John Healey
Main Page: John Healey (Labour - Wentworth and Dearne)Local Government: Combined Authority Orders
John Healey Excerpts
Brandon Lewis
These orders, if approved, will bring about the establishment of combined authorities in three of our major metropolitan areas: across Merseyside and Liverpool; around Sheffield and South Yorkshire; and in West Yorkshire. In each of those areas the combined authority will be responsible for economic development and regeneration, and for transport. As all the councils in each area have agreed, their combined authority will be able to recognise and exercise their functions on economic development and regeneration. Their combined authority will also have the transport functions currently exercised by the area’s integrated transport authority, and that ITA will be abolished on the establishment of the combined authority.
Central to what we are considering today are two key priorities for this coalition Government: growth and localism. Achieving economic growth is essential to the recovery of our economy and rebuilding our future after the economic failures and spiralling of debt that we inherited when we took office in May 2010. It is through achieving economic growth that jobs are created, that incomes of hard-working families can grow and that we can build sustainable prosperity for communities across the country. The policies of this coalition Government are delivering, with unemployment now at just 7.2%; with increasing numbers of people in employment; with more women in work than ever before; and, as my right hon. Friend the Chancellor told the House in November, with growth then estimated by the Office for Budget Responsibility at 1.4%.
An important element of our policies, as we made clear in our White Paper response to Lord Heseltine’s report on growth, is that local authorities have a vital role to play. Councils should put economic development at the heart of all that they do, collaborating with private sector partners and others across a functional economic area. A combined authority is a means for councils to undertake that collaboration, which will be the foundation of all that they do to promote economic growth. It is not surprising, therefore, that each of the proposed combined authorities has been recognised as key in the city deals that we have agreed with each area. If Parliament approves the draft orders, we expect those authorities to be equally key in any future growth deals with funding from the local growth fund.
Under our policy of localism, it is entirely up to councils whether they choose to collaborate through a combined authority or through some other arrangement. Our whole approach to combined authorities, which is reflected in the draft orders, is one of localism. When councils come forward with a proposal for a combined authority that commands wide local support, our policy is this. If we consider that the statutory conditions are met, we will invite Parliament to approve a draft order that provides for the establishment of the proposed combined authority, which will enable the councils concerned to give full effect to their ambitions for joint working.
Localism will guide our response to any proposals for changes to a combined authority after its establishment, such as if another council wishes to join the combined authority as a constituent council, or if a council that is a member of a combined authority wishes to leave. In any such case, our policy will be to seek parliamentary approval for a draft order that enables the change to be made, provided that we are clear that the change meets the statutory conditions.
John Healey (Wentworth and Dearne) (Lab)
The Minister is making the interesting argument that localism will be the principle that guides future decisions about the development of the combined authorities. Does that principle also apply to the devolution of further powers and responsibilities to combined authorities if they properly request such powers?
Brandon Lewis
The right hon. Gentleman’s question gets to the heart of the Localism Act 2011, which was about devolving power not only to local authorities but to local communities to empower people to get things done. If local authorities have further ideas about things that they want to do, I encourage them to come and talk to us. The Minister of State, Cabinet Office, my right hon. Friend the Member for Tunbridge Wells (Greg Clark) and I will be interested to talk to local authorities about what more we can do to empower them to develop economic growth and take their communities forward.
In each of the draft orders, we have considered the circumstances of the combined authority proposal that the councils have made, as the law requires, and we have concluded that it is right for us to pursue our localist policy in those cases. We have considered each proposal for a combined authority in the light of the statutory conditions set out in the Local Democracy, Economic Development and Construction Act 2009, under which any combined authority is established. Those conditions are that my right hon. Friend the Secretary of State must consider that establishing the combined authority is likely to improve the exercise of statutory functions relating to transport in the area; improve the effectiveness and efficiency of transport in the area; improve the exercise of statutory functions relating to economic development and regeneration in the area; and improve the economic conditions in the area. We consider that those tests are unambiguously met in each case.
In short, each combined authority will bring together decision making on the closely interrelated issues of transport and economic development, and will provide for more efficient, effective, and transparent decision making by councils, with their partners, across the whole of the functional economic area they serve. We consider that it is right to establish those combined authorities, having regard, as the 2009 Act requires, to the need to reflect the identities and interests of local communities and to secure effective and convenient local government. Further, we are clear that in each of the areas, the combined authority will command wide local support.
