authorities were told that they needed to submit the proposals or the Government would take powers to direct them to do it. It was a gun to their heads. It was not the case that local authorities came forward proactively. During the 14-year era under the previous Government, it was clear that proposals that did come forward for reorganisation would be entertained by Government, and a number of those were taken forward, but compulsion was not the case. It is only since the Government told local authorities that they either had to come forward or would be directed to do so that we have seen the proposals, so it is not the case that they are locally led. The Committee needs to be clear on that.
Miatta Fahnbulleh
I completely disagree. I have been having conversations, for example, with our strategic combined authorities that are going through the process. The difference between this Government and the last is that we have created a clear sense of the powers and the economic opportunities that areas can take forward. Take, for example, our current devolution priority area. I am the new Minister, and I am having the first set of conversations with them. Every single one is excited and enthusiastic about the prospect. At the moment, the demand for devolution deals is outstripping our ability to respond, because we have attached to them clear powers, access to funding and the ability to drive the change that we want to see in those areas. So I completely reject the premise that places are being driven to do this.
Paul Holmes (Hamble Valley) (Con)
There is a risk here that we are conflating what is actually happening on the ground. The Minister is absolutely right, and no one can argue that this Government have not been clear about the structures that they want to put forward. However, to say that there is a demand from local authorities requesting devolution is stretching it a bit, because it is quite clear out there—particularly in my area, in Hampshire and the Solent—that this Government have said to them, “You have to do this; otherwise we are going to force it on you.” That is not locally led, is it?
Miatta Fahnbulleh
I spoke to the leaders of Hampshire and the Solent just last week, and they were unanimously enthusiastic about what was being proposed, because they could see the opportunity. I am pleased that it is being voted on, and ultimately it is for places to come forward. What we have said to them is, “If you go through this journey, there are powers that you can draw down that will allow you to drive change in your areas.” The strategic authorities, combined authorities and constituent authorities can see the economic prospect. They see what is happening in Greater Manchester, the Liverpool city region and the west midlands, and they want that for their residents. That is absolutely right, and what we are doing is enabling and supporting that.
Let me talk about the backstop power provided here. We do not expect to use it, which is why it does not come into force at Royal Assent; it is there if we need to draw on it. The only reason it is there—because we think the demand and the momentum created by devolution will do the job for us—is in the instance where there are blockages. That means when constituent authorities that want to move forward are being resisted by a particular authority, we give ourselves the ability to intervene. The reason we are doing that is because we do not want any residents to be left out. We do not want areas to be devolution deserts, not being able to benefit from the economic opportunities and prospects provided.
Vikki Slade
The reality is that the only reason they are queuing at the Minister’s door to access devolution is that they are being denied access to funding if they do not. Let me give the example of Wessex: Somerset, Dorset and Wiltshire have all been unitarised over the past 10 years. They should have been in the ideal position, but they were overlooked for the first wave of devolution. They were apparently not ready, and I accept that fact, but they have missed out this financial year on more than £300 million—£159.29 for every single household in that area—compared with other areas. They have no real choice but to devolve to a single authority, because why would their residents think it is acceptable for them to miss out on £300 million? So it is not fair, or it is disingenuous, to suggest that this is not compulsion. The other point I want to make—
Miatta Fahnbulleh
It is absolutely right that we say that, in order to drive economic success in particular areas, there are powers that relate to economic drivers and levers that we want, and there is an investment fund that can be deployed at that functional level. I will not resile from that; it is absolutely the right thing to do. We are clear with places that we think a strategic authority operating at a functional geography is the way to unlock their economic potential, and we are building powers alongside that. Places that want to take it up absolutely can. At the moment they are queuing up to do so, and I am incredibly happy about that.
I am very disappointed in the hon. Member for Hamble Valley for not getting on in support of his area, which is enthusiastic for this and moving forward. Ultimately, there is momentum around devolution because the benefits of it are being seen already. It is not theoretical; it is not on paper. We are seeing it in our areas, and I want it for every part of the country, not just the ones that have gone through the journey.
Paul Holmes
The Minister should be very careful about attributing motives to myself that are not there. I am very supportive of the fact that Hampshire and the Solent and will have a mayor. Hopefully, it will be a Conservative mayor, as that will drive the economy going forward. I want to press the point that we can see how divisive this is in the fact that three different versions of local government reform are being proposed. Hampshire and the Isle of Wight were told, in this Government policy, that if they did not go ahead and embrace devolution, it would be forced on them in a way they may not like. That is not locally led; it is compulsion, is it not?
