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Cities and Local Government Devolution Bill [HL]

Volume 764: debated on Monday 13 July 2015

Report (1st Day)

Relevant documents: 1st, 2nd and 3rd Reports from the Delegated Powers Committee

Amendment 1

Moved by

1: Before Clause 1, insert the following new Clause—

“Devolution: annual report

(1) The Secretary of State must lay before each House of Parliament an annual report about devolution for all areas within England pursuant to the provisions of this Act.

(2) The report shall include information on—

(a) the areas of the country where agreements have been reached; (b) the areas of the country where proposals have been received by the Secretary of State and negotiations have taken place but agreement has not yet been reached;(c) additional financial resources and public functions which have been devolved as a result of agreements; and(d) the extent to which consideration has been given by a Minister of the Crown to the principle under section (Devolution statements) that powers should be devolved to combined authorities or the most appropriate local level except where those powers can more effectively be exercised by central government.(3) The annual report shall be laid before each House of Parliament as soon as practicable after 31 March each year.”

My Lords, I start by declaring my interest as a vice-president of the LGA. I shall speak also to Amendment 2, which we consider to be consequential. In moving this amendment, I welcome the support of the noble Lord, Lord Shipley, and the LGA.

Throughout our consideration of the Bill there has been an explicit recognition that it is an enabling framework Bill. Specifically, it could enable, by order, the transfer of any function of any public authority to a combined authority, and for the mayoral combined authorities some or all those functions could be exercisable only by a directly elected mayor. The scope has been widened by government amendments relating to single authorities. We support those amendments and will be considering them later today. That is being supplemented by a fast-track process and by relaxations on what can qualify as a combined authority.

Our approach to the Bill has been supportive of its thrust—not to seek to stifle the process of devolution and the innovation that it can engender but to endeavour to understand the parameters of the Government’s willingness to devolve, to ensure that devolution is fairly available to local authorities across England and to make sure that the approach is comprehensive. As we have sought more detail, the Government have resisted being prescriptive, and the answer has always been to the effect that they stand prepared to listen to any propositions from local authorities and will evaluate them on a case-by-case basis. Nothing is seemingly off the table, there are no constraints on the capacity of the Government to respond, there is no programme with priorities, everything is possible in the best of all possible worlds, and deals are done behind closed doors with announcements at politically propitious moments.

When we sought to put some structure in the process and to publish a forward strategy, it was suggested by the noble Lords, Lord Heseltine and Lord Bichard, that this would give central government an opportunity and leverage to claw back some of the powers that they are about to lose. Therefore, we have moderated our approach, as Amendment 2 in particular will indicate.

Hitherto, the only parliamentary oversight on offer has been the affirmative process for the relevant orders and the debate in both Houses of Parliament. We know from experience that this gives restricted effective oversight. The commitment to expand the process with individual reports covering matters laid down in government Amendment 33 and related expanded provisions, is to be welcomed, but that covers only part of what is required. It addresses individual deals at the time they are made, and, when we come to discuss these later, we will explain that this will not necessarily be comprehensive. As we have seen in the case of Manchester, devolution arrangements can evolve, and not all components would require a Clause 6 order—the trigger for the Government’s additional report. Much of the proposed health devolution in the case of Greater Manchester does not appear to need the provisions in the Bill at all.

Therefore, the amendment calls for an overall annual report on the progress of the devolution: agreements reached, work in progress, functions transferred and resources devolved. Each year, such a report would provide the opportunity to take stock of progress across the country. It would be an opportunity to see whether and how devolution was working for different types of authorities—the counties as well as the metro cities—how devolution was shaping up in rural and coastal areas, whether all relevant authorities had been able to take advantage of similar functions, and whether devolved funding was fair. It could be a driver of best practice and would serve as a bulwark against those who might be tempted to linger in the slow lane. The annual report would be part of the process of holding government, central and local, to account in that it would shine a spotlight on them.

It would also be an opportunity to see progress on the devolution statements referred to in Amendment 2. This amendment was inspired by some of the comments of the noble Lord, Lord Bichard, in Committee, when he commented on the propensity of government—civil servants and politicians—to seek to constrain the process of devolution. The concern expressed was that they would seek to claw back powers through other legislation; that as we focus on this Bill there will be moves in that other legislation to prevent real devolution happening.

It was suggested that each piece of primary legislation coming before Parliament should have a devolution test—a devolution litmus test, if you like. The Minister who has introduced a Bill in either House should be required to make a devolution statement before Second Reading to the effect that the provisions in the Bill are compatible with the principles of devolving power to the most appropriate level. A statement itself would not, of course, directly trigger a process of devolution but would concentrate the minds of government and be a reminder that if the Government are serious about devolution, it should be the collective responsibility of central and local government and of all departments.

I hope the Government will accept Amendment 1 and the consequential Amendment 2 as being entirely supportive of their devolution agenda and a positive contribution to the Bill. I beg to move.

My Lords, my name appears on both Amendments 1 and 2 and we give our full support to both. The amendments require an annual report on the progress of devolution, and require that Ministers consider when they introduce a Bill whether that legislation is compatible with the principle that decisions should be made at the most local level possible. Both amendments seem to us to be entirely reasonable.

In Committee, we moved an amendment to create an independent panel that would review proposals for devolution and assess the Government’s record. We now have this amendment, which achieves broadly the same objective. It is important because devolution must not be unnecessarily piecemeal—that is, it needs to be clear what responsibilities are being devolved, or not devolved, to whom, and why. That, in turn, will help to define the criteria that the Government are pursuing—and that will help other authorities to frame their own proposals.

I agree with the noble Lord, Lord McKenzie of Luton, that the point which the noble Lord, Lord Bichard, raised in Committee on Amendment 2 is a very important statement of principle and I am glad that it has been included in this group in the form of that amendment.

I hope the Minister will take seriously the suggestion of the noble Lord, Lord McKenzie, that the Government should accept the amendment, which is entirely reasonable. I declare again my vice-presidency of the Local Government Association.

My Lords, I, too, support my noble friend’s amendment. This is a very welcome Bill and we are delighted that the Minister—together with her boss, the Secretary of State—is so committed to localist values. That is great, and it is very welcome.

However, one of the problems that we found in Committee is that—because of the desirability that the energy in the Bill should come from the bottom up, from localism and from local authorities trying to establish what works best in their patch—it will be very difficult for those of us outside the great authorities to know what will or will not be acceptable to the Secretary of State as future patterns for combined authorities. No general principles of any sort are laid down in the Bill—anything may go, or nothing may go. We do not want to descend into ad hocery, and we do not want to descend into blueprints, but we do need to learn from what the Secretary of State is supportive of in other bids so that those that follow in the wake of those bids can devise a structure of combined authorities that are more likely not to waste our time, waste resources or raise false hopes in our local taxpayers but will command the support and, I hope, the assent of the Secretary of State as the way forward.

If the Minister is not willing to do this—and she has very good reasons not to be willing—and lay down principles by which local authorities may guide their submissions to the Secretary of State, it will be important for the rest of us to learn through example which submissions have been successful with the Secretary of State so that we can model ourselves on the best practice that he has commended. It seems to me that this amendment is entirely in the spirit of what the Minister wants and what the Secretary of State should follow. It is the route forward to combine the best of localism and a bottom-up approach, while avoiding a straitjacket of top-down structures and allowing us to learn from each other what is going to be best practice in the eyes of the Secretary of State. I hope very much that the Minister can support something that seems very strongly to support the path that she wants to go down and we want her to go down.

My Lords, I declare my interest as president of the Local Government Association.

Noble Lords will know from my maiden speech my passionate commitment to devolution and support for this Bill. It is because I support devolution that I think we should support Amendments 1 and 2 today. An annual report and a devolution statement seem to me to be entirely practical and sensible additions that will further devolution, not hinder it.

The exam question before us is: why, given that all three of the main political parties have supported devolution for as long as I can remember, has progress been so slow and uncertain? Here are four quick reasons. The first is the silo nature of central government. Departments think “police, health”, but they never think place. Secondly, devolution is inherently disruptive. I recall a senior official saying to me that he was very supportive of the city and local government deals provided they did not get in the way of delivering his current programmes. I did say that that was the entire point. Thirdly, there is a dislike of difference in this country, and devolution is different in different places. Fourthly, there is often nervousness at local level, particularly in voluntary and community organisations, that this will be a cosy deal between central and local government that will leave them on the sidelines.

What is proposed here is a powerful antidote to those very powerful pressures and is designed to keep the Government to their intent as set out in the Bill. If agreed, these amendments will advocate and ensure transparency and reduce the risk of one step forwards, two steps backwards, which has bedevilled the devolution debate. Indeed, the Secretary of State, Greg Clark, produced something very similar to annual reports on progress in departments in the previous Government. We should support both amendments as practical and sensible moves that will keep the Government to their intent and advance the cause of devolution.

My Lords, I, too, support these amendments and very much echo the points made by the noble Lord in his last remarks. There is a silo mentality in Whitehall and it often works rather badly against what is best for place. These amendments will, in my view, help the Government progress the objectives of the Bill. I know that we are going to have a debate on Wednesday on some NHS issues around this, but Amendment 1 will help with the laggards and those who are uncertain where the health functions make sense in this legislation. It would be good to know, across the country, when particular services have been led into a devolved state and when they have not. We need to be able to capture on a regular basis the progress in this area across the range of functions it may be possible to devolve. I fully support these amendments and hope that the Government will as well.

My Lords, I add my voice in support of this amendment. I declare an interest as a member of Cumbria County Council. In that part of the north of the north, we hope that effective devolution can be extended beyond the major cities.

Some noble Lords may remember that, in Committee, I made a strong case for action to try to promote unitary authority or authorities in Cumbria. I still believe that to be necessary, as do a large proportion of people in Cumbria, but there are obstacles. We would have more effective local government if that came about, more democratically accountable local government, because responsibilities would be clearer. We would be in a much better position to exploit the potential for economic development, in particular in our part of the north of the north the billions of pounds of investment in both the new Trident missiles in Barrow and the new nuclear power station on the west coast of Cumbria. Those investments are either straight from the taxpayer or underwritten by various types of taxpayer guarantee. The potential to have effective planning around them depends on us being able to sort out our local government structure.

I shall not move on Report the amendments that I moved in Committee. I was grateful to be able to have a chat about the problem with the Minister and I think that we in general share the objectives. However, this amendment, which tries to maintain the pressure on government—it is government regardless of political party—to push ahead with devolution, is desirable. In our case, I want the Government to work with local authority leaders in our area to see what can be done. The Minister indicated that she might along with the noble Lord, Lord Heseltine, be prepared to meet the local leadership. I hope that, in the light of that, the Government may be able to invite the authorities to present proposals for reorganisation, as they are enabled to do under a previous Act of Parliament, and that the department could play an active role in trying to establish consensus in the county. This is a vital point not just in terms of economic efficiency, but with the lack of trust that there is in politics now we have to apply the principle of subsidiarity and get decision-making as close to the people as we can. That would do a lot for the democratic health of the nation. I hope that the Minister will bear these points in mind.

My Lords, I, too, support the amendments, but for one additional reason: that a great deal of the implementation of the Bill will depend on secondary legislation and a series of deals, each one of which, as I understand it, will be set out and agreed by both Houses in secondary legislation. As there will be a range of such deals, concerned with different parts of the country and involving different arrangements, it is enormously important that this is pulled together each year so that Parliament as well as the public and the press can understand how it is progressing and how it all makes sense put together. Individual pieces of secondary legislation are fine; it is about understanding the pattern that emerges. Rather than it being simply a series of individual deals, we should look at what they add up to. Do they add up to a pattern of devolution that makes sense across the country? From the point of view of Parliament, to have an annual stocktaking on that element would be extremely helpful.

My Lords, I thank all noble Lords who have made points on these amendments. I think that we are seeking the same ends but perhaps by a slightly different approach, as I will outline.

Amendment 1 would insert a new clause which places a statutory duty on the Secretary of State to provide annual reports to Parliament setting out information about devolution deals which have been agreed and those in discussion. Amendment 2 would add a new requirement that all Bills are to be accompanied by a “devolution statement”. Noble Lords have heard me say a number of times that the Government are open to discussing devolution proposals with all places. We have been clear that our approach is for areas to have conversations with us about the powers and budgets they want to be devolved to them so that they can grow their local economies and improve the competitiveness and productivity of the area. The importance of this cannot be overstated. As the Chancellor said in the Budget, the great economic challenge we face is on productivity. It is by addressing that challenge that we will ensure that Britain is what we want it to be—the most prosperous major economy in the world by the 2030s. Devolution deals are one of the most important levers for generating growth and delivering this aim.

However, notwithstanding the importance of devolution deals, a new statutory requirement of an annual report on devolution statements is not the right way forward. The focus should not be on the process but on the substance of implementing the devolution deals in our major cities, our counties and across the country. The Bill enables the implementation of such bespoke devolution deals and the nature of these deals will be set out individually in orders to implement changes in respect of each proposal approved and brought forward by the Secretary of State. Therefore they will be available for both Houses of Parliament to see and consider under the affirmative procedure.

In Committee, noble Lords expressed concern that Parliament should be fully informed on the nature of the proposals. We have considered carefully those points and agree that we could strengthen and extend the information available to Parliament. Government Amendments 33 and 70, which I will move later in the proceedings, seek to do this. They provide that when the Secretary of State lays a draft order in Parliament, in addition to the order’s Explanatory Memorandum he will also lay a report explaining what the order does and why he proposes to make it. These reports, together with the Explanatory Memorandums, will ensure that Parliament will have before it all that it needs to consider the orders implementing devolution deals and governance changes. The bespoke approach in my amendments is preferable to the approach in Amendment 1 in terms of increasing genuine transparency around the devolution deals while enabling also the bespoke deals to be agreed with different places, rather than a template or a selection from a list of functions.

Amendment 2 would require a statement to be made for each and every Bill laid before Parliament as to its compatibility with the principle that powers should be devolved to local areas unless they could be more effectively exercised by central government. Whatever the superficial attractions of such an approach, in practice it would descend into another tick-box process. It risks being a distraction from delivering the substance of real bespoke deals in places. Accordingly, such a requirement is unnecessary. If Members of either House feel that the Government are being inconsistent in their approach, they will have the opportunity to raise the issue with them.