John Healey
I welcome the orders that have been placed before the House. The Minister described them a moment ago as “draft orders”. If they are draft orders, when will we get the actual orders? He rightly said earlier that the integrated transport authorities would be abolished on the day on which the orders are made. For the sake of clarity, will he therefore tell us whether the orders that he is asking the House to approve today are draft orders or the orders that will actually do the job that he has described?
Brandon Lewis
I think that there is an issue around wording here. They are draft orders until the House approves them. When that happens, they become the orders. I am asking Members to vote today on the orders, but they are technically draft orders until we approve them.
John Healey
I thank the Minister for that clarification. Will he therefore tell me the date on which the orders will come into force and on which the integrated transport authorities will effectively be abolished?
Brandon Lewis
If the right hon. Gentleman will bear with me, I will come back to him on that question later this afternoon.
Julian Sturdy
My hon. Friend is absolutely right. There is a real danger that if York is removed, the North and East Yorkshire conurbations will lack a centre. I fear that it would be very difficult for a combined authority to come forward in those circumstances. Removing York would essentially leave North and East Yorkshire alone.
John Healey
The beauty of the Minister’s solution is that it will not take York out of the heart of North Yorkshire. As the hon. Member for York Outer (Julian Sturdy) has argued, York’s economy is intertwined with West Yorkshire’s. This is a variable geometry that allows it to be part of a combined authority for some of the strategic economic decisions that it can play a part in and benefit from while still maintaining its leading role within the wider North Yorkshire area for other purposes and services.
Julian Sturdy
I thank the right hon. Gentleman for his intervention. He might not be aware that York plays a key role in both LEPs, because it sits within not only the York, North Yorkshire and East Riding LEP but the Leeds LEP. It is absolutely vital that the city of York plays a leading role in both LEPs. Worryingly, over the past 12 months York took a decision to leave the North Yorkshire LEP and put all its eggs into the Leeds LEP basket. Thankfully, after some strong persuasion, that situation has been reversed. However, it showed the real danger that York could, in essence, walk away from its hinterland area for completely the wrong reasons, and we have to guard against that.
York, as a leading centre of innovation and wealth creation in the north, has so much to offer, but such opportunities must not be squandered by jumping on the first bus that comes along, which is what I fear is happening. In my view, that bus is also travelling in the wrong direction. York must not rush headlong into a decision. It must consider all its options, in consultation with local businesses and local residents, as the shadow Minister said, and then come to a transparent decision—I underline the word “transparent”—that reflects the views of the majority, not just the few.
John Healey (Wentworth and Dearne) (Lab)
It is good to follow the hon. Member for Southport (John Pugh), who reminded the House just how complex any system or blueprint can be if the objective is to make it universal. That is why the Government are right to help groups of local authorities find a way to come together when that reflects a desire in their local communities. It is a question of responding to demand.
The Minister rightly told the House that he is ready to make the membership of the combined authorities as flexible as possible, according to the decisions of local people and local authorities. I hope that the Government and local authorities will not take a commitment to a combined authority lightly and simply walk away if decisions start to go against them or the political leadership of a local authority changes.
Julian Smith
Does the right hon. Gentleman agree that that is exactly what City of York council did last year? It walked away from the York, North Yorkshire and East Riding economic partnership. That example of walking away from a commitment that it had made was pretty shocking.
John Healey
I am not entirely convinced that the two situations are comparable. We are talking today about a legislative commitment that binds authorities into exercising statutory powers. Participation in a local enterprise partnership is of a totally different order. I do not know the details of the judgment that City of York Council took about that LEP’s performance and its contribution to the jobs and wealth of people in the city—it would have to explain that.
I am pleased to speak after my right hon. Friend the Member for Knowsley (Mr Howarth), who is a very good friend. He made the important point that the change is a good first step, with the potential for our areas—South Yorkshire in my case, Merseyside in his—to go a great deal further, as long as the Government are prepared to back them to do so and to devolve essential powers and funding decisions that are better taken at that level. I will return to that point.
I also agree with my right hon. Friend that the South Yorkshire combined authority could and should be called that. Instead, we are asked to approve the Barnsley, Doncaster, Rotherham and Sheffield combined authority. I hope that the Minister will prove as flexible about name changes as he has promised to be about membership changes.
