Lord McKenzie of Luton
Main Page: Lord McKenzie of Luton (Labour - Life peer)Cities and Local Government Devolution Bill [HL]
Lord McKenzie of Luton Excerpts“Audit committees
(1) A combined authority must arrange for the appointment of an audit committee to—
(a) scrutinise the authority’s financial affairs;(b) review and assess the authority’s risk management, internal control and corporate governance arrangements; and(c) review and assess the economy, efficiency and effectiveness with which resources have been used in discharging the authority’s functions.(2) The audit committee must have an independent chair.”
Lord McKenzie of Luton (Lab)
My Lords, I shall also speak to our other amendments in this group. A strong and adequately resourced scrutiny process is an essential ingredient in the process of devolving substantial powers to combined authorities—and, it might be thought, especially to mayoral combined authorities. The sheer quantity of amendments in this group reflects the importance that all noble Lords, including the Government, have given this issue.
Our Amendments 35 and 37 ensure that the scrutiny committees can inquire into and challenge not only actual decisions—for example, by call-in procedures—but matters under consideration prospectively, rather than just retrospectively.
Amendment 43 requires that guidance by the Secretary of State on the functions of overview and scrutiny committees should be affirmed by the affirmative procedure, in the light of the crucial role that such committees should play.
The Bill lacks an adequate procedure comparable to that of the audit committees found in local government. Amendment 36 seeks to remedy this deficiency, but we felt on reflection that it does not quite meet the case, since it delegates to the overview and scrutiny committee the task of appointing another committee, independently chaired, to carry out that audit function. Our Amendment 34A seeks to remedy the position by explicitly requiring the appointment of a separate audit committee, again independently chaired, with the responsibility for reviewing and scrutinising the authority’s financial management and affairs in the same terms as Amendment 36. Given the potentially large expenditure of the combined authorities if the promise of devolution is to be realised, this is an important role and one that is distinct from the general overview and scrutiny process.
Although they have yet to be moved, we support the Lib Dem amendments concerning political balance and the chairing of the scrutiny committee, but have some concerns about possible delays of call-in powers, which could necessitate another round of consultation.
We will listen with interest to the government amendments, particularly to Amendment 41, which requires the approach to reconsideration powers to need the consent of the combined authority. This would appear unduly restrictive. We are not quite sure why it is proposed to have an alternative to an independent chair of scrutiny, but in any event can live with what is proposed. I understand that we are not able to hear from the noble Lord, Lord Kerslake, today on his very substantial amendment about governance, which we felt was very important. As proposed, however, some of the voting thresholds may be problematic, especially the requirement for unanimity at the first meeting of the overview and scrutiny committee.
Overall, however, these amendments highlight the importance that we should place on getting oversight right in circumstances where considerable power is rightly being placed with a combined authority and possibly a mayor. This should also address in part—although, doubtless, not comprehensively enough—those who have expressed fears about a single-party state. I beg to move.
Lord Shipley (LD)
My Lords, we have a number of amendments in this group. During the debates on this Bill, we have tried from these Benches to emphasise the importance of legitimacy and accountability in this new tier of government. By legitimacy, I mean, first, a direct connection with the ballot box in the new structure and, secondly, the prevention of one-party states in which the same political party has control of the post of elected mayor, the nominated combined authority and the nominated overview and scrutiny committee. In Committee, we proposed direct election to the combined authorities, so that the mayor was not the only elected post, but this did not find favour. Now we have a group of amendments that concerns overview and scrutiny committees, which are very important—more important than they might have been, had some of the amendments that we debated in Committee been agreed.
I am pleased that, following our debate in Committee, further, more detailed proposals have come forward from the Government. Some are welcome but some do not go far enough. Let me explain what I hope the Government will do. Our amendments would require the chair of an overview and scrutiny committee to be from a different political party from the mayor; that assumes that the mayor is a member of a political party. If that is not the case, the chair could be from any political party. An independent chair could work—we said that previously—but it would be better to have an opposition councillor who has been duly elected to their post as a councillor from within the combined authority area, not least because if one appoints an independent person it immediately raises the question of who appoints that independent person. To put it another way: how is independence guaranteed? The make-up of the overview and scrutiny committee also needs to reflect the number of seats held by each party in those local authorities making up the combined authority. Later, we have proposals on the electoral system that should be used so that the first past the post system does not encourage the development of a one-party state.