Miatta Fahnbulleh
I will not press this point. All I can say is that I sat down with the leaders last week as a new Minister—the newbie—and I asked them how it was going. They told me, “we are enthusiastic and there is momentum around this because we can see the value that it will provide for our communities, so we are driving forward. What we need is for Government to get out of the way and for the Government to support and enable us.” I take that as a ringing endorsement of what we are trying to do. I can only go by the conversations I have had with local leaders. At the moment, I am seeing momentum and support for this, and rightly so because we are seeing the impacts of this on the ground and the Bill will extend that across the country.
Question put, That the amendment be made.
Vikki Slade
I beg to move amendment 30, in clause 3, page 2, line 32, at end insert—
“(3A) Before making a designation under this section, the Secretary of State must consult town and parish councils within the area of the proposed single foundation strategic authority.”
This amendment would require the Secretary of State to consult town and parish councils prior to the unitary district council or county council within which they are situated being designated as a single foundation strategic authority.
David Simmonds
The short answer to the hon. Gentleman’s question is yes. I have spent a good deal of my time in local government. One of the key issues that we learned from the process, and one of the reasons why former Secretary of State Eric Pickles said that he had a pearl-handled revolver in his desk—for anyone who came to him to suggest forcing local government reorganisation on England—was the need to get things right with local consent.
There are times, which I think we can all see in the local government landscape at the moment, when, because of geography or failure of leadership, we know it is necessary for Government to intervene, and Governments of all parties have done so. Northamptonshire was an example of such a place. Individual local authorities within it had not failed, but there had been a collective failure of the public service in that area. The Government therefore felt compelled to intervene to remedy that, as opposed to imposing an alternative vision for how they thought the local area should be governed.
New clause 23 stands in my name. It seeks to enshrine in the legislation the principle of consent. We have the very opposite of what we have been told as a Committee, that this is all locally led. Clearly, the Government are already using the levers in their power to compel local authorities down a certain route. Under the force of such compulsion, local authorities feel that that is what they have to do, because it is the only way to address some of their reasonable and justifiable concerns. The timetable, the process and all those things come at the same time as a wholesale reorganisation of planning and infrastructure, which is stripping away the local powers and voices that are so critical to ensuring that the infrastructure and new housing that we all want are delivered.
The view of the Opposition, therefore, is that we need to enshrine in this legislation not powers for Whitehall but powers for people—powers for people to shape through their local leaders the community structures of service that deliver for them and the taxes that they pay. People are represented to exercise such powers. Enshrining the consent of local authorities is a small step in that direction.
Miatta Fahnbulleh
I will respond to amendments 30, 31 and 33 first, and then amendments to 266 to 280. I appreciate the intention of the Liberal Democrat amendments, and I reiterate that I think we are completely aligned in this Committee in our desire not just to push power down, but do so in a locally driven way. On the specifics of the lead amendment, the principal body affected by the designation that we are seeking will be the unitary council or the county council. The Bill already provides that no designation can be made without the consent of the relevant councils.
On amendment 31, the Secretary of State must already notify the proposed constituent councils, and any other persons that the Secretary of State considers appropriate, about a proposal to direct the establishment of a combined authority. The Secretary of State must consider the representations of that body. As my hon. Friend the Member for Mid Cheshire said, there is no shortage of representation and voice from individual town and parish councils. We think that the process of engagement is already there and that to impose additional requirements to consult every town and parish council in the proposed areas would be disproportionate and also risks conflating the distinct roles of town and parish councils, which, as I said at the evidence stage, we absolutely see having a role to play in the new architecture of strategic authorities.
Strategic authorities have been created to tackle regional issues and to capitalise on the opportunities that exist over a significant economic geography, such as pursuing, for example, integrated transport. Town and parish councils, meanwhile, will continue to represent their local communities, managing neighbourhood services and supporting initiatives that improve the day-to-day lives of their residents. Each tier of local government will be accountable to their local communities and should continue to represent their interests and to work in alignment.
