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Greater Manchester Combined Authority (Functions and Amendment) Order 2019

Volume 797: debated on Tuesday 2 April 2019

Motion to Approve

Moved by

My Lords, 10 orders have already been made in relation to the Greater Manchester Combined Authority. If approved by Parliament and made, this 11th order will be the next step in bringing to life the five devolution deals which the Government have agreed with Greater Manchester since 2014. It fulfils the commitment that the Government made to the combined authority in the first devolution deal, agreed in November 2014, that the mayor would have powers over bus franchising and smart ticketing.

As agreed by Greater Manchester, the order makes the mayor responsible for all operational matters relating to bus services. It will enable the mayor to fund and deliver improved bus services across Greater Manchester. This means that people will be able to see clearly who is responsible for changes to bus services and hold the mayor to account for this. It will also replace the existing Transport for Greater Manchester Committee with a new committee of the same name, chaired by the mayor and with representatives of all the constituent councils, to co-ordinate transport across Greater Manchester.

This order will be made, if Parliament approves, 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 provisions for the transfer of powers on concessionary bus fares from Transport for Greater Manchester to the combined authority, to be exercised by the mayor.

Before laying this order, the Secretary of State has considered the statutory requirements in the 2009 Act. He is satisfied that these requirements are met. In short, he considers that making the amendments to the combined authority’s powers would be likely to lead to an improvement in the exercise of the statutory functions across the Greater Manchester area. He has also had regard to the impact on local government and the identities and interests of local communities. Further, as required by statute, the 10 constituent councils, the mayor and the combined authority have consented to the making of this order.

I turn to the details of the draft order, which builds on the powers that were given to combined authorities when the Bus Services Act came into force. This Act gave mayoral combined authorities new powers to improve bus services in their areas using a range of options such as smart ticketing, bus franchising and partnership delivery models with bus operators. The order we are debating gives responsibility for those powers, which are currently exercisable by the combined authority, to the mayor. This also means that the mayor will be able to raise a precept to pay for these changes. Currently, the councils that make up the combined authority pay for transport through a levy issued by that authority.

In addition, the order transfers the concessionary travel power from Transport for Greater Manchester, which is the public body responsible for delivering transport services across Greater Manchester, to the mayor. Reimbursing bus operators in Greater Manchester for both mandatory and discretionary fares and subsidies currently costs £86.7 million, funded by the 10 constituent councils. This order means that the constituent councils will carry on paying for these fares and subsidies to fund bus services, but caps the amount at £86.7 million. If the mayor wants to provide further funding for buses, he will have to do it through his mayoral precept.

As this order transfers the exercise of bus powers to the mayor, new governance arrangements are needed for transport. The order allows for the establishment of a new Transport for Greater Manchester Committee, which would replace the current one, and permits the mayor to delegate most of his transport functions to this new committee. The order sets out the number of members that can sit on the committee and who can appoint members to it, and gives the mayor the power to appoint the chair or to chair the committee himself.

The order also makes some minor amendments to the constitution of the Greater Manchester Combined Authority. Currently, when votes are taken on constituent councils to provide additional funding to support the mayor in exercising his powers, the standard is that seven out of 10 constituent councils must consent for the motion to pass. The order brings into line with this standard three powers where currently a simple majority is required. These are: first, the ability to designate mayoral development areas and create mayoral development corporations; secondly, the ability to pay grants to the constituent local authorities; and, thirdly, the ability to prepare local transport policies and a local transport plan.

In conclusion, Greater Manchester has undertaken two consultations on the matters in this order. The first was published on 21 March 2016 and ran for six weeks, ending on 18 May 2016. It covered the introduction of bus franchising and making it a mayoral function. Of the 145 people who responded on bus franchising, 52 agreed with the proposals and 26 disagreed, while others gave no view. The second consultation also ran for six weeks, from 4 July to 15 August 2016. It included questions on the proposed funding arrangements for transport, including concessionary fares. It also consulted on the formation of a new Transport for Greater Manchester Committee. Of the 278 respondents to the section on transport, 183 were supportive of proposals, while 48 were not supportive, 30 neither agreed nor disagreed and 17 did not comment.

In short, when the order is approved and made—it has already been approved in the other place—it will drive real improvement in how the residents of Greater Manchester move around the region using buses, trams and trains in a truly integrated way. This integrated transport system, fit for the 21st century, will help drive growth across not only Greater Manchester but the whole of the northern powerhouse. I therefore commend this draft order to the House.

My Lords, I am very pleased to contribute to this debate. I represented one of the constituencies in Greater Manchester for 18 years, and served on one of its councils—Stockport—for eight years. Although I will make comments, ask questions and seek reassurances from the Minister, my view is that this Motion should be agreed. I am grateful to Transport for Greater Manchester for the briefing it has supplied to me and, I am sure, to other Members of the House.

It might be helpful, however, to remind noble Lords how we got here. The 10 local authorities have a history of vigorous rivalry stretching back more than 100 years: in sports, obviously, but also in civic matters—which is why we have an outstanding collection of amazing town halls, of which Manchester’s, which most closely resembles this building, is the one that your Lordships will be familiar with.

A less positive side of that history is that for many years, and in many places, zero-sum politics has been played between the different authorities. It is very much to the credit of the leadership of the local authorities in Greater Manchester that, over the past 15 or so years, zero-sum politics has been replaced by co-operation and joint working on an increasing scale.

The new working arrangements which have been developed, first in the local democracy Act 2009 and then in the moves by the coalition to start the combined authority on its current route, have been very much in response to co-operative working, rather than being pushed upon those councils. It is extremely important in implementing this order to retain that bottom-up push for devolution, rather than imposing a solution on any or all of the local authorities and civic societies. That requires the careful balance of different interests which is in place at the moment. This is very much admired, not just in the UK but around the world. Greater Manchester has a constant stream of visitors from other cities and regions asking how it was done and how they can emulate it.

I regret that in 2016 the new Conservative Government imposed a mayoral model, which makes some of this consensus working more difficult. However, in the policy framework we have at the moment, we have to get on with it and make the best we can of it. When the combined authority was set up, the 10 local authority leaders were unanimous in rejecting the mayoral model, which is why it did not come in in 2011, during the coalition period. The current Government, as well as imposing the mayoral model, has not always had a consistent view about what the outcomes should be. I was pleased to hear the Minister mention the northern powerhouse, but he skipped over the fact that the attempt by Greater Manchester Combined Authority to have a handle on the allocation of the Northern Rail franchise was not accepted; indeed, Transport for the North has also found it difficult to get the leverage it believes is important to make sure that transport investment goes to the right place.

The order gives important expanded powers—not just expanded functions but expanded powers of taxation. My questions, and the reassurances I seek, are very much focused on how the mechanics will work and how the admirable pattern of co-operation, joint working and decision-making that we have in Greater Manchester at the moment will be entrenched, emphasised and enhanced in the new order. Crucial to this will be, first, the operation of the mayor’s powers to appoint members of the new joint transport committee and, secondly, his capacity to delegate those decisions. There are two big issues there at the moment, and probably others as well: the whole bus franchising issue, and smart ticketing.

The joint transport committee clearly has to have broad geographical representation. It needs to have expertise and be representative of the various strands of political opinion and thought in Greater Manchester. It is important to look at that, but also at the actual delegation of decisions which are going to be handed to it. You clearly need people on the committee with local knowledge, and people who are able to evaluate—and possibly have a hand in agreeing—what the tax and precept-setting power should be and how it should be exercised.

That brings me to my first question on the big issue of the taxation trap. The £86.7 million is currently raised on a per head basis. Any additional precept will be raised on the basis of house value, through the council tax system. To quote from the brief provided to me by Transport for Greater Manchester:

“One of the effects of the above is that councils with a high council tax base relative to their population benefit from expenditure being financed through a levy or statutory contribution, whereas councils (and their council tax-payers) with a low council tax base relative to their population benefit from expenditure being funded through a mayoral precept. The effect of switching from a levy to a precept produces significant winners (e.g. Manchester) and significant losers (e.g. Trafford)”.

It might just as well have also added: “e.g. (Stockport)”. In other words, the power to raise the precept will have a differential impact on the different boroughs within Greater Manchester.

The formula is described in the paper as requiring the “unanimous approval” of the 10 councils for it to be varied. What is the mechanism for actually raising the precept as opposed to changing the formula? Will it be via the mayor’s decision-making? Will it be via the new joint committee by majority? Will it be via the new joint committee by unanimity? Or will it require all the councils to reach a unanimous decision? Who will call the shots in the decision-making that lies ahead?

Linked to this is a consideration of the make-up of the committee itself. The present oversight committee—the Transport for Greater Manchester Committee—has 33 members. Under the new order, a committee with the same name but extra powers will be reduced from 33 members to 23. They will consist of: a representative of each council, except for Manchester, which will have two; an appointment by the Greater Manchester Combined Authority, which sounds as though it would be a council leader chosen collectively; an appointment by the mayor, which could mean that the mayor himself or an appointee of his will chair it; and 10 appointments from a pool of councillors who would be from the 10 authorities and representative of the political opinion across Greater Manchester. To quote again from the briefing of TfGM:

“Such appointments must ensure that the political balance on the joint committee reflects the political balance of councillors across GM and will be made in accordance with the preferences proposed by the three main political parties. This will be reflected in the Operating Agreement which will be agreed by each District”.

The Minister mentioned the parallel change in the rules whereby in future a number of decisions which can be taken simply by a majority of councils will be subject to the seven out of 10 rules. I certainly welcome that as making sure that there is a broad consensus, but does he understand and agree with the importance of delivering the same element in this order as far as that committee is concerned? What consideration was given to making that process easier to deliver by retaining the membership at its existing size of 33, rather than 23, which would allow two councillors from each authority to be appointed and make the questions of proportionality and representation easier to meet?

The joint working and co-operation of local authorities across Greater Manchester has been hard won and is now a model which many others seek to copy and which some, such as those just across the Pennines, have sadly failed to achieve. In giving assent to this order, I hope that noble Lords will share in our belief on these Benches that its operation must enhance that joint working and in no way become a lever to return to the bad old days of zero-sum politics.

My Lords, I shall speak very briefly to this order to give it my strong support. I declare my interest as a resident of Manchester and in the light of the opening comments made by the noble Lord, Lord Stunell, I am also a former city councillor and a former Member of Parliament for the city. The people of Greater Manchester desperately want an integrated transport system across the area. The order is a further step in the right direction to achieve this by unblocking some of the logjams currently in the system. Its primary purpose, as the Minister has well explained, is the transfer of further powers to the elected mayor of Greater Manchester—Andy Burnham—particularly transport functions of the Greater Manchester Combined Authority relating to buses. This is in line with the devolution agreements in Greater Manchester, which specifically provided that any potential future bus franchising and/or smart-ticketing functions should be the responsibility of the mayor.

I wish to make three quick points. First, I welcome the establishment of the joint transport committee to cover Greater Manchester. I hope that this smaller group will bring a new, coherent focus on an integrated transport system across the area, covering not only the buses but the Metrolink light rail system and the region’s train services, with a particular emphasis on establishing a multimodal through-ticketing system, which is so strongly supported by all local people.

Secondly, we have heard some detail about finance, and it is pleasing that the 10 districts in Greater Manchester have agreed that all transport functions relating to buses that currently sit with the combined authority should become mayoral functions and the current expenditure level of around £87 million will continue to be paid by those councils. However, any additional expenditure on buses beyond that figure should be funded by the mayor through the transport precept or other resources available to the mayor. I believe that this should underpin the cost of new bus passes for 16 to 18 year-olds, which are about to be piloted and then rolled out for all 16 to 18 year-olds for the future. However, the amount of the precept does not form part of the constituent districts’ budget, and the mayoral precept itself will be subject to its own referendum triggers—perhaps a topic we should not pursue on this occasion.

Thirdly, the Bus Services Act 2017 allows an assessment of a proposed franchising scheme. While this is not full reregulation of the buses, which London benefits from, it is clearly the best option available in the circumstances. The order facilitates the franchising option, and I now hope that the mayor, Andy Burnham, will grasp the opportunity and see it as a vital step in the overarching aim of delivering the integrated transport system that the people of Greater Manchester dearly want.

My Lords, I draw the attention of the House to my relevant registered interest as a vice-president of the Local Government Association. Like my noble friend Lord Bradley and the noble Lord, Lord Stunell, I very much welcome this order. It is another part of the transfer of powers to the northern powerhouse, to the mayor of Greater Manchester, Andy Burnham, and to the combined authority. It will be able to deliver bus franchising, smart ticketing and the multimodal ticketing system that my noble friend talked about.

I was involved in the passage of the Bus Services Act through your Lordships’ House and I am very supportive of bus franchising; the mayor will be able to set the fares, the routes and the timetables and the bus companies can then deliver those services. I think that is a very good way forward and I endorse what my noble friend Lord Bradley said: I hope that the Mayor of Greater Manchester will be able to move forward and introduce bus franchising, which is what people want to see locally.

The noble Lord, Lord Stunell, raised a number of questions I was going to raise, so I hope he will get a response. They were about the taxation trap—we clearly have the same briefing—and the issue of the oversight committee, so I look forward to the comments of the noble Lord, Lord Bourne, on those matters and on the question raised by my noble friend Lord Bradley about bus passes for16 to 18 year-olds. I shall leave the matter there because those points have been raised. As I said, I very much support the introduction of the order, like the other noble Lords who have spoken.

My Lords, I thank the noble Lords who have participated in the debate on this important SI. It is worth noting that in the other place there was just one contribution from the Official Opposition, which welcomed the SI and commended the Government for acting very quickly in bringing it forward following the request from Greater Manchester. I am very grateful for that support in the other place.

The noble Lord, Lord Stunell, rightly referred to the civic pride and sense of togetherness in Manchester, and the rivalry between some of the boroughs and authorities that now make up the Greater Manchester Combined Authority. All that is absolutely true—I was in Manchester recently and saw the strength of the Manchester area. Of course, we were all very conscious of that at the time of the dreadful terrorist attack on the Manchester Arena—the sense of coming together in the area was very strong. I was there recently to launch the ESOL funding programme. There was a very good bid from Manchester and I was very conscious, again, of the sense of coming together and civic pride.

The noble Lord, Lord Stunell, also asked about financial arrangements, particularly in relation to the mayoral precept. It is the position that the mayor makes proposals which can be overturned by a two-thirds vote, which is a veto of seven of the 10 authorities. The noble Lord went on to ask about measures in relation to oversight in this committee. It is a streamlined committee, a fact welcomed by the noble Lord, Lord Bradley, for which I am very grateful. The order reflects the request for flexibility on the membership of the committee. Greater Manchester asked for the reduction to 23 members, and based on what the noble Lord was saying about responding to the bottom-up approach and sensing what is important in the area, we went along with the request. We judged that it is reasonable and will lead, as the noble Lord, Lord Bradley, said, to more streamlined decision-making. I think it maintains—not in the same proportions, I accept—some of the checks and balances that are needed.

I am grateful to the noble Lord, Lord Bradley, for saying that transferring powers to the Mayor of Manchester is a step in the right direction. Although the mayor is not of my politics I think that people locally recognise that he has been doing a good job and giving some sense of direction to Manchester. That is a good thing and it is true of all our metro mayors. It is something we should welcome widely and, as the noble Lord rightly said, it opens up possibilities in relation to the franchising schemes and so on as well. I confirm that I think it does underpin the costs of the young people’s passes in relation to the financial settlement.

I am grateful to the noble Lord, Lord Kennedy, for the welcome he gave to the order; he reiterated some of the questions I hope I have dealt with. This is an important part of the suite of powers that were promised to Manchester: we have been listening to the people of Manchester and responding to what they have asked for, and this represents another step in that journey. I am very grateful to the support given by noble Lords and I beg to move.

Motion agreed.