Our other amendments would also allow the committee to call in decisions made by the mayor and delay them—not for long—to allow further consideration when it is felt to be necessary. To do its job properly, an overview and scrutiny committee needs the power to call for information and to receive it. It will not be enough if the overview and scrutiny committees exist but are then prevented doing their job by a combined authority that prefers to keep things out of public scrutiny.
Amendments 35 and 37, which we support, would enable the overview and scrutiny committee to examine decisions before they are taken, rather than wait for a decision to be made; that is welcome. Amendment 34A, which I signed up to, would create an audit committee with an independent chair. I welcome that proposal as well. It is essential in this case that the chair is independent and appropriately qualified to do the job. In practice, it should cover the functions of a public accounts committee, an efficiency committee and a risk committee. This matters because the savings that could be achieved by public service reform and reducing duplication at a local level have been well established, but we now need to ensure that it all happens. The audit committee would be of significant help in delivering that objective.
The noble Lord, Lord McKenzie, made mention of Amendment 41, and I will do likewise, with two questions for the Minister on that amendment. First, proposed new sub-paragraph (4A) states:
“An overview and scrutiny committee must publish details of how it proposes to exercise its powers in relation to the review and scrutiny of decisions made but not yet implemented”.
If the implementation period is very short, what power would an overview and scrutiny committee have under this measure to hold up a decision for further consideration? Secondly, and this is the point that the noble Lord, Lord McKenzie, raised when talking about proposed new sub-paragraph (4B), what is the objective in requiring an overview and scrutiny committee to,
“obtain the consent of the combined authority to the proposals and arrangements”?
I can see that there could be a situation in which the overview and scrutiny committee misses something, which would need to be put right by the combined authority. However, I certainly hope that this measure would not be used by members of a combined authority who do not wish to see the overview and scrutiny function work effectively. I look forward to hearing the Minister’s comments on that.
Finally, all our proposed amendments have a common purpose in wanting to ensure proper accountability for the devolution that is about to occur. I hope the Minister will agree that they should be included in the Bill.
Baroness Williams of Trafford
My Lords, that is an interesting question. I have witnessed many a stand-off in local authorities. The combined authority is obliged through its voting arrangements, whatever they may be—they will be different in different places—to come up with a resolution. I appreciate that it might start with a stand-off but I hope that it will be resolved in accordance with the democratic arrangements within the combined authority.
The noble Lord, Lord Shipley, asked about implementation, the short period of time and the powers of call-in. I hope I have explained to him that our new amendments give the Secretary of State the power to provide, by order, for a minimum call-in period.
The noble Lord also inquired about the chair of the overview and scrutiny committee. Under the Government’s amendments, the chair of an overview and scrutiny committee can never be a member of a constituent council if he is a member of the same political party as the mayor of a combined authority.
I hope those responses are helpful and that, with them, the noble Lord will feel happy to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for her detailed response to our amendments and a raft of other amendments. I also thank the noble Lord, Lord Shipley, for his support for most of our amendments. I look forward to the Government bringing forward at Third Reading something on Amendment 34A and the audit committee. In respect of Amendments 35 and 37, I understand that the matter is already covered. I take the point on statutory guidance.
I do not 100% agree with the Government on Amendment 41 on the point that we discussed. However, it is fair to say that, together with the noble Lord, Lord Shipley, we have a substantial identity of view over a broad range of areas. We do not have an identity of view on everything, particularly around access to some of the documentation. However, for my part, I am happy to withdraw the amendment.
Lord McKenzie of Luton
I thank the Minister for her detailed exposition of the issues around these two sets of amendments. I support the noble Lord, Lord Tyler, in asking whether we can take this forward to Third Reading, if necessary. These substantial amendments herald very significant changes to what has been the process hitherto. We had the Delegated Powers Committee’s report just yesterday—for some of us who were on other duties, not until this morning—and the noble Baroness’s presentation raises issues. Rather than asking the Government to withdraw the amendments, why do they not proceed while recognising that they are if necessary open to final amendment at Third Reading, which is only a few days away? Given the range of queries now emanating from our considerations—every time we look at this it raises more issues—it seems that we should try to structure a meeting with the Minister, and colleagues if necessary, between now and then to iron out as much of this as possible.
From our point of view, as my noble friend Lord Woolmer said, if we can speed up the process we would be supportive of that in principle. We certainly support extending the arrangements to individual counties and councils. That is not an issue but some of the process stuff is. One point that bothers me still is in relation to what the Delegated Powers Committee report said on Amendment 62. In paragraph 11, the report says clearly:
“We see the scheme process, which involves local engagement and consultation, as being wholly different from the process of discussion and negotiation which takes place only between the local authorities and the Secretary of State”.