Lewis Cocking (Broxbourne) (Con)
When areas go through this process—and they are being made to go through it—will the Minister consider making it easier for areas that are unparished to create town and parish councils? Otherwise she will create large unitary authorities and some areas will have town and parish councils and others will not. Will she make it easier to set up town and parish councils where there are not any?
Miatta Fahnbulleh
We will discuss neighbourhood governance and neighbourhood boards later in the Bill. When it comes to areas that do not have town and parish councils, we recognise there is an opportunity for us to create structures so that there is stronger community representation and a stronger community voice. There is an opportunity for us to design something that works in areas where town and parish councils do not exist or may not be appropriate. We want to create flexibility so that local areas can find the right structures for them, so that neighbourhoods and communities have the voice and representation that we want to see across the country.
I turn to amendments 266 to 280. As I have said before, we have been accused of compulsion, and all I can do as a new Minister is point to the feedback that I get from the local areas that we speak to. Our engagement to date suggests there is genuine enthusiasm and momentum, because areas can see the economic opportunity and what a strong Mayor can do for their area. The Government have been clear in our aims: we want to get universal coverage of strategic authorities across England, because we can see the benefits that places like Greater Manchester and Liverpool are experiencing. We want that for every single resident across the area.
David Simmonds
During the evidence sessions, we heard senior local government leaders describe “inconsistent and…unhelpful messaging” on the building blocks of the new authorities—I quote what I wrote down. When we heard from those who are intended to be part of the investment agenda, they described no “meaningful consultation” from the Government on the proposals. How does the Minister square that with the idea that this is strategic and locally led?
Miatta Fahnbulleh
That is not the feedback that I heard in that evidence session. At the moment the places in our devolution priority areas are going through a process of consultation. They are talking to their constituent councils, voting it through the council chamber and taking it to their residents to make the case.
What we are seeing is positivity and momentum. Our job as a Government is to build on that and support and enable that. I come back to the point that there is a backstop power that we do not expect to use. But in the instances where we have got a blockage, we want to be able to help create a strategic authority so that we do not have devolution deserts and parts of the country left behind. We are very clear that the powers will commence only at the point that they are needed, rather than on Royal Assent.
Finally, new clause 23 would impose disproportionate consent requirements for these processes, requiring strategic authorities to seek the consent of all district, parish and town councils in their area. As I have said, there are already provisions in place to ensure a level of consultation. A primary aim for us in this Bill is to make the process simpler, more streamlined, more effective and less expensive. That is the feedback that we have had from places that have gone through the process and the feedback that we are getting from places going through the process.
My worry is that the proposed amendments would undermine the principle of having a process of devolution that is far more streamlined and far easier for places. Again, the feedback we are getting from conversations is that there is enthusiasm, appetite and commitment to do this. We want to make it as easy as possible for places, which is why I hope that hon. Members will not press the amendments.
Question put, That the amendment be made.
Vikki Slade
I beg to move amendment 38, in clause 3, page 2, line 32, at end insert—
“(3A) The Secretary of State must make provision to ensure councils designated as a single foundation strategic authority receives adequate funding to facilitate their transition.”
This amendment would require the Secretary of State to ensure that councils designated as a single foundation strategic authority receive funding to facilitate their transition.
Manuela Perteghella
It is pointless to establish a strategic authority without appropriate financial support. Without support to build structurally, hire staff, co-ordinate partners and begin delivering on their devolved powers, new combined and strategic authorities risk becoming bodies with responsibilities but no real capacity to act. As the Minister will know, local authorities have been starved of funding by consecutive Governments. We need to ensure that these new unitaries—these new beginnings—have the best start in life, and that begins with fair funding so that devolution can be effective.
Amendment 39 is complemented by amendment 361, which would require the Government’s annual devolution report to include details of funding given to support new strategic authorities. Each year, when the Government report to Parliament on devolution, they would be required to explain how and why money has been spent to help to establish new devolved authorities.
As it stands, the Bill risks becoming a Trojan horse for centralisation, concentrating power in Whitehall rather than genuinely devolving it to local communities as promised. Amendment 361 would support true, locally led devolution by ensuring financial transparency and holding Ministers accountable for supporting local government reform. That is why we intend to divide the Committee on amendment 39, which is essential to ensure that new combined authorities and new strategic unitaries can operate effectively from the outset and deliver the powers and services they are intended to provide. Without adequate funding, the whole exercise of devolving powers and establishing new authorities will be meaningless.