John Healey
The Minister nods, so I will take that as a good sign. Perhaps the new combined authorities will make a forceful case for a name that properly reflects not just the geography but the identity of the area, which is what really counts for the people for whom the new combined authority will work.
I am really pleased by the active involvement of the hon. Members for York Outer (Julian Sturdy) and for Skipton and Ripon (Julian Smith) in the debate and by the arguments that they have made. That signifies to me that there is a good Conservative case, and good Conservative support, for the innovation and wealth creation potential of areas outside London and the south-east. The hon. Member for York Outer reminded us of the great contribution that many of our northern and midlands cities have made in the past and can make again. I hope that both hon. Members have made strong representations to the Chancellor on that point, and that tomorrow he will provide significant policy freedoms and funding that could give life to the arguments that they have made. I am not holding my breath, but I will be delighted if they have succeeded in arguing that case with the Chancellor.
The Minister opened the debate with the obligatory page of the Chancellor’s spin sheet. The platitudes about racing economic recovery simply do not ring true in most areas of South Yorkshire. The recovery has not reached Rotherham or Barnsley. People there feel, and are, worse off under the current Government, because incomes have not kept pace with the cost of living—in fact, they have fallen behind it. The average family in my area are at least £2,000 worse off than when the Government came into power. In a year’s time, when the Government leave power, families face the prospect of being worse off at the end of a Government’s five-year period than they were at the beginning of it, for the first time.
I do not wish to make any more political points because this is an important debate and there is a broad measure of support for what the Government are proposing. On behalf of the four South Yorkshire local authorities, I pay tribute to the Minister’s decision to lay these orders before the House, and to his very able civil servants who have worked with our authorities to frame these provisions. Certainly from my point of view, and I think that of other Labour Members, he will receive support.
Authorities and areas such as Barnsley, Rotherham and Doncaster in South Yorkshire have a long history of working together well over the years, which reflects our natural economic geography and sense of identity in the wider county. The introduction of local enterprise partnerships, underpowered as they are, have reinforced that joint working over the past couple of years, and in some respects the combined authority will help to hardwire the private and public partnership working that we have established in South Yorkshire.
This is legislation for what has been collaboration by consent up to this point, and in future joint decision making will be more formal, have a legislative underpinning, and be part of a statutory entity. Those words do not mean much outside Whitehall, but I say to the Minister, and to the Minister of State, who has left his place, that I am prepared to take at face value the assertions given to the House that both Ministers are willing to consider and argue the case for greater devolution of powers, funding and responsibilities from central Government.
The problem, however, is that their arguments have not cut enough ice with colleagues in the Government and they have not made enough headway. Establishing the combined authorities removes one of the alibis that the Minister will often have found in Whitehall against devolution: “But Minister, we don’t know with any certainty who we’re devolving to.” Now that argument, that pretext for hanging on to powers at the centre, is gone. A statutory body, properly constituted with a governance arrangement and a degree of democratic accountability will, I hope, reinforce the Minister’s hand in the final 12 to 14 months that he and his Government have in office.
I hope that this will be not just the first example of bringing strategic economic development powers under the new combined authorities, working alongside LEPs, or of the powers and responsibilities of the current integrated transport authorities in our areas, but the start of a much more significant programme of devolution from the centre to our new combined authorities.
I make a plea for two steps for the Minister and his colleagues to argue with the Treasury. Will he argue to ensure that the combined authorities will, like the local authorities that constitute their membership, be able to reclaim VAT? That will make them more efficient with the use of public money, and reinforce their capacity to make a real economic difference to our area. Secondly, will he make the case, and will the Government concede for the new combined authorities the same borrowing powers that integrated transport authorities and local authorities now have—in other words, the well-established prudential regime, which is proven since the mid-2000s to have worked well for local government? Will he allow the combined authorities to borrow in order to invest beyond simply the transport field? I offer those remarks to the Minister perhaps as a very late Budget representation for Budget 2014. If I am too late for that, however, may I offer them as the first Budget representation for Budget 2015?
Brandon Lewis
The shadow Minister and other Labour Members commented on the Government’s ability to localise, but I struggle to listen to them on devolution and localisation. As a council leader under the previous Labour Government, I did not see very much devolution or localisation and neither did other council leaders. I gently point out that after 13 years in government the number of combined authorities the Labour Government put in place was zero, while this Government have managed to introduce them in just three years.