I would accept having administrative law brought into play and prayed in aid as a constraint or parameter that the Secretary of State had to comply with. But introducing that sort of concept fairly late in the day is a bit unusual, and its context needs proper consideration.
On Amendments 71 and 72, we know that the innate problem is of having a difference between those of us who believe that there should be some parameters put into the Bill, but not to stifle initiative and innovation, and the Government’s view that they will oppose that. Notwithstanding that, it would be helpful for progress today and to get the best solution possible over these amendments if the Government would recognise that, if necessary and appropriate after further discussion, this would be open for amendment at Third Reading. That would otherwise save us making more difficult choices here and now.
Baroness Williams of Trafford
My Lords, I thank all noble Lords for the comments that they have made. My noble friend Lady Eaton talked about the problems of delay, which are very real. The noble Baroness, Lady Jenkin, talked about Amendments 71 and 72 being necessary for places such as Cornwall. She is absolutely right.
My noble friend Lady Eaton asked whether an area that is not currently a combined authority can access the powers of devolution. She asked about areas without combined authorities. Again, without Amendments 71 or 72 it is not possible to confer powers on, say, Cornwall. Places such as Cornwall would be very concerned if the Bill did not have that power.
The noble Baroness, Lady Hollis, asked why you cannot be in two combined authorities. Councils can be constituent members of one combined authority and non-constituent members of another. That is quite possible. I will give the noble Baroness an example before she gets to her feet. In Greater Manchester, Cheshire East is a non-constituent member of the Great Manchester Combined Authority for the purposes of, I think, business rates.
“Devolved governance arrangements for London
(1) The Secretary of State may by order establish as a body corporate a joint board for the Greater London Area for the purposes of improving statutory functions relating to economic development and public functions generally within the Greater London Area.
(2) An order may be made under subsection (1) only if the relevant authorities within the Greater London Area and the Mayor of London consent to the making of this order.
(3) In this section relevant authorities means—
(a) London borough councils, and(b) the Common Council of the City of London.(4) An order under this section must specify the name by which the joint board is to be known.
(5) The joint board for the Greater London Area is to consist of members appointed by the Board’s constituent councils and the Mayor of London.
(6) The Secretary of State may by regulation make provision in relation to the joint board about—
(a) the membership of the board, (b) the voting powers of members of the joint board,(c) the executive arrangements of the joint board, and(d) arrangements for the transfer of property and other liabilities.(7) The Secretary of State may by order—
(a) make provision for a function of a public authority that is exercisable in relation to the Greater London Area to be a function of the joint board, and(b) make provision for conferring on the joint board in relation to the Greater London Area a function corresponding to a function that a public authority has in relation to another area.(8) An order under subsection (7)(a) may make provision—
(a) for the joint board to have the function instead of the public authority, or(b) for the function to be exercisable by the joint board concurrently with the public authority.(9) In this section a public authority—
(a) includes a Minister of the Crown or a government department;(b) does not include—(i) the Mayor of London,(ii) the Common Council of the City of London Councils, or(iii) a London borough council.(10) The Secretary of State may by order provide for Chapter 1 of Part 1 of the Localism Act 2011 to have effect in relation to the joint board as it has effect in relation to a local authority.
(11) The Secretary of State may by order abolish the joint board for the Greater London Area only if the board’s constituent councils and the Mayor of London applies consent to the making of the order.”
Lord McKenzie of Luton
My Lords, I will also speak to Amendment 75C. In doing so, I return to the issue of devolution for London. Following our brief debate at the conclusion of consideration in Committee, we have now tabled two more detailed amendments in my name and that of my noble friend Lord Beecham and the noble Lord, Lord Tope, whose experience of the London local government scene is second to none—in parallel of course with the noble Lord, Lord True. These amendments have been drafted by London Councils. We thank the Minister for facilitating the meeting after Committee, which included a representative of London Councils. We understand that there may have been other meetings as well. It is hoped that these have helped establish a consensus around what is required in terms of additional devolution for London and how that might be delivered. We are advised that over the last year London boroughs and the Mayor of London have worked together to develop ambitious plans for further devolution to London. Yesterday, at a meeting of the London Congress, London’s elected leaders endorsed a proposition for London that set out proposals for devolution and public service reform in relation to employment, skills, business support, crime and justice, health and housing. Each of these areas represents a key challenge facing London. Indeed, some touch on two of the most critical issues facing the country over the next five years: improving productivity and boosting the supply of housing across all tenures. The approach to each is underpinned by the belief that London, like other cities, should have significant responsibilities devolved from the national level in order to develop locally led responses to its most pressing issues.