For too long, my constituents, like so many across the country, have faced the consequences of under-resourced local authorities, with promises to their families and communities left unfulfilled. Our amendments would provide the vital financial support that this new era of local government requires, enabling us to deliver on the ambitions of devolution and achieve real, tangible results.
Miatta Fahnbulleh
I thank the hon. Member for Ruislip, Northwood and Pinner for highlighting the deep cuts that were imposed on local authorities during a decade and a half of Conservative government, which fundamentally weakened our civic infrastructure. We should never forget that. We absolutely appreciate that, as a result, local government is operating in a difficult context. I welcome the intent behind the amendments: it will be important for strategic authorities to ensure that they have the capacity funding so that they are established.
Amendment 38 concerns single foundation authorities. We do not anticipate that there will be transition costs for such authorities. When a unitary or county council is designated as a single foundation strategic authority, it will retain its existing voting and governance arrangements. The designation will sit alongside its status as a local authority. In other words, there will be no transition involved, so transitional funding is unnecessary.
We recognise that the mayoral strategic authorities that we are creating will need funding to support the transition and build capacity. All Members across the House want to see strong, capable authorities in their area, with the tools and capacity to deliver for their local communities. That is why in the English devolution White Paper we committed to provide new strategic authorities with capacity funding to kick-start their organisation. I am pleased to confirm that all areas on our devolution priority programme will receive £1 million in mayoral capacity funding this year to help establish new institutions, once the legislation has been laid before Parliament. They will also receive capacity funding in future years, so that they are ready and prepared to deliver the benefits that we believe devolution will unlock. As the Government are committed to providing funding for establishment expenses through the mechanism of mayoral capacity funding, we do not believe that amendment 39 is necessary, but we recognise the intent behind it, which is why are we are taking action.
Amendment 361 would require the Government to report on funding allocated to support the establishment of new strategic authorities. I am pleased to say that that is already established practice. Clause 19 amends the Cities and Local Government Devolution Act 2016 to ensure that all funding devolved to strategic authorities is reported. That will include any funds to support their establishment. Again, therefore, we agree with the intent behind the amendment but we do not believe that it is required.
Vikki Slade
Will funding be made available for areas that are not yet in a programme on the same footing as the areas that are already in one? It would be completely inappropriate if that funding was not committed to. I want to get that on record.
Miatta Fahnbulleh
We have established a principle that there should be mayoral capacity funding. We have established a principle that for places that are going through the transition, to ensure that any mayor that is created is able to hit the ground running, capacity building needs to be a core part of that. That applies to the places that are going through the devolution priority programme at the moment, but the same principle invariably will apply across the piece.
Vikki Slade
We were seeking to divide only on amendment 39, but given that we have had that assurance, I am happy not to do so. I beg to ask to leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 ordered to stand part of the Bill.
Clause 4
Combined authorities and CCAs: establishment, expansion and functions
Question proposed, That the clause stand part of the Bill.
Miatta Fahnbulleh
Clause 4 introduces schedule 1, which will streamline and simplify existing processes for establishing new combined authorities and combined county authorities, and for changing the arrangements of existing authorities. The Government have been clear that their goal is to achieve universal coverage of strategic authorities. We are therefore confident that clear and tangible benefits of devolution will be experienced across the country. We have also been clear that we want to create mechanisms that will ensure that the process is streamlined—that it is fast, and effective and efficient locally—and allows representation, but fundamentally allow us to move through the process that we see appetite and demand for across the country.
The powers introduced by the clause will be used as a backstop. They will be deployed only where we have devolution deserts and we want to work with areas to remove blockages, to the benefit of residents.
David Simmonds
We return to the theme that areas can have devolution provided it is in the form that Whitehall dictates. It remains a significant concern to the Opposition that we are proceeding in this manner, but that point is made and I suggest that we move on.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Schedule 1
Establishment, expansion and functions of combined authorities and CCAs
Amendment proposed: 266, in schedule 1, page 79, line 15, leave out subparagraph (b).—(David Simmonds.)
This amendment, and Amendments 267 to 273, remove the ability of the Secretary of State to create, or make certain changes to the governance or composition of, combined authorities without consent of the councils involved.
Question put, That the amendment be made.