None of this is to deny the importance of devolution and what it means for this country. I hope we can all agree on that. I hope that we can all agree that the devolution of powers and budgets to areas across the country should reflect what the areas themselves want. This would be a major reversal of the decades of centralisation—indeed, a century and a half—which we all realise has not served us particularly well as a country.

Turning to specific points, the noble Lord, Lord McKenzie, questioned whether Greater Manchester is using Clause 6 and whether in its deal it will draw on its powers. The clause enables powers to be given to a combined authority which are exercised by a public authority in a different area. Hence the clause could give Greater Manchester the powers on strategic planning which the GLA currently has. Giving Greater Manchester such powers is part of the deal.

The noble Baroness, Lady Hollis, talked about the importance of annual statements so that we can learn from best practice, how deals have worked, and what principles were needed to back them up. Obviously, Manchester is well on the way, but as the Chancellor announced last week, Sheffield, Leeds and Liverpool are in talks with the Secretary of State. I also understand that as of last week Norwich is now in talks, which is very good news indeed. It will enable Members of both Houses as well as the councils at large to see what has been agreed and on what basis, and to learn as they go along. Indeed, I hope that Cornwall will come up with some exciting proposals soon.

The noble Baroness also talked about not setting principles on devolution because it is a waste of time. We do not intend to waste anyone’s time—

I hope that the noble Baroness will forgive me, but I think that she has slightly misunderstood me. I accept for the sake of this argument her position—that the Secretary of State does not want to lay down principles—but what you actually have to do is deduce from the examples he has accepted which principles and action he is motivated by. That is best done in an annual statement to bring them together, which may or may not be accompanied by any contemplation that the Secretary of State may have had about the offerings. That is the way we learn from each other. I worry that small seaside towns do not have the resources of Greater Manchester to do the sort of heavy lifting that this work might otherwise require.

I thank the noble Baroness for her intervention. The process undergone by Greater Manchester, Norwich, Cornwall and other places can act as a learning tool for small seaside towns which I agree absolutely may not, in the early stages, have the capacity or capability to think about what might be appropriate. We learn from others and this is an important process.

The noble Lord, Lord Liddle, referred to our discussion on Cumbria. Either myself or my noble friend Lord Heseltine—or indeed both of us if we can manage to get our diaries free on the same day—are looking forward to meeting with Cumbrian representatives to discuss what I thought were some very constructive points raised by the noble Lord in the meeting.

The noble Lord, Lord Kerslake, talked about the four reasons why devolution is not pursued. We understand and share the noble Lord’s analysis of why devolution can be slow or non-existent, and he gave a very pertinent example which I recognise from my local government days. However, where we differ is that I doubt whether these proposals for annual reports and statements are an effective means of challenging either silo working in Whitehall or the disruption, fear of difference and nervousness at the local level. The strong drive given by the Bill, backed by the early devolution of major powers and budgets, thus creating a whole culture of devolution, is the best way forward, not annual reports which may themselves become prescriptive, or at least perceived by local areas as a direction from the Secretary of State. Given those points, I hope that the noble Lord will feel happy to withdraw his amendment.

My Lords, I thank all noble Lords who have spoken in support of the two amendments before us, with of course the exception of the Minister. We heard from the noble Lord, Lord Shipley, about the importance of not doing things piecemeal, and the pertinent point, reiterated by my noble friend Lady Hollis, that if no general principles are laid down, an annual report would at least help smaller authorities to understand what the parameters are in practice. We also heard the passionate commitment of the noble Lord, Lord Kerslake, to the Bill, but he described these amendments as practical and sensible and a powerful antidote to the prospect of government from the centre drawing back the thrust of devolution. My noble friend Lord Warner talked about help with laggards, and said that the amendments would help us to understand the pattern. My noble friend Lord Liddle does a great selling job for Cumbria, which I hope it appreciates.

I say to the Minister that none of this would stop the “come and have a conversation” approach that the Government are pursuing. If anything, it should aid that process because it would alert those who have not yet engaged to the prospects—what is actually going on around the scene. This is a very positive contribution. Of course, nothing in these amendments is in conflict with Amendments 33 and 70, which will be moved in due course. Indeed, we can see those reports as a component of the annual report, but not sufficient.

I hope I did not say that Greater Manchester would not need to rely on Clause 6 at all. My point was that not all of the deal is dependent on the use of Clause 6. If the extra reporting that the noble Baroness is talking about is tied to that Clause 6 order process, it would not necessarily embrace all of what is going on in practice.

I had hoped that we could agree on this. The amendments are genuinely meant to help the Bill but the Government have made their position clear. On the basis that Amendment 2 is consequential on Amendment 1, I certainly would like to test the opinion of the House on Amendment 1.

Amendment 2

Moved by

2: Before Clause 1, insert the following new Clause—

“Devolution statements

(1) A Minister of the Crown who has introduced a Bill in either House of Parliament must, before the second reading of the Bill, make a devolution statement to the effect that in his view the provisions of the Bill are compatible with the principle that powers should be devolved to combined authorities or the most appropriate local level except where those powers can more effectively be exercised by central government.

(2) The statement must be in writing and be published in such a manner as the Minister making it considers appropriate.”

My Lords, I move this formally on the basis that it is accepted as consequential. If it is not, I would like to test the opinion of the House.

The Question is that Amendment 2 be agreed to. As many as are of that opinion will say “Content”, the contrary “Not Content”. The Contents have it.

I beg your pardon, my Lords. I did not hear any “Not Content” voices. Let me put the Question again. The Question is that Amendment 2 be agreed to—as many as are of that opinion will say “Content”, the contrary “Not Content”.

Clause 1: Power to provide for an elected mayor

Amendment 3

Moved by

3: Clause 1, page 1, line 8, at end insert—

“( ) An order under subsection (1) shall not be used as a condition for agreeing to the transfer of local authority or public authority functions.”

My Lords, in moving Amendment 3, I shall speak also to Amendment 4 when I wind up, after we have heard from the noble Lord, Lord Shipley. Amendment 3 would prevent the order-making power of the Secretary of State for the creation of a directly elected mayor of a combined authority being used as a condition for agreeing to transfers of local authority or public authority functions to such an authority. I acknowledge straightaway that the order-making power generally becomes available only if the combined authority has made a proposal or consented to an elected mayor, but that this proposal or consent may not be freely made if it is clear in advance that the Government will insist on this as part of the price, or the price, of a deal.

In last week’s Budget speech, the Chancellor of the Exchequer was clear that the expanded devolution for Greater Manchester and the work in progress with Sheffield and Liverpool city regions and Leeds and West Yorkshire for far-reaching devolution of power was in return for the creation of directly elected mayors. It seems that the door is open for some devolution without having an elected mayor, and we discussed in Committee on 22 June the view expressed by the noble Baroness’s colleague, James Wharton, about there being no necessity to insist on having a mayor when something less—a Manchester-type deal—is preferred. However, we never received an answer about what “something less” amounted to, and perhaps the Minister could help us further today, as it is important that we get this on the record.

This is not an anti-elected mayor amendment. It allows that combined authorities should not have to seek an elected mayor when they have alternative models of governance and leadership which they consider best suits their circumstances. Of course, government would be able to evaluate these models as part of the devolution process. Currently, there are a variety of elected mayors of varying political persuasions—Lib Dem, Labour, Conservative and independent—in varying types of authority, including London and regional boroughs, unitary met boroughs and non-met districts. They are overwhelmingly men, with some elections preceded by referendums and some not. Of the cities required to have mayoral referendums in 2012, only Bristol agreed, but it now wishes to change its mind and is blocked from doing so—which is why we support Amendment 74 in the name of the noble Baroness, Lady Janke. Indeed, it is unfortunate that the Bill perpetuates this situation and denies a combined authority the right to revoke its decision about a directly elected mayor without disbanding the authority.

We know that there are those who are strongly supportive of the directly elected mayor model in all parties—certainly in mine—but there are those who are strongly opposed. Those in favour would argue that the scale of what exists in England at present, with the exception of London, does not particularly reflect the role envisaged for the mayor under this Bill. This may be so. We accept that it needs individuals of integrity, experience and vision who can speak with authority and hold their own with their counterparts domestically and internationally. Not only elected mayors can fulfil this role, which is why we consider that individual combined authorities should have the opportunity to bring forward alternative models.

It seems somewhat strange that the Government are rightly prepared to pass responsibility, power and resources on a very substantial scale to combined authorities and trust them to deliver on vital parts of the Government’s agenda, especially the need for growth, yet seek to straitjacket them on the issue of the directly elected mayor. It seems out of balance with the whole thrust of what devolution is all about. The whole approach is characterised by the Government as a willingness and eagerness to listen to what local authorities propose and to respond accordingly. The insistence on directly elected mayors jars with this. I beg to move.

My Lords, there are two amendments in this group. I support Amendment 3, which was moved by the noble Lord, Lord McKenzie, and shall speak to Amendment 4. In essence, the question being addressed is whether it should be compulsory for there to be an elected mayor in some circumstances.

There are two ways of looking at this. First, with a directly elected mayor, there would be a direct connection between the ballot box and the additional powers being devolved, which would give local electors a say in who is running the devolved powers. It would also give the combined authority a chair who is not dependent on a single council for their authority. On the other side of the equation, it represents a huge concentration of power in one person, and it raises the question, which we debated in Committee, of whether the range of responsibilities is so vast that one person cannot do it all. In the context of some areas, such as the north-east of England, which I know well, the scale of the geographical area, which would run from the Scottish borders almost to the Tees valley, is so very large that it is very difficult to see how a single person could run that huge geographical area, even with the support of the leaders of the seven constituent councils. So it is right, as the noble Lord, Lord McKenzie of Luton, said, that constituent councils, together with their combined authorities, should have the right to come forward with different models to propose to the Secretary of State.

We addressed this issue in Committee with a proposal for a greater degree of direct election to the combined authority. It would have provided a stronger degree of legitimacy because the electors would have had a role in electing more people than just the single elected mayor. But that proposal was not supported by your Lordships’ House and, as a consequence, we have not proceeded with it on Report. As we have made clear, we want devolution to succeed, but it has to succeed with clear legitimacy across the whole of a combined authority area. There are serious dangers that if it is not owned across the whole of that area, the public will start to turn against it.

One other aspect of this relates to the overview and scrutiny processes, and we discussed in Committee how that might be done. We will debate this later, but the Government have come up with some proposals that, while not as strong as I believe they should be, are certainly stronger.

I support Amendments 3 and 4 because they would give the essential flexibility needed to meet specific local needs without which devolution may not work well. We would get flexibility through Amendment 3; it would mean that there might be greater public ownership of the structure that is created.

Amendment 4 would require evidence of sufficient democratic accountability if there were to be an elected mayor. I think I have demonstrated in what I have said that it is very difficult to see how that would be delivered other than by the four-yearly election procedure. We also say that there needs to be a demonstration both that there is local support for the mayoral model and that in the construction of this new layer of government there will not be a risk to the proper functioning of the existing tier of local government.

I look forward to hearing the Minister’s reply, but I think that the ad hoc decision-making by Ministers on which areas must have elected mayors and which need not needs to be spelled out clearly. At the moment it is not clear to anybody on what basis the Government are making the announcement that they regularly continue to make, without it being clearly understood what the criteria are for the devolution of powers to specific areas.

My Lords, basically this is a decision about whether mayors should be compulsory or whether there should be a degree of local input about whether or not mayors should be directly elected. The history of public acceptance of the concept is pretty hopeless from the perspective of those who favour directly elected mayors, which I do not.

Neither my dear old Labour Party nor the Conservative Party have covered themselves in glory on this issue. I briefly remind the House that the concept of directly elected mayors came from the last Labour Government. As far as I am concerned, as a very long-standing member of the Labour Party, it came out of a clear blue sky—or a clear red sky. I had never been to any meeting of the Labour Party at any level where there had been a clamour for directly elected mayors, nor had I, in 50-plus years of canvassing—I do not know whether anyone can challenge me on this—ever knocked on a door to be told, “I’d vote for your party if you gave us directly elected mayors”. I think it is a product of a think tank; it is certainly not a product that has at any stage involved consulting the public.

The last Labour Government at least allowed local areas to have referendums before they embarked on a system of directly elected mayors. The results, certainly from my perspective, were pretty conclusive. There were 40 mayoral referendums under the Labour Government’s legislation: 13 local areas said yes and 27 said no. That was a fairly clear demonstration nationwide that this was not a universally popular proposition.

When the Conservative-led Government came into power in 2010, they had seen the Labour Government’s experience of a lack of wild enthusiasm, but for some reason the Conservative leadership thought that it was a great idea, as had the Labour leadership, so they did not allow the public to initiate referendums for directly elected mayors but simply said, “No. You, the 10 cities, shall have a referendum whether you want one or not”. That was the basis on which they legislated. As we all know, and as my noble friend Lord McKenzie already said, the public were consulted in 10 referendums and in nine cases—my maths makes that in 90% of the cases—they said, “No thanks very much, we don’t want directly elected mayors”. Only 10%, or one city, said that it did, and I understand that that city is now not too keen on the concept, having seen it in operation.

So we have gone from a stage of local, initiated referendums under Labour, which did not work very well from the perspective of those who want this system, to compulsory referendums under the Conservatives, which if anything went even less satisfactorily. Now what do we have? We have a system that does not involve the public at any stage whatever and is simply an imposition from national government on the kind of local authority structure, or rather the management structure, that you will have whether you want it or not. If I could draw a graph to illustrate this, it would be pretty clear. The political class, which we talk about these days, of which I suppose we are members here one way or another, thinks this is a good idea, or at least the leadership does. Whenever the public are consulted they say, “No, we don’t, thank you very much”, so what does the political class do? It says, “Well, you’ll have it, sunshine, whether you want it or not”, which is the position that we are at with this legislation.

I simply appeal to the Government—it is a non-partisan appeal to the extent that I freely admit that in part my Government were to blame for all this—that if local authorities are being told, “You must have this hugely significant figure in your area, which will dramatically change how local government works there”, surely at least there must be a degree of flexibility in considering whether the people in the area want it. Surely that is the most modest of propositions. However, as things stand, whatever the Minister says when she replies—and I am sure she will say, “It is possible in certain circumstances”—in practice we know that this is about compulsory directly elected mayors, and I do not like that idea one little bit on democratic grounds, let alone on administrative grounds. I hope that the House will consider these two amendments very seriously.

I hope that the Minister will not accept what has just been said. We are looking at the history of local government, which I have been involved in for a very long time—since I first sat on the Inner London Education Authority in my twenties, so I know a little about how it operates. I say to my noble friend that we need something entirely new in local government if we are to recover the kind of verve and real local contribution that local government ought to make.