We have taken a lead on combined authorities in a short time and I am glad that we have the support of Opposition Members. I remind them, particularly the hon. Member for Corby (Andy Sawford), that the Localism Act 2011 saw a massive change in how we devolve powers to local communities, not just to local government. It is probably a large part of why the well-respected Richard Leese said that there had been more devolution in three years of this coalition Government than in 13 years under Labour. Labour Members might want to bear that in mind before trying to give us lessons on how to localise.
On a more positive note, we have had an interesting debate on what will be—if Parliament approves the orders and it is clear from what has been said that the House will support them—an important development in each of the three areas under consideration. It is an important development for the economic success of the three major conurbations, centred on the cities of Leeds, Liverpool and Sheffield. It is a development that epitomises localism, being in each area founded on, and driven by, the initiative of the councils and their partners. The combined authorities will have a central role in taking forward the city deals in each of these areas. The combined authorities will be able to provide stable, efficient and accountable governance to drive forward the projects and investment needed to deliver the outcomes envisaged in those city deals. Likewise, the combined authorities will be able to provide the governance needed for any future growth deals, with resources being provided from the local growth fund.
Important points were raised by hon. Members from all parts of the House. The hon. Member for Corby raised a number of issues, not least on the local government finance settlement. He and I have had that debate on a number occasions and I can only remind him that the settlement made it clear that authorities with the highest demand for services continue to receive substantially more funding than others and have higher spending power.
The hon. Gentleman asked how the counties and districts will operate in South Yorkshire. The Sheffield city region local enterprise partnership has a strong board, and the intention is for it to work alongside the combined authority. We also understand now that the chief executives of the counties and constituent authorities have come together in agreement with the councils to have clear structures for joint working, and that gives us confidence.
The hon. Gentleman rightly raised, as he has before, the question of why York cannot now be part of the order for West Yorkshire. I am happy to deal with that point. The Local Democracy, Economic Development and Construction Act 2009 requires that combined authorities consist of whole local authority areas that share the same boundaries. We are committed to reviewing the legislation as soon as possible and we will consult on how to change it and facilitate that change at the earliest opportunity. We intend to consult in the next few weeks.
The hon. Gentleman and the right hon. Member for Wentworth and Dearne (John Healey) raised the question of VAT. I am pleased to be able to give them some reassurance. I confirm that the Government will open a consultation shortly on a proposal to add Greater Manchester and the combined authorities to the existing VAT refund scheme for local authorities, and to do that through secondary legislation.
John Healey
That is an extremely welcome statement, which will be warmly welcomed in Barnsley, Rotherham, Doncaster and Sheffield. Will he give the House an indication of the value of that move for the funding available to the combined authorities?
Brandon Lewis
Not at this stage, but I will happily look into it and write to the right hon. Gentleman.
My hon. Friend the Member for York Outer (Julian Sturdy) highlighted concern that York could walk away from North Yorkshire. As the Secretary of State and I said to him when we discussed this matter recently, we appreciate the circumstances. It will be important for York to continue to maintain a constructive partnership with North Yorkshire while it pursues its ambition for calibration with the neighbouring West Yorkshire councils, its natural economic partners. I understand that York is committed to that. However, my hon. Friend also raised the interesting possibility of a combined authority of a different construction. No doubt he will be putting forward that proposal soon.
Brandon Lewis
I am glad that the right hon. Gentleman welcomes the fact that we have given authorities the power to do what they like, to brand their names, and to use them as they wish. I am sure that they will do so very successfully. I also noted what he said about what he thinks will be the future development of the process and the establishment of a non-elected mayor for the entire area. That touches on a point that he made about this being a first step for local authorities. I am happy to state clearly from the Dispatch Box that I agree that local government is evolving and changing, as it always does over time. That is one of the strengths and beauties of the way in which local government in our country works. I have no doubt that it will evolve and change further in many other ways, and the right hon. Gentleman has described one potential change in his own area.
