Skip to main content

Levelling-up and Regeneration Bill

Volume 831: debated on Thursday 13 July 2023

Report (2nd Day) (Continued)

Amendment 61

Moved by

61: After Clause 78, insert the following new Clause—

“The Common Council of the City of London: removal of voting restrictions(1) In section 618 of the Housing Act 1985 (the Common Council of the City of London), omit subsections (3) and (4).(2) In section 224 of the Housing Act 1996 (the Common Council of the City of London), omit subsections (3) and (4).”Member’s explanatory statement

This amendment removes the restrictions in section 618 of the Housing Act 1985 and section 224 of the Housing Act 1996 on members of the Common Council of the City of London from voting as a member of the Council, or a committee of that Council, on matters relating to land in which they have a beneficial interest.

My Lords, the amendments in this group are all concerned in one way or another with devolution. To start, I beg to move government Amendment 61; I will also speak to Amendment 309. Taken together, they pick up a proposal made by my noble friend Lord Naseby in Committee about the voting rights of members of the Common Council of the City of London. Having considered the issue raised by my noble friend, the Government are of the view that there is merit in correcting the disparity that applies uniquely to members of the Common Council of the City of London, preventing them voting on housing matters when they are also tenants of the council. These government amendments will allow common council members to apply for a dispensation to vote, bringing the City of London into line with the disclosable interest regime that applies to all other local authority members via the Localism Act 2011. I commend them to the House and will be happy to respond to the amendment in the name of the noble Baroness, Lady Taylor, once she has spoken to it.

My Lords, for the last two years a very nasty, cruel war has been waged only two or three thousand kilometres to the east of here by the Russians who attacked Ukraine quite gratuitously under the orders of Mr Vladimir Putin, the President of the Russian Federation. He is a man who, I think everybody knows, identifies with the most imperialistic Russian traditions of former tsars such as Peter the Great and Catherine the Great.

We could have flinched from our responsibilities when this invasion took place but we did not, and I congratulate the Government on the strong line that they have taken in support of Ukraine and the good example they have set, which has been followed by many other members of NATO, in supplying vital arms to the Ukrainian forces. It is very important to respond to aggression because, if one does not, one will quite clearly have more of it.

My reason for speaking today is that there has been a very important meeting in Vilnius over the past few days in which the leaders of NATO have set out the kind of policy we should adopt in relation to Ukraine over the coming months and possibly longer. I am glad to say there has been a large measure of consensus and some important developments—very important is the fact that Sweden has now joined NATO. Sweden is an influential country, much respected throughout the world, and a great asset to us in this difficult situation.

The other countries—most recently France and Germany, in the last few days—have also agreed to supply new weapons, which is very important. The West generally has shown that it will not be ignored in a matter of this kind, which threatens the fundamental sovereignty of the peoples of Europe and the peace of our continent. We must always remember—we learned it in the 1930s, of course—that aggressors invariably come back for more, and what one must never do is give in to them. What is very important is that we do not conduct ourselves in such a way as to send a signal to Mr Putin that he can get away with invasion with impunity and that he can alter the frontiers of Europe quite deliberately at his own behest. That must never happen.

There is something personal that I should mention. If I am alive today, it is thanks in large part to the remarkable work of the medical profession. I pay tribute to all those who work in it, most particularly in the NHS. My father was a GP all his working life and was devoted to the founding principles of the NHS. My eldest son has volunteered for years with St John Ambulance, and he gives me graphic and often disturbing accounts of what life is like on the medical front line. The emergency intensive care and trauma teams at Nottingham’s Queen’s Medical Centre defied the odds when they saved my life after my near-fatal car crash three years ago. I am eternally grateful to them, together with the wonderful rehabilitation team in London, who got me back on my feet.

I am gravely concerned at reports of insufficient numbers of staff and hospital beds, plummeting staff morale, crumbling buildings and other problems which beset the NHS. The Government owe it to the country to do whatever is necessary for the health of the nation, and the time for taking urgent action on this matter is now.

My Lords, it is a great honour and privilege to follow a characteristically eloquent speech from my noble friend Lord Davies of Stamford. After so many years’ service in both Houses since 1987, we owe him a great debt of thanks for the work he has done for the people of this country and for our country. It is my great sadness that I have known him for only such a short time. I was appointed as his Whip just a few months ago. It is a great regret that we have not been able to get to know each other better during that time but, as my noble friend sets off on what I hope will be a long and peaceful retirement, I hope we can keep in touch. I thank him greatly for all the things he has done during his time serving the people of the country.