I agree with the noble Lord opposite that both sides can be blamed for a lot on this. Local government pretended that it could replace the Opposition and therefore could have nuclear-free zones, foreign policies and the like. This was countered by a reaction from a Conservative Government who took away local government’s power to raise money through the business rate and the like. Both sides have a lot to answer for as regards the way in which we had that countervailing situation, and it took a long time for people to recover their respect and support for local government.

However, we have recovered our respect for a system that lacks vitality and deserves a great deal more opportunity. Our great cities should have the same kind of powers and the same sort of verve that you find in many continental cities. I do not see that we can do that under the present structure. What is more, all the amendments that come from the Opposition are about the perpetuation of the very systems that have helped to pull down local government and do not give it the sharpness that is necessary if local communities are to be properly represented.

I found the comment about the effect of mayors a bit odd. All I can say is that after a very long period of appalling local government in Bristol, in which all three parties were involved, the elected mayor of Bristol has made a dramatic improvement. He has no history of being a supporter of my party, so I speak entirely independently and objectively on that. Bristol is now extremely lucky in its representation and in the way the mayor can speak for that great city. It had years of destructive labour authorities, followed by the most peculiar system whereby each of the parties took control one by one and none covered itself in glory.

Therefore, I beg my noble friend to stand up for this radical view. It is not surprising that the Labour Party continues to be conservative with a small “c”, and it is not surprising that people did not vote for directly elected mayors in certain areas. The whole system determined that they would not, because it would have meant that the carefully arranged local power bases would be shaken by individuals who might make a very big difference.

I was opposed to having a mayor of London. I was wrong. London is much the better for having a mayor, but it is not comfortable and this is not meant to be comfortable. These amendments are designed to avoid what will be an uncomfortable change, but it is a change that could give local authorities the same kind of standing that they have elsewhere and the same kind of standing that they once had.

It is worth taking what for the party opposite is a risk. If we go down the route followed by that party we will never get there at all. We will go on fiddling about with the system. We will not make the changes necessary and the people of Britain will continue to live in one of the most centralised societies in western Europe. I do not think that is right. I believe in devolution, but devolution needs people to lead, and that is why this amendment should be opposed.

I support my noble friend’s amendment. I was not expecting to speak on this but, if I may, I want to challenge the view expressed by the noble Lord, Lord Deben. As far as I can see, it is a view supported very strongly by former Secretaries of State, who think that basically local government should be led by people like them, ideally swishing round in cars and flying off to Japan to make contracts and so on. However, that is not what local government is about; it is about a sense of place.

The noble Lord, Lord Deben, seemed to suggest that local government has declined since the 1960s—when I came into local government, and stayed with it right through to the 1990s—because of a lack of local leadership, but I say to the noble Lord that the primary reason local government has declined is that my Government to some extent but his Government notoriously have taken away our powers, our responsibility, our finance and our accountability. They have centralised us in field after field after field, and have tried their best to turn us into postboxes of central government decisions.

I respect the position taken by the noble Lord, Lord Deben, in favour of devolution. However, if his answer is that leading local authorities should be strong people—mainly male, I guess, but not necessarily so—who are just like Secretaries of State so that in local government we get a mirror image of what is happening in central government, then I say as someone who has lived my life in and trained in local government that that is not the route that I want to follow. A sense of place means collaborative, consensual arrangements that local people want and support. If they choose to have a mayor, that is fine by me, but if that does not fit their sense of place then it should not be imposed on them by the swagger factor.

I have listened to the noble Baroness with interest and I wonder whether she has not caught up with the news that both Alan Johnson, a former Cabinet Minister in the Labour Government, and Liam Byrne, the very perceptive Chief Secretary who noticed that there was no money left, have said that in the circumstances of there being mayors they would be interested in a nomination. The fact is that creating the job of mayor has attracted a degree of interest at the very highest level in government and opposition politics. To me, one of the attractive ideas of a mayor is that it will be a ladder up which budding national leaders will climb on their way to another place, or it will be the opportunity for people who have served at the highest levels of government to serve their local communities with all the experience that they have gained in government, having ceased to be members of a Cabinet. That is an interesting evolution of our constitutional practices that would enrich the political process. I very much hope that my noble friend will resist Amendments 3 and 4 because—let us be frank—they are wrecking amendments.

This Government were elected on the basis that there would be a deal—I quote the noble Lord, Lord Smith—of a sort “unimaginable” to local government in his experience. As the noble Lord, Lord Deben, said on this issue, we have taken power away from local government decade after decade after decade without a referendum and without any sort of consultation; we did it because we did not think local government was doing a good enough job. The noble Baroness, Lady Hollis, rightly said that it was done by both parties and admitted that her party played a part. But her party never did anything to restore any of the powers that my party had taken away; it loved it, shared in it and wallowed in it, as it exercised the powers that we had extricated from local government into the hands of central government.

The first point on Amendment 3 is that it removes the nature of the deal with government that there will be a mayor. It is designed to remove that condition. The noble Lord, Lord Shipley, has a different version, which has another delaying process, about consultation. But what does that mean? It means referenda. It means consultation of one sort or another. This is a delaying process.

I have no doubt that noble Lords all over this House are fully aware that from one end of England to another local councillors, leaders and industrial partners from the local enterprise partnerships are way past the debate that we are having today. They are actually designing the deals that will make this a reality. In his speech last week, the Chancellor listed Liverpool, Leeds, Sheffield and the possibility of the West Midlands as being already in the process of evolving the most detailed proposals to put to the Government. The condition behind all that is a directly elected mayor, as the noble Lord, Lord Smith, said in this House not that long ago. It is a deal. He said: “We did not particularly like directly elected mayors but the offer was too good”. I therefore urge noble Lords to consider carefully whether we should be concentrating on whether there is a mayor, because there will be no deal in the circumstances we are talking about unless there is a mayor. What we should be talking about is how to ensure that the deal that is done is of the scale and level of imagination that meets the extraordinary offer that has been made.

I was surprised and disappointed when the noble Lord, Lord Shipley, asked: “How can one man, or woman, cope with such a situation?”. Look outside this country and show me one where there is any alternative form of local government except what the Bill is proposing. There are senators in America with huge power. Germany has the Länder and France the departments. They seem perfectly capable of handling this massive responsibility. Are the English so impoverished as people that we have no one in our country capable of being the equal of what every advanced economy seems perfectly happy to deal with?

Anyone who has looked at this legislation will know that this is not the creation of a dictator. The checks and balances that exist within the negotiation that has been concluded with Manchester, for example, are very clear. The existing councils that make up the combined authority retain very large powers. They are part of an arrangement with the elected mayor that provides very substantial checks and balances.

The heart of this matter is that the Chancellor, in arguing for his deals, is looking, as my noble friend Lord Deben said, for a range of men and women capable of exercising leadership and appealing to the local community across the board. That is what we hope to see. In doing that, there is an offer from government to transfer power in a way that is outside any experience that any of us have had, with the exception, partially, of London.

Those of us who care about this issue are very familiar with Leicester and Liverpool, both of which have Labour mayors. One is a former Member of another place and the other a council leader who persuaded his colleagues to allow him to become a mayor. In talking to those who hold this responsibility, I have learned that their experience of the change in stature that takes place when they are seen as being a mayor—an internationally understood and recognised position—is extraordinary.

I hope very much that we in this House can perhaps move on from the minutiae of the Bill to the implementation of the legislation at the greatest possible speed. I really hope that your Lordships will catch up with where local government and the local enterprise partnerships are already. They are making this happen now. It is an exciting prospect that I never thought to see happen.

Forgive me for interrupting, but before the noble Lord sits down will he clarify something? A statement was made at the other end that, if an area wants a deal that is not the size of Greater Manchester, it may not have to have an elected mayor. Can we have some clarity on what the lesser deal is that does not cause the imposition of an elected mayor?

That is a very good question and rightly asked. Where the difficultly comes is that no one is imposing a deal. The Government are not saying that A, B, C and D must happen—the noble Lord shakes his head, but I had the privilege to sit in some of the negotiating discussions that have taken place and know that no Minister is saying that this is the prescription. That is what we would have done. All my life, that is what happened: it was not a question of whether an area wanted power over housing; it was a question of filling in 75 forms before building a council house. I had all those forms on my wall in the Department of the Environment—70 forms, about the slope of the roof and the pitch of the eaves. That is what we did. And here we are talking about trying to impose some sort of structure of deal in the detail, which the Government are not going to do.

In the big conurbations, the position is black and white. In the very different areas that make up much of rural England, or the mixed suburban areas, it is for the local people to come forward with a proposal. If they come forward with a proposal which simply says, “Give us the power and we’ll get on with it”, there is not a ghost of a chance that they will get a deal. The party opposite, which took as much power away as anybody, would not have given them a deal on that basis. So it is a waste of time pretending that they could have the sort of deal that they want without the change that is fundamental, which is to create leadership commensurate with these responsibilities.

It is for them. They will look at their circumstances, which will be very different, and they will design the leadership model they want. I am not a member of the Government, but I personally cannot conceive of a leadership model coming forward that does not involve a directly elected mayor. I had the privilege of advising the Conservative Party before the coalition Government and I was absolutely clear that there should be mayors, because I have seen it work all over the world—it does work and it is much better than what we have got in this country. However, if someone can come up with something that is credible and is able to persuade the Government that they can bear the responsibilities on offer to them, they may be successful, but it is for them, not for us. That is why I do not pretend to give a specific answer to the noble Lord, because I do not know of an answer that is other than the mayoral one. Somebody may think of one, so that would be looked at. Frankly, within six months, my guess is that this debate will have moved on so fast that we will know whether there are alternative structures that are acceptable.

For the vast majority of cases, my own view is that there will be mayors. From the more advanced conversations that are going on—largely among councillors who come from the parties opposite; they are the people making the pace, to be frank—my guess is that the mayoral model is the one that will survive and emerge. Four or five years from now, people will wonder what we were arguing about.

My Lords, the noble Lord spoke with great passion and is very well informed. For my own part of the country, West Yorkshire, I am very supportive of the proposal for elected mayors, but much of his argument was that there is no alternative to that wherever you are in the country; in other words, this model really ought to be adopted everywhere. If that is true, why does it not apply to individual local authorities? I am not advocating it, because I do not agree with it. For example, in my neck of the woods, you have Leeds, Bradford, Calderdale—which is Halifax—and Kirklees, which is Huddersfield and Wakefield. If the only way to run a local authority is to have an elected mayor, is the noble Lord saying that that applies to all major local authorities? As we know, this legislation relates not to all services and local authority activity but to certain strategic powers, where the case that he makes with great passion and history is persuasive. However, if his arguments are generalised to imply that you can run a significant-sized authority only by having a mayor and you cannot get the same thing with what we now call the leader and cabinet model, is he advocating mayors within combined authority mayoralties?

The noble Lord asks me for my personal opinion on that matter and I give him my answer: yes. I think that we would have been incomparably better over 50 years if, instead of taking power away from those authorities, we had concentrated on their leadership and performance. Yes, that would have meant differentiating in the early stages about the financial support that one entrusted them with, but it would have left them with the potential of the power that we have taken away. I have no doubt that if we could rewrite the last 50 years we would have seen much stronger local government. Frankly, for those of us who remember Redcliffe-Maud: well, he was right, wasn’t he?

My Lords, I support Amendments 3 and 4. I have listened with interest to what the noble Lords, Lord Heseltine and Lord Deben, have said. The amendments are about flexibility—the whole point of devolution is flexibility—and the noble Lord, Lord Heseltine, let the cat out of the bag when he said that you would only have a deal if you have a mayor. That is diktat, not a deal: it means that you have to have a particular model. In this new world of the noble Lord, Lord Heseltine, the conurbations of Leeds, Sheffield and others are coming back to a mayor. That is because they know that they can only have a deal with a mayor.

Not only politicians but business people said on BBC Radio Sheffield this morning, “We do not necessarily want a mayor. It is unfair that we are being told to have a mayor”— particularly only a few years after the people had a voice and said no. This is what Amendment 4 is about. What arrogance to say that this place knows what the better governance arrangements are for cities and conurbations elsewhere in this country. Again, it marks the political class as being distant from the people whose lives it wishes to improve.

I was surprised when the noble Lord, Lord Heseltine, said that he was erecting a ladder for politicians to climb up—the very thing that local governments have done which has failed their areas. It was a very strange thing to say. Again quoting directly from what noble Lords have said, the noble Lord, Lord Deben, said that we need to do something new. As someone who led a council relatively recently, I agree. However, something new does not necessarily mean one issue in a straitjacket called a mayor.

Are mayors so successful? Tell that to the people of Doncaster, where the Government had to send in commissioners when they had—and still have—a mayor. Tell that to the people of Stoke-on-Trent and Hartlepool, who have voted to no longer have a directly elected mayor. Go down the road and tell that to the people of Tower Hamlets, who have a directly elected mayor. It is not even a panacea internationally. Some cities in the USA have become bankrupt even though they have a directly elected mayor.

The amendment is not against directly elected mayors in areas where people wish to have them. I would not stop people who feel it appropriate and wish to have a directly elected mayor in their area from having one. However, it is arrogant to say to people who may come up with a new model that works for their area that they cannot have the powers because we have decided that their governance model is not correct. It is not only politicians who are saying that. The PwC report by Jon House, its head of local government and devolution, which was published only a couple of weeks ago, said that you have fallen into the trap of moving away from innovation and outcomes when you enforce one model of governance and people start talking about that.

I support the amendments. Amendment 3 gives flexibility and allows for the kind of innovation that the noble Lords, Lord Heseltine and Lord Deben, have talked about—I am sure other models will emerge. Secondly, what kind of Bill sets out the way a locality is governed and administered on the people’s behalf, but does not ask the people what they think about it?

My Lords, I rise to speak in support of the amendment as one of the very few people in this House—I exclude the noble Lord, Lord Tope—who has had up close experience of the two London mayors we have had over the past 15 years. I can assure noble Lords that the system works sometimes, but not always, so to make it a compulsory element is absolutely nonsensical. Some of the language used here is a bit misleading. Talking about an elected Mayor of London as local government is a complete nonsense because it is not local government, it is regional government. The whole point of the Mayor of London is that he or she is not a local politician; they are a regional politician with responsibility for the strategic oversight of the area to which they are elected. Sometimes it works and sometimes it fails. It has failed spectacularly in London on our housing stock. The fact that we are so short of affordable and social housing is, I think, a failure of the mayor. As I say, this is not about local government, but strategic regional government.

