Cities and Local Government Devolution Bill [Lords]

Debate between Clive Betts and Lord Wharton of Yarm

Monday 7th December 2015 Commons Chamber

[Mr Betts]

I see my hon. Friend’s concerns in that regard, but the reality is probably that many national parks do look at ways to raise revenue to help support their budgets. I share his views that national parks are subject to cuts and that they are finding it more difficult to do the job that we expect them to do with their much reduced resources. I think that they will look at other ways to raise funds. That happens anyway. I am not sure whether this new clause widens that possibility greatly. I understand that it simply puts the national parks in the same position as a local authority to try to fulfil their functions.

[James Wharton]

I wish to clarify that this proposed new clause has no impact on planning as it would affect national parks. It has nothing to do with shale gas extraction, or fracking. I hope that is clear enough for the hon. Gentleman, and that it will give him some reassurance about our intention, which is to deliver on a request from the national parks.

[Mr Betts]

I am aware that the national parks have been asking for it, and I accept the Minister’s statement. Will he think about the comments made by my hon. Friend the Member for Hemsworth (Jon Trickett) on fundraising and the extent to which the powers of general competence could be used by national parks in any way that undermined their primary purpose, which is to look after the national parks, their beauty and the environment while ensuring they are a place where people can live and work? That is an important function of national parks authorities.

[James Wharton]

I thank the hon. Gentleman for generously giving way again, and I can offer that reassurance. The primary purpose remains, as I said in my speech, that anything that a national park does must be in line with its statutory obligations. There is no legal basis for charging, and we are not looking to allow it. I hope that we might move to a position of greater consensus on the new clause, which I felt would be uncontroversial. I recognise the concerns expressed by hon. Members and I thank the hon. Gentleman for accepting my interventions and giving me the chance to put some of these matters to bed.

[Mr Betts]

I thank the Minister for his helpful comment. Perhaps more discussion could have been had before we reached this point; that might be something that everyone could learn from. The Minister’s intervention has been helpful to me and I thank him for it.

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[Mr Betts]

I entirely agree. In the end, of course, a district council as a whole will have to go to an area, but, as the hon. Gentleman says, the focus should be on what works for the economy in terms of job creation, growth and the development of skills, and on ensuring that the necessary transport links exist.

I hope that the Minister will clarify one important point. There may ultimately be a decision for the Secretary of State or the Minister to make on these matters. The districts in North Derbyshire and North Nottinghamshire, or some of them, may well decide to become part of the Sheffield city region—I hope that they will, because I think that it makes economic sense—but it is nevertheless possible that Derbyshire and Nottinghamshire will form another combined authority, an N2D2, and that there will then be a conflict between the two decisions.

I understand from the amendment that it will be up to the Secretary of State to decide which combined authority the districts should join, because they cannot join two; the people in those areas cannot have a vote for two elected mayors in different combined authorities. I hope when he decides that he will indicate that his key criterion will be what is right for the local economy—that point was made by the hon. Member for York Outer (Julian Sturdy)—and right for developing skills, for economic growth, and for the development of a proper transport strategy for those areas.

[James Wharton]

I absolutely hear what the hon. Gentleman says. We must do what is right. If devolution is to be successful, it must recognise the boundaries that are, as my hon. Friend the Member for York Outer pointed out, more than political: the economic boundaries and the community boundaries. We must take account of what local people want. I am sure that, in exercising whatever powers he has when discussions on the Bill have concluded, the Secretary of State will first seek to build that consensus, as he has throughout the devolution discussions, but will then seek to ensure that the deals that are done will stand the test of time.

[Mr Betts]

Standing the test of time is about what works economically and what works for growth, because that is the purpose of devolution in the first place.

Cities and Local Government Devolution [Lords] Bill

Debate between Clive Betts and Lord Wharton of Yarm

Wednesday 21st October 2015 Commons Chamber

[James Wharton]

I will of course give the hon. Gentleman that undertaking, and I shall listen carefully to what he says later. I know that he has a great deal of expertise in this area, and I recognise some of his concerns. It is important that we find the right mechanism to address them as best we can in the Bill.