Miatta Fahnbulleh
I beg to move amendment 62, in schedule 1, page 80, line 19, at end insert—
“5A After section 105B insert—
‘105C Non-mayoral combined authority: consent to budget
(1) A non-mayoral combined authority may only exercise the following functions with the consent of each constituent council—
(a) adopt or amend the authority’s budget;
(b) where it is not part of the budget, approve the total sum of the transport levy.
(2) In this section a reference to the “transport levy” is a reference to any levy issued by the combined authority relating to the exercise of its functions relating to transport in accordance with any regulations made from time to time under section 74(2) of the Local Government Finance Act 1988.”’
This requires that a non-mayoral combined authority must have consent from its constituent councils to the approval and amendment of the budget and to the approval of the transport levy (if separate).
Miatta Fahnbulleh
I will begin by talking to Government amendments 63 and 65. The Government recognise that the creation of a combined authority or combined county authority can cause some concern in prospective constituent councils. One of the main worries is that the new institution could create new financial burdens on existing councils.
Many existing combined authorities and combined county authorities already include provisions in their constitutions that enable constituent councils to veto decisions that could create a financial liability on them. We recognise that those provisions have helped to soothe concerns about establishing new combined authorities and combined county authorities. That is why the amendments will create a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of affected constituent councils before exercising their functions in a way that could create a financial liability on these councils. That will ensure that any future non-mayoral combined authorities or non-mayoral combined county authorities will need to comply with this requirement without the constituent councils needing to secure agreement to its inclusion in the individual authority’s constitution.
I turn to Government amendments 62 and 64. In the English devolution White Paper, the Government set out that in combined authorities and combined county authorities without a mayor, most decisions would require a simple majority vote. That is provided for in clause 6. However, in the White Paper, we also said that key strategic decisions would require unanimity in non-mayoral authorities. The budget for the authority is one of those decisions.
Similarly to amendments 63 and 65, amendments 62 and 64 introduce a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of all their constituent councils when adopting or amending their budget. That includes the direct contribution of those councils to transport expenditure.
Government amendments 66 and 67 are minor, technical amendments. They amend the terminology used in schedule 1 so that references to secondary legislation within the Levelling-up and Regeneration Act 2023 use the term “regulations” rather than “orders”.
David Simmonds
I have a couple of questions for the Minister. It feels as though these amendments are intended to bring some welcome consistency and clarity.
The Committee will know that local government finance is largely regulated by the Local Government Finance Act 1992, but that older legislation on council tax fixing and budget setting all essentially states that a local authority’s budget must balance in-year. A local authority is not the same as central Government—it cannot borrow to fund its day-to-day expenditure.
However, one implication of the Secretary of State’s allocation of all these new powers to mayors or combined authorities is that they may choose to incur expenditure that imposes a liability on an individual local authority without seeking that authority’s consent. For example, there would be a legislative conflict if the mayoral combined authority decided to increase spending, or to increase rights to services for social care, which a local authority has to pay for, without giving the local authority the opportunity to include that in its budget.
Will the Minister give us clarity, first, on accounting standards? The legislation mentions that local authorities should refer to guidance from the Chartered Institute of Public Finance and Accountancy. CIPFA is not the only accepted accounting standard in the public sector, although it is generally a reliable one. Given our previous discussions and the evidence we have heard about access to local audit and financial advice, can the Minister confirm that accounting standards other than CIPFA will be accepted, if a local authority relies on them? Or will they have to be reframed within CIPFA? That will let the Committee and member authorities know exactly where they stand.
Secondly, while this is a fairly catch-all provision, there will be areas—we have seen this in Greater Manchester most recently—where central Government fund the investment and set-up of a new transport network but the ongoing running costs must be met by trading that service to local residents, and a large deficit emerges; essentially, the service runs at a significant loss. Especially if the underlying authority is a transport authority that issues freedom passes, that can have a significant financial impact. Essentially, council tax payers of one authority subsidise the costs of service delivery by a mayor.
We see significant elements of that in London under Mayor Khan. I think that was one reason why the Labour leader of Manchester city council spoke about how Manchester works and London does not. It would be helpful to have clarity—if necessary, in writing to the Committee—about how those trade-offs will be managed effectively, so that the capital costs of mayoral projects are not subsidised by the revenue or capital budgets of individual local authorities. Particularly with larger projects, mayoral authorities do not always have to meet the same tight financial requirements, especially in respect of things like education. It would be useful to know how that will be managed so that local authorities do not suddenly go bust because something emerges from the financial accounting arrangements between the new structures.