I can assure noble Lords that making an elected mayor compulsory is nonsensical. It all depends on the talents and abilities of the person, and I would argue that while it has worked for some issues, for people here to say, “It is the answer because it is modern, innovative and fresh thinking”, is complete nonsense. Please do not be fooled; rather, accept that a mayor should be an optional extra, not compulsory.

My Lords, I too rise to support Amendments 3 and 4, and to echo some of the comments that have already been made. This is actually about choice. The Minister has rightly said that the Bill is not prescriptive, and yet it is highly prescriptive when it talks about mayors. We can see different forms of leadership working well in other parts of the country. We talk about international cities and Europe, but mayors in France are not directly elected; they are the top person on the list. People in other cities elect their leaders in different ways. Some call them mayors and some do not, and as I say, some of them are not directly elected.

We heard last week from colleagues who said that in their area of the country, a mayor would be entirely inappropriate. Indeed, the noble Baroness, Lady Hollis, has explained how it would be unacceptable and inappropriate in her own area. I would say that if we are in favour of no prescription, we should allow innovative forms of leadership to emerge in different parts of the country. We should not try to impose a certain form and say that people will not have powers if they do not adopt a mayor.

Perhaps I may talk briefly about the noble Lord, Lord Deben, and his rewriting of the history of the city of Bristol. I should point out at the start that the successes of Bristol have been well known for a long time. For the past 10 to 15 years it has been the most successful city outside London. It has the highest GDP per head of population of any English city except London and it is the European Green Capital, something that emerged through my own administration and has been carried on by the mayor. Certainly, there was instability of government when the Labour Party lost its majority on the city council, but that is no different from what has happened in many other places. Indeed, the city ran a successful three-party coalition for 18 months. I led that coalition, so it is no good the noble Lord shaking his head; that is indeed what happened—

I worked with Bristol over a long period and it was one of the most difficult councils to deal with. Bristol succeeded in spite of its local government rather than because of it, and now it is succeeding because of it. That is the change.

Again, that is a rather selective rewriting of history. If you speak to the leaders of any of the three parties in Bristol, they will say that there have been successes by all the parties and they are united in being proud of their city. But as happens in national government, there can be differences of view and policy, and I do not believe that the very bad impression given by the noble Lord is at all just or reasonable.

The most important thing about these new measures is that we should address the powers. Much as we applaud what is happening in Manchester and other areas, if you were to speak to the mayor of Toulouse or the mayor of Hannover, one of Bristol’s twin cities, and say, “We are going to finance your area by giving you predetermined, formula-determined grants in sealed envelopes; you will have no power to raise your own capital or to raise revenue; and you will have no other powers than those that the Government give you”, they would be horrified. This is not the spirit of devolution.

Devolution is about trusting people and giving them powers where they have scope and can use their energy, creativity and innovation to take forward projects that can make their economic area more prosperous. It is not about giving people conditions or requiring local government to have to employ legions of lawyers to work out the various agreements and restricting conditions. Whether we are looking at LEPs or future arrangements, we need to set our cities free. We need to allow them to select their own form of leadership. A mayor may or may not be appropriate, but certainly many parts of the country will not find it appropriate. In support of both amendments, I say that we should liberate local government and give it powers. We should let it have its vision and regenerate its own areas in the way it has wanted to do for so long.

My Lords, first, the Bill confers a discretion on the Secretary of State which is not restricted in any way whatever. Therefore, to say that this Bill is restrictive and that the amendments are intended to increase the discretion does not seem to be in accordance with the wording. Secondly, there are two powers in proposed new Section 107B, under Clause 1, providing for the election of a mayor under subsections (1) and (3). For some reason, these amendments apply only to subsection (1). That is rather strange. There may be a reason for that and if so, I would be glad to hear it.

My Lords, Amendment 3 would set out in the Bill that the introduction of a mayor for a combined authority area would not be a precondition for the transfer of functions to combined authorities. We had a very lively debate on this amendment in Committee and we have had another very lively debate today. In that context, I am not surprised that we are considering the amendment.

I have been very clear on the Government’s policy on the devolution of far-reaching powers to local areas. I think we can all agree that if areas are to have such powers they must adopt strong governance and accountability arrangements. As my noble friend Lord Heseltine said, it is not for us to come up with the proposals. It is a bottom-up process, and we want to hear from areas what their proposals are for the powers and budgets they want devolved to them, and the governance arrangements that they think are necessary to support such devolution. As my noble friend Lord Deben said, we need something new.

What sort of governance arrangements will be necessary—the scale and scope of the powers—will depend on the sort of proposals put forward. Last week, in his Budget speech in the other place, the Chancellor was very clear when he stated:

“The historic devolution that we have agreed with Greater Manchester in return for a directly elected Mayor is available to other cities that want to go down a similar path”.—[Official Report, Commons, 8/7/15; col. 329.]

Our policy is therefore clear and this amendment is directly at odds with it.

We have this policy for good reasons. We have it because where there is devolution of the ambition and scale as in Greater Manchester, there needs to be a clear, single point of accountability. People need to know who is responsible for the major decisions in their area—decisions which will affect their daily lives.

My noble friend Lord Deben highlighted the importance of there being real change in local government. That is why we committed so clearly in our manifesto to legislate to implement the Greater Manchester deal and to offer similar deals to other cities that choose to have a mayor. The Bill, with its provisions on mayors, allows us to implement the Greater Manchester deal and fulfil our manifesto commitment. The amendment would, in fact, frustrate it.

As other noble Lords have said, mayoral governance for cities is a proven model that works around the world. It provides a single point of accountability. As my noble friend Lord Deben said, it has made a big difference to Bristol. When the office of the Mayor of London was created there was not much excitement across the country. As either my noble friend Lord Heseltine or my noble friend Lord Deben said—I cannot remember who it was—it is now seen as a force for progress in our capital.

Is it not the case, however, that the election of the Mayor of London was preceded by a referendum where the people of London chose to have government in London and an elected mayor—by, if I remember correctly, a two-thirds majority?

That is correct. I am making a point not about referenda but about the profile and remit of the Mayor of London and how it is now something that people with a very high-profile background in both local and national government wish to go for.

I must say at this point that a mayoral model is not an imposition: it has to be agreed. No order can be made to transfer powers and create new governance arrangements without the consent of all authorities involved. The Secretary of State is not imposing a mayor on anyone, but he wants to see accountability proportionate to the scale of the devolution of powers. That we have this offer does not preclude us from engaging with all areas, cities, towns and counties to consider their proposals for devolution. Quite the contrary: we are ready to have conversations with anyone. The Bill does not limit in any way the devolution proposals that areas can make, and the Government will consider any and all proposals for greater local powers. In short, our clear policy is that the Government,

“intends to support towns and counties to play their part in growing the economy, offering them the opportunity to agree devolution deals, and providing local people with the levers they need to boost growth”.

That was made clear in the Budget.

If what the Minister says is accurate in practice—that any proposal from below, or however you want to describe it, is entirely up to local initiative and will go ahead if there is agreement—presumably she can agree with Amendment 3. She is arguing that it is basically a permissive thing: that mayors may or may not be there, dependent on local initiatives. So I assume from what she said that she would not be in any way opposed to Amendment 3.

I will address the noble Lord’s point shortly.

Amendment 4 would insert a new subsection into new Section 107B to allow the Secretary of State to refuse to make an order providing for there to be a mayor if the proposal put forward by the area does not provide sufficient democratic accountability, does not have the support of local authority electors or would risk the proper functioning of local government in the area. Not only is this unnecessary, given that the Secretary of State always has a judgment as to whether to make an order; it does not reflect the context in which the provisions of the Bill will be used: to implement bespoke devolution deals agreed with areas—to be precise, agreed with those democratically elected to represent the area and who are accountable to it through the ballot box. It would be quite wrong to have considerations for devolution deals that in some way sought to have the Secretary of State second-guessing those local democratically elected representatives, or turning discussion of the deal into some sort of tick-box exercise.

Is the Minister saying, therefore, that the factors in proposed paragraphs (a), (b) and (c) in Amendment 4 would be irrelevant considerations that the Secretary of State would not be entitled to take into account?

My Lords, I am saying that it will be an agreement between the Secretary of State and local electors that will determine what the deal looks like, if that helps.

I am sorry—combined authority areas. I apologise; this debate has gone on for a while.

I wish to address some of the points that noble Lords raised. The noble Lord, Lord Shipley, talked about the mayor not having capacity to fulfil all functions. As my noble friend Lord Heseltine said, that is common practice in cities across the world which seem to manage to fulfil this perfectly well. However, the mayor will have power to delegate functions to a deputy mayor or officers to ensure that responsibilities are properly fulfilled. Crucially, regardless of whether a particular power is delegated, the mayor is, and is widely seen to be, accountable for the exercise of that power.

The noble Lord, Lord Shipley, also talked about areas coming forward with their own ideas on governance. As I have said on many an occasion, we are ready to have a conversation with any area about its governance proposals alongside its proposals for power to be devolved to it. The governance needs to be proportionate to the powers, delivering accountability and the necessary transparency.

The noble Lords, Lord McKenzie and Lord Shipley, asked the crucial question: what is something less? As I said, the form of governance needs to be proportionate to the scope and nature of the power being devolved. Where less than major powers are devolved, because that is all an area wishes for, the existing governance of an area may be appropriate. Again, depending on the nature of powers devolved, a combined authority, with the governance combined authorities have today, may be appropriate—that is, governance by the leaders of the area collectively. However, with major powers there needs to be a single point of accountability, and that is provided by a directly elected individual.

Does the Minister agree that, when you have this much power vested in one person, you also need a very good system of accountability and scrutiny? Here in London that has not happened enough. As a member of the London body, I know that we have not had enough powers. Is that something the Government are thinking about?

The noble Baroness’s question is the subject of later amendments. Certainly, the London model is not being considered in Greater Manchester. However, during the Bill’s passage, there has been a lot of discussion on the need to strengthen scrutiny.

Before the Minister moves on, will she clarify what is included in “major powers”? What are major powers and less than major powers or minor powers? That is the dividing line in this matter.

As noble Lords will see, an example of major powers is devolution for Greater Manchester. That is an example of a suite of major powers.

I should like to make some progress. The noble Lord, Lord Grocott, referred to Amendment 3, which would obstruct our policy of allowing major powers to be devolved to a city because there is a necessary single point of accountability—that is, the mayor. The noble Lord also said that people should have a referendum to decide whether to have a metro mayor. We recognise that in the past some cities have rejected the opportunity to elect a mayor. This time it is an entirely different proposition. It is about putting in place a devolution deal which the democratically elected representatives of the place have agreed with government. Part of that deal is the necessity for robust local governance for the new devolved powers, and for a powerful point of accountability such as a mayor. It is for the elected representatives of an area who have a democratic mandate to decide, in discussions with government, whether they wish to introduce a mayor and benefit from major devolved powers.

I will address the points made by the noble Lord, Lord Scriven—if not, he will stand up, I am sure. He said that the amendment only allows flexibility. That is not the case. The Bill already gives total flexibility as to what the deal can be. The amendment introduces a straitjacket to the kind of deal that can be put in place. Under the amendment, an area may be interested in having powers devolved of a kind where a mayor would provide that necessary single point of accountability, but this could no longer be the basis of a deal.

The noble Lord, Lord Scriven, talked about us imposing a model of governance. It is entirely the opposite. The Bill does not seek to impose governance models. As the Bill has progressed and we have had arguments about what can and cannot be had, I have always said that we are interested in hearing from all areas about all different types of proposals. The noble and learned Lord, Lord Mackay of Clashfern, pointed out why the Bill does not impose a model of governance.

If, for example, my own area of Sheffield decides to go for this with a mayor and it is then not deemed to be as successful as some of the proponents want, and the public and the politicians in that area wish to move away from the mayoral model, what would be the procedure to do that—to prove that it was not an imposition, that actually it was a deal, it was voluntary and could be withdrawn from by both the public and the politicians of that area?

My Lords, if a local area agreed a process with government and it was done through a parliamentary process, that local area would then have to go back to Parliament in some way and say that the local electors did not wish to have this any more. I am not going to stand here and prescribe a particular set of circumstances in which a particular area may not wish what it had agreed with government to continue to be the case. Having agreed it through a parliamentary process, it would have to go back through that parliamentary process and explain why the local electors no longer wished for it to be the case.

The noble Baroness, Lady Janke, talked about predetermined grants in envelopes. As I say, I have spent the entire Bill demonstrating that this is not the case. Nothing is predetermined. That has caused confusion in some ways in that there has been constant pushback on me to prescribe, and we are not prescribing. I hope that with these explanations the noble Lord will feel able to withdraw his amendment.

The Minister said two separate things. The first was that it was for local areas to come up with proposals for devolution and the Government were keen to hear what those were. Secondly, she said that to have major powers devolved requires a mayor, and she gave Greater Manchester as an example. Does the Minister have a list of the powers that can be devolved without an elected mayor and those that can be devolved only if there is an elected mayor? It seems absolutely central to this issue because at the moment it is not clear—certainly not to me and, I suspect, others in your Lordships’ House—exactly what the Government’s offer is.

My Lords, I do not and will not have a list. As I have said repeatedly, what powers are devolved will be up to agreement between local areas and the Secretary of State.

My Lords, this has been an extensive and good debate and the time moves on, so forgive me if I do not respond to each point that noble Lords have made, whether it was as a trip through history about what has happened to elected mayors or the stage that we have reached today. The problems with the London system, some of the time, and the difficulties that other areas have found were mentioned.

I would like to challenge the proposition that the amendments are wrecking amendments. I am bound to say to the noble Lord, Lord Heseltine, that that really is not the case. It was not the intent and is not their substance. If we look at the thrust of all the amendments that are before us today and will be on Wednesday, they are overwhelmingly about trying to improve the Bill and achieve the very thing that he wants and campaigns for. It is unhelpful to characterise these amendments as wrecking when, in total, we are trying to improve the Bill so that devolution can be delivered across the country.