Amendment 59 and new clauses 23 and 25 have been tabled by the shadow Secretary of State, the hon. Member for Hemsworth (Jon Trickett), and his colleagues. Amendment 59 would require a report reviewing the Localism Act 2011. New clause 23 would require the Government to publish a report about the impact on combined authorities of the way in which resources had been distributed through the local government settlement. New clause 25 would require the Government to publish a list of the public authority functions which may be transferred.

We do not consider amendment 59 to be necessary. The Government are committed to a process of post-legislative scrutiny to review the effectiveness of legislation and to inform the development of future legislation. The lead Department submits a report to the Select Committee, usually within three to five years of the legislation receiving Royal Assent, with its preliminary assessment of how the Act has worked in practice in relation to its objectives and benchmarks, as identified during the passage of the Bill. This would inform the Select Committee’s view on whether to conduct a fuller post-legislative inquiry into the Act. The additional steps proposed in amendment 59 are therefore unnecessary.

[Mr Clive Betts (Sheffield South East) (Lab)]

When the Localism Act was passed, the Secretary of State for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark)—in a previous guise—produced an annual report on how each Department was doing in regard to devolution. Unfortunately, that practice was stopped, but the right hon. Gentleman came to the Select Committee and argued strongly that it should be continued. Does the Minister think his boss has changed his mind?

[James Wharton]

The hon. Gentleman shares my admiration for my Secretary of State and for the work that he has done in this area of policy over an extended period. It is of course open to my right hon. Friend to do that again, and I suspect that the hon. Gentleman will wish to prevail upon him and to repeat his argument on the value of considering that course of action. However, I do not think it necessary to include amendment 59 in the Bill.

We also consider new clause 23 to be unnecessary. It would not add anything to the information we already provide. By separating Government funding from the other sources of income available to local authorities, as the new clause proposes, and by isolating deprivation from other drivers of spend—for example, the impact of population sparsity in rural areas—the report required by the new clause would fail to present a properly rounded picture of the settlement. As hon. Members know, we already publish an annual assessment of the impact of the settlement on authorities’ wider spending power and an equalities statement on the settlement’s effect. Moreover, the settlement is subject to wide-ranging consultation and comes before Parliament for approval. I am not persuaded that anything further of this nature is needed in the Bill.

On new clause 25, I remind hon. Members that this Government’s devolution policy is a bottom-up one. We want to ensure that devolution opportunities are available to all parts of England, including rural and coastal areas, counties, towns and cities. On Second Reading, we discussed at some length the devolution deal that has been done with Cornwall, a non-city area that wants to be part of this process and that has got behind a plan that it believes can drive real change for the better. The enthusiasm from hon. Members from Cornwall who spoke in that debate was obvious and is commendable.

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[Mr Betts]

The Minister has just said that the Sheffield deal could be put at risk, but at this stage it is not a done deal—it is a proposal. If Sheffield were to say, “We actually rather like the proposal, but without the mayor,” what would be wrong with that, as the Bill stands?

[James Wharton]

The hon. Gentleman might recognise that that would then not be the agreement that has been proposed. Where there is devolution on the ambition and scale of Greater Manchester, we could not ensure that the strong, clear accountability necessary to support such devolution and provide the leadership to drive forward that area’s economy would be in place without a metro mayor. That strong, clear accountability needs to be a single point of accountability that only an elected metro mayor can provide. Where major powers and budgets have been devolved, people need to know who is responsible for decisions that can have a radical impact on their day-to-day lives. Mayoral governance for cities is a proven model that works around the world—it is indeed the model of governance for world-class cities. None of that is to say that we are imposing mayors; mayors are not being imposed anywhere. If any area has a mayor, it will be because that area, through its democratically elected representatives, has chosen to have one. The Bill specifically provides for that.

[Mr Betts]

The Minister is making the case that a mayor is required in order to have strong enough leadership and get things through, but in the proposed Sheffield deal only the transport functions go to the mayor—all the economic functions go to the combined authority. Is he therefore saying that there is not going to be strong leadership on these economic functions, because a mayor is not in charge of them?

[James Wharton]

Let me be absolutely clear about this: this Bill does not allow this Government or any future Government to impose mayors on anybody. But where we make a deal it is a two-way process, and it is the Government’s clearly stated intention for those metropolitan areas that the accountability a mayor brings is desirable and we want to see it as part of those deals.

