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West Midlands Combined Authority (Functions and Amendment) Order 2017

Volume 782: debated on Thursday 30 March 2017

Motion to Approve

Moved by

My Lords, the draft order which we are considering today, if approved and made, will bring to life the devolution deal which the Government agreed with the West Midlands on 17 November 2015.

The Government have already made significant progress in delivering their manifesto commitment to devolve far-reaching powers and budgets to large cities in England which choose to have directly elected mayors. This House has now debated and approved a number of orders establishing combined authority mayors and devolving powers, including Greater Manchester, the West of England, Cambridgeshire and Peterborough and, more recently, the Tees Valley and the Liverpool City Region, for which the noble Lord, Lord Young, stood in my place.

I am very grateful to the House for the attention it has given to these matters. We are now nearing the end of the first stage of this devolution process, with one final order after those today which confers powers on those combined authorities with May elections to be considered—that is, Greater Manchester, which was at the forefront of the devolution process. We also have the draft Combined Authorities (Finance) Order, which we will turn to following this debate.

The order we are considering today will confer important new powers on to the West Midlands mayor and the combined authority as set out in the devolution deal, particularly on transport, housing and regeneration, air quality, smoke-free premises, places and vehicles, anti-social behaviour, and culture. The overall result is to create for the West Midlands arrangements which will materially contribute to the promotion of economic growth across the area, improve productivity, and facilitate investment and the development of the area’s infrastructure. Through this deal, the West Midlands combined authority will receive: first, a devolved transport budget to help provide a more modern, better-connected network, allowing the West Midlands to choose how to spend the money across the area; secondly, new housing and regeneration powers to provide a strategic local approach to tackling these issues in the West Midlands; and thirdly, control over an investment fund of £36.5 million a year for 30 years to boost growth and prosperity in the area.

The implementation of the devolution deal agreed between local leaders and the Government has already seen two orders made, having been approved by this House and the other place, in relation to the West Midlands. First, the West Midlands Combined Authority Order established the combined authority on 17 June 2016, with functions in relation to economic development, regeneration and transport. Secondly, the West Midlands Combined Authority (Election of Mayor) Order created the position of mayor for the West Midlands, with the first election to be held on 4 May for an initial three-year term. Second elections will be held on 7 May 2020, with elections subsequently taking place every four years.

Today’s draft order is to be made under the Local Democracy, Economic Development and Construction Act 2009, as amended by the Cities and Local Government Devolution Act 2016. As required by the 2016 Act, along with this order we have laid a report which provides details about the public authority functions we are devolving to the combined authority. The statutory origin of this order is in the governance review and scheme prepared by the combined authority, together with the seven constituent councils of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton, in accordance with the requirements of the 2009 Act.

The scheme sets out proposals for powers to be conferred on the combined authority, some to be exercised by the mayor, for funding and constitutional provisions to support the powers and functions conferred, and for the addition of a further five non-constituent members to the combined authority: North Warwickshire, Rugby, Shropshire, Stratford-on-Avon and Warwickshire. As provided for by the 2009 Act, the combined authority and the councils consulted on the proposals in their scheme. This was a public consultation which was entirely undertaken by the authorities concerned. They decided the approach, which was a matter for them.

I know noble Lords are interested in the consultation so will provide some further details. The local consultation undertaken by the combined authority ran for seven weeks from 4 June to 21 August 2016. In that time, 1,328 responses were received. Of these, 777—60%—agreed that the mayoral combined authority will promote more efficient and effective governance in the West Midlands. With regards to some of the specific functions covered in the deal and conferred by this order, 79% agreed with the transport proposals, 71% with the air quality proposals and 69% with the housing proposals. On all the questions asked, more people supported than opposed the proposals.

Following that consultation, as statute requires, the combined authority 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 considered the statutory requirements in the 2009 Act. He is satisfied that these requirements are met. In short, he considers that conferring the functions on the combined authority would be likely to lead to an improvement in the exercise of the statutory functions across the area of the West Midlands combined authority. He has also had regard to the impact on local government and communities. Further, as required by statute, the seven constituent councils and the combined authority have consented to the making of this order.

The detail of the draft order reflects the commitment in the deal that the mayor should take on responsibility for a devolved and consolidated transport budget and a key route network of local authority roads. This key route network of combined authority roads is identified in Schedule 1 to the draft order. It is clear that a lot of consideration and detail have gone into this network, and I congratulate the local area on the work that it has done in identifying this strategic network. The order provides that the mayor, with the assistance of the combined authority, will exercise the following powers over this network: powers to enter into agreements with highway authorities, Ministers and Highways England in relation to the maintenance of roads; powers to promote road safety and regulate traffic; powers to operate a permit scheme to control the carrying out of works on the combined authority roads; and powers to collect contributions from utility companies for diversionary works needed as a result of highways works carried out on the key route network.

More generally, the mayor will have powers to pay grants—in practice for highways maintenance—to the seven constituent councils of the West Midlands combined authority, with the condition that the mayor has regard to the desirability of ensuring that the councils have sufficient funds to effectively discharge their highways functions. The mayor will also exercise, with the assistance of the combined authority, compulsory purchase powers in relation to housing and regeneration—the same power as the Homes and Communities Agency has elsewhere.

The order also provides that the functional power of competence, already exercisable by the combined authority, is also exercisable by the mayor. The order confers various powers on the combined authority, in addition to its existing transport, economic development and regeneration powers. These are: powers to issue penalty charges in respect of bus lane contraventions across the area of the combined authority; powers and functions of the Homes and Communities Agency relating to improving the supply and quality of housing, securing the regeneration or development of land or infrastructure, and supporting the creation, regeneration or development of communities in the area, to be exercised concurrently with the Homes and Communities Agency; power to designate mayoral development areas, leading to the creation of mayoral development corporations, such as we are seeing in the Tees Valley; powers relating to air quality, which can support the creation of emission control zones; powers to be an enforcement authority in relation to the prohibition of smoking in premises, places and vehicles; powers to issue civil injunctions for anti-social behaviour on the bus and tram network; and powers to take a role in cultural activities, in both the provision and support of cultural events and entertainments in its area.

Finally, the order also provides for the necessary constitutional and funding arrangements to support the mayor and the combined authority, including the establishment of an independent remuneration panel to recommend the allowances of the mayor and deputy mayor. It also provides for the addition of five new non-constituent councils—North Warwickshire, Rugby, Shropshire, Stratford-on-Avon and Warwickshire—to the combined authority, to join the existing five non-constituent councils to the combined authority: Cannock Chase, Nuneaton and Bedworth, Redditch, Tamworth, and Telford and Wrekin.

I should be clear at this stage that the inclusion of non-constituent council members to the West Midlands combined authority is the model proposed by the local area, which considers that this is the most appropriate governance structure to deliver growth across the area of the West Midlands combined authority and indeed the wider region. Furthermore, the addition of these new non-constituent council members does not alter the area of the combined authority, which remains, as it always has, that of the area of the seven constituent councils of the West Midlands. These non-constituent members will be able to sit at the table of the combined authority, but will be able to vote in decisions only if the constituent members of the combined authority choose to involve them in this way. This is a progressive way to ensure appropriate governance and decision-making in the area. However, the Government are clear that devolution of powers and funding should be achieved only through increasing the number of full constituent members. Residents in areas of non-constituent councils do not vote for the mayor.

The order will come into force on 8 May, when the West Midlands mayor takes office, with the exception of the provision relating to the establishment of an independent remuneration panel, which will come into force on the day after the order is made, to enable the combined authority to make any necessary arrangements in advance of the mayor taking office.

In conclusion, this order devolves brand new, far-ranging powers to the West Midlands, 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 that will contribute to greater prosperity in the West Midlands and pave the way for a more balanced economy and economic success right across the country. I commend the draft order to the House.

My Lords, I thank the Minister for introducing this order. I find it refreshing that councils want to join the combined authority, as opposed to wanting to opt out of it. It is good to see the broadly positive outcome of the consultation, with some quite strong figures. It will be helpful to have the extent of the responsibilities and powers that are defined in the order, because they are not up to the same as other combined authority orders, so it makes it much easier to pile up the differences between combined authorities. It is also good to see in the order the checks and balances in the powers of the constituent councils, the combined authority and the mayor. They are quite complex, particularly in view of the number of constituent councils, but I think they are quite workable.

I want to ask the Minister a very specific question about the powers of the mayor and the combined authority, given that they have compulsory purchase powers and, of course, that the combined authority takes over the powers of the Homes and Communities Agency. I just want to be absolutely certain on the record that there is no involvement by the mayor or the combined authority in the granting of planning permission in any part of the West Midlands Combined Authority.

The Minister referred to the independent remuneration panel. This panel relates to the mayor and the deputy mayor of the West Midlands. I think that we are creating too many independent remuneration panels. The time has come for there to be a single, national system for England in the remuneration of combined authority members, elected mayors and councillors. It should not be difficult to construct a system; most other organisations have national schemes. I no longer understand why everything has been localised in the way that it has or, indeed, why there has to be a separate independent remuneration panel for the mayor and deputy mayor of a combined authority.

I want to make two final, very brief points. In the paragraph about the appointment of a political adviser, which I understand applies to all combined authorities, can the Minister clarify the meaning of “within proportionate resource”? A political adviser can be paid “within proportionate resource”, but I do not understand what it is proportionate to. It could be proportionate to the remuneration of the mayor or of the deputy mayor; it could be proportionate to the remuneration of those serving on the combined authority; or it could relate to the budget of the office or of the mayor’s office. We need to be clear about what that phrase means because it is the kind of thing that might cause difficulty later.

My final point relates to political balance. There are 28 members on this combined authority, which I find a welcome number because it means that there is support for the concept of the combined authority. First, I want to be clearer about the political balance of those 28 members to ensure that all interests are involved. In other places—for example, in individual councils—questions of political balance on the appointment of committees are required to be considered. I am slightly concerned that one may find a predominance of only one political party, or maybe two, on a combined authority. How will political balance be ensured, given the number of members on the West Midlands Combined Authority? Secondly, with regard to the scrutiny function, which is subject to legislation that has already been passed by your Lordships’ House, I just want to hear from the Minister that political balance will be ensured on the terms that have already been agreed and that there will be no difference at all in the West Midlands, given the importance that scrutiny is going to have in what is a comparatively large combined authority.

My Lords, I have not been involved in these matters before, but I am a member of the Secondary Legislation Scrutiny Committee and, during our earlier reviews, I have become aware of the questions about the extent of public consultation and the extent to which that consultation has favoured the Government’s proposals. My noble friend referred to that in his opening remarks; I think he said that 1,328 people had responded. That is a decent number, but we are talking about several million people in the organisation that we are talking about, so it is not a significant number statistically. Nevertheless, I welcome that more than half that number were in favour.

I happen to have had a regret Motion on a completely different matter that preceded the discussion we had the other day, about the combined authorities of East Anglia and the north-east, and I noted some of the concerns expressed by other noble Lords at that time. When the scrutiny committee had the West Midlands authority brought before it, I decided to look at it with slightly more care. I entirely appreciate and support the original concept of the urban West Midlands. I know that there are tensions between the Black Country and Birmingham, and so on, but nevertheless there is some cohesion. But when I saw what had been tacked on, I got out my mobile phone and googled the distance from Nuneaton, which is on the eastern end of the area, to Montgomery, which is just over the border in Wales and just outside the western end, and the distance is 96 miles. I did the same from north to south, and the distance is 106 miles. This is a very big area indeed, and I wonder what an authority which runs from the Potteries to the Cotswolds and from the M1 to the Welsh border is going to be able to do to hold this thing together and give it a sense of cohesion.

I understand about the urban West Midlands and the mayor elections taking place there in May. But with this very limited consultation in the first place, which brings in an entirely different type of society—rural, quite lowly populated—I wonder whether we are creating a structure that is really going to deliver what the people in those outlying, tacked-on areas are going to appreciate as a worthwhile and efficient use of local authority and indeed central government funds.

My Lords, on the question of remuneration for the mayor, I ask the Minister whether the Government have a particular figure in mind. He will be aware that the election of a mayor in the West Midlands has caused a little controversy in the area about the size of the salary. Indeed, I understand that a recent meeting of leaders of various local authorities recommended a figure of around £40,000, which is, understandably, a bit less than one or two of them earn themselves. Can we have an idea from the Minister, before he sets up the remuneration committee, what a sensible figure would be? Does he agree that that figure ought at least to be in excess—perhaps considerably in excess—of the salary of existing local authority leaders, given the wide area, as outlined in the previous contribution, for which the mayor would be responsible? Can the Minister give us some assurance that whoever is elected will be seen to be independent of government, so that if it is necessary for the mayor to take a decision contradicting the views of government Ministers, he would not, regardless of party, be subject to the sort of treatment that has just been meted out to the noble Lord, Lord Heseltine, who, because of his temerity in disagreeing with the Government’s philosophy, was hurriedly dropped from a particular government position despite his distinguished record? The least the Minister can do is to reassure the House that whoever is elected will be seen to be independent of government.

My Lords, the noble Lords, Lord Shipley and Lord Hodgson, both referred to the consultation process. I do not really want to make an observation on that, but consultations are wondrous things, are they not? They are often prayed in evidence. The figure that the Minister gave was, I think, that 777 people or thereabouts had agreed with the proposals. What that represents as a proportion of the West Midlands would barely be able to be determined on a quite sophisticated computer—it is a very, very small proportion of the population of the West Midlands. Having said that, I find myself impressed at the idea that as many as 777 people agreed with the proposal—when I for one find even these orders extraordinarily complex—and had weighed up these issues and thought that, on balance, it was a good system to introduce.

On the question of intelligibility—there are a lot of things that I am not keen on, including the point implied by my noble friend Lord Snape—let us get it down to punter level. I lived just outside the area, but for someone living in the West Midlands area who is faced with a problem involving housing, transport or jobs, is there a simple guide being proposed by the Government that tells them whether to go to their directly elected mayor—even though the people of Birmingham voted against a directly elected mayor, as we know well enough—or to one of the members of the combined authority or to one of the constituent boroughs? Any democratic system, in my book at any rate, needs to be as intelligible as possible, and I am not at all sure about this new structure. It took the Minister, who understands these things, 10 minutes of speed-reading to refer to just these orders. The punters need to know what they are buying.

That brings me to my last point: has anyone worked out the cost so far of reaching the stage that we are at now? I dread to think how much it cost to produce these documents before us—I imagine quite a bit of ministerial and Civil Service time, not to mention the time spent by the local authorities themselves, who have had to submit evidence and attend meetings. And of course there is the cost of these elections, when they take place in May. Some indication, along the lines of the request of my noble friend Lord Snape, would be helpful for us to know precisely what sort of figures we are dealing with.

I will briefly follow up on a couple of the points that have been made. I declare an interest in the sense that I live in the total area, as I live in Ludlow, in Shropshire. I will be amazed when the people of Shropshire wake up on 8 May and discover that they will be sending the combined authority what will be a few tens of thousands of pounds—they are not involved in the election of the mayor, because the mayor is only for the metropolitan county area, which is the old seven councils. I wish it well—do not get me wrong—but the noble Lord, Lord Hodgson, mentioned the variety of the area, and I think that we do need to exploit the assets of the area.

For example, there are 326 local authority areas in England, and their density of population varies from 9,000 people per square kilometre to well under 100 people per square kilometre—as it is in Shropshire. Of the 326, Shropshire lies at about 312; in other words, it is an incredibly sparse area. What that tells me is that it has land for development. We do not need to rip up the countryside to use the land for development, and therefore there is potential in this area—the motorway links are not brilliant, by the way.

I do not know what the local authorities will do about this. The bosses who run Shropshire are not very keen on factories coming into the area. I once raised the issue at a public meeting, as I think jobs and manufacturing are important. In the area of the old seven councils—where I lived and worked and I also represented the area, so I know what it is like—it is not easy to put a factory on a greenfield site. You cannot do that in the Black Country; you can use brownfield sites, but you are absolutely limited for modern, technological industrial undertakings and you cannot do it in the old way. I just want to put that on the record.

On consultation, I have not seen anything in the local papers about the effect of this. I remember that the issue of consultation was raised about three orders ago. I hope that we are not playing with fire, because the body is being set up and it will perform its functions from 8 May.

My final point is that, in the West Midlands, we miss figures of substance, if I can put it that way.

I think that the noble Lord will find that, because Shropshire volunteered, it was not consulted at all. The consultation referred to by the noble Lord, Lord Grocott, was about the West Midlands area. I do not think that there was any consultation in Shropshire at all; it was a volunteering effort by the Shropshire leadership. So I do not think that the people of Ludlow, where the noble Lord and I both live, would ever have had a chance to say anything.

That is right; it has not been commented on. It has not been an issue that has figured at all, and that is why I think it will be a bit of a surprise on 8 May.

My final point is that I hope that the new structure will generate some figures of substance. We miss in the West Midlands people of the stature of the late Sir Adrian Cadbury and the late Denis Howell, who were Midlanders who got things done. That is the one thing that has been missing in the West Midlands compared to the north-east and north-west, where figures of substance have emerged in a leadership role, which has transformed the communities. So in some ways I hope that—although I have not seen any on the horizon at the moment—once this new structure is up and running, such people will come forward.

My Lords, I welcome the order before us today and I welcome the combined authority. It is good news that the constituent councils have all agreed this, and of course there are also non-constituent members taking part in this new arrangement. I lived in Coventry for many years, so I can see the logic of, for example, Nuneaton and Bedworth being part of the combined authority, as that is very near there. However, I do not know the area of Shropshire as well as my noble friend Lord Rooker does.

The noble Lord, Lord Hodgson of Astley Abbots, has raised an important point, though, about the wider area. I will not get into this today, but I think that there is an issue about where are going with local government in England. No party has dealt with this, outside of London, and it is an issue that at some point someone needs to deal with. I am not sure that these patchwork arrangements are the solution.

It is good that the consultation was positive, although I take on board the point that the number of responses was still quite low. However, for some of the other orders that we have looked at, the consultation response was very negative. At least the consultation response on this order was supportive of it.

When the Minister responds, it would be useful if he could comment on the powers that the mayor will have under the order. Will the mayor have the power to dispose of public land at less than market value for use as social housing? In terms of the mayoral development corporation, can he confirm whether it will have that power as well? As he will know, we tried to get this issue resolved in the Neighbourhood Planning Bill in respect of London, but for all sorts of reasons, which I am not yet quite clear on, it never happened, despite it being suggested and everyone being in support of it.

Can the Minister also say something about powers? I am conscious that this combined authority has more powers than some authorities but fewer than others, such as Greater Manchester, which has powers over the police and the health service. How would this authority go about getting further powers? Were there powers that were asked for but were refused? I do not know, and it would be interesting to find out.

The noble Lord, Lord Shipley, made a very important point about the remuneration panel. The idea of an England-wide panel is sensible, rather than having lots of different remuneration panels. That seems a good idea.

Having said that, I am content with the order. I shall finish my remarks by saying that I wish the authority well and, whoever is elected as mayor, I wish them well in this important role.

My Lords, I thank noble Lords who have participated in the debate. I shall try to pick up the points made. I thank noble Lords for the generally positive way in which they want to take things forward, although there are some understandable concerns. I shall try to address the points in the order in which they were made.

Turning first to the noble Lord, Lord Shipley, I thank him very much for his comments on progress, on checks and balances and on the consultation response. As the noble Lord, Lord Kennedy, has just said, the response was much more positive than has been the generality and was perhaps the most positive of all such consultations. Positive responses outweighed negative ones on every single question asked in the consultation, in most cases by a significant margin.

In that regard, I happily concur with the noble Lord, Lord Grocott, about the intelligence of people in the West Midlands. In relation to the wider and very fair point that he made about an intelligible guide on how this will operate, in the department we are going to publish a plain English guide. I welcome that, because sometimes the language about how mayors and combined authorities will work is obscure and Byzantine. I hope that that guide will be helpful.

The noble Lord, Lord Shipley, rightly said that compulsory purchase powers are exercisable by the mayor. I can confirm, as he has raised the issue, that planning permission stays, as before, with the constituent councils. There is no change on that point.

I take the noble Lord’s point about the independent remuneration panels existing in isolation. Clearly, each authority is bespoke and they are different one from another, so one would expect the remuneration packages to be somewhat different. I shall take away the idea of having some way of cross-referencing the independent remuneration panels, so that we can both share experience and perhaps seek to keep costs down. That seems a sensible approach.

On the point that the noble Lord raised about the political adviser, within the mayoral office there is the capacity for a political adviser. That is paid for out of the mayoral budget, and we anticipate that the cost will be proportionate to that budget.

On my noble friend Lord Hodgson’s point about the scrutiny committee—it may have been the noble Lord, Lord Shipley, who made this point—there must be political balance on the scrutiny committee. With regard to the combined authority, there is no statutory requirement, just as in any local authority election. The balance is the balance as represented in the elections and the process that follows from that. However, there is a legal requirement that carries across to scrutiny committees of combined authorities in the same way as for other authorities.

On my noble friend Lord Hodgson’s point about the extent of the authority, I think that it is important to distinguish the combined authority, with its seven constituent members, from the larger area that he cited as stretching from Nuneaton to just outside Montgomery and from north to south. That larger area includes non-constituent authorities, which do not have rights to vote and do not participate in the mayoral election. They are part of the broader engagement because of the strategic interest that often arises in relation to transport, housing and so on. They are not tacked on in any casual sense; they are important for strategic concerns.

The noble Lord, Lord Snape, echoed the point about remuneration, which I have already addressed. He talked about how the Government would work with mayors. I share his view that it is important that we work well with mayors. The experience of the Government working with the Mayor of London has been positive—we have engaged with Sadiq Khan on a regular basis on issues such as housing and last week’s atrocity—and it has been a positive exercise.

I pay tribute to the work that my noble friend Lord Heseltine has done in my department. It was considerable. Of course, he was not elected in the same way as a mayor, as the noble Lord knew when he was making the point. However, I place on record the debt that we all owe to the work of my noble friend Lord Heseltine.

The noble Lord, Lord Grocott, talked about the fact that not that many people responded to the consultation. That is true. As we know, that has been the experience across the piece with consultations. One always wishes that more people did respond. However, 1,328 is at the better end in this area and, as I think that we have all agreed, 777 in favour—about 60%—was considerable. There were quite a lot of “Don’t knows” so those in favour considerably outweighed those that were against.

On the costs of elections—the costs, as it were, of democracy—I shall, as I often do, write to all who have participated in the debate. Of course these things come with a cost, and I shall try to answer. I do not have all the figures to hand. There are costs, but, as I have indicated in my response on the independent remuneration panel, we are trying to keep those costs sensibly down without prejudicing the importance of the process.

The noble Lord, Lord Rooker, also made some valuable points about the differences in the area that includes the non-constituent councils, such as Shropshire. Shropshire is very different from the densely urban parts of the area, such as Birmingham, Coventry and so on. I observe that the seven councils forming the constituent members are pretty heavily urban.

I share with the noble Lord the hope that a national figure of substance will arise from the elections, and I hope that Andy Street will be that person. We may not agree on that particular issue, but I look forward to the forthcoming elections.

How constituent councils decide who serves is a matter for constituent councils. It is usually the leader of the council, but there is no requirement that it should be. I have covered the point about the political balance on scrutiny committees. That balance is still there.

The noble Lord, Lord Snape, asked whether the Government have a view on mayoral remuneration. It would be inappropriate for us to have a view when we are setting up an independent panel on remuneration, but I share his view that this is a substantial role and I am sure that panel members will bear that in mind.

Finally, I thank the noble Lord, Lord Kennedy, for his general welcome—he always provides a general welcome—of what we are seeking to do in this area. I thank him for that and for acknowledging that the consultation was more positive than in some other cases. He asked whether other powers had been discussed with Birmingham, as had been done for Manchester. He is right that Manchester has had a bespoke deal that gives more powers; the powers are not uniform. As he knows, every combined authority is slightly different. I am unaware of any discussion on any other issues, but I shall cover that in a letter because I am not absolutely certain.

The noble Lord also asked about the power of the mayor to dispose of land. I think that that is in conjunction with the combined authority and subject to the normal rules of obtaining best value and acting intra vires. I shall also cover that in a letter to ensure that I am right on that point. I commend the order to the House.

Motion agreed.