The noble Lord, Lord Shipley, asked the pertinent questions about major powers—what is in and what is out—and of course we got the usual answer. I do not think that anybody sees it as a credible response to say that nothing is being imposed on people because the Bill is a framework Bill, in circumstances where the Government make it absolutely clear from the start that you can get certain powers only if you have an elected mayor. That is not a process of not imposing anything on anybody. It is making sure that the price paid is very clear up front, in some circumstances. It is very unclear in other circumstances what price will be asked, depending on what powers are available. I am bound to say that whether we are in favour of or against elected mayors instinctively, we did not see it as a ladder up which budding leaders could climb—and even less so a retirement job for ex-Cabinet Ministers. I did not think that that was the process we were involved in today.

The noble Lord, Lord Heseltine, made a powerful speech reiterating his passion for devolution and what it could lead to. We support all that but he himself said that if somebody comes up with something it will be considered, so seemingly from his point of view there is not an inevitable imposition of an elected mayor. The noble Lord may feel that something credible would not come up, and he may or may not be right. But even he seemed to recognise that there should be scope, which is effectively what Amendment 3 is seeking. It may be, in the terms used by the noble and learned Lord, Lord Mackay, that the wording is imperfect but then it is the job of government at Third Reading to tie that up.

I am sorry to interrupt—it is not my habit—but the present Bill simply gives a discretion to the Minister, absolutely free. There is no limit on that discretion to having an elected mayor. It is a discretion to consider the particular proposals made. I understood the Government to have said in the debate that the idea of an elected mayor, while very attractive from their point of view, was not essential for every proposal that might come forward.

My Lords, we accept that there is a discretion but we know that that discretion will inevitably be operated in certain ways in certain circumstances. The Government will insist upon an elected mayor and the discretion, which I accept is permitted under the Bill, will be exercised in a certain way. This is about trying to get clarity or preclude that being an inevitable part of a deal. If somebody wants an elected mayor and can put forward governance arrangements and credibility around all that, fine. But if they do not, why should that not inevitably be considered fairly by the Government in the negotiations which go on?

Nothing that I have seen anywhere so far says that the Government can give powers under these proposals only if there is an elected mayor. It is left completely open. All this seems to be based on is some suggestion that that is what the Government want to do. However, the Government have proposed a Bill that does not have that in it. I cannot myself see why that discretion should be limited.

The noble and learned Lord is right that there is a discretion in the Bill, but we know, alongside that, that the Government have made it absolutely clear that an elected mayor will be insisted upon in a range of circumstances. We are seeking to determine that that insistence should be precluded, not that the option should not be available, if that is what a combined area wants. The starting point should not be that you must have an elected mayor in that range of circumstances.

It seems that there is some recognition that there should be discretion for combined authorities to come forward—the Minister has said that. It is all very well recognising that, but at the same time they are saying, in this place and in the Chancellor’s Statement at the other end, that you have to have an elected mayor, come what may. There is an inconsistency between those positions, and this amendment is trying to clarify that inconsistency. We do not think that there should be that insistence. If people want this and can come forward with a credible model, fine; but if the starting point of these deals is that you must have an elected mayor, that is wrong and we oppose it.

This a great shame because there is substantial agreement across the Chamber, I think, about the thrust of the Bill. The one point where it jars is this obsession and insistence on an elected mayor—not in the Bill itself but in terms of how we know it will be applied and how we know it is being applied in the case of Greater Manchester and other areas. That is the point that divides us. Given the support that we have across the piece for the Bill, it is a great shame that we have to divide on this, but I propose to divide and test the opinion of the House.

Amendment 4 not moved.

Schedule 1: Mayors for combined authority areas: further provision about elections

Amendment 5

Moved by

5: Schedule 1, page 13, line 12, at end insert—

“(1) The term of office of a mayor is to be four years.

(2) The first election for the return of a mayor is to take place on the first day of ordinary elections of councillors of a constituent council to take place after the end of the period of 6 months beginning with the day on which the order under section 107A comes into force.

(3) Subsequent elections for the return of a mayor are to take place in every fourth year thereafter on the same day as the ordinary election of councillors of that constituent council.

(4) But this paragraph has effect subject to any provision made under paragraph 2.

(5) In this paragraph “constituent council” means—

(a) a county council the whole or any part of whose area is within the area of the combined authority, or(b) a district council whose area is within the area of the combined authority.”

Amendment 5 sets a default term of office for an elected mayor of a combined authority area and a default date of the election for the return of an elected mayor for a combined authority area. Amendment 8 is a minor and technical amendment.

As the Bill currently stands, the term of office and the date of election are set by order by the Secretary of State. Following the comments of the Delegated Powers and Regulatory Reform Committee and an amendment brought forward by the noble Lords, Lord McKenzie and Lord Beecham, in Committee, we wish to include default provisions in the Bill to apply in cases where specific orders are not made.

The Delegated Powers and Regulatory Reform Committee suggested that the Bill’s order-making powers should be limited to specifying the timing and frequency of metro mayor elections only at the initial establishment of the office of mayor. We do not believe it right to limit the order-making power in this way, as I shall explain, but to provide some assurance that with Amendment 5 we are following the precedent in the Local Government Act 2000, which was referred to by the Delegated Powers and Regulatory Reform Committee. It provides in the Bill default timings of mayoral elections and the mayoral term. Equally, to retain the flexibility needed, the Secretary of State will be able to make specific orders under paragraphs 2(a) and 2(c) of new Schedule 5B to the Local Democracy, Economic Development and Construction Act 2009. The amendments providing for the default position in no way curtail the scope of the order-making powers in Schedule 5B.

The ability for the Secretary of State to set the timings of elections by order allows for the fact that there is currently no single pattern of local elections across the country with which a new mayoral election may be synchronised. It also recognises that devolution deals will be bespoke, and therefore it is possible that different arrangements may be sought by, and agreed with, different areas. For example, an area may wish its mayoral election to be held in a year when there are no council elections, but another area may wish to combine mayoral and council elections. Again, for example, while we expect that probably most deals with metro mayors will have mayoral terms of four years, it is possible that an area may wish to have, say, five-year terms similar to the parliamentary term.

Returning to the default position that we are providing, it reflects that in general a mayoral term will be four years and the election will take place at the same time as council elections in the combined authority area. Hence, under the default provisions, the first election of the mayor will take place at the next local council elections not less than six months after the order creating the mayoral combined authority comes into force, and elections will be every four years thereafter.

Amendment 8 is a minor and technical amendment to ensure that the provision in the Bill applies equally to the disqualification of an individual in respect of their being, or being elected as, a mayor, as well as more specifically in relation to their being, or being elected as, the mayor for that area.

Before I sit down, it may be helpful if I speak to the amendments proposed by the noble Lord, Lord Grocott. Amendment 6 seeks to ensure that a mayoral term of office should be limited to four years. As I have explained, we do not believe that it would be right to restrict the mayoral term in this way. This Bill is very much an enabling Bill, and I believe it is right that this legislation has a degree of flexibility, enabling us to respond to proposals that chime with and reflect local requirements. Hence, we would not wish to rule out the possibility of, say, a five-year term if that is what the area wanted and, of course, if that is what Parliament agreed when approving the order.

With Amendment 7, the noble Lord seeks to limit the number of terms of office that any individual may serve as a mayor for a combined authority to two terms. Some may see that such a provision would serve to re-energise and revitalise the leadership of a combined authority, ensuring that it did not become too comfortable and forcing, in a sense, the injection of new ideas and a new direction, particularly in areas that may have a strong and stable political affiliation that may not, on the face of it, create or nurture the environment for such change.

However, we have concerns about term limits. First, and in a vein that will be familiar from the debate to date, I am concerned that it would introduce a degree of prescription in the Bill that sits uneasily with the devolutionary and enabling legislative framework that we are seeking to introduce. However, and more importantly, any such prescription would start to cut across the rights of local people—local electors—to determine who they should be led by. Imposing on the electorate of an area a requirement that, for example, a strong leader with a clear vision for the future and a record of delivering against that vision should be forcibly stood down, with that decision being taken out of the hands of those who had elected that person in the first place, goes very much against the grain and is unlikely to be welcomed by the people who elected him or her.

We have spoken about accountability. Noble Lords will know my views on the importance of the elected mayor being held to account by his or her electorate. That electorate will continue to have their opportunity to either endorse the incumbent or select a successor. I hope these comments are helpful, and I beg to move Amendment 5.

My Lords, I am grateful for a fair amount of what the Minister said. My Amendments 6 and 7 are, I think, about the shortest and, in many ways, the simplest in the Marshalled List. Amendment 6 suggests that mayoral elections should basically be every four years and Amendment 7 suggests that there should be a maximum of two terms.

On the four years, I think the Minister has probably gone as far as she can. It may not be precisely in her amendment, but in truth the Government seem to be saying that four years is a reasonable, sensible term of office for a mayor. It struck me as very odd indeed—I said so in Committee—that the term of office of the mayor was left entirely to ministerial order in the original Bill. In theory that could provide for a term of office of four, five, six, seven, eight or nine years, or any other number you care to think about. It is such a fundamental part of a democracy to know when an election is going to take place that it is essential to have at least some reference to it in the Bill, and I welcome the fact that the Government have put down an amendment. It does not do everything I would like, but in life you do not get everything.

Amendment 7 would effectively limit the mayor’s term of office to two four-year terms. That, the maths will tell us, is a maximum of eight years. I emphasise that the amendment would be in no way retrospective; I do not think that, under the Bill, it could be. It does not say to those people who are directly elected mayors at the moment—I would not dare say this—“Sorry, you’ve had your eight years and you must go”. It would simply apply to the provisions of the Bill.

I submit that this amendment is very important. I have made it plain that I do not like directly elected mayors. I much prefer the parliamentary system to the presidential one, and there are checks and balances built into the leadership of local authorities at present. Leaders can be removed if they are not doing the job properly. It has never inhibited great leaders of local government in the past, as far as I can make out. I must admit that from some of the comments we have heard in earlier debates you would think that local government had been bereft of outstanding leaders. I do not think that Joe Chamberlain did too badly and I thought that Herbert Morrison was not too bad either. Anyway, we have had that debate.

What I know is that the great strength of the present system, prior to directly elected mayors, is that there is a daily check and balance on the performance of the leader, and if they are not good enough they can be removed. We all know that that has happened in local authorities; we probably all have our own examples. The problem with a directly elected mayor, and I do not think that the Bill addresses it, is that once you have elected them—there is one election once, and that is it—there is very little under this system to deal with a mayor who is considered by his or her peers not to be doing the job very well. There is no power of recall.

Perhaps the Minister could spell out what the checks would be if it became manifest that a mayor was not doing the job properly—obviously, short of a criminal offence. The noble Lord, Lord Heseltine, referred in the earlier debate to checks and balances, but as far as I can see there are none. That is why the amendment is important; again, I will stand corrected if other people have better international examples than I have, but I think in most systems where there are direct elections there is a limit somewhere to the number of times that you can be directly elected. There are good reasons for that, not least that there is an inevitable tendency for directly elected mayors to see the job of the administration as basically to secure their re-election; that tends to develop in their minds and in the operation of many of their staff.

At its zenith, the American system decided that eight years was long enough, and if it is long enough for an American President it is probably long enough for the mayor of a city in the United Kingdom. I suggest that this has been a mistake in previous legislation about elected mayors; it simply has not provided for limits of terms of office, and it is right that we should do so. I think that the Minister even acknowledged that there are some problems that have not entirely been addressed in that legislation. I submit to the House that this amendment is well worthy of consideration.

My Lords, in intervening briefly, I make it clear that I am a passionate supporter of the whole mayoral principle. I believe in elected mayors and have done from the very beginning. I saw them in France when I lived there many years ago. I believe that the system works and it is better than other models, so I have no problem with it at all. However, I also support my noble friend’s amendments.

It is more than 40 years since I was in local government but I always felt that very often local government becomes lazy. People do not always get into that position—there are often very good mayors outside the mayoral model that we are discussing, and leaders of local authorities can be there for years doing a perfectly good job—but you often find in local authorities that people simply become lazy, and they should be moved on. However, they have such control over what is going on around them in the local authority that they cannot be moved. The people whom they have appointed are somehow compromised, and they spend more time ensuring that their position is safe than in engaging themselves in the innovation that was talked about by a number of those who contributed to the last debate.

I think that a term of eight years is quite sufficient. It would keep the mayor on his or her toes, and they would want to be seen to be innovative at every stage. In many ways, I think it would avoid the kind of problems that I have heard and read about over recent years when I have looked at what happened in some of the mayoralties. The recent problems in east London in many ways reflect what I am saying: someone had total control and now, fortunately—through the courts, in the end—we have managed to get rid of them. If you have a model that is based on a more limited term, there is less opportunity for those sorts of problems to arise.

My Lords, we seem to be moving on to somewhat more consensual territory after the excitement of the past couple of hours. When I listen to discussions about the offer of devolution being based on a requirement to have an elected mayor, I am rather reminded of Henry Ford’s famous offer that anyone could buy a car of any colour as long as it was black. The mayoral model seems to be that you can have devolution as long as the devolution car is driven by an elected mayor; it is a less than free choice.

However, the Minister’s amendments are acceptable. They certainly incorporate some of the concerns that were mentioned in Committee, particularly with the default position that we are clear as to the limits that would be applied to the length of term. No doubt the Lord Chancellor, Mr Gove, has been sending over memos about the wording, or indeed the grammar, in reference to Amendment 8.

I was of course interested in my noble friend Lord Grocott’s amendments, one of which is effectively met, I suggest, by the government amendment. I think that four or five years is seen by the Minister as a maximum, and that seems to be reasonable. I am somewhat in two minds about my noble friend’s suggestion of a limit of two terms. I stood down from the leadership of Newcastle City Council 20 years ago and, in reference to the remarks from the noble Lord, Lord Heseltine, about the recognition or otherwise of council leaders as opposed to mayors, I have to say that 20 years on people still remember—I cannot say with what relish—my service as council leader for a period of 17 and a half years before that. It is possible to hold office, be accountable and, I hope, make a contribution for a somewhat longer period than two terms would necessarily imply. For myself, I am prepared to accept the Government’s position.

However, it might be worth keeping this matter under review. I suppose that in any event it would be reviewed over time, and we might have examples in this country, which so far we have been spared, of the kind of conduct in office that sometimes has occurred, particularly in the United States but in other jurisdictions as well, where, frankly, there needs to be some kind of limit. In our political culture, we have not experienced much of that. On balance, I invite my noble friend not to divide the House on that amendment. For my part, I am content with the Minister’s amendments.