The hon. Member for Southport (John Pugh) mentioned seaside towns, and I share the experience that he described. He was right to point out that such towns felt left behind in the past, which is one of the reasons for the coalition Government’s introduction of the coastal communities fund. I was delighted to announce the round 2 funding a couple of weeks ago, along with the opening of round 3, which will make much more money available to help seaside towns with their economic regeneration. New criteria will make it easier for them to grow their economic futures while protecting their coastlines from erosion.
The hon. Gentleman also raised an issue related to governance. I will give him more details in writing, but I can tell him that each constituent council will appoint at least one of its elected members to be a member of the combined authority. As I said earlier, we intend them also to have non-voting members and members representing minority parties.
The hon. Gentleman also mentioned the potential for dominance by the big players. The orders have specified the voting arrangements based on the scheme developed by the councils concerned and each member does have one vote and no member has a casting vote. That is why it is important that the scrutiny is run efficiently and effectively.
The hon. Gentleman also touched on West Lancashire. In response to the Government’s consultation, West Lancashire stated its support for the combined authority because of the expected improvements in transport and economic growth.
The right hon. Member for Wentworth and Dearne, in asking about VAT, also mentioned the powers to borrow. The combined authorities’ borrowing powers are limited to their transport function. They will inherit the levy-raising power of the integrated transport authority, hence the revenue-raising power exists only in relation to transport. The right hon. Gentleman also commented on my opening remarks.
John Healey
The Minister is being generous in giving way and in responding to some of the arguments today. He is stating the obvious fact that the borrowing powers in relation to transport derive from the levy-raising powers of the integrated transport authority from which the functions will be taken. However, what is the principled case for these properly constituted, legally established combined authorities not being able to borrow within the general prudential borrowing regime for local government?
Brandon Lewis
We believe the bodies that have the powers to raise revenue, or precepting bodies, should have directly elected members and be directly answerable to the electorate, and that is not possible for combined authorities. Indeed, to make it possible would require changes to primary legislation. However, I can see that the right hon. Gentleman may want to take up this issue, but, as I said earlier—and I know the Minister of State, Cabinet Office, my right hon. Friend the Member for Tunbridge Wells (Greg Clark) takes the same view—if areas have ideas on how they want to move forward and what they want to develop, they can make the case. We will certainly give them the airtime to look at that, but I would say there is a concern around them and the point about elected accountability.
I understand why the right hon. Gentleman referred to my opening remarks about economic prosperity and the desire to see more of it in parts of the country. I am sure he will want to join me in apologising to the people of his area for the problems they have faced over the last few years as a direct result of the economic mess left by the last Labour Government.
Brandon Lewis
I am sure the right hon. Gentleman is going to agree with me now—
John Healey
In 2007 people in my area of Barnsley and Rotherham had seen 10 years of stable economic growth, unemployment fall, employment rise, and inflation and interest rates at a stable level. Then the global financial crisis hit, and this country faced enormous economic problems, but I am proud to say the Labour Government played a part in co-ordinating the international response that dealt with that.
Brandon Lewis
The right hon. Gentleman will not be surprised to learn that I do not entirely agree with his description. He seems to forget that from 2007 to 2010 not only was there the issue with the banks, but that since 2010 this Government have been having to deal with the bad economic decisions of the previous Government. We are having to deal with the fact that they spent money the country simply did not have. Nobody should be doing that; certainly we know from our own credit card bills that that is not a good way to move forward. This coalition Government are dealing with that mess and are making the difficult decisions required to develop a good long-term economic plan. The outcomes of that are now starting to be seen, with growth coming back while interest rates are being held down and with more people in work and unemployment falling. That is a good thing for our country and I commend that to the House in the same way that I will commend these combined authority orders.
Establishing these combined authorities is what the areas themselves want to see. They want them because of their commitment to delivering growth and prosperity for their areas and this Government have given them the power to do that. It is a priority that should be at the heart of everything that councils across our country are working to do. It is a commitment that business and other partners in each of these areas rightly share. It is also a commitment this coalition Government share, as demonstrated through the city deals we have agreed with these areas and others. Let us be clear about the importance of this: the first wave of deals alone is expected to create 175,000 jobs and 37,000 new apprentices —that is in addition to the almost 1.5 million new jobs in the private sector under this Government. It is a commitment I am confident this House shares, and I commend the orders to the House.
Question put and agreed to.
Resolved,
That the draft Combined Authorities (Consequential Amendments) Order 2014, which was laid before this House on 10 March, be approved.