Motion to Approve
My Lords, I shall speak also to the draft Tees Valley Combined Authority Order 2016, which was laid before this House on 11 February. We will also be considering today the amendments to the Motions in the name of the noble Lord, Lord Beecham. I would simply say for now that the various wider local-government funding matters that these amendments touch on are wholly separate from what these orders and the devolution deals are all about. These deals are about promoting economic growth and prosperity for the area, providing investment and giving local places the powers to decide what to invest in and where. That is quite different from how local services are funded.
If these orders are approved and made, they will deliver significant milestones in fulfilling our manifesto commitments to implement the historic devolution deal between the Government and Greater Manchester and to devolve far-reaching powers over economic development, transport and social care to places that choose to have elected mayors. We want a shift in power from central government to local government, with decentralisation bringing power closer to local communities. We are committed to devolving powers and budgets to Tees Valley, to Greater Manchester and to other areas. We are committed to this so that places can achieve their potential and take control of their own growth, and so they can play their part in rebalancing our economy, including building the northern powerhouse: a powerhouse which has massive potential to add an extra £37 billion to our national economy by the next decade.
If approved and made, the Tees Valley order will establish a combined authority with functions in relation to economic development, regeneration and transport across the Tees Valley. It provides for there to be rigorous scrutiny arrangements, with the chairman of any scrutiny committee required not to be a member of the majority political party. This puts on a statutory basis the close working which already exists between the five constituent authorities and their partners, including the Tees Valley Unlimited local enterprise partnership. This close working will enable the Tees Valley to work together even more efficiently and effectively to promote economic growth, to secure investment and to create jobs.
The order is laid under the Local Democracy, Economic Development and Construction Act 2009, as amended by the Cities and Local Government Devolution Act 2016. As the statute requires, before laying the order, the Secretary of State has considered whether the proposal for a combined authority satisfies the statutory tests. I can confirm that they have been unambiguously met. The Secretary of State considers that establishing this combined authority is likely to improve the exercise of the statutory functions, and in reaching the decision to lay the draft order, he has had regard to the impact on local government and communities.
This order is the first step towards devolution in Tees Valley. Further orders will be laid later this year to create the position of mayor—to be elected in May 2017—and to confer on the combined authority and the mayor the additional responsibilities set out in the devolution deal, including powers for a mayoral development corporation.
I turn now to the order for Greater Manchester, where there has been a combined authority since 2011. This order takes further steps in the devolution journey by creating the position of a directly elected mayor for Greater Manchester, with the first election to be held in May 2017, and specifying that the first mayoral term will be for three years, with the next election in May 2020, with four-year terms subsequently.
The order also specifies that the Greater Manchester mayor will exercise the functions of a police and crime commissioner, cancels the May 2016 elections for a Greater Manchester police and crime commissioner and extends the current police and crime commissioner’s term of office until May 2017, when the mayor will be elected. To hold an election for a police and crime commissioner who would hold office for just one year would make no sense, either democratically or in terms of value for money.
Both orders are laid before Parliament following the statutory process specified in the 2009 Act, as amended. As required, all of the constituent councils have consented to these orders being made, and the Government have laid the draft order having considered the statutory requirements. As required, we are now seeking Parliament’s approval before making the orders.
The other place has approved each of these orders, and the noble Lord, Lord Beecham, has indicated publicly his support for devolution, for devolution agreements with Greater Manchester and the Tees Valley and, indeed, for the orders, which the regret Motions before the House in his name welcome.
I turn to the amendments. In essence, they focus on—regret—two matters. First, they assert that the devolution agreements were conditional on there being an elected mayor and that that is to be regretted, and that resources for these deals are inadequate. Secondly, they regret the Government’s policies on the broader issue of local government funding—that is, regret the measures that this Government have had to take to put right the economic chaos that the coalition faced, with a deficit of more than 10% of GDP.
As to mayors and the devolution agreements, there are simply two points which have been made on many occasions in this House. First, nobody has been required to have a mayor. Secondly, it would be irresponsible of any Government to put in place devolution of the scale and ambition as in Tees Valley and Greater Manchester without the clear, single point of accountability that an elected mayor can bring. As for resources for these deals, the devolution agreements provide funds for investment which the Government are absolutely committed to deliver. Devolution is an ongoing and iterative process, and we are committed to continue to discuss with places such as Tees Valley and Greater Manchester what else would help meet the needs of the place.