My Lords, I will address some of the points made by the noble Lord, Lord Grocott, in the course of moving his amendment. He said that you cannot get rid of mayors. In any elected office that I can think of, you can get rid of leaders or back-bench councillors in two ways: first, through the party’s electoral or selection arrangements, and, secondly, by the ballot box. Therefore, just as with local authorities, so with the office of mayor there is the ability to get rid of the mayor.

The noble Lord also talked about the power of recall. Again, referencing it back to local authorities, there is not a power of recall within local authority arrangements, either. Obviously, they are talking about this in the House of Commons: there is not a power of recall in local government. The build-up is incredible, but later on in the debate we will talk about scrutiny—and there is an ability to scrutinise both local authority leaders and an elected mayor.

The noble Lord’s third point was on limiting a mayor to two terms of office. First, in this country there are no other arrangements that replicate that, but I thought of two leaders, one of whom I will name, the other of whom I will not. Richard Leese is one of them; he has been leader for almost 20 years now, and his continuity within Manchester City Council has enhanced the city greatly. I will not name another local authority leader, who was in power for 35 years; I do not think that a single year of his leadership was beneficial to the local area—which is why I will not name him. Therefore, I can see that that could be true in some areas. However, it is also for local electors and political parties to make that change if they so wish.

My Lords, does the noble Baroness recall the leader of a council not too far away from Manchester who led the council for some 50 years before retiring at the age of 85 to make way for a younger successor who was 76?

I do not think that we are thinking of the same person, but that is very interesting. I thank the noble Lord and ask him not to press his amendments.

Amendment 5 agreed.

Amendments 6 and 7 not moved.

Amendment 8

Moved by

8: Schedule 1, page 17, line 4, leave out “the” and insert “a”

Amendment 8 agreed.

Clause 2: Deputy mayors etc

Amendment 9

Moved by

9: Clause 2, page 3, line 4, at end insert “with the consent of the combined authority”

My Lords, Amendments 9, 11, 12 and 14 in this group relate to the functions of the elected mayor and his relationship with the combined authority in that context. Amendment 9 requires the consent of the combined authority to the appointment of a deputy. In Committee the Minister asserted that given that the mayor would by definition have been elected, it was only reasonable for him or her to appoint their deputy. However, we are dealing here with very wide powers over potentially sizable geographical areas, as we heard earlier this afternoon, and certainly with large populations.

The amendment does not advocate a sort of “House of Cards” process, as chillingly exemplified by Kevin Spacey in the United States version of the entertaining drama by the noble Lord, Lord Dobbs. However, it is surely reasonable for the appointment of a deputy—even one drawn from the members of the combined authority—to be approved by that body, especially as there is effectively no limit on the character and extent of the powers that might be so delegated. Moreover, of course, the deputy would, in the event of a vacancy, step into the mayoral shoes pending a fresh election. For these reasons Amendment 12 is also relevant, as it requires the consent of the combined authority to the delegation of powers by the mayor to the deputy or, as the Bill prescribes, any other officer or member. After all, neither the public nor the combined authority would have had a say in those appointments.

Amendment 11 seeks to ensure that mayoral functions which the Secretary of State may make exercisable only by the mayor should be assigned only with the consent of the combined authority. That appears to be the position, if I read it correctly, of the Greater Manchester agreement, and if it is right for Manchester, I suggest that it should be for more general application. Finally, Amendment 14 reinforces the need for combined authority consent to a Secretary of State’s order as to the delegation made under subsection (3). I beg to move.

My Lords, I will speak to Amendments 10 and 13 in this group. Broadly speaking, whereas the amendments moved by the noble Lord, Lord Beecham, are about securing the approval of the combined authorities, ours require the approval of the overview and scrutiny committee. As we said in Committee, it is much better for that committee to do it, for three reasons. First, it is independent of the mayor and of the combined authority. Secondly, it can be objective and can hold a hearing in public to assess the suitability of a proposed person, thus giving real effect to the principles of scrutiny. Thirdly, it can satisfy itself that the person selected can represent the interests of all parts of its combined authority area, which can sometimes be very large.

In a sense we debated this in Committee, and I listened carefully to the Minister’s answer at the time. I am not convinced that it is right to give the powers of what could appear to be patronage to a single individual. Nor am I convinced that the members of a combined authority, who were appointed as opposed to being directly elected to it, should simply be given the power to decide or to agree who the deputy should be. I would be much happier if we had an independent process which the overview and scrutiny process would look after. I therefore look forward to hearing the Minister’s response to the point about how you ensure that those who hold very senior, responsible jobs, which are very well remunerated, can maintain the confidence of the general public.

My Lords, these amendments are all about requiring members of the combined authority or overview and scrutiny committee to be involved in actions which are, quite rightly, those of the elected mayor.

I will first speak to Amendment 11, which would insert the requirement that the combined authority must consent to functions of the combined authority being exercised by the mayor. I do not disagree with what the amendment seeks to achieve. There are a number of circumstances in which an order could be made to make a function of the combined authority exercisable only by the mayor. Our intention is that in all circumstances the combined authority must give consent—or, if this is at the initial stage of setting up the combined authority, the constituent councils must do so.

First, when an order is made to create the post of mayor and transfer powers to the combined authority, in this circumstance nothing can happen without the consent of the combined authority or the local councils involved. Clearly, consent would not be given if the order proposed to give a mayor powers with which the councils or combined authority were not content. Secondly, when an order is made to transfer further powers to a combined authority, similarly, such an order would require consent from all the local councils.

Finally, and notwithstanding our intention, I accept that there could be, at least in theory, a subsequent order to make an existing function of the combined authority a function exercisable only by the mayor. We are ready to accept that any such lacuna in the legislation should be addressed and we are minded to accept this amendment. However, the drafting will need further consideration and, if noble Lords will allow, I will come back to it at Third Reading.

Amendments 9 and 10 would require the mayor to obtain the consent of the combined authority or, in the case of Amendment 10, the overview and scrutiny committee before appointing the deputy mayor. For mayoral governance to be effective, the mayor and the deputy mayor must be able to work together and the mayor must have confidence in his or her deputy. Moreover, the mayor’s choice of deputy mayor is very restricted. As provided for in the Bill, the deputy mayor must be a member of the combined authority, so the mayor is already choosing from a small group of people.

In practice, a mayor will consult some of or all the members of a combined authority about a deputy mayoral appointment, but it would be wrong for the members of the combined authority or the overview and scrutiny committee to have the ultimate say over who the deputy mayor is. The noble Lord, Lord Beecham, talked about Greater Manchester and he is absolutely correct that that is an interim arrangement.

The mayor, with a clear mandate, needs to be able to have the say over who among the members of the combined authority will be the deputy and who will assist him or her in delivering what he or she has promised the voters. Giving the combined authority or overview and scrutiny committee the final say as to whether a person can or cannot be the deputy opens up the possibility of appointments which would hinder the mayor and prevent the mayor and deputy working together effectively and smoothly for a common purpose. These amendments are therefore not a sensible check or balance on the exercise of executive functions and I invite noble Lords not to press them.

Amendments 12, 13 and 14 would require a mayor to consult the combined authority or, in the case of Amendment 13, the overview and scrutiny committee before delegating a general function to the deputy mayor, another member or an officer. The provisions in the Bill relating to delegation align with the policy for a local authority mayor or leader, who may arrange for the discharge of functions by members of the executive or officers of the authority. Although the mayor may delegate functions, he or she remains accountable for any actions taken and is accountable directly to the electorate.

I understand the thoughts behind these amendments—that is, to ensure that a mayor is indeed effectively and transparently held to account and that, while there is the capacity for strong executive action, equally the right checks and balances are in place to give confidence in that respect and ensure accountability. However, such checks and balances will not be delivered if executive and non-executive actions are confused by involving the members of the combined authority in decisions such as how the mayor performs his or her role.

Later, we will discuss the appropriate strong and transparent overview and scrutiny to ensure sensible and robust checks and balances on the actions of the mayor and the combined authority. It is entirely right that the mayor is held to account, but he or she must also be able to deliver effectively on the commitments made to the electorate, and these amendments could be severely detrimental to that. With those explanations, I hope that noble Lords will agree not to press their amendments.

My Lords, I am most grateful to the Minister for accepting the principle of Amendment 11 and I look forward to working with her to agree a form of words when we get to Third Reading.

I am slightly disappointed at the response to some of the other amendments in my name and that of my noble friend Lord McKenzie—in particular, about the delegation of functions. Given the huge scale of the authorities that we are talking about and the huge responsibilities which it is hoped will be devolved, it seems to me that this is a rather different role from that of a council leader or chief executive or even an elected mayor in the authorities as presently constituted. However, I will not press those amendments and will rely on the noble Baroness’s undertaking to revert to the subject of Amendment 11 at Third Reading. I beg leave to withdraw the amendment.

Amendment 9 withdrawn

Amendment 10 not moved.

Clause 3: Functions

Amendments 11 to 14 not moved.

Amendment 14A

Moved by

14A: Clause 3, page 5, line 29, at end insert—

“107F Discharge of functions: access to press and the public

(1) In transferring any functions of the mayoral combined authority to the mayor under section 107D or 107E, the Secretary of State shall make regulations to provide for press and public access to information and meetings of—

(a) members or officers of the combined authority, or(b) any combination of members and officers of the authority,concerning how the function is discharged.(2) Subsection (1) does not apply to access to information and meetings concerning the discharge of these functions governed by Part V of the Local Government Act 1972, the Local Government (Access to Information) Act 1985 or the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.

(3) For the purposes of subsection (1), “access” includes but is not limited to—

(a) attending and viewing,(b) taking notes,(c) taking a visual or audio recording,(d) prior provision, inspection and copying of agendas, reports, background papers and minutes, or(e) pre-publicity of any significant decisions to be made or considered at the meeting.(4) For the purposes of subsection (3)(e), “significant” means significant with regard to the authority’s expenditure or the impact on local communities.”

My Lords, this amendment would require meetings and documents concerning the discharge of functions by the mayor or the combined authority to be accessible to the press and public unless they were necessarily excluded by existing law. This is important to ensure transparency of decision-making. The Minister has said on several occasions this afternoon that an elected mayor would be a single point of accountability. It is therefore important that that accountability is transparent.

The amendment talks about the discharge of functions in transferring any functions of the mayoral combined authority to the mayor under new Sections 107D or 107E introduced by the Bill. New Section 107D talks about the general functions of mayors. It says:

“The Secretary of State may by order make provision for any function of a mayoral combined authority to be a function exercisable only by the mayor”.

New Section 107E, which relates to the policing functions of mayors, says:

“The Secretary of State may by order provide for the mayor for the area of a combined authority to exercise functions of a police and crime commissioner in relation to that area”.

On the face of it, the Secretary of State can require a further centralisation of power to the elected mayor from a mayoral combined authority, and it is clear that the function would be exercisable only by that single person. Therefore, if the power lies with a single person and there is a single point of accountability, it really does matter that that person and the decisions they make are seen by the general public to be properly accounted for.

The aim of Amendment 14A is to allow the Minister to counteract any slide towards behind-closed-doors decision-making. That seems to be all the more important given that, as the Bill stands now, overview and scrutiny applies only once decisions have been made and not while they are being discussed. I have a very serious concern that the Bill could be used to reduce the rights of the press and public to access meetings and information, without which the general public may not be properly informed or engaged. I do not want more and more decisions made behind closed doors. The Minister herself said in Committee in reply to our Amendment 42A that,

“the decision-making has to be in public”,—[Official Report, 29/6/15; col. 1810.]

but of course it is not just the announcement of a decision but the discussion that can matter profoundly, in that the discussion can explain how the decision was reached.

I fear that the Bill as drafted runs the risk of encouraging further secrecy outside the scope of the Local Government Act 1972 and subsequent regulations. Therefore, I hope that the Minister will agree that we should have on the face of the Bill the right of the press, the media generally and the public to attend meetings and to receive information, as is currently the standard within local government. I beg to move.

My Lords, I see reference in the amendments to public access to officials of the council. I am opposed to that concept. I have had the privilege of serving in Government after Government and value hugely the advice that comes from officials, but I have never believed that officials always give you agreed advice. Some do, but the composition of such advice starts at a relatively low level in the official machine. Committees and dialogues take place and a consensus emerges. That becomes the agreement that officials put to Ministers.

Often, one finds oneself in disagreement with that advice. Some of the most rewarding experiences that I have taken part in are when you get the officials to break down the consensus which has been put to you. You may find that the more-established and long-serving officials have taken a rather conservative view, while some of the younger, more energetic, adventurous or imaginative—you can use any language you like—have a more dramatic option which has been suppressed in the process. In the end, it is for Ministers to take their choice: that is what they are paid to do.

If we were to have full public access to the official process, the consequence would be that Ministers would try to ensure that they got the advice they wanted. The easy way to do that is to politicise the Civil Service or the officials in local government and to ensure that the people providing the advice do not leave you with any great issues of controversy, which will be fanned by the press the moment that they get their hands on them.

Although I am in favour of the thrust towards openness and accountability in local government, as in national government, and of the facts being widely available, I am not in favour of there being exposure of the official debate which takes place in providing advice to councillors or, in my experience, Ministers.

Perhaps the noble Lord will comment on the fact that within local government now, officers of councils are required to give advice publicly when full council meetings or council committee meetings are held, so there would be nothing new in that happening. I understand his concern about official advice being given at the point at which ideas are being developed, but will he bear in mind that the amendment states that,

“the Secretary of State shall make regulations”?

Broadly speaking, that is designed to prevent a slide towards access to the press and the general public being denied through the structures now being created.

Unlike the noble Lord, I have never served in local government, so I cannot speak with his experience. As I understand it, officials give advice in public, but I do not think that meetings of officials before they formulate that advice are open to public or press scrutiny. I was addressing that concern when I intervened.

My Lords, I have some practical experience of this as a former council leader. When I became leader of the council in Sheffield, we had an economic development agency which met in private. Everything was in private—advice, meetings and papers—because it was deemed to be somehow arm’s length and pseudo public sector. Through a very hard-fought and long battle, I thought that it was absolutely right that that was dealt with in public, because huge amounts of public money were being spent on behalf of the people of Sheffield. The reason to write this in the Bill is to open up the advice and the decisions made.

I hear what the noble Lord, Lord Heseltine, says, but exactly the same arguments were used in another place when what became the Freedom of Information Act was published. With freedom of information, a lot of the advice given now could be made public. This is just the next step concerning that type of advice. I see no reason why, if someone wishes to understand a decision in the area where they live, where multi-billions of pounds are spent on their behalf to improve their lives, they cannot be privy to some of the advice given before someone makes a decision. It is really important that both the press and the public understand the process that has been carried out to reach a decision, not just the decision itself.