Miatta Fahnbulleh
I thank the hon. Member for his detailed, complicated questions. We will write in response, particularly on the public accounting standards.
We have set what we think is a good baseline. There will obviously be some flexibility for constituent authorities. The hon. Member will remember from the evidence session that the accountability and financial framework across local government is a current challenge, so we are looking to drive improved standards across the piece. That will apply to strategic authorities as much as to local authorities, but we will write fully in response.
On the wider question about the balance and the trade-off, our judgment is that for non-mayoral combined authorities, where constituent authorities operate together, we should put in those safeguards. In essence, constituent authorities act in concert, collectively, to make decisions. Whether it is a question of financial liabilities or transport budgets, it is right that all the constituent authorities provide consent. In the case of the mayor, however, our view is that because the mayor has his or her own democratic mandate and the ability to direct, that is separate from what we see in non-mayoral combined authorities.
Inevitably, there will be safeguards. In the evidence session, we heard really powerful evidence that the mayoral model works well when the mayor works in lockstep with constituent authorities and the two are aligned, with a strategy that they work around. We have seen examples of where the model does not work well, and we have had to go in and support and remediate the process when the mayor works without their individual local authorities. The model drives that. However, we think that there is something specific in the mayor’s democratic mandate; we have a model where there is a majority vote, with the mayor on the side of the majority, in order to drive through big strategic decisions.
David Simmonds
I am grateful to the Minister for undertaking to provide that clarity in writing. She said that there are differences between a mayoral authority and a combined authority without a mayor. We have seen a good case study in the Mayor of London’s decision that he wished to be seen to fund free school meals in primary schools, but the budget that is provided is less than the cost. School budgets, which are determined by the Department for Education, are subsidising the shortfall in the money provided by the mayor. We see posters on the tube saying that the mayor is funding this, but in fact the amount he provides is less than the cost. Probably all London MPs have had representations from schools that have said, “We are having to make staff redundant because of this shortfall. It’s a significant burden. It is causing a real cost.”
That is an example of where accounting and legal decision making sit across several different authorities. Although it is not the only ringfenced local authority grant, it would be helpful to have clarity about how the dedicated schools grant will be managed in a mayoral combined authority, so that we do not see a repeat of what happened in London with school budgets being raided to cover up a shortfall in a mayoral policy proposal.
The Chair
The Minister has courteously and helpfully said that she will write regarding those specific questions. May I ask that that is done within the period in which we are considering the Bill, and made available to all Committee members?
Miatta Fahnbulleh
Yes.
Amendment 62 agreed to.
Amendment made: 63, in schedule 1, page 80, line 19, at end insert—
“5A After section 105B insert—
‘105C Non-mayoral combined authority: functions imposing financial liability
(1) This section applies where a non-mayoral combined authority considers that the exercise of a function by the authority may result in a financial liability being incurred by one or more constituent council (each such council being a “relevant constituent council”).
(2) The function may only be exercised with the consent of each relevant constituent council.
(3) When deciding whether subsection (1) applies, the authority must have regard to the “Code of Practice on Local Authority Accounting in the United Kingdom” published by the Chartered Institute of Public Finance and Accountancy, as amended or reissued from time to time.’”—(Miatta Fahnbulleh.)
This restricts a non-mayoral combined authority from exercising a function that might impose a financial liability on any of its constituent councils unless those councils have given their consent.
Amendment proposed: 269, in schedule 1, page 80, line 20, leave out paragraph 6.—(David Simmonds.)
See explanatory statement for Amendment 266.
Perran Moon
I have had no commitments; I have had discussions with Ministers. We have had discussions about the difficulties with the proposals made here, with the potential for the Bill to become a hybrid Bill and the complications that that would bring. I am happy to keep talking to the Government in a spirit of openness, reflecting the views of every political party in Cornwall bar one. On that basis, I am content to keep talking. I cannot support the amendments because of the negative change that I think they would make to the nature of the Bill, so I will be voting against them.