London’s current government arrangements work well, with London boroughs and the mayor possessing distinct executive powers, but maintaining a successful strategic partnership. However, it is considered that further devolution to London will require new decision-making arrangements at both pan-London and sub-regional level. Further, London Councils points to a need to explore which elements are likely to require underpinning in order to meet the standards of accountability expected of government in respect of process and funding.
Lord Brooke of Sutton Mandeville
I realise that the drafting of the amendment is not the noble Lord’s, but in proposed new subsection (9), to which he referred a moment ago, it might be sensible if the penultimate word in the penultimate line was struck out at this juncture, as, at the moment, it constitutes nonsense.
Lord McKenzie of Luton
Are we dealing with Amendment 79B and proposed new subsection (9)?
Lord Tope (LD)
Perhaps I can help and speed things up a bit. The subsection to which the noble Lord draws our attention refers as printed to the “City of London Councils”. The word “Councils” is obviously superfluous and a mistake. It might reveal where the drafting came from.
Lord McKenzie of Luton
I am grateful to the noble Lord, Lord Tope, for some assistance on that. This was the drafting of London Councils, but I will make sure that it is corrected. I am grateful to the noble Lord for bringing that to my attention.
Proposed new subsection (10) proposes that the board be given the general power of competence. That is in order to support the potential for future rounds of negotiation. Proposed new subsection (11) creates provision for the Secretary of State to dissolve the board only if the board’s constituent councils and the Mayor of London agree, although we recognise that the board might be dissolved through an Act of Parliament.
We are close to the end of this House’s consideration of the Bill. Nevertheless, we hope that the amendments will elicit a response today or at Third Reading that will enable progress to be made. If not, we hope that at least a fair wind will be given to the issue as the Bill heads for another place. I beg to move.
Lord Tope
My Lords, my name is also to the amendment, and I am very pleased to give my support in the terms described by the noble Lord, Lord McKenzie, to whom I am particularly grateful for introducing the amendment so clearly and fully. I join him in expressing our gratitude to the Minister for meeting us and London Councils so that we could explore our concern over the issue rather more fully—leading, I think, to a better understanding all round.
It has been my lot to speak only at the end of each stage of the Bill, having sat through all the other debate—which I have done with great interest and considerable patience. It has been clear from the start that the Bill as drafted, although it includes London, does not really relate to London government. Nor is there any intention to recreate in any way the structure of government that pertains in London. That is correct. London’s government structure is unique. On the whole, over the past 15 years, it has worked fairly well.
However, I have had the impression, in part from your Lordships’ debates, but also from debate outside the House and in other places, that there is a general feeling that because London has its Greater London Authority, its directly elected mayor and the London boroughs, devolution within London is largely finished, certainly in legislative terms—that we have done it and now it is time for the rest of the country to catch up. I entirely reject that view. London is by no means finished. Devolution is anyway an ongoing process that will develop and evolve, possibly for ever, in different ways. Certainly after 15 years, we are ready to see greater devolution of power—I stress that word—from central government to London government. By London government, I do not mean only the Mayor of London, I mean the London boroughs as well, and I mean jointly between the Mayor of London and the London boroughs.
In replying so far, at each stage of the Bill, the Minister has been fulsome in welcoming any proposals that may come from London to bring that about. We are concerned that there should also be the necessary enabling legislation in place to allow any proposals agreed between each borough, the mayor, the City of London and the Government to come into effect as quickly as possible. Concern has been expressed during debate among your Lordships that we should not delay implementation by holding referendums or in any other way. It would be absurd if we went through all the stages of getting 32 London boroughs, the City of London, the Mayor of London and the Government all to agree on what we wanted to do about further devolution in London only to find that there was not legislative provision to enable it to happen and that we had to wait for another legislative opportunity to bring that about. We all know that such legislative opportunities do not come along very often. This is the obvious place to make such provision and this is the right time to do so.
The noble Lord, Lord McKenzie, made clear that our amendments are not intended to be a detailed proposal for implementation now, but rather a fairly detailed indication of thinking within London. Not the amendment but the proposals reflect considerations that took place yesterday at the meeting of the congress of leaders of the London boroughs and the mayor. To that extent, it is a probing amendment rather than one that we seek to see in this exact form in the Bill.