My recent practical experience in local government, in an area of economic development, makes me believe that this is the right thing to do. Open decision-making is good decision-making; closed decision-making is bad decision-making, on the whole. It is really important for the press and the public to be able to understand both the decision and the process of how their taxes are spent—to know how decisions are made to improve their area. It is for those reasons, both the practical ones based on what I saw in Sheffield and to take freedom of information one step further, that it is really important that people can understand the advice given to and the process followed by politicians, the mayor or the combined authority to enable them to come to a decision.

My Lords, we are fully committed to openness and transparency in the proceedings of local government, combined authorities and mayoral combined authorities. We would draw the line so that the same rules operated as for local government currently. We would have reservations about taking it back beyond that—certainly taking it into the area of advice.

That raises a question; I do not know whether the Minister can help us with it. When there are discussions and negotiations about devolution deals, are they in the public domain?

My Lords, my first intervention in proceedings on the Bill were when we were discussing the same subject in Committee. There were references then, as there have been today, to the 1972 Act. The particular episode to which I referred in that previous debate was the Private Member’s Bill introduced by Margaret Thatcher in the 1959-64 Parliament, which was her first real appearance on the parliamentary scene. My late noble kinsman sat on the Front Bench throughout the passage of her Bill.

I have taken an interest in the subject going back a great deal further, to that moment in 1809—we were fighting the French at the time—when the Treasury intervened to say that three particular government departments which it had nominated must by 12 noon on any day, on anything which had been in any way controversial or interesting in the morning’s papers, agree the Government’s position, which would then literally, in the language of government, become the line to take thereafter for the rest of the day. When I served as a Treasury Minister, the reason that I had responsibility for the Central Office of Information went back to that fact, because it was the Treasury which had set up the system in the first place.

I want also to say a brief word about the passage of the then Greater London Authority Bill, because it was the first Bill under which the evidence of those advising councillors in local authorities could be made available to the public at large. I am not in any way intending to pour anything hostile into wounds that are long since healed, but the Minister in charge of that Bill made an extremely loyal and long-term defence of the fact that that provision was in the text of the Bill—which it was not. I am afraid that I did go on pestering the Minister in charge of the Bill—no names, no pack-drill—as to where in the text of the Bill, which we were looking at, that information was. Eventually, he broke down and admitted that they were planning to do it and were going to put down an amendment, but had not actually put down the amendment before. It was very loyal of him to have defended and covered for the junior Minister, the Minister who should have put it down.

This has long been an interest and I shall be very interested indeed to hear what my noble friend says in responding to the propositions that have been put in front of her.

My Lords, not having worked in local government but having sat on boards that involved public money, such as that of the Royal Opera House, I very much like to see open debate. On the other hand, I think the point that the noble Lord, Lord Heseltine, made is very pertinent. Sometimes, if people cannot think outside the box, as we had to when the Royal Opera House was faced with closure, what tends to happen is that the things that the proponents of this amendment want can be completely thwarted: discussion can become more closed because people are frightened of saying what needs to be said, as it will create such a storm. I am not going to come down either way on this but I see both points. As somebody who has sat on a board and wrestled with this, I reiterate that I understand the point that the noble Lord, Lord Heseltine, made.

My Lords, Amendment 14A seeks to ensure that the public have full and free access to combined authority meetings and documents and meetings of officers regarding the discharge of functions. The noble Lord, Lord McKenzie, put it absolutely right when he said that the same rules must apply to local authorities as do to combined authorities.

The noble Lord also asked whether devolution deals would be done under the gaze of the public and cameras. I imagine that, when a deal gets to the stage of a combined authority, that decision-making process would be in full view of the public and may even be recorded in some circumstances. Certainly that is allowed now under the rules of 2014. The process of developing a deal would involve a range of discussions, as the noble Lord will appreciate, between members and Ministers and between officers and officials. Crucially, decisions on whether or not to agree to anything will, as I said, be formal decisions of the combined authority; and—devolving down further—the constituent councils would have to agree to it as well, subject to the openness and access requirements applicable to councils and combined authorities.

The Local Government Act 1972, which applies to a combined authority just as it applies to a local authority, provides that all meetings of a combined authority must be open to the public except in limited and defined circumstances. A meeting of a combined authority, as with all other council meetings, may be closed to the public only in two circumstances: first, if the presence of the public is likely to result in the authority breaching a legal obligation about the keeping of confidential information; and, secondly, if the authority decides, by passing a resolution of its members, that exempt information, for example information relating to the financial affairs of a particular person, would likely be disclosed. The normal rules about access to agendas and documents that apply to local authorities apply to meetings of a combined authority—that is, to meetings of all or some of the members of the combined authority in their role as members of the combined authority to discharge the functions of the combined authority. Moreover, the Conservative-led coalition Government made new regulations in 2014 to make clear that a combined authority is required to allow any member of the public or press to take photographs, film, audio record and report on all public meetings. This openness ensures that combined authorities are genuinely accountable to the local people whom they serve.

The amendment seeks to extend this to give the public the right to attend meetings of officers. It would not be appropriate for the public to have a right of access to meetings of officers of the authority and would be wholly impractical. My noble friend Lord Heseltine and the noble Lord, Lord Berkeley, made the point that, far from opening up options and discussions, it would seek to restrict them and close them down. It is right that officials give advice in public. I can think of one occasion—the annual budget setting—where the finance officer has to stand up and say whether or not the budget is sustainable. It is absolutely right that that is done in a public forum. However, to invade officers’ meetings would be wrong. It would not happen in a council, and given that these provisions mirror the provisions for local authorities, why should it happen in a combined authority? Officers cannot discharge functions of a combined authority, in the same way as officers collectively cannot discharge the functions of a local authority. In a combined authority, as in a local authority, functions are discharged by the members, committees or sub-committees of members, or can be delegated to particular officers. It would be wholly impractical for the public to attend officers’ meetings. Officers meet continually through the day to discuss issues, prepare advice for members and implement the decisions that members have taken.

I rather like my noble friend Lord Brooke’s suggestion of 12 noon decision-making. I think we would get rather a shock if that came into your Lordships’ House. On that note, I ask noble Lords to withdraw the amendment.

Before the Minister sits down, can I just ask one question? Is it not the case that any advice that is given, which is written down or in an email, can be requested under freedom of information legislation? What is the difference between that and debate being curtailed by allowing the public to hear the advice being given? They can request it anyway through a freedom of information request.

My Lords, there is an informal process for discussions and there is a formal process. If something was written down in an email, it would, barring some restrictions on access to information, be disclosable under a freedom of information request.

My Lords, I am grateful to the noble Lords who have taken part in this debate, and in particular to my noble friend Lord Scriven for pointing out the importance of the Freedom of Information Act and its provisions in this respect.

I share some of the concerns of the noble Lords, Lord Berkeley of Knighton and Lord Heseltine. I understand exactly the points that are being made. However, the Secretary of State would, as part of this amendment should it succeed, be able to state in regulations how this would be managed.

This is an extremely important issue. This amendment is not asking for commercially sensitive matters to be revealed when it would not be in the public interest to do so or for informal day-to-day meetings with officers to be included. We are saying that the Secretary of State should recognise that the accountability of an elected mayor does matter. The Secretary of State should therefore regulate to ensure proper access to meetings and information to avoid a slide into greater secrecy in decision-making.

The noble Lord, Lord McKenzie of Luton, said that the same rules should apply as for local government—if I recall correctly what he said. I understand that perspective, but we are talking about a single elected person. There is no precedent for the scale of the roles to which they are about to be elected, for the reason that existing mayors in some of our cities and towns have more limited powers. Here, there is to be significant devolution of power from central government across Whitehall and Westminster. There is not even the scrutiny system that is provided within London through the GLA—and we heard from the noble Baroness, Lady Jones of Moulsecoomb, earlier about how the London system does not work terribly well. So I am still very concerned by this situation.

The public right of access to meetings and information must not be diminished as a consequence of this Bill. That is the risk that the Bill introduces. As a consequence of that, I beg leave to test the opinion of the House.

Schedule 2: Mayors for combined authority areas: police and crime commissioner functions

Amendment 15

Moved by

15: Schedule 2, page 19, line 10, at end insert—

“( ) An order under sub-paragraph (2) must include provision for an appointment process for any other person who may exercise any PCC functions of the mayor.”

My Lords, the amendment requires that on page 19, line 10, we should insert:

“An order under sub-paragraph (2) must include provision for an appointment process for any other person who may exercise any PCC functions of the mayor”.

This is a straightforward issue. The amendment deals with the important role of the PCC taken on by the mayor and the extent to which its functions can be passed to others. It seeks to ensure that there is a proper appointments process to put that into effect. I beg to move.

My Lords, I thank the noble Lord, Lord McKenzie, for being so brief in moving the amendment. As he said, it seeks to insert a new provision into new Schedule 5C to ensure that the Government must provide, by order, an appointment process for any other person who may exercise any of the PCC functions of the mayor.

The amendment is not necessary because the Government have already committed on the Floor of this House to apply Schedule 1 of the Police Reform and Social Responsibility Act 2011 to metro mayor areas by order where PCC functions are being transferred. Paragraphs 9 to 12 of that schedule set out an appointments process for senior posts below a PCC, including for the post of deputy PCC. This involves the scrutiny of any proposed appointment by a police and crime panel. I reiterate that we intend to apply these provisions to metro mayors by order to ensure that such appointments are properly scrutinised in the same way. The role of the dedicated police and crime panel will, of course, continue.

However, it will almost certainly be necessary to amend these provisions to some extent before they can be applied directly to a particular metro mayor area, given the different structures and posts which might exist in different areas, hence our proposal to implement this by order. I wish to be clear that we intend that there will be an appointments process for senior posts that will be based on that set out in Schedule 1 to the Police Reform and Social Responsibility Act 2011. All posts other than that of the deputy PCC mayor, and which support discharging the mayor’s PCC functions, will be subject to the standard local government requirement that appointments must be made on merit, as set out in Section 7 of the Local Government and Housing Act 1989. This requirement currently applies to all appointments made by PCCs other than the post of deputy PCC, which may be a political appointment, albeit still subject to scrutiny by the panel. Appointments to all other posts below mayor on policing matters would have to be made on merit alone, and appointments to senior posts will additionally be subject to scrutiny by a police scrutiny panel.

I hope that reassures the noble Lord and that he feels content to withdraw the amendment.

My Lords, I am most grateful to the noble Baroness for that much longer explanation than mine in moving the amendment. It is perfectly satisfactory and I beg leave to withdraw the amendment.

Amendment 15 withdrawn.

Amendment 16

Moved by

16: Schedule 2, page 19, line 21, leave out “or (e)” and insert “, (e) or (f)”

My Lords, in moving Amendment 16, I will speak to the others in this group. Amendments 21 to 24 seek to insert new provisions into new Section 107F to clarify how the council tax requirement is calculated and precept issued in respect of mayoral combined authorities.

Amendment 21 requires that issuing the precept will always be a function of the mayor acting on behalf of the combined authority. Amendments 22 and 23 ensure that the Secretary of State can by order modify the application of Chapter 4 or 4ZA of Part 1 of the Local Government Finance Act 1992, where that chapter is being applied to a mayoral combined authority, in order to provide for the specified outcomes in respect of calculation of the council tax requirement and issuing of the precept.

Amendment 24 extends the Secretary of State’s powers to make provision in an order in respect of how the council tax requirement will be calculated where the functions of a mayor include PCC functions. In these cases, we will require there to be separate components of the council tax requirement in respect of the mayor’s PCC functions and the mayor’s general functions. Amendment 24 also requires that the calculation of the component of the council tax requirement that relates to PCC functions is to be regarded as a PCC function exercisable only by the mayor.

By requiring that there is a separate component of the precept for PCC functions, we will ensure that the council tax referendum criteria can be applied separately to the council tax element of police funding, thereby ensuring that government has full flexibility to apply distinct council tax referendum principles for the police component of a mayoral combined authority precept in the same way as it currently does for all other PCCs across England and Wales. This would allow a mayoral combined authority the flexibility to hold a council tax referendum on the level of funding for the police specifically. These amendments will ensure broad consistency with the PCC model, in that the mayor will calculate the element of the council tax requirement that relates to PCC functions as a PCC does now, and this calculation will be subject to challenge by the police scrutiny panel. Amendments 16, 17 and 18 are consequential amendments to new Schedule 5C to reflect these changes.

Amendment 16 would ensure that only the mayor can calculate the component of the council tax requirement which relates to policing and that this function cannot therefore be delegated to a deputy PCC mayor or any other individual. This is consistent with the PCC model whereby the PCC cannot delegate such responsibilities to a deputy. Amendments 17 and 18 clarify that the Secretary of State’s power to provide directions to a mayor acting on behalf of a mayoral combined authority in respect of police budgets applies only to the calculation of the component of the precept relating to PCC functions and not to the component relating to general functions. With this explanation, I beg to move.

My Lords, as we have heard, Amendments 21 to 24 require that there should be two components of a single precept in circumstances where the mayor for a combined authority takes on the role of the PCC: the policing and the general work component. We have heard that this separation is necessary should different referendum principles be applied to PCC precepts generally, and this is enabled, of course, because the Bill also requires separate accounting for PCC functions. Amendments 16 to 18 have been described as consequential, and we see them as being entirely reasonable.

Amendment 16 agreed.

Amendments 17 and 18

Moved by

17: Schedule 2, page 21, line 10, after “to” insert “the mayor acting on behalf of”

18: Schedule 2, page 21, line 10, at end insert “in relation to the calculation of the component of the council tax requirement relating to the mayor’s PCC functions (see section 107F(2A)(a) above)”

Amendments 17 and 18 agreed.

Amendment 19

Moved by

19: Schedule 2, page 21, line 16, leave out “to (5)” and insert “and (4)”

My Lords, Amendments 19, 20 and 25 make minor and technical amendments to Clause 4 and Schedule 2. They remove a reference in the Bill that is relevant to Section 107E of the Local Democracy, Economic Development and Construction Act 2009. The reference would have provided that an order made by the Secretary of State may amend, apply, disapply, repeal or revoke any police and crime commissioner enactment. Amendment 25 removes the definition from new Section 107F inserted into the Local Democracy, Economic Development and Construction Act 2009. The definition of “modify” to include amendment or repeal in relation to Part 1 of the Local Government Finance Act 1992 where the precepting authority is a mayoral combined authority is no longer necessary. These references have been removed as the express power to amend or repeal, and the amendment to the definition of “modify”, are no longer needed given that Amendment 82 amends Section 117 to include a general power to amend or repeal. I beg to move.