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[James Wharton]

The hon. Gentleman makes a salient and important point. The Government will not support the amendment for that very reason, but I will listen carefully to the speeches that are made because it is important that we address concerns to the fullest extent to which we are able without attracting from the intention of the Bill and the intention of the Government to deliver on our agenda.

Clause 3 provides flexibility to enable a single local authority to leave, in line with the comments that the hon. Gentleman has just made, if it does not wish to continue to be part of a combined authority. A council can also leave a combined authority once a mayor has been elected for the area of a combined authority without the need for the combined authority to be dissolved and reformed, using exactly the same process as is used to establish such an authority of undertaking a governance review demonstrating that the change would improve the exercise of functions. In addition, a council that wishes to leave a combined authority can do so if it obtains consent from the other constituent councils of the combined authority, and if there is one, the mayor. Again, I will listen carefully to the comments of hon. Members with a view to finding a position that can get broad agreement across the House as the Bill makes progress.

Amendment 39 is tabled by my hon. Friend the Member for Amber Valley (Nigel Mills). It applies to circumstances in which a combined authority is proposed and seeks to require that no order can be made for a combined authority unless local government electors have been consulted on replacing the existing county councils and district councils with unitary authorities. That moves away from the flexibility we want to be to deliver and puts conditions on deals that we might want to make but that we do not necessarily want to impose. Again, I will listen very carefully to my hon. Friend’s comments later on in today’s discussions.

[Mr Betts]

Will the Minister also listen to the problem in the districts in north Nottinghamshire and north Derbyshire? They are part of the Sheffield city region for economic purposes under the proposed deal but not for transport purposes, because in order to come under the mayor’s jurisdiction they need the permission of the county. Equally, the districts have to give their permission to join a county combined authority. This is a really complicated situation that needs resolution with Government help.

[James Wharton]

We will consider both the specific situation that the hon. Gentleman raises and more generally its application to our policy direction. I will listen carefully to the comments made in the rest of today’s debate.

Amendment 18 to 22, 27 and 28 are technical and simply provide that where the Secretary of State has powers in relation to electoral matters, those powers may also be exercised by the Chancellor of the Duchy of Lancaster. The provisions are similar to those in other legislation regarding local electoral matters, such as the election of mayors under the Local Government Act 2000, and ensure that the rules made on the election conduct of elections are consistent over wider electoral landscape. I hope that the explanation I have been to give in the time available adequately and sufficiently explains the Government’s position. I reiterate our commitment to listen to the comments of hon. Members and to build as broad a consensus as we can.

[Mr Betts]

I want to make a very few points, because I know that other Members want to speak, particularly my hon. Friend the Member for Nottingham North (Mr Allen), who has tabled a number of amendments and has a long track record of constructive engagement in matters of constitutional reform and devolution of which I am very supportive. He did excellent work on that in the last Parliament.

My first point is about the question of elected mayors and takes me back to the point I made on Second Reading. If the Government are committed to considering bespoke arrangements on devolution for particular parts of our country and considering requests from combined authorities—groups of authorities voluntarily coming together and proposing what they want to see devolved—why do we need one element of imposition in all this? Why do we need one element that says that they can have the powers they come up with providing that agreement is reached but that they must exercise them in a particular way and that there is no ability to discuss that or come to a different view? I find it completely inconsistent with the rest of the Government’s approach.

I do not know why the Government are so insistent on having a mayor as a solution. If it was left to the combined authorities, they would come up with different arrangements. The arrangement in Sheffield has been negotiated not because the combined authorities wanted it but because they were told that they had to have it or else they could not have devolution. That is the situation.

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[James Wharton]

I thank my hon. Friend and note that flattery can get you a long way in this business.

The hon. Member for Harrow West (Mr Thomas) tabled new clause 10, which would provide for the devolution of the Secretary of State’s housing powers to the Mayor of London. Since 2012, the Mayor of London has had overall responsibility for housing policy and delivery in London, taking over from the Homes and Communities Agency. The Mayor has powers to set strategic housing and regeneration policy through the London housing strategy. The Secretary of State has a legitimate role in relation to housing across England and it would be inappropriate to remove that role.