We do this to try to give greater clarity to the direction in which London and London government are going in their thinking and determination to have much wider powers devolved to it from central government in the areas, as the noble Lord, Lord McKenzie, said, of employment, skills, business support, crime and justice, health, and housing—in other words, on a much wider basis than is presently the case. The concern is that we can go only so far on co-operative arrangements and mutual agreement. We need reassurance that there is statutory provision to enable the bodies—particularly the joint committees when they are established—to operate effectively, be responsible and, when appropriate, be legal entities. So we are trying to find out the latest thinking of the Government in those areas. If it is the view that further legislative provision is necessary—I think now that it increasingly is—then this is the Bill in which to do it. We seek an undertaking from the Government that, by the time the Bill reaches Royal Assent, such provision will be included in it.
Baroness Williams of Trafford
My Lords, as discussions on these amendments have demonstrated, the ideas for devolution in London to London councils are interesting and varied. As I have explained many times in previous debates, there is an expectation that local areas will do just that and come forward with proposals to support devolution for their areas, and of course London is no exception.
I know that London boroughs and the Greater London Authority are working on a package of reform proposals, and I was very pleased to meet the noble Lord, Lord Tope, and others—I think that it was last week; time goes very strangely in this House—and interested to hear their thinking. We expect boroughs and the GLA to come forward to us with those proposals in the coming months. I recognise that the proposals may need a strengthening of London governance arrangements, and I can see how the proposals in the amendments may provide the kind of governance arrangements that might be needed.
However, for now, I suggest to noble Lords that we continue at some later stage our discussions on what the most appropriate changes would be to provide the London governance needed for future greater devolution and how such changes might best be provided for in this Bill. Therefore, I ask that noble Lords do not press their amendments.
Lord McKenzie of Luton
My Lords, I am grateful to all noble Lords who have spoken in that brief debate. Insofar as what the Minister said, yes, of course, we will withdraw the amendment at the appropriate time, but it is good to hear that a package of proposals is being worked on which might entail strengthening of governance arrangements.
The point of having amendments now is that the Bill is just about to pass from this House. This is a legislative vehicle, which is why it is an opportunity to test the water on what might be an appropriate structure to deal with the emerging devolution proposals.
Clearly, the noble Lord, Lord True, is heavily involved in all this—it is an integral part of what he does—and I accept entirely that, as he said, there is a desire to continue with the work in progress of developing these thoughts. It is not a done deal in the sense of what he said. I accept, too, and can well imagine that devolution in London is heavily impacted by diversity and the need to build a climate of trust with government. Given the massive expansion in the population, to which the noble Lord referred, I acknowledge, too, the need to look at this on a regional basis and the need for broader discussion.
I am grateful to the noble Lord, Lord Tope, for his support for the draft amendments, on the basis that they are probing amendments to try to set down and understand some parameters. A key question that emerges from this is whether the legislative hurdles that they seek to address are real—I think that this is one of the issues that London Councils had concerns about.
I accept that this is not necessarily about locking people into particular institutions. It is an attempt to understand where these sorts of devolution arrangements that London boroughs wish to enter into can be enabled under existing legislation or whether something is needed in addition. Perhaps we could hear more specifically from the Minister. We had one discussion on that and it seemed that, in some areas, there was acceptance that additional legislation would be required. We have got the sense this evening that this is the case—this Bill will go to the other place in September and October but it will have been passed in some shape or form by the end of this year—so this is a missed opportunity if London devolution, as London wants it, needs the benefit of some tweaking or changing of legislation. Can the Minister address that point?
Baroness Williams of Trafford
I thank the noble Lord for that—it may be that some tweaking of legislation is required; we have on other parts of the Bill similarly alluded that the tweaking of other legislation might be required in order to align it with this Bill on devolution. The discussions have started well but I request that we give a bit more time to this and discuss it in due course.
Lord McKenzie of Luton
I am grateful for that. It is good that discussions are proceeding well; it is a good start to the process. I just hang on to the point that this is not an open-ended legislative opportunity. I suppose that we have had DCLG Bills quite frequently in recent times, but this one will be out of the other place by the end of the year. It will be a great pity if there is still uncertainty as to the legislative arrangements, this Bill is passed and somebody then says, “Hang on, we can’t do something that we want to do as an integral part of devolution in London because we need primary legislation to do it”. That was the thrust of the amendment —to probe and tease out that matter. I think that we have probably given this enough of an airing tonight, so I beg leave to withdraw the amendment.