As for the funding of local government, when local authorities account for a quarter of public spending, they must carry their share of reducing the remaining deficit. To date, I must say that they have played their part in deficit reduction with great responsibility, so that public satisfaction with their services has been maintained or even improved.
The Government are clear that we have delivered a fair settlement to every part of the country, while giving councils greater financial independence so that they can deliver sensible savings while protecting front-line services.
The settlement, including the transitional grant, means that no council receives less than we announced in the provisional settlement. The settlement is broadly flat in cash terms between now and 2020. Resources are distributed fairly, taking into account the main resources available to councils. The gap in spending power between urban and rural authorities continues to reduce. We have given councils the multi-year budgets they have asked for and helped to transition from the old, centrally funded world to the new one of localised income. We have responded to their request for support for the elderly by providing £3.5 billion through the social care precept and the better care fund.
However, as I said, this is all a separate matter from what the orders are about. They are about delivering devolution, about giving local authorities the power to set their own policy agendas, the power to target their spending priorities to match, the power to drive growth, and power supported by investment funds, to which we are committed in the deals. I commend the orders to the House. They are a milestone on the devolution journey leading to greater prosperity, a more balanced economy, and economic success across the country. I beg to move.
Amendment to the Motion
As an amendment to the above motion, at end insert “and that this House welcomes the principle of devolution, the Greater Manchester Combined Authority Devolution agreement, and the draft Order; but regrets the lack of adequate resources allocated to the Greater Manchester Combined Authority; is concerned that funding is being cut whilst essential services are being devolved; notes that a transitional grant is available to local authorities to ease the pace of funding reductions but that out of the ten constituent member local authorities of the Greater Manchester Combined Authority only three member local authorities will receive this funding; and regrets that the Agreement was conditional on having an elected Mayor”.
My Lords, the concept of devolving power to cities and regions is admirable. The councils in Greater Manchester and Teesside are to be congratulated on the way that they have worked together to negotiate a deal with the Government with the object of assuming greater control over the services, policies and destinies of their respective areas. My amendments welcome the principle of devolution, but draw attention to two aspects of the situation which are far from satisfactory: both deals were conditional on having an elected mayor, and large questions remain over funding.
Astonishingly, the Minister claims that there has been no requirement, no compulsion, to have an elected mayor. That is perfectly true, but of course, if you do not have an elected mayor, you do not have a deal. That is a strange position. We continue to oppose that requirement. There have, of course, been referendums in several authorities on the mayoral issue under the present system, several of them ordained by the Government. My city rejected the concept, despite the best efforts of the noble Lord, Lord Shipley, to persuade the electors of Newcastle to support it, while I am happy to say that his successor as leader joined me in the campaign against it, as did Manchester. As to the latter, I remind the House of the claim by Nick Boles that the only route back for the Conservatives in Manchester was to have an elected mayor. Naturally, no such motives could possibly have influenced the Government in imposing this requirement on the deals for greater Manchester, Teesside, and, indeed, anywhere else that opts to take them up.
Of course, there have also been referendums to dispense with elected mayors, as in Stoke and, interestingly and more relevantly for the purpose of this debate, in Hartlepool, which is part of the Teesside authority. They had an elected mayor, but disposed of him—well, not of him, but of the post. A referendum to do likewise is in progress in North Tyneside, which is a member of the proposed north-east combined authority currently in the throes of deciding whether to sign up to a deal.
However, I suspect that for most people, the key factor will be what benefits devolution might bring. These will depend on two factors: the nature and extent of the power to take local decisions on key areas of public policy, and the extent to which adequate funding is available. The two geographical areas that we are considering today have, as is proper, taken different approaches to the first of those questions. Greater Manchester has opted for an ambitious range of responsibility extending from the local economy to transport and police to health and social care. Recently, a further significant area has been added to the original deal: involvement with the criminal justice system including, as I understand it, probation. Teesside has taken a different approach, concentrating, as well it might in the aftermath of the disastrous closure of the Redcar steelworks, on the local economy, with transport and skills at the heart of its programme. In some ways, of course, this represents a return to the former Teesside county borough.
However, there are big questions about the extent to which enthusiasm for devolution extends beyond the Treasury and perhaps the DCLG, not least in the light of recent events. There is nothing new in this. Under the Labour Government, regarding the Local Government Association’s concept of total place—under which local councils and a range of government departments were to work together on a range of policies and programmes affecting individual localities, not least in regard to their financing—there proved in effect to be no real buy-in other than from the Treasury and the DCLG itself. What is different this time? During the passage of the cities Bill, the Minister convened a meeting with the noble Lord, Lord Prior, the Department of Health and interested Peers. It was attended by the Minister for the Northern Powerhouse —or poorhouse—who left after 25 minutes without uttering a word. More importantly, it was apparent that the Department of Health, certainly at that time, had had little if any engagement with the process.
Can the Minister tell us how much involvement other departments from the Treasury down have had in the agreements which today’s orders enshrine? More especially, can she say what structures are in place, or will be in place, to secure their continuing engagement so that a cross-departmental perspective is included in the work of the new authorities? There are precedents of a kind, including the inner-city partnerships of the 1980s, in which I recall serving alongside a number of Ministers at what was then the Department of the Environment, several of whom are or have been Members of this House. This is all the more necessary given, for example, the parlous financial state in which all the member councils involved in today’s orders find themselves. Their cumulative loss since 2010 occasioned by funding cuts and unfunded cost pressures amount, on an annual basis, to no less than £180 million in Teesside and over £700 million in Greater Manchester, with Manchester’s loss alone amounting to just under £197 million to date. That is the annual loss that it will have to carry from now on, and it is, of course, rising. The current round of budgets will push those figures to an even higher level, with more to come over the next few years.
Strikingly, only one of the councils in the two areas—Stockport—received any transition grant under the recent government announcement. I suppose it should have considered itself lucky to have received anything, as it is not a Conservative council but one with no overall control. Even so, the £2 million it received is only 5% of its annual loss so far.
Here is the key issue. How much certainty will there be about the level of funding for the key areas where responsibility is being devolved, let alone the services which remain with the individual councils, and whence will it come? The Government are committed to pouring vast amounts of money into Crossrail and HS2, about which many of us north of Birmingham have considerable doubts, and a modicum into what they misleadingly call HS3, which will improve the appalling rail link between Manchester and Leeds—though not, incidentally, extend to Teesside—but this is capital expenditure. What guarantees are there about the revenue budgets of the combined authorities and separately of their several numbers and of the capital funding for other programmes which will be necessary to make a reality of the claims to be promoting a northern powerhouse or any other substantial economic improvement elsewhere?
What will be the impact of the Chancellor’s £6.7 billion cut in business rates recently announced? Can the Minister inform us how and to what extent councils will be protected from this loss of revenue on which, given the demise of revenue support grant, they were supposed to rely? I assume that the Treasury has now briefed her following her understandable inability to answer questions about this matter last week—I do not blame her at all for that. I understand that whereas hitherto the DCLG has used its share of business rates to ensure a modicum of redistribution to authorities with a low business tax base, it is now scrabbling round to find a method of securing some equalisation when they will not be receiving any business rates. Can the Minister tell us what they are looking into, how far they have got and when we might expect an announcement? Is it true that, in future, increases in the business rate will be based on CPI rather than on RPI as hitherto? That would represent a further erosion of the value to local government of the business rate.
Moreover, how does the Government’s effective removal of democratically elected councils from the provision of education—which the councils have supported though not controlled, as the Government and media constantly assert, for many years—fit with the concept of devolution? If one is looking—as certainly Teesside and I suspect Manchester and other authorities are—to enhancing skills, extending links with further education and opening up employment opportunities to the next generation of young people, because the current generation has not had those opportunities, how can that possibly be reconciled with what is in effect a nationalisation of the education service and the exclusion of local government from it?
What other incursions on local council responsibilities are being considered in the Treasury or other government departments which might extend to the new authorities and their members? Can the Government give any assurance that the new authorities will not go the way of metropolitan counties, which in many ways foreshadowed these new structures? Those were invented by a Conservative Government in 1973 and abolished, along with the GLA, by a Conservative Government 12 years later.
Finally, may I mount again a hobbyhorse that I confess to having ridden in a number of debates? Will the Government abandon remote control and engage effectively with the new combined authorities and other councils through the well-tried and successful mechanism of regional offices, engaging relevant departments and agencies at the local level? In fairness, this was a product of a previous Conservative Government. It worked very well, providing an invaluable two-way conduit between Whitehall and the locality. If that was good enough for Margaret Thatcher, it should surely be good enough for her successor.
Perhaps I may raise one other question, not directly in relation to Greater Manchester or Teesside but possibly to other areas which are considering a deal. There seems to be the opportunity, or temptation, for a backdoor reorganisation of local government to take place in areas where counties with shire district components may find themselves in a difficult position in relation to adjoining former metropolitan county areas. I cite for example the position in South Yorkshire, Nottinghamshire and Derbyshire, where for some purposes those district councils may become part of the combined authority, but not for others. However, once they start getting into the health and social care combination that is going to pose extreme difficulties, because social care is provided by the current shire counties. There is a suggestion in the air that the Government may be looking in this way to promulgate a further reorganisation of local government, creating more unitary authorities and changing the map completely. I do not know whether the Minister is in a position to comment about that today. If not, perhaps she can write to me. I beg to move the amendment.
My Lords, first, I welcome the two orders, each at a different stage of the devolution process. I understand there will be a further order in respect of the Tees Valley later this year about a mayoral election next year.
I listened carefully to the comments of the noble Lord, Lord Beecham, and to his amendment to the Motion. It is true that the financial context is important. I also subscribe to his view that having some system of government offices linked particularly to combined authorities would be a hugely helpful conduit or communication channel.
However, I noticed three things that the noble Lord, Lord Beecham, missed out of his amendment. The first was the opportunities for councils through a combined authority structure to share services and thereby cut costs. Secondly, there are the opportunities for public service reform across all public services, which can be delivered only by closer co-operation across council boundaries. Thirdly, there are the opportunities to create strategic policy in areas such as transport and regeneration which transcend council boundaries and would give the combined authorities a role in devising what policy should be rather than waiting for Whitehall to start a process and attempt to define that policy.
I also accept the noble Lord’s comments on business rates, which need to be examined very closely. However, the implications of business rate devolution suggest that councils must come together geographically to make the best use of the powers that they will have, particularly to encourage business rate growth.
Greater Manchester has the benefit of having all three major parties involved in the Greater Manchester Combined Authority, and I pay tribute to its leadership, cross-party working and clear sense of what devolution could mean in terms of benefits for Greater Manchester as a whole. However, first, I have doubts about the following assertion, at the very end of the order:
“A full regulatory impact assessment has not been prepared as this instrument will have no impact on the costs of business and the voluntary sector”.
In fact it will have an impact because this order is about transferring police and crime commissioner functions to the elected mayor model, and there would be powers of precept and so on. If business rates are then to be set locally, there is a clear implication that there will be an impact.
Secondly, I have serious doubts about the elected mayor model. It was the only offer the Government made to Greater Manchester, I understand, so the offer was accepted on that basis. We have doubts on these Benches about the elected mayor model, which I will come back to in a moment.
I pay tribute to Tees Valley’s clear ambition in the face of major challenges to its local economy, and to the willingness of those councils to pool expertise to drive strategic policy forward and to the excellent record of Tees Valley Unlimited, the local enterprise partnership. It is good to see the LEP working closely with the combined authority, and we wish the combined authority in Tees Valley every success when it comes into being in a few days’ time. The new structure will help to drive growth, and that sense of common purpose will be central to achieving it.
The Minister was right to say, in introducing this debate, that there is a common misunderstanding that devolution is an event rather than a process. It does not happen overnight, and as the Minister said, this is a milestone. It is a slow process, building trust geographically and between parties in the wider public interest. Greater Manchester serves as a model of how that can be achieved which should be copied by others.
The Minister will remember that during the passage of the Cities and Local Government Devolution Bill, we made a number of comments on these Benches about government thinking on how to proceed with individual devolution deals. We expressed concerns about the elected mayor model—the extensive powers, the large geographical area they might cover and the impossibly large number of functions they might be asked to undertake—and concluded that, in the guise of devolution, we actually had a centralist model that would find it difficult to engage with the general public and with local councils. We accepted that to be legitimate, combined authorities had to have some form of direct election which would give a mandate to the chair of the combined authority from the ballot box. At present, the public and councils are too remote from the workings of combined authorities, and to have the leader or chair of the combined authority structure simply nominated behind closed doors from among a group of council leaders seemed to us not to satisfy the public interest test.
We expressed concerns about the creation, too, of a one-party state and about the need for better scrutiny and audit. I am pleased to see that there are now plans to improve the level of scrutiny and audit that is taking place in combined authorities, although we still prefer a form of direct election to combined authorities using proportional representation. My noble friend Lord Tyler and I tabled an amendment in Committee that would have provided a means of doing that so that more than one person would be directly elected to the combined authority. However, at that stage, there was not support across the House so the matter did not proceed.
I remain of the view that the structures being put in place will be tested. For this elected mayor model to succeed, there has to be trust and shared objectives in the wider public interest. As the Minister says, it is not compulsory to have devolution, but as we devolve, we must be really careful that we are not centralising, whether through the elected mayor model or through the model of the regional schools commissioner, whereby all schools, if they become academies, will be taken completely out of local authority control. The Minister might wish to respond to the idea that the regional schools commissioners could be made democratically accountable to the combined authorities. If that is to be the case, or if there is thinking in that respect, it would be helpful to know more.
This is all about a process and leadership. In the end, as we said in passing the Cities and Local Government Devolution Act, this process needs all-party consent to work but is ultimately in the interests of England, our level of growth and the general well-being of our economy.
My Lords, I make a short intervention to welcome the Tees Valley order. I first went to work in Stockton-on-Tees over 60 years ago and have lived in the north-east of England ever since. I noted that the noble Lord, Lord Beecham, constantly referred to Teesside. He is absolutely right to do so, and I hope none of your Lordships who go to the north-east and visit the area from Darlington down to Middlesbrough expects to be in a valley. It is not a valley: the Tees falls under 200 feet from Darlington, which is about 20 miles inland, to the mouth at Middlesbrough and Hartlepool. I very much hope that one day the mayor, whose creation I fully support, will promote a change back to the name of Teesside instead of the mistaken appellation of “Valley”.
I have one other regret, which is that County Durham has gone north instead of staying where it should be. My 60-something years there tells me that the three places named in the order—Darlington, Hartlepool and Stockton-on-Tees—always look towards the city of Durham. Indeed, Durham University is now split because there is a college in Stockton which is part of the university. This is a matter of regret because there is a big problem with identities in what I call Teesside. The history and the identities of Darlington, Hartlepool, Middlesbrough and Stockton particularly are very different. Middlesbrough was, in 1820, a hermit’s chapel on the banks of the Tees: there was nothing else there at all at that time other than a ring of villages down to the south. Beyond Stockton-on-Tees, the tidal river goes up to Yarm, the heart of the wool trade, and so on. I will not go on about this, but the historic identities of these five places are very different from each other. That will present a huge challenge to the mayor in terms of how to provide the leadership to bring this combined authority together.
Ab initio, I worked in Hartlepool, Middlesbrough and Stockton, to name but three places. I remember somebody called Darlington Jack, who was a very good worker and worked in Stockton-on-Tees at the same place as me. The Stockton-on-Tees lads came to me one day and said, “I think it’s time you got rid of Darlington Jack, he doesn’t come from here”. I hope that this authority is a great success, but it will be a tremendous challenge to the mayor and his staff to create the identity that means it will really pull together.
My Lords, I, too, intervene mainly on the Tees Valley order. I have great sympathy with what the noble Viscount, Lord Eccles, said. I note that he talked about coming from the north-east. A real problem in all of this is that the previous Secretary of State did not want to hear the words “regions” and banned it for a while. Nobody was allowed to mention a region. In doing so, he broke up the north-east.
That leaves us with significant problems. One problem in the Tees Valley area is that there is one police authority and one fire authority for some of the Tees Valley, but Darlington comes within the Durham and Darlington fire authority and the Durham and Darlington police authority. This will present Tees Valley—and, I suggest, the Government—with a little bit of trouble, because there will be one mayor and one police commissioner not covering the whole of the area. There is a split there that I do not think the Government have worked through. They have brought it upon themselves by the daft things that were done in getting rid of the regional development agency in the north-east. But there you go—history often comes back to bite us.
The Tees Valley order is essentially about how to get a greater economic drive in that area. Of course, we and the local authorities in that area fully support that. There is huge ambition, but there are huge challenges. On its own the closure of the steelworks means that there will be at least £10 million less per year coming into the local authority from business rates, let alone all the other economic challenges from the closure of the steelworks. The financial settlement that goes with the combined authority deal simply does not address the enormous challenges.
Another challenge that is not mentioned in the order, but certainly if Tees Valley goes the way of Greater Manchester it will become an issue, is that there is a large workforce in the Tees Valley area involved in social care. I confess that I have not yet been around all the authorities, but in either the north-east or the Tees Valley area I have not yet come across a local authority for which the amount it will be allowed to raise through the 2% additional levy on council tax will even cover the increase in the minimum/living wage. The amount that those authorities will be able to take in will be much less than in other authorities, such as Surrey, because they have more houses in the lowest council tax bands. They will be able to raise less, but the north-east and the Tees Valley also have the highest proportion of people needing social care who are entitled to public funding. When you put those two things together, there is a catastrophe waiting to happen. I have been asking the Department of Health what the way forward is on this, because the authorities will not be able to raise the money to meet the costs. As a very quick example, Surrey, which will be able to raise a lot through the 2%, has 1% of its elderly care population dependent on public funding. In Newcastle, more than 80% is dependent on public funding; as I said, it is unable to raise even what the rise in the minimum wage will cost this year.
These are incredible challenges. The Government have not addressed them and just keep saying, “It’s up to local authorities”. Local authorities are not miracle workers. The people in the north-east deserve better. The Government need to put their attention to this—I think their collective attention, because when I have talked to different people in government they do not know that this is going on and that this is likely to be an effect. They have not thought about it. I plead with the Minister: we are all in favour of more devolution and of the combined authority concept, but that has to be done in a way that does not disadvantage the people of these areas even more. At the moment, government policy—I am quite prepared to accept by mistake—will make their task virtually impossible. That is not fair. When the Minister talks about fair funding, she needs to think of these other things, which will really have an impact on Tees Valley’s ability to get the economic drive that it is working so hard to see.
My Lords, I join my noble friend Lord Shipley in welcoming the Tees Valley order. I sympathise with those who prefer to call it Teesside as well. I note in particular that Liberal Democrat councillors and party chairmen in the Tees area have firmly and publicly stated how much they want to work together with others to make a success of the combined authority and associated arrangements.
I also say in passing that I share the view expressed in several quarters that making an elected mayor a condition of deals of this kind is a very unreasonable position for the Government to adopt. I say that when I look at what would happen if we had to have an elected mayor covering an area from Berwick to Sunderland—an area of very diverse differences. It would be a very inappropriate governance arrangement.
I turn to the Greater Manchester order because of a little-mentioned positive aspect of it, but I am not clear how far it goes. It is what was referred to at paragraph 1.279 of the Budget statement, on criminal justice:
“The government has also agreed a further devolution deal with Greater Manchester, including a commitment to work towards the devolution of criminal justice powers”.
That is rather weak wording: “to work towards” is what Governments sometimes say when they are making concessions and are in difficulty. I do not think that that is the origin in this case. As far as I am aware, there is a genuine government commitment to achieve some devolution of criminal justice powers. Will the Minister, in responding to the debate, say just a little more? It was barely mentioned at the opening. It is a new development and unique to the Greater Manchester deal.
There is tremendous scope to be had from developments of this kind because at the moment we have a distortion in our system that means that, whereas the prison system is funded nationally, all other disposals arising from sentences tend to depend on local funding and extremely variable local provision of services for alcohol addiction, drug addiction and so forth. Greater Manchester is one of the areas that has tried to grapple with some of this. When, in my former capacity as chairman of the Justice Committee, we visited Stockport, we found there determined co-operation between magistrates, the local authority and the probation service, the development of something more like the problem-solving court, and the bringing together of various public bodies to deal with the problems that a case identifies that could lead to the ending of a pattern of offending behaviour. That requires a lot of co-operation between different bodies. Similarly, making logical use of alternatives to custody in sentencing depends on having a financial structure in which the commissioning is not done by completely different bodies.
There is a lot of scope here, and there will be even more scope if national spending on criminal justice is increasingly devolved to local areas. If that is done, we have a much better chance of ending up spending money on preventing crime, rather than on keeping people in prison for crimes that should never have happened. I see this as potentially important, and not something that we should allow to be forgotten in the Greater Manchester deal.
My Lords, I agree with pretty well everyone who has spoken, particularly my noble friend Lady Armstrong. Everyone was in favour of devolution and of decisions being made as locally as possible. I wish there was a bit more of that thinking in the Government as far as education is concerned, but I suppose there are inconsistencies in all government policies. I still feel a sense of foreboding about these orders and they are not entirely removed by my noble friend’s amendments, although I think it is infinitely desirable for the amendments to be carried.
The foreboding comes, at least in part, from the sense that we are developing in an almost ad-hoc way. I do not want to use the word “hotchpotch”, but it is the nearest thing to the truth. We will have different forms of local government in different parts of what is still, certainly geographically, quite a small and homogeneous country. We will soon reach the stage when a member of the public will need a doctorate in public administration to know what kind of system they live in, who does what, where and how, when to vote and all the rest. That will particularly be the case when people move around the country, as they do, of course, from one part to another. I do not think that it is the only principle governing constitutional change, but I think that intelligibility should be one of the principles.
We are in increasing danger, as these orders come through, of forgetting that principle and making a very complicated system of local and regional government public administration. I say that despite the fact— I am very conscious of the fact—that some people I admire enormously in local government, friends of mine, have been involved in the various negotiations and the conclusions that have been reached. It is something that should cause us concern. We should at least keep a watchful eye on how these things are developing.
I confess to a prejudice in all this, in that I think one should always be a little wary of Chancellors who say they are here to help. Chancellors of the Exchequer have a fair bit of power and a fair bit of money at their disposal. It is never quite an equal discussion when they come and negotiate with local leaders, who have tremendous knowledge of their area but nothing like the same capacity to implement decisions for their area that people in national government quite rightly have.
However, my main concern with these changes remains, as it was when we were taking the Bill through, about this business of directly elected mayors being compulsory. Let us not throw weasel words around any more. I do not like using language like that, but it is using weasel words to say that this is an optional addition to devolution agreements—that it is optional as to whether you have a mayor or not. It is not. It is quite clearly an absolute requirement for the Chancellor. It is something that should not just pass in an order without us at least registering our concerns, as others have.
I will not repeat things I said during the passage of the parent legislation, but I did not expect that on the leader page of the Daily Telegraph I would find an article by a Conservative writer with whom I found myself agreeing wholeheartedly. The headline in last Friday’s Daily Telegraph was: “Voters don’t want them, but the march of the mayors is now unstoppable”. It is not me saying this, though I find a great affinity with it. The article says that four years ago:
“George Osborne … asked 10 cities, in a referendum, if they’d like a directly-elected mayor. Nine said “no”. It was the wrong answer … It’s hard not to admire his audacity. Soon, all nine of the cities which rejected the offer of a mayor in a referendum will have one anyway”.
We know the history of this. It was introduced by a Labour Government, I acknowledge that, but then the impetus for an elected mayor had to come from below. Then the Conservative Government said, “Well, this isn’t moving fast enough, so we are going to force these 10 local authorities to consult the people”. They did consult the people and the people said, “No, thank you very much, we do not want one”. So what do the Government do? In the finest traditions of the European Union, I have to say, if you do not like the first result you have another go until the electorate come to their senses. That is essentially what has happened. Fraser Nelson goes on to say:
“Since 2001, there have been 50 mayoral referendums, of which just 15 agreed to mayors. Many have come to regret it”.
We know two, of course, where there has been a vote to get rid of it.
I know that it is whistling in the wind now to say this, but we are setting up a quasi-presidential system as a model across the country. This is not yet at a national level, thankfully—because I think that a parliamentary system is infinitely preferable—but that is what is going to happen. It will inevitably mean different systems in different parts of the country. We are still in the very unfortunate situation, as far as I can see, unless the Minister can correct me on this, where unlike in any quasi-presidential system anywhere in the world there is no limit on the number of terms a mayor can serve. That is a great fault in the system. Parliamentary systems get rid of leaders when they are not keen on them, but mayoral systems do not have that mechanism. I should have thought that eight years—two terms—should be a maximum, but that safeguard does not exist.
I have no sense of joy and exhilaration at a wonderful new experiment. I do not think that that was detected in any of the three Front-Bench speeches; I may be misinterpreting them. I hope that as this process continues—it now seems inexorable—care will be exercised to ensure that we do not develop a system of devolution across our relatively small country which no one without a double doctorate can understand.
My Lords, I thank all noble Lords who have taken part in this debate. I shall open my remarks by reflecting the words of the noble Lord, Lord Shipley, about the process of devolution being iterative and evolutionary over time. Those were very sensible words. I shall address some of the issues that were brought up that I did not address in my opening remarks.
Several points were made about referendums for different types of mayors being held under different processes. It is probably quite important to distinguish between the different provisions at different times. It is quite misleading to link referendums about whether there should be an elected mayor for a local authority area and the proposed combined authority mayors. The latter mayors are very different from local authority mayors—that is probably one reason Greater Manchester saw fit to have one. They have wholly different and novel roles and are closely interconnected with the devolution of new, wide-ranging powers for areas.
The noble Lord, Lord Beecham, asked how much agreement there was from other departments in doing these deals and implementing them. The departments concerned have all signed off the deals, which have been collectively agreed by Ministers. The implementation process is both local and across Whitehall, led by a director-general and a cross-Whitehall group involving all departments involved in the specific deals.
The noble Lord, Lord Shipley, asked about impact assessments. I hope it comforts him that when we confer functions on the combined authority to be exercised by the mayor, there will be, where appropriate, a regulatory impact assessment. This will be done in future orders that will be considered by this House.
The noble Viscount, Lord Eccles, talked about Durham moving north, which was interesting, and the identity in Teesside. The naming of the combined authority was a matter for the local area. The Government have recognised the historic boundaries but this combined authority is about strengthened, joined-up working and building on strong relationships across boundaries, recognising local identities.
The noble Lord, Lord Beecham, talked about the certainty of funding, particularly in relation to HS3. The Government have committed to HS3 and the Chancellor announced in last week’s Budget that £60 million will be available to bring forward HS3 between Leeds and Manchester, reducing journey times towards 30 minutes, which will increase the jobs market for people in both Leeds and Manchester and improve links between the north’s other major cities. The Government are absolutely committed to this.
The noble Lord, Lord Grocott, brought up term limits. We do not have term limits for mayors, just as we do not have them for local authority leaders. It is for the electorate to decide whether or not a person should be re-elected.
The noble Baroness, Lady Armstrong, talked about police and fire authority boundaries. It is not planned at this stage that the mayor in Tees Valley will be a police and crime commissioner.
The noble Lord, Lord Beecham, talked about the financial cuts to local authorities. The Government have responded to councils and provided longer-term certainty about funding availability in the four-year settlements. He also talked about business rate relief—again—and I am now in a position to be able to answer the question, which slightly caught me on the hop last time. Councils will be protected from the impact. Specifically, local government will be compensated for the loss of income as a result of the business rate measures announced in the Budget, and it will be full compensation, as it has been for the past few years.
The noble Baroness, Lady Armstrong, talked about social care pressures. Following consultation, the Government are making up to £3.5 billion available by 2019-20 to recognise the priority and growing cost of caring for the elderly. I know the point that the noble Baroness is mouthing at me but I am just making the point that we have made that funding available.
The noble Lord, Lord Beith, talked about more criminal justice devolution in the GM deal. It is at a very early stage and, as agreed last week, for the first time Greater Manchester will have a greater role in the commissioning of offender management services and the Government will engage with Greater Manchester Combined Authority on its agenda to create a modern prison estate—more details to follow.
In conclusion, these are important orders to progress the devolution to all areas that all sides of the House support.
My Lords, I do not propose to test the opinion of the House. We have had an interesting debate, which will continue for some time. I will look very carefully at what the Minister said about the business rate element, and other matters as well. No doubt we shall return to these issues because presumably there will be a string of orders over the next few months. I beg leave to withdraw the amendment to the Motion.
Amendment to the Motion withdrawn.