The amendment would weaken the Mayor’s role by requiring the Assembly’s consent. That fundamentally misinterprets the role of the London Assembly, which is a scrutiny not an Executive body. I recognise the hon. Gentleman’s desire to pursue the issue and to put it on the record. I am sure he will want it to be considered further as matters progress and that this is not the last time it will be discussed on the Floor of the House.

A significant number of other amendments relate to finance. Government amendment 9 provides greater flexibility in funding the functions to be devolved. Orders under the Local Democracy, Economic Development and Construction Act 2009 enable a combined authority to levy for transport purposes, and the constituent councils to make financial contributions to that combined authority to fund economic development and regeneration functions. The amendment provides flexibility to enable the constituent councils, if they so wish, to make financial contributions for any function of the combined authority, not just economic development and regeneration.

Opposition amendment 58—which the shadow Minister, the hon. Member for Croydon North (Mr Reed), has said he wishes to pursue further this evening—proposes that the Secretary of State be allowed the power to allow combined authorities to set multi-year finance settlements. For a combined authority to set multi-year budgets, it requires not a power from central Government, but the certainty of knowing what funding it is to get. The deals we have agreed with Greater Manchester and the Sheffield city region show how funding across the years can be agreed. We do not, though, need powers to put in place multi-year settlements for local authorities. We can already do that administratively as part of the wider local government finance settlement.

Amendment 60, tabled by the hon. Member for Sheffield South East (Mr Betts), would delete from clause 5 the exclusion of borrowing powers from the ancillary powers that can be given to a combined authority mayor. I listened very carefully to his contribution and understand his concerns. We agree that in appropriate cases there should be prudential borrowing for funding investment for which the mayor is responsible. The Bill provides for that, and the exclusion that the amendment seeks to remove is not about prohibiting such prudential borrowing.

Clause 10 makes provision for funding combined authorities and, in particular, provides that the Secretary of State may make regulations specifying the functions for which there can be borrowing. The Bill explicitly provides that those functions can include mayoral functions and that the constituent councils must consent to any regulations allowing borrowing.

I assure the hon. Gentleman that there are indeed borrowing powers for mayoral functions. In addition to devolving powers to a mayor, the Bill also allows ancillary powers to be conferred on a mayor to allow him or her to exercise the devolved powers. These ancillary powers could be those needed to ensure that there are no doubts about a mayor being able to run an office or to commission necessary studies, or they could include giving the mayor a general power of competence.

The exclusion, which the amendment seeks to remove, is to make it clear that those ancillary powers cannot include a power to borrow. They cannot be a back door to borrowing. The Bill sets up a proper regime for borrowing to fund mayoral powers, and that should be the route for a mayor being able to borrow.

[Mr Betts]

These are complicated issues and I am not totally sure that I followed all that, and I do not know whether anyone else did, either. The Minister seemed to be reading out a brief from civil servants. Could he provide a note with a thorough explanation of the issue? None of us wants to end up with mayors who need to create transport systems but then find that they do not have the powers to borrow in order to do so.

[James Wharton]

In line with my desire to retain my reputation as a benign velvet glove, I have already written a note to my officials asking that we write to Members following this debate, to ensure that we fully clarify those matters. I will, of course, write to the hon. Gentleman, and if he has any concerns, I would be delighted to discuss them further with him.

Amendment 55, tabled by the hon. Member for Nottingham North, would enable control over decisions on business rates and council tax discounts to be devolved, if that is what is wanted locally. We have always said that we are interested in hearing proposals from authorities and that nothing is off the table for conversation. The Government have signalled their intentions and enabled a large degree of the sorts of financial flexibilities sought by the amendment. We recently announced that, by the end of this Parliament, local government will be able to retain 100% of its business rates. Through the existing powers that govern the business rates retention scheme, we can already give mayoral combined authorities their own share of local rates income and ensure that they benefit from the local growth that that will help to establish. Of course, any decision to make use of the existing powers to extend the rates retention scheme would be taken alongside that on any wider transfer of powers and functions to mayoral combined authorities.