Miatta Fahnbulleh
I put on record my thanks to hon. Members who are championing specific areas that have a unique identity, which the Government completely recognise. On amendments 43 and 44, I pay tribute to the hon. Members who have been championing the Isle of Wight and its proud history. The Government understand and support the intent behind the amendments, but we will not be taking them forward. Let me explain why.
Earlier this year, Isle of Wight council, Hampshire county council, Portsmouth city council and Southampton city council submitted a joint expression of interest in the Government’s devolution priority programme. They went through a consultation process, based on the proposed name of Hampshire and the Solent. This was not imposed by the Government; it came as a proposal from the local area, and on that basis a public consultation was conducted.
It is worth saying that of the 6,000 responses we received, only a small minority commented specifically on the name of the proposed combined authority area. The Government’s response to that consultation is online, if hon. Members want to look at it. It is important to say that once it is established, it is completely open to any combined authority or combined county authority to change its name by resolution, with the consent of its members and using existing powers. That is already in the Bill. The Liverpool city region combined authority and the South Yorkshire mayoral combined authority have both changed their names in the same way. There was no constraint from Government; the powers are there. It is within the gift of local areas to go ahead and do that.
Lewis Cocking
The Minister mentions that 6,000 people replied to the consultation on Hampshire and the Isle of Wight, but that only a small number of respondents actually mentioned the name. How many people from the Isle of Wight responded to that consultation, and how many of them mentioned the name?
Miatta Fahnbulleh
I do not have those figures, but we can write to the hon. Member with them. However, the principle remains that the power is there. It is within the gift of constituent authorities; it is not being imposed by Government. If there is a name change that the combined authority wants to take forward, it can take it forward. We have seen that in Liverpool and South Yorkshire. There is no constraint from us. It is a determination for, and with the consent of, the constituent authorities. It is within the gift of Hampshire and the Solent to make that change.
Paul Holmes
The Minister says that it is not the Government who are making sure that it happens. I accept that. However, having been in her position for only a short time—that is not her fault, as the fickle finger of fate has rested it on her shoulders—she may not know that the negotiation process that has taken place among the local authorities in Hampshire has not been smooth. There has been an overarching view that the county council, which has rushed towards accepting this devolution notwithstanding the impacts of the Government’s decision to push it forward, has not worked collaboratively. There is a wish for devolution, but in the minutiae it has been a very county council-dominated process.
As my hon. Friend the Member for Broxbourne says, the reason that there has not been a huge uptake in response to the consultation is the flawed nature of the decision-making process. I ask the Minister not to rest on the consultation responses, because as my hon. Friend says, a number of people on the Isle of Wight simply did not bother to respond. It is not about the make-up of a geographical devolution settlement; it is about a name. I ask her to listen to the elected representatives on the Isle of Wight who serve in this House, who have asked for it, and to consider it again.
Mike Reader
I declare that I am Hampshire born and bred, being from Romsey. I just ask: why are we so disrespectful of a place like Brownsea island? If it is called “Hampshire and the Isle of Wight”, what about the great Brownsea island, the home of our native red squirrels? Surely “Solent” is more inclusive for all the other islanders who live in the area beyond the Isle of Wight.
Miatta Fahnbulleh
I say gently to hon. Members that we absolutely recognise the desire. I have had multiple conversations with the leader of Isle of Wight council, who was enthusiastic about this devolution deal. It is within the gift of constituent authorities to change their name; it is not for Government to impose. I hope that there is now a constructive conversation and relationship among the leaders of all the different parties. The leader is an independent politician, and I hope that in that spirit they will move forward.
I recognise the uniqueness of the name, but what really matters is what devolution will deliver for residents and constituent authorities. I hope that as much energy and time will be put into the nuts and bolts, the bread and butter, and the impact of what we are trying to do through devolution as will be put into the name. However, I recognise the particular sensitivities in relation to the Isle of Wight.
My hon. Friend the Member for Camborne and Redruth spoke about the issue of Cornwall. He has been a long-standing champion of Cornwall and its distinct identity. He has prosecuted the case incredibly effectively, not just in the context of this debate but across the piece. He is a proud Cornishman and I know that he wants the best for his constituents. I have put it on record in Committee, and I do so again, that we recognise the uniqueness of Cornwall. We are keen to continue engaging not just with my hon. Friend, but with other Cornish MPs, to ensure that we recognise that uniqueness and status and, critically, that we are doing a set of things that can enable local leaders to respond to the challenges—