Amendment 19 agreed.

Amendment 20

Moved by

20: Schedule 2, page 21, leave out lines 28 to 30

Amendment 20 agreed.

Clause 4: Financial matters

Amendments 21 to 25

Moved by

21: Clause 4, page 6, line 8, at end insert—

“(1A) The function of issuing precepts under Chapter 4 of Part 1 of the Local Government Finance Act 1992 in respect of mayoral functions is to be a function exercisable only by the mayor acting on behalf of the combined authority.”

22: Clause 4, page 6, line 9, leave out “Provision under subsection (1) may” and insert “The Secretary of State may by order”

23: Clause 4, page 6, line 10, after “4” insert “or 4ZA”

24: Clause 4, page 6, line 12, at end insert—

“(2A) Where the mayoral functions of a mayor include PCC functions—

(a) the provision made by virtue of subsection (2) must include provision to ensure that the council tax requirement calculated under section 42A of the Local Government Finance Act 1992 consists of separate components in respect of the mayor’s PCC functions and the mayor’s general functions, and(b) the function of calculating the component in respect of the mayor’s PCC functions is itself to be treated as a PCC function for the purposes of this Part.”

25: Clause 4, page 6, leave out line 38

Amendments 21 to 25 agreed.

Clause 5: Local authority functions

Amendment 26

Moved by

26: Clause 5, page 7, line 13, leave out subsection (5)

My Lords, in moving Amendment 26, I shall speak to all the other amendments in the group. They are about streamlining, fast-tracking and giving greater flexibility in the setting up of combined authorities or the making of changes to an existing combined authority. Certain of the amendments also give greater flexibility in establishing or changing economic prosperity boards, which can also be established under the Local Democracy, Economic Development and Construction Act 2009. Specifically, Amendments 26, 27, 62 and 77 modify the processes for establishing a combined authority in order to provide, if circumstances warrant it, a fast-track process that, while quicker, will maintain all the necessary essential safeguards.

The current process for creating a combined authority under the 2009 Act is lengthy. Past experience shows that it can take well over a year even to reach the point of the order being made, and that is before the real implementation begins. The process involves duplication, particularly where the setting up of a combined authority is agreed as part of the conversations and discussions surrounding a devolution deal. These amendments provide a streamlined process for creating combined authorities where the risks of duplication are minimised—a streamlined process that in particular can be used where local areas have agreed to have combined authorities as part of the devolution deals which they have agreed with the Government. This streamlined process will allow them to implement the deal as quickly as possible without getting tied up in further administrative processes that do no more than duplicate the conversations and discussions that have led to the deal.

For example, a number of councils agree as part of a deal to the establishment of a combined authority. They have provided the Secretary of State with sufficient information and evidence for the Secretary of State to undertake the statutory tests: that is, to conclude that creating the combined authority is likely to improve the exercise of statutory functions in the combined authority’s area, to have regard to the need to reflect the identities and interests of local communities, and to secure effective and convenient local government. Finally, all the councils in the area of the proposed combined authority consent to the combined authority. In such circumstances, the fast-track process will enable the Secretary of State to proceed to seek Parliament’s approval of the necessary draft order once he has fulfilled a statutory duty to consult such persons as he considers appropriate. His decision as to who is appropriate will of course have to be taken in accordance with the well-established principles of administrative law—to act reasonably having regard to all relevant considerations.

With this streamlined process, councils no longer have to undertake the lengthy process of developing a governance review and preparing a scheme. This is not because the substance of these steps is unimportant but because that substance will have been undertaken in a different way, and the guarantee that this is so is provided by the statutory requirements of the Secretary of State to apply in accordance with administrative law the statutory tests and the statutory consultation.

These amendments also provide that where the fast-track process is not being followed and councils are developing a governance review and scheme, the process can still be more streamlined than is currently the case. The current requirement that the Secretary of State undertakes a consultation, including the clear duplication of being required to consult the very authorities that have prepared the scheme, is replaced by simple requirements that the Secretary of State must have regard to the scheme and the councils must consent to the combined authority. The Secretary of State still has the option of consulting if he considers it necessary. These amendments therefore facilitate the timely implementation of devolution deals, which will be of critical importance to areas being able to respond to the economic challenges and opportunities the country faces today. It is not an option that we have bureaucratic and time-consuming processes slowing the actions needed to grow our economy, improve productivity and increase our competitiveness.

Amendments 63, 64, 65, 76 and 78 provide certain greater flexibility and streamlining aspects of combined authorities and greater flexibility for economic prosperity boards, for which the 2009 Act also provides. Amendment 79 makes a small change to references in Sections 111 and 112 of the 2009 Act. The origin of these amendments is the draft legislative reform order that was laid in Parliament in March this year. In its report of 19 June, the Delegated Powers and Regulatory Reform Committee noted that the Bill and the LRO were operating in the same policy space, and commented that making changes through two separate legislative vehicles progressing at different speeds would present challenges. We have responded to the committee’s comments and by these amendments are now incorporating into this Bill provisions that give effect to those in the draft LRO, and are withdrawing the LRO.

The amendments do three things. First, they enable local authorities that do not have contiguous boundaries to form combined authorities and economic prosperity boards if the statutory tests are met. They also allow the creation, if the statutory tests are met, of combined authorities and economic prosperity boards that have a “doughnut-shaped” area. Secondly, they enable a county council in a two-tier area to be within a combined authority for only part of its area where that area coincides with one or more districts. Thirdly, they provide that minor changes to the funding, constitution or functions of an economic prosperity board can be prompted by the councils asking for such a change.

All these amendments streamline and facilitate putting in place the governance needed to support the devolution of powers to areas, helping areas grow their local economies and improving the efficiency of local public services. I commend them to the House and beg to move Amendment 26.

My Lords, I shall speak to Amendments 62 and 77 in this group. First, I very much appreciate the Minister’s explanation of the reason for this group and I particularly welcome the fact that the Government have moved so quickly to amalgamate the previous draft LRO with the Bill. In my view, that is extremely important.

I think the Minister knows that I serve on the Delegated Powers and Regulatory Reform Committee. As an individual, I very much welcome that she has been able to respond so quickly. However, I think she will also know that this afternoon the committee met especially to look at the latest set of amendments. Amendments 62 and 77, to which I want to draw attention, were in one set of amendments that we looked at today.

I am obviously in some difficulty; I cannot refer to the precise recommendations of the committee because they will be reported to your Lordships’ House tomorrow, which is really my point. It would be quite wrong for us to move on those amendments without having seen the recommendations of your Lordships’ committee. However, I can refer briefly to the importance of these amendments. Amendment 62 would introduce a new clause which would make substantial amendments to the Local Democracy, Economic Development and Construction Act 2009. It would do so in a way that quite deliberately dilutes the provisions for consultation.

I think all Members of your Lordships’ House who have been following this Bill are well aware that wide consultation, which was a requirement of that previous Act, is central to the acceptance of this Bill in its current form. The dilution of those very important provisions in the 2009 Act seems to me to raise important issues. The Minister has been talking at some length about streamlining and fast-track. I am always a little apprehensive about fast-track streamlining because it usually means a sleight of hand. I fear that in this case that is precisely what is in place. If we are not to have the effective consultation provided for by the previous Act, at the very least we need a full explanation. We have not yet had that and I do not think we can expect to have it until the Minister has had an opportunity of seeing the report from the committee, which will be published tomorrow.

I understand only too well that in the speed with which the department has had to composite—I think that that is the appropriate word—the LRO from the provisions in the Bill, it may well simply have been a mistake that this consultation process has been, in the words of the Minister, streamlined. That raises very important issues that Members who have been following the consideration of this Bill throughout will wish to look at again in the light of the report from the Delegated Powers and Regulatory Reform Committee. Since that will not be available until tomorrow, I hope the Minister will at least agree that there should be, as there can be under the rules of the House, a further debate on these clauses on Wednesday. I certainly would reserve the right to speak. as an individual of course but with the information that will then be available from the committee, when these come before us again on Wednesday. I hope that the Minister will recognise that that is a perfectly appropriate way for the House to proceed.

My Lords, it is a great pity that these proposed changes have come forward very late in the day. Certainly, for some of those not caught up in regulatory reform, we will have to unpick some of the intricacies of the Local Democracy, Economic Development and Construction Act 2009. Even with the aid of a Keeling schedule, that takes some time. I perhaps go further than the noble Lord, Lord Tyler, and say that, rather than preserve some right to have a further debate on Wednesday, we should be entitled to come back to this at Third Reading if necessary. A lot of new stuff has been introduced. I would certainly like to take the opportunity of reading what the noble Baroness has said on the record so that we can get our minds round all that. It is not absolutely clear in every respect.

As I understand it, in terms of the key provision, Amendment 62 will provide a fast track to the establishment of a combined authority. Amendments 63 and 64 concern the removal of geographical restrictions on EPBs and combined authorities, and Amendment 65 covers changes to existing economic prosperity boards. We see the benefits of being able to move more swiftly perhaps than circumstances hitherto have permitted, but we need to stand alongside that a caution about not abandoning parts of that process which have made a valuable contribution to the judgments that have been made today.

Amendment 62 would provide an override of the existing requirements of Section 109 to undertake a review and prepare and publish a scheme for combined authorities, which I think the noble Baroness confirmed. That would seem to reverse the current process so that the initiative is with the Secretary of State, who still has to make a judgment about whether a change would improve the exercise of statutory functions in the area. We have had introduced—I think for the first time in our consideration of this Bill—administrative law and what that requires in terms of consultation and other matters. I am bound to say that we need a little time to fully understand what all that entails. Even under the amendment,

“the Secretary of State must have regard to”—

perhaps the Minister can expand on that obligation—a Section 109 scheme if one has been published. If not, what is to underpin the Secretary of State’s judgments? The Minister went through a range of issues in making her presentation. We would certainly like the opportunity to study what is on the record in that respect.

There is the prospect of the Secretary of State consulting persons he considers appropriate, “if any”, and the constituent councils having to agree. But it is unclear what analysis or review the Secretary of State will look to in making that judgment. What is to stop the fast-track approach becoming the norm? Perhaps that is what is intended. Will the Minister confirm whether that is the intention in this regard and that the previous or existing process will now be replaced in total by this fast-track process? Clearly, some further information will come when we get the report of the DPC. We cannot reasonably conclude our deliberations without sight of that report and advice.

Amendment 63 deals with EPBs and Amendment 64 with combined authorities. They appear to address the same issue of geographical restrictions on what can be included in an area. For example, for combined authorities it relaxes the current requirements that the local government areas of a combined authority must be contiguous and that no area not in the combined authority can be surrounded by local authorities that are. As I think has been confirmed by the Minister, this would appear as a “doughnut” formation, or as a combined authority formed from areas that are geographically quite far apart. However, in applying the new rules, the Secretary of State must have regard to the likely effect of the new arrangements on the exercise of equivalent functions in any adjoining local government area. We have no detail on how this test is likely to be applied; perhaps the Minister will say more on that.

Generally, some flexibility on the geographical construction of the combined authority should be welcome, provided there is protection for those authorities that might be surrounded, for example. Given that we are on Report, I was about to say that this would perhaps have to be sorted out in another place, but on reflection I do not think that that is right. The noble Lord, Lord Tyler, is right that we should have a further opportunity to pick up these important issues on Report or at Third Reading. They may be fairly brief amendments, but they touch on the processes that have operated hitherto. To clarify: we are not trying to make life difficult in this respect, but we need to understand the detail of what is proposed and the safeguards that will be there to balance the speedier process that these amendments seek.

These proposals are enormously important. I hope very much that we will have time to consider them and to reflect, but I see them as potentially extremely helpful, certainly to Yorkshire.

I will ask for clarification on two matters, but I will study the detail more carefully over the next couple of days. First, I assume that these proposals will apply to extending a current combined authority area, as opposed to establishing a de novo combined authority. I assume that they would apply if an existing combined authority area wished to have discussions to extend its boundaries. Secondly, if I understood the Minister correctly—I apologise that I have not read the proposals in the detail I should have—they would enable an existing combined authority to extend its boundaries, either with contiguous shire districts or potentially even to an authority that does not adjoin the existing combined authority; the word “doughnut” was used. It would be helpful for me to understand whether that is the case.

These are enormously important proposals and a lot of people will be extremely interested to understand them. They could be very helpful in making combined authority areas make a lot of sense in economic terms. Some existing combined authorities, while very useful, could do with extension to a degree.

It might be helpful to noble Lords if I say that Amendments 62 and 77 are expected to be reached on Wednesday. They are after Clause 9. Therefore, there will be an opportunity to discuss them then if noble Lords wish.

The noble Lord, Lord McKenzie, asked about fast-tracking becoming the norm. The amendments have been proposed to enable deals where constituent councils are content to approve deals that are ready, not to rush other areas that might take a bit longer. He also asked what underpins the Secretary of State’s judgment if there is no scheme. It will be the information and the evidence available in the deal. If insufficient information is available for the Secretary of State to make a judgment on whether the tests are met, then the fast-track process cannot be used.

The noble Lord, Lord Woolmer, asked two very useful questions. One was on changing an existing combined authority. The answer is yes, existing combined authorities would be able to be non-contiguous or doughnut-shaped; I am glad he will find that response helpful. He talked about non-adjoining areas. The answer is also yes, that will be possible. I hope that that assists noble Lords.

Before the noble Baroness sits down, could she clarify this? I think she said that we would reach Amendments 62 and 77 on Wednesday. According to the groupings list, they are in the group that we have just discussed.

We would be very happy to have a further discussion—it is vital that we do—although we would be squeezed for time on Wednesday with lots of other big issues. I thought from what the noble Baroness said that these amendments are not included in the group that we just discussed. According to the groupings list, they should be.

It might help the noble Lord if I point out that even though the amendments are in this group, if they are to be taken on another day it is open to any Lord to raise them when they are called.

Amendment 26 agreed.

Amendment 27

Moved by

27: Clause 5, page 7, line 20, leave out subsection (7)

Amendment 27 agreed.

Consideration on Report adjourned until not before 8.27 pm.