My Lords, I listened with much regret and enormous respect to the valedictory speech of the noble Lord, Lord Davies of Stamford. He served as Member of Parliament for Grantham and Stamford for 23 years—for the vast bulk of that time on behalf of the Conservative Party. It did not take long for him to make his mark in the other place, as was evidenced by the Guardian naming him parliamentarian of the year in 1996. The BBC named him Back-Bencher of the year in the same year.

The noble Lord served in the shadow Cabinet in the early years of the last Labour Government and demonstrated there his very considerable political and personal abilities. I remember how shocked and saddened his Conservative colleagues were at his decision to leave our ranks, but then how proud we were on his behalf and that of his family that his manifest abilities were recognised by his appointment in the Labour Government as Parliamentary Under-Secretary of State for Defence Equipment, a position he held for two years and one which I know he greatly enjoyed.

In your Lordships’ House, the noble Lord has been a doughty and persuasive debater, an assiduous support to his party and a most congenial parliamentary colleague. We wish him well in his retirement.

I thank the Minister for those words. I say to my noble friend Lord Davies that there is of course a special place in our hearts for those who see the light, and we are very pleased that the other side’s loss was definitely our gain. We too wish him a long and happy retirement.

Back to the levelling-up Bill—and I thank the Minister for clearing up the long-standing anomaly relating to the Common Council of the City of London—my Amendment 62 would require the Government to publish a draft devolution Bill setting out their plans for comprehensive devolution across the United Kingdom to empower all local authorities in a wide range of areas where we know they do not currently have the powers to act for their communities in the way that we know that many councils are keen to do. These powers could include a whole range of areas that would enable councils to support local economic growth and help to rebalance and equalise living standards, potential and opportunity across the UK to ensure that every area gives its residents the best chance of contributing to the post-pandemic, post-Brexit economy, and would bring some much-needed hope back to every corner of the UK.

The PACAC report governing England from last October set that out very clearly. The key question this raises is whether decisions are being made in the right place to provide effective government to the people of England. We found that the dominant reason for continued overcentralisation is a prevalent culture in Whitehall that is unwilling to let go of its existing levers of power. The trouble with the way that the levelling-up Bill deals with devolution is that it imposes the long arm of Westminster in selecting the chosen few who will benefit from additional powers. In many ways, that has the potential to add to the complexity instead of making the lines of responsibility and accountability clearer. Surely the devolution agenda has now demonstrated that decisions are best taken in the local interest—for local people, by their local elected representatives. That view was backed up in the Institute for Government’s recent report, How Can Devolution Deliver Regional Growth in England?, which argued that councils should have greater responsibility for transport, skills and planning to enable them to better support their areas.

The draft Bill would set out plans to ensure that the Westminster apron strings were untied for good and a new relationship of mutual respect and trust—of course, with the appropriate mechanisms for local accountability—could exist between government and local authorities. That would see an end to the expensive and wasteful bidding bingo to which local authorities are currently subjected just because they have ambitions to make things better for the areas they represent and their local people.

Additional powers could relate to, but not be limited to, housing; energy; childcare; transport, including buses and trains—we have an amendment on bus transport in a later group; and skills, training and employment. Many of those areas will require intense and effective partnership working, but councils are no stranger to that; the financial constraints that councils have been under in recent years have meant that almost nothing can be achieved without working across the public and private sectors and between all local agencies. This would require a new relationship of mutual respect and trust between local and central government.

I am sure that many of us hoped that the incredible, extraordinary response that local government delivered during the pandemic and in other recent crises, such as the cost of living crisis and the arrival of refugees from Ukraine, Syria, Hong Kong, Sudan and other places, would encourage the Government to think more broadly and deeply about devolution.

There was a powerful debate on local devolution in your Lordships’ House on 15 June led by the noble Lord, Lord Shipley. We have already seen the power devolution has to deliver better outcomes for people, places and communities as well as for the economy. A Bill setting out a plan for comprehensive devolution across our country, building on what we have learned already, rather than a piecemeal approach where Whitehall picks the chosen few and keeps them tethered with promises of further jam tomorrow, is long overdue. At the end of the debate on 15 June, we were pleased to hear the noble Lord, Lord Evans of Rainow, state:

“we recognise the importance of local democracy, and that devolution is essential for flourishing local democracy”. —[Official Report, 15/6/23; col. 2194.]

