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West of England Combined Authority Order 2017

Volume 778: debated on Tuesday 7 February 2017

Motion to Approve

Moved by

That the draft order laid before the House on 16 January be approved.

Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee

My Lords, this draft order, if approved and made, will establish for the West of England an elected mayor and a combined authority and will confer important new powers on to both the mayor and the combined authority.

The Government have already made significant progress in delivering their manifesto commitment to devolve far-reaching powers and budgets to large cities in England that choose to have directly elected mayors. Since the first devolution deal with Greater Manchester was agreed in November 2014, we have passed the Cities and Local Government Devolution Act 2016, which provides new powers for the Secretary of State by order to devolve to a combined authority a Secretary of State function, and confer on a combined authority any functions of a public authority. I remind noble Lords that Parliament has approved orders establishing combined authority mayors in Greater Manchester, Liverpool City Region, Sheffield City Region, the West Midlands and the Tees Valley. Parliament has also approved an order conferring additional functions on to the Greater Manchester Combined Authority covering planning, transport and skills. Furthermore, orders conferring functions on to other combined authorities have been laid before Parliament, to be considered.

This order brings to life the devolution deal that the Government agreed with the West of England councils in March 2016. We are taking forward this deal with three councils—Bath and North East Somerset, Bristol City Council, and South Gloucestershire. As noble Lords may be aware, North Somerset Council was also initially part of the deal but later decided that it did not wish to go ahead with it. The deal agreed between the Government and the West of England means that the area will receive a devolved transport budget and transport powers to help provide a more modern, better-connected network; new planning and housing powers to manage planning across the region; new functions over skills and, in particular, responsibility for the adult education budget in the area; and control over an investment fund of £30 million a year for 30 years.

Noble Lords will want to know that the basis of the draft order before us today is the governance review and scheme prepared by the three West of England councils in accordance with the requirement in the Local Democracy, Economic Development and Construction Act 2009. The three councils—Bath and North East Somerset Council, Bristol City Council and South Gloucestershire—published this scheme in June 2016 and, as provided for by the 2009 Act, the three councils consulted on the proposals in the scheme.

The consultation ran from July to August 2016. It was primarily conducted digitally and included promotion through social media. In addition, respondents were able to provide paper responses, and copies of the consultation were available in public buildings such as libraries, citizen service points and other locations across the three councils’ areas. As statute requires, the councils provided the Secretary of State with a summary of the responses to the consultation in September.

Before laying this draft order before Parliament, the Secretary of State has considered the statutory requirements in the 2009 Act. The Secretary of State considers that these requirements have been met in relation to proposals to establish a directly elected mayor for the West of England; to establish a combined authority across the local government areas of Bath and North East Somerset, Bristol City, and South Gloucestershire; and to confer functions on to that combined authority. In short, he considers that establishing the West of England mayoral combined authority and conferring the functions on it would be likely to lead to an improvement in the exercise of the statutory functions in the areas that I have just set out across the West of England area. In this consideration, the Secretary of State has had regard to the impact on local government and communities.

Also as required by statute, the three councils have consented to the making of this order, and as required by the 2016 Act we have in parallel with this order laid a report before Parliament which sets out the details of the public authority functions that we are conferring on the West of England through this order. Noble Lords may recall that the requirement for this report was one of the additions that this House made to the 2016 Bill during its passage.

If approved by Parliament, the order will come into effect the day after it is made. The order gives effect to many of the proposals in the three councils’ June 2016 scheme. If approved and made, it will establish the office of elected mayor for the West of England, elected by the people of the three council areas. The mayor will be first elected on 4 May 2017 and will then take office on 8 May 2017 for a four-year term. Second elections are to be held on 6 May 2021. The order will also establish a combined authority, chaired by the elected mayor with a membership drawn from the three councils, provide the combined authority with functions over transport, give the mayor the power to pay grants to the constituent councils and provide the mayor with the function of producing a local transport plan for the area.

It will provide powers on road improvement and maintenance, and for the mayor to pay grants to bus operators ahead of bus franchising as envisaged in the Bus Services Bill. A duty will be placed on the mayor to prepare a West of England spatial development strategy, enabling an integrated approach to spatial planning in the same way as in London. Councils will continue to prepare local plans and will remain responsible for local planning decisions. The three councils have also confirmed their intention to continue engaging with North Somerset as per their current working relationship.

The order will confer the ability to designate mayoral development areas, leading to the creation of mayoral development corporations on to the combined authority, to be exercised by the mayor. It will confer land acquisition, disposal and housing powers, including a compulsory purchase power for the mayor, the same powers as the Homes and Communities Agency and councils. No powers are being taken away from councils. It will provide the mayor and the combined authority with the power to exercise the general power of competence, allowing them to do anything an individual is entitled to do.

The order provides the combined authority with functions over economic development and regeneration, the powers which are held by the existing combined authorities, and provide for the constitutional and funding arrangements that will support the mayor and the combined authority to manage the investment fund. In particular, provision is made for the three councils to contribute to the funding of the mayor and combined authority’s activities in an arrangement where the councils are totally in the driving seat of any decision about the level of contributions.

In conclusion, this order devolves brand-new, far-ranging powers to the west of England, putting decision-making in the hands of local people and helping the area to fulfil its long-term ambitions. The draft order we are considering today is a significant milestone, contributing to greater prosperity in the west of England and paving the way for a more balanced economy and economic success across the country. I commend this draft order to the House.

My Lords, this part of the country owes a great deal to Conservative Governments. This is the third local government reorganisation that the Conservative Government have effectively imposed on the area in the last 40 years. We had the creation of Avon County Council in 1974, its abolition and replacement with a number of unitary authorities, and now we have the combined authority, while in addition of course we have an elected mayor in Bristol. It is an interesting case of an area being subjected to a number of experiments in local government.

As the Minister may have said, although I did not quite catch a reference to it, one council, North Somerset, ultimately declined to be part of the new organisation. It is interesting that the Secondary Legislation Scrutiny Committee has reported in some detail on the outcome of such consultation as did take place in the remaining three authorities. Bristol is a large and historic city with a population of around 400,000, and we also have South Gloucestershire and Bath and North East Somerset, with a total population of what I imagine probably runs to about 800,000 people, of whom something fewer than 1,700 responded to the consultation exercise—with rather different views. In Bath and North East Somerset, of those who did respond a small majority disagreed with the proposal to go ahead with the combined authority, but of course they were outvoted because the vote had been taken across the whole area by residents from Bristol and South Gloucestershire. In one sense there was a legitimate majority among the very small proportion of the electorate who voted.

This agreement is rather different from those we have discussed previously which have gone beyond the basic economic functions referred to here. There is definitely a good case for putting them together in any given area. In Greater Manchester, people are looking at health and social care as well as a whole range of issues that go further along the devolutionary model than this. However, I suppose that there is always the possibility of seeking further devolution in the future or, as is more likely, having it imposed upon them by the Government.

It is interesting to note that the pill, such as it is, is sweetened by the customary reference to additional funding over a 30-year period amounting to £30 million a year. This has been offered to a number of areas. It does not seem to alter very much in proportion to the number of residents in the area, or any other factor. It has to be seen against the background of what is happening to the finances of the local authorities that constitute the new combined mayoral authority. In Bristol, for example, an annual cut of £83 million a year was accumulated between 2014 and 2017. That will be doubled by 2020; that authority alone will lose £166 million a year from its budget and services. I do not have the figures for Bath’s losses to date, but it has projected a further loss of £37 million a year. South Gloucestershire had lost £56 million a year by the current year and will lose £27 million a year over the next couple of years. The total annual loss—annual cuts—imposed on these authorities, which are to be rewarded between them with £30 million a year, will be £280 million a year by 2020.

That is the background against which this wonderful devolution agenda is being progressed. It really is a three-card trick; I cannot find any other way of describing it. It is not to say that the bringing together of these authorities to work on strategic issues is not in itself valuable, but to describe this as a wonderful devolution of power is a grotesque misinterpretation, not by the Minister personally but by the Government as a whole, of the reality facing those councils and their communities under whatever system, mayoral or otherwise, they will have to live with. Frankly, the Government would do better to look at the main line funding of local authorities than by creating these structures with a fairly minimal contribution that in no way off-sets the problems they face.

Having said that, these Benches will not oppose the order. We cannot, because we have not tabled a Motion to that effect. This is a decision that has been taken locally. They think it is the best course for them and we have to accede to their view. The reality is that they will continue to suffer massively, notwithstanding the relatively small amounts the Government will provide by way of extra funding.

My Lords, the west of England has actually seen the strongest economic recovery outside London since 2008. Its economic output is reported by the Resolution Foundation to be 7% higher than its pre-crisis peak, while the output in many British cities has yet to return to pre-crisis levels. Its employment, at 76.8%, is higher than any other city region in Britain. That is the background to this combined authority order. I think that the order will enable the west of England to build on the success it has had in riding out the financial crisis—but we need to note that, according to the Resolution Foundation, rising house prices and rents are swallowing up the gains in living standards made from the strong economic performance of the three councils that comprise it.

I have three specific questions for the Minister. I understand that North Somerset has made a decision not to be part of the combined authority. However, given its very close proximity to Bristol, I have not understood how the transport investment decisions will be made and who will be responsible for what.

Secondly, will the Minister confirm that the powers of the mayor for the west of England combined authority will be the same as those of the other combined authority mayors in other places? The legislation is slightly different because it covers slightly different matters. Therefore, I seek assurance that the mayor does not have any form of enhanced power against a comparison with, say, Greater Manchester or any of the others.

Thirdly, the mayor for the west of England has the power to pay grants; there are other powers, but there is a specific power to pay grants. I would like to be reassured that the same involvement of the combined authority in reaching decisions and the same rights and powers for each council separately have to be considered by the mayor. In other words, this is not simply a mayoral order where a single person has an absolute power, subject to scrutiny and audit, to make a decision without the agreement, first of the combined authority and, secondly, of the constituent councils.

My Lords, as the noble Lord said just now, this new authority covers most of the area of the former county of Avon. As it turned out, my time in another place neatly bracketed the existence of the county of Avon. It came into being under earlier Conservative legislation in April 1974, a month after I was first elected, and it was abolished in 1996, a few months before I left the House of Commons —involuntarily, I may say.

The county of Avon always made administrative sense in governing the area that it did, but it was much disliked from start to finish, and unlamented when abolished. That legacy lingers and was reflected in the consultation responses. Governments muck about with traditional loyalties at their peril. I do not think that this change runs the same dangers to the same extent, but it will require first-class leadership—and it will flourish only if the constituent councils co-operate. It could provide vision and the potential to pull together forces, both public and private, for the good of our area and to help it to continue to flourish—which, as the noble Lord from the Liberal Benches said, it is doing at the present time. I wish it every success.

My Lords, I have a few questions for the Minister on this new authority. I support the concept of a combined authority, certainly in transport terms, for the whole area around Bristol and Bath. It is a great shame, as the noble Lord, Lord Shipley, said, that North Somerset is not there.

I start off with a basic question, as I live in Cornwall. Why is it called the West of England Combined Authority? What about the poor people of Cornwall, Plymouth, Devon, Torbay and the other bits of Somerset? Have they fallen off the edge of the map? The reason that I ask this question is that, as the Minister knows—because he kindly met us after this event that I am about to describe—his Secretary of State spoke at a conference of business people in Exeter in the autumn, and made it more than 100% clear that if any authority wanted extra money, it would have to have a mayor. The size of the authority did not seem to matter very much, so he was quizzed as to whether that could have been one region—I could almost call it a region if it included some of Somerset, all of Devon, Torbay, Plymouth, Cornwall and the Isles of Scilly—at one end of the spectrum, leaving aside whether it would ever be possible to elect a mayor for such an area, or the Isles of Scilly with a population of 2,500 on the other. The Secretary of State, however, was absolutely clear: if you want the money—and my noble friend Lord Beecham has made it clear that there is not very much money compared to what is needed, but it is still the same principle—you have to have a mayor. So, now that we have bits of the west of England going into a combined authority, perhaps the Minister could explain whether his version of the settlement that he kindly explained at the meeting—that you do not really need to have a mayor to get more money; you just have to be properly organised as a council—is the Government’s policy, or whether, somehow, the rest of the west of England, if it has not fallen off the edge, has to create one or more mayors.

My second question relates to transport. The Minister said in his opening remarks that there is money for transport. That is certainly necessary, because the area around Bristol and Bath has suffered from having several different authorities arguing—in my perception, slightly from the outside—about what should be done to whom and how. This is a major step forward in that direction, if they get the money. But who chooses which bit of transport gets the money and where? Is it just the mayor, is there any discussion about it or how does the process work? I notice in Article 8(2) that the combined authority or the mayor does not get the penalties for bus lane contraventions, so presumably they will not be enforced and we will continue to see the traffic jams that happen so frequently in Bristol and other parts.

I rather like the new Part 1, covering what can be done by this combined authority: “surface rail”, “bus ways”, “rapid transit”, “public highway infrastructure”, “bridges” and “flood defences”. That is an enormous list, especially as there have been floods in the next-door county of the rest of Somerset for several recent years. Is this just pie in the sky, or is there going to be some really serious money available to help fund these very important developments?

My Lords, I make my usual declaration as a local councillor and as a vice-president of the Local Government Association. I apologise to the House for not having made that declaration in the previous debate.

The order before us today creates, as we have heard, a West of England Combined Authority. I have no issue with the creation of combined authorities per se, and the order is standard in that respect and similar to those that have been agreed in many other parts of the country, all of which are going to the polls this May.

I shall confine my remarks to the report of the Secondary Legislation Scrutiny Committee, which raises a number of issues that the House will want some answers on. Does the noble Lord think that a sufficient level of support for this authority has been demonstrated? Does he regret that north-east Somerset decided not to implement the deal? The noble Lord, Lord Shipley, raised important points in respect of transport and how that is going to work. As he said, this is effectively the old county of Avon. Does the Minister agree that the period between 4 July and 15 August may not have been the best time to undertake a consultation and maybe some other time should have been thought of? Does he think that the feeling of some residents about not wishing to re-establish Avon, or the election of a “metro mayor” have been particular problems? I am conscious that this is not a huge area and Bristol has recently elected a mayor. Bristol now has its second mayor, so there will be two mayors in quite a small area. Having real levels of support for the new governance model is of course really important. What does the Minister think about the conclusion of the report of the Secondary Legislation Scrutiny Committee, at paragraph 9, about the level of support? Has enough support been demonstrated?

I want this to succeed. As my noble friend Lord Beecham said, we do not intend to oppose the order today and we obviously wish the combined authority success, but when some orders that come before the House do not have as much support as others, that is a matter for concern.

My Lords, I thank noble Lords who have participated in the debate on this draft order relating to the west of England. I shall try to pick up the points that were made.

The noble Lord, Lord Beecham, said that most of the local government changes that have happened have happened under Conservative Governments. That is probably because most of the time we have had Conservative Governments in this country, for reasons we all know. This is not being imposed, as he suggested. It is not being imposed at all. It is up to the relevant councils to agree to it. I wish they were all Conservative councils in places such as Teesside, Manchester and Liverpool, but that is far from the case. So this is not something that is imposed; it is something that those leaders and those councils have wanted.

Perhaps I might say gently that the Labour Party needs to make its mind up on whether it wants these deals or not. There did not seem to be much of a welcome, other than to say it will not oppose it. This has been carried out according to the letter, in every respect. Nevertheless, I will try to answer the points that have been made. I have the greatest respect for the noble Lord, Lord Beecham, and I am very fond of him, but he often appears to be, as I think I have said before, a Victorian undertaker praying for a hard winter. We had a somewhat dismal litany of points. There we are, counting the corpses as we speak. It is wholly misleading to compare the investment fund of £900 million over 30 years with our proposed overall finance settlement for local government, which is flat in cash terms for 2019-20. That is an invalid comparison.

The noble Lord, Lord Shipley, gave the order a warmer welcome. He referred to the strong economic performance of the area, which is absolutely right. He asked some specific questions, particularly concerning North Somerset—it is North Somerset that has decided not to participate, not north-east Somerset—and how this would be carried forward in relation to transport. The councils of the combined authority have given an indication that they want to work with North Somerset in relation to transport and many other functions. I anticipate that there will be a sort of associated status there. He also asked whether the mayoral split with the combined authority was the same as in other areas, such as Manchester and Liverpool. Each deal is bespoke but, mutatis mutandis, I think it would be the same sort of balance but with slightly different powers moving between the different bodies.

I thank my noble friend Lord Cope, who indeed gave distinguished service in the other place as Member for Northavon and recalls very well the days of Avon County Council, for his warm welcome for what we are seeking to do. I very much appreciate that.

The noble Lord, Lord Berkeley, broadly welcomed the concept of the mayor. Cornwall has status here because we have had devolution in Cornwall. I suppose it is a combined authority, as I found out, because it combines with the Isles of Scilly in this respect. The point made by my right honourable friend in another place in relation to money for Cornwall was not, as perhaps was faintly suggested, that you get more money if you sign up to a mayor. If you have a mayor, the powers that will be devolved are that much greater. The Cornish settlement does not involve the transfer of as many powers as this one.

Just for the record, the Council of the Isles of Scilly is not part of Cornwall or a devolved authority; it is separate.

So it is not part of the Cornish deal? In that respect, it could not be called the West of England Combined Authority because it is not combining with anybody so I do not think it can lay claim to that title. But I take the point, which was probably made slightly tongue in cheek.

Additional money was committed to Cornwall just last week—I know because I was the one who announced it—in relation to Cornish language and heritage, which I know the noble Lord would want to welcome. The point here is that added responsibilities will result in added money.

Not every devolution deal is in an urban area. Some deals are progressing in relatively rural areas, such as Cambridgeshire. I appreciate that the towns in Cornwall are perhaps not as large as Cambridge or Peterborough, but it is substantially a rural area. So there are rural areas that are interested in proceeding with this and we are very happy to talk to those that want to do so.

The noble Lord, Lord Kennedy, spoke about the timing of the consultation. I take the point that complaints are often made about consultations. It is difficult to get the timing precisely right. If I may correct one small point that I think he made, he said that all the elections are happening in 2017. I believe that, because of Doncaster, in Sheffield they will be in 2018 but that is a minor point.

If I have missed any points, which is always possible, I will pick them up in correspondence and write to noble Lords who have participated. This is something that the people of the area, through its elected councils, want. It will enhance what the West of England, an area of great success and great potential, is able to do. We should welcome the order and I commend it to the House.

We are very happy from these Benches for local government to agree arrangements that it is happy with—arrangements that can actually improve the service delivery in their area, bring economic development and grow and enhance that area. Our particular issue is the paltry level of funding provided for these authorities, as my noble friend Lord Beecham highlighted.

I thank the noble Lord for that clarification but, again, many Labour councillors and Labour leaders in areas such as Liverpool, where there are perhaps not so many Conservative councillors and leaders, must be taking a contrary view. They must see some benefit to this or they would not be proceeding.

Motion agreed.