Devolution is a process, not a moment, and the country continues to see the model evolve and the benefits it brings. Let us take that on to its next steps and give local authorities all the powers and encouragement they need to do their best to deliver everything, everywhere, if not quite all at the same time.

My Lords, my name appears on Amendment 62 in this group. I am grateful to the noble Baroness, Lady Taylor of Stevenage, for referring to the debate I moved a few weeks ago on the importance of local government and of renewing it, reviving it and devolving more to it.

The problem is that the Government think that they are doing devolution within England, but they are not; they are effectively replacing with combined authorities, combined counties and mayoral combined authorities all the different forms we had of devolution, such as the regional development agency structure that we had until some 11 years ago. We have seen the problems caused by the fact that no comparable structure exists. The combined authorities are effectively doing spatial planning, strategic housing policy and strategic transport policy, but what we have not got is devolution to local government. The amendment moved by the noble Baroness, Lady Taylor of Stevenage, is terribly important; I could add to the list in subsection (2) of the proposed new clause—we could all do that.

Subsection (3) of the proposed new clause really matters. It states:

“The Bill must also include provisions for a new framework of cooperation between local authorities and the Government based on mutual respect”.

I think that is really important. What we have at the moment is an attempt by the Government to run England out of Whitehall, and it simply cannot be done with 56 million people in England; it must be done through devolved structures.

So far, with the replacement of the regional development agency structure, in practice what we have is now a hub-and-spoke model in which schools are effectively being run through a regional structure and, more and more in Whitehall, one can see structures being created which are its attempt to manage the delivery of services across England. Whitehall is undertaking the management of services—as opposed to the policy which underpins those services, which is the role of Whitehall in the main—when it should not be managing the delivery of the service.

That met a major problem with Test and Trace. You simply cannot operate something as big and fundamental as that centrally out of one of the Whitehall departments. I hope the Government will understand that this really matters. It is not just a question of fair funding, money or, indeed, powers in some areas but about a fundamental reset of the relationship between central and local government across England.

If there were to be a change of government, I really hope that I would hear from the Opposition Front Bench that they would keep to the commitments that they have prioritised, that the new Government would do the same thing by producing a devolution Bill within 120 days of being elected, and that that would

“include provisions for a new framework of cooperation between local authorities and the Government based on mutual respect”.

We are here having a preliminary debate about what might happen over the next two or three years, but I sincerely hope that the Government understand the seriousness of this situation. With all the funding problems there are now, I do not think the situation can last that much longer.

My Lords, Amendment 62 from the noble Baroness, Lady Taylor of Stevenage, seeks to place a requirement on the Minister of the Crown to publish a draft devolution Bill within 120 days of this Bill gaining Royal Assent. I understand and agree with noble Baroness’s desire to ensure that local authorities can request powers from central government. However, this is already possible for any principal council under our existing devolution legislation. Any such council could ask for functions to be conferred on it, and the Cities and Local Government Devolution Act 2016 provides that public authority functions can be conferred on local authorities by statutory instrument where the statutory requirements are met. These include consent from the local authority and approval from Parliament.

The devolution framework in the levelling up White Paper sets out our policy offer. It provides a comprehensive menu of options for devolution within a functional economic area or whole-county geography, underpinned by four key principles. The options are multifarious, whether that is moving towards a London-style transport system to connect people to opportunity, improving local skills provision, or being able to act more flexibly or innovatively to respond to local need. There is not a one-size-fits-all approach to English devolution, and areas will want to choose the right model for them.

There is no need for this to be set out in a new Bill: these functions all already exist in primary legislation and, as I said, can be conferred on a local authority via secondary legislation under the 2016 Act. I hope that that is of some help to the noble Baroness and that she will not feel the need to move this amendment when it is reached.

Amendment 61 agreed.

Amendment 62 not moved.

Amendment 63

Moved by

63: After Clause 78, insert the following new Clause—

“Fair funding reviewThe Secretary of State must publish the fair funding review within one year of the day on which this Act is passed.”Member's explanatory statement

The Secretary of State must publish the fair funding review setting out baseline funding allocations for local authorities within one year of the day on which this Act is passed.

My Lords, we have one amendment in this group, on the fair funding review. The review document was first published some time ago, back in December 2017. We are concerned that virtually nothing has happened in those five, nearly six, years to bring about its implementation.

We know that local government needs its core funding to have long-term security in order to make proper budgetary decisions and to ensure that it can meet all its obligations. So, the fact that reforms to local government funding have been delayed time and again is of great concern. We are particularly concerned now—we were initially told that they were being delayed until April 2023, but they now seem to be delayed beyond the next general election. For some authorities, the delay will simply postpone an inevitable reduction in funding, which is concerning in itself, but for others it could mean waiting up to at least two more years for funding to come close to catching up with their needs.

I stress that what we are talking about here is the critical core funding; it is not related to the other different pots the Government have for councils to bid and apply for. It is the central, critical core funding that councils receive.

What is the Government’s expectation about when these funding reforms will be implemented? Is it going to be in 2026-27? Is it likely, by any chance, to come in earlier, or could it even be later? It is important that local government has some sort of clear idea about when to expect it. Is the Minister able to give any oversight on the factors likely to govern and influence the timing of implementation? What kind of package of funding reforms is currently under consideration within the fair funding review?

Given that it has been quite a long time—more than five years, coming up to six—do the Minister and his department believe that the proposals which came out then are still fit for purpose? Are they flexible enough to deal with the shifts in available data and the different council service models that have come forward as a result of Covid-19? There have been quite a number of changes and responses to the pandemic.

We tabled this amendment because we feel that the Government need to act urgently in this area and to basically just get on with it. Our amendment would ensure that within a year of the passing of this Act, the Secretary of State must publish the fair funding review, which would include setting out the baseline funding allocations for local authorities. We believe this is necessary to bring to an end so much uncertainty for local authority budgeting and to allow our councils to plan and deliver the services our communities need. I look forward to the Minister’s assurances.

My Lords, my Amendment 66 would repeal Section 13 of the Elections Act 2022. Its aim is to reinstate the supplementary vote system for police and crime commissioners in England and Wales, the Mayor of London, combined authority mayors and local authority mayors in England. I said earlier today that there was an excess of centralisation in this Bill and other structures that have been created around combined authorities.

We are creating a very centralist structure based on a hub-and-spoke model out of Whitehall, in which fiscal powers are not devolved and the Treasury has major control over what happens locally. Given, however, that greater centralisation is occurring, and given the powers of individuals holding those positions, they should demonstrate that they have public support. It is not acceptable—whichever political party a mayor belongs to, for example—that they are elected with around one third of the vote in a first past the post system. I have never believed that, and I have spoken in your Lordships’ House before on this matter. You need to show that the individual charged with major responsibilities and powers actually commands public support. To do that means that they should command majority support. First past the post is simply not enough.

I do not intend to test the opinion of the House, but I would not wish this occasion to pass without repeating what I say quite frequently: you have to believe that democracy matters and that those charged with making major public investment decision command the support of their electorates.

My Lords, I wish to speak in support of Amendment 63, which I had understood was tabled in the name of the noble Baroness, Lady Taylor, but to which the noble Baroness, Lady Hayman, spoke. I speak having consulted with my colleague the right reverend Prelate the Bishop of Bristol, who has been doing some work in this area.

It seems entirely right and logical that the methodology used for allocating funds for a local authority is based on the most up-to-date information. As has been outlined, the current mechanism of allocating funds does not respond to local needs or local data and often seems to rely on data that is out of date. This will simply act as a barrier to the crucial role local government has to play in ensuring that people can receive the services and support they need, no matter where they live. These services, from collecting bins and filling potholes to providing much-needed support for low-income households and preventing homelessness—core business—have a considerable impact on the wellbeing and welfare of families and households who may be struggling to get by, and in turn affect the fabric of our communities.

We are all acutely aware that as pressure on council budgets grows, the demand for local services continues to rise. If levelling up is to be the mission that animates government to share prosperity across the country, it is vital that local authorities have the powers and funding from government to ensure that they can undertake the services that are so important for people in all our communities, especially those with higher levels of deprivation, and that they are ready to respond to unforeseen emergency crises such as the Covid pandemic.

A broader challenge facing local authorities which will make a difference in determining the success of levelling up is their ability to recruit staff, especially in planning departments. If we are to build more homes and improve our infrastructure, we need high quality fully staffed planning teams alongside neighbourhood and local plans. Again, this is part of core purpose. The fair funding review offers an opportunity to estimate the relative spending needs of different local authorities based on up-to-date information and more recent trends. I support this amendment as a way of increasing support for deprived communities whose welfare and wellbeing rightly has to be the focus of this Bill.

My Lords, the two amendments in this group apparently have little in common, but they do. Their common feature is that they are all about fairness. Amendment 66 in the name of my noble friend Lord Shipley is about fair voting systems. I obviously support his remarks about the importance to our democracy of having an electoral process and system that is seen to be fair to the electorate. As he rightly said, anyone elected with a third of the vote does not have the support of the majority of the electorate in their area. Fairness in voting is very important.

Amendment 63 in the name of the noble Baroness, Lady Taylor of Stevenage, and introduced by the noble Baroness, Lady Hayman of Ullock, is about fair funding. If levelling up—the name of the Bill—means anything, one element must be fairness across the country. This means fairness in terms of our democracy and fairness in terms of the financial support given to communities across England.

One thing we know is that our communities across the country vary considerably in their levels of inequality. As I have said many times during the debate on this Bill, the levelling up White Paper is full of information about how some people in some parts of our country are at a huge disadvantage because of the inequalities that they suffer as compared with the rest of the country. We have listed these inequalities before: in health, in skills, in access to public transport, in crime levels in their areas and in the quality of the housing and green spaces available. There is a plethora of examples of where some communities and the people who live in them are at a serious disadvantage because of those inequalities. At the heart of that are the councils that serve them. If councils have inadequate funding to provide the level of services that respond to the level of need, those inequalities will persist and get wider.

This brings me back to fair funding. As the noble Baroness, Lady Hayman of Ullock, said, fair funding has been a promise of this Government—a pledge, even—for six years, and rightly so. The national audit companies that do the external audits for local authorities make regular reports about the state of the whole local government system and its financial well-being. I read those reports because they are important; they give you an independent look at the state of local government. They say clearly that a number of local authorities in England will soon not be able to fulfil even their basic statutory responsibilities because they have inadequate finance. As the external auditors say, that is not because there is profligacy in the way the councils are run; it is simply because they have inadequate funds to fulfil their responsibilities. This could be because the areas have high levels of need and deprivation to respond to but it could also mean that they have historically inadequate levels of funding; that is why fair funding is so important.

I understand why the Government have been reluctant to fulfil a fair funding review. Unless there is a bucketload of extra money for local government finance, which I doubt, it will require a re-spreading of the same amount of funding for local authorities. This means that there will be winners but there will also be losers. I guess that is why the Government have so far failed to tackle this thorny issue. I accept that it is not easy but it is essential.

The cause of this is partly the base level of council tax that each authority can raise. Band D is supposed to be the average across the country. However, in my authority, it is band A+, if you like. In the council area that I represent, 66% of the properties are in bands A and B. They cannot raise the same levels of funding from council tax that others can. It also means that people who are living in very modest properties are paying high levels of council tax. None of that is fair. I come back to fairness and levelling up because, if levelling up is to mean anything, it must mean—I say it again—more investment in the very areas that the Government’s White Paper identifies. Those are the same areas that are underfunded in terms of their core funding with which to deliver essential public services.

I support Amendment 63 and urge the Government to put something into practice—to do something. Even if it has to be phased in, there must be a better approach to the funding of local government than we have currently. I will put the same pressure on the Labour Front Bench that my noble friend did. If Labour gets into government, will it do fair funding? It is vital because, otherwise, a number of councils will no longer be able to sustain basic services.

My Lords, as the noble Baroness, Lady Hayman, explained, this proposed new clause would require the Secretary of State to publish the fair funding review, which I take to mean the 2018 government consultation on fairer funding for local government, A Review of Relative Needs and Resources.

I hope to persuade the noble Baroness that publication of the review would not now serve any useful purpose. As I explained in Committee, the data on which the review was based are now historic. First, the review does not take into account the 2021 census and demographic data. Secondly, neither the data nor the consultation responses take any account of the events of the past five years, including, most significantly, the Covid-19 pandemic and the advent of high inflation. Both developments have profoundly changed our economic landscape. As the noble Baroness, Lady Taylor, has pointed out previously, using outdated information is a fundamental issue in today’s system. Publishing the response to the fair funding review at this point in time would not help us to fix this problem.

There are important questions about how resources should be allocated and about how and by whom local services should be financed. The noble Lord, Lord Shipley, made these points cogently in Committee. If we are to tackle these complex questions, which underpin levelling up, the way to do so is for the Government to consult local partners on the challenges that they are facing today, not to publish a review based on outdated data. We constantly hear the sector’s calls for stability, which is why I firmly believe that the right moment to work with local partners, as I have described, to consider any changes that might be needed is in the next Parliament.

I was grateful for the speech by the right reverend Prelate the Bishop of Chichester. It may be helpful to the House if I set out very briefly some of the things that we have tried to do to address the issues that he rightly raised. The final local government finance settlement for 2023-24 has made available up to £59.7 billion for local government in England, which is an increase in core spending power of up to £5.1 billion, or 9.4% in cash terms, on 2022-23. Over the last three spending reviews, between 2019 and 2024, local government has seen real-terms increases in core spending power. That reflects a conscious desire by government to maintain stability in local services.

The noble Baroness, Lady Pinnock, spoke of the inequalities that exist in a number of local authority areas. She was quite right to do so. The most relatively deprived areas of England—the upper decile of the index of multiple deprivation—will receive 17% more per dwelling in available resource through this year’s settlement than the least deprived areas. Millions of people in local areas throughout the UK will also benefit from the levelling up fund. The second round of the levelling up fund will invest up to £2.1 billion to 111 local infrastructure projects across the UK, which will create jobs and boost economic growth. In recognition of the differing abilities to generate income from council tax increases, we have equalised against the adult social care precept since its introduction and will continue to do this in 2023-24. The only other point I want to emphasise is that the Government remain committed to improving the local government finance landscape in the next Parliament and beyond.

I hope that the noble Baroness, Lady Taylor, will understand that I am not trying to be difficult; I just want to get us all to where we need to be in the most effective and sensible way. I suggest that this is not an amendment that the noble Baroness should press to a Division.

Amendment 66, in the name of the noble Lord, Lord Shipley, seeks to repeal Section 13 of the Elections Act 2022. The Government’s manifesto committed to supporting the first past the post voting system. Section 13 of the Elections Act implemented that commitment, changing the voting system for mayoral elections in England and PCC elections in England and Wales, and was approved by noble Lords just last year.

We remain clear about the merits of first past the post as a robust and secure way of electing representatives. It is well understood by voters and provides strong and clear local accountability. First past the post makes it easier for the public to express a clear preference; the person who is elected will be the one who directly receives the most votes. The change also reduces complexity for the voter and administrator. Repealing Section 13 alone would not automatically reinstate the supplementary vote system. It would instead leave a gap in the applicable voting system. Express provision reinstating the supplementary vote system would be needed to do that.

In addition, in practical terms, Section 13 of the Elections Act works together with a suite of statutory instruments which were also approved by your Lordships in 2022. Those statutory instruments made consequential changes to the rules for how mayoral and PCC elections are conducted, and to the ballot paper and other forms to ensure consistency with the first past the post voting system. Repealing Section 13 would therefore leave an incomplete and inconsistent legislative framework, which could lead to confusion for those tasked with administering elections.

I thank the Minister for his response. However, I would like to make a couple of points. I do not think he has addressed the fact that we still have this huge issue of funding not being fairly allocated. That is the whole consideration. I completely appreciate that the figures are different now and that things have moved on; the Covid pandemic changed the situation for councils. But how long will it be before further consultations and discussions take place? How long will it be before we have another proposal, and will that be looking at fair reallocation? This is something that has been promised to councils for an awfully long time, and it is frustrating that it is potentially going to drag on for years longer, because we still have that disparity of core funding.

The extra funding mentioned by the Minister such as the levelling-up funds is not part of what we are talking about in this instance. It does not deal with the fundamental problem of the long-term fairness of allocation of funds right across the board. The Government may say that they are giving a particular council some extra money or there is this bit coming in, but that does not deal with the ability of councils to know in the long term what kind of funding to expect and be able to budget and plan services accordingly.

Finally, the lack of fair funding, which means that many poorer areas have less money, is only exacerbated by council tax returns—richer areas tend to receive more because their properties are of a higher value—and this is particularly true for business rates, as poorer communities do not tend to have businesses that pay the higher rates of tax to local authorities. So, while I will withdraw my amendment, I really think that this needs to be considered in more detail.

Amendment 63 withdrawn.

Amendment 64

Moved by

64: After Clause 78, insert the following new Clause—

“Business improvement districts(1) Within 6 months of this section coming into force, the Secretary of State must launch a review of arrangements for business improvement districts (“BIDs”).(2) The review must consider whether the arrangements should be changed so that—(a) local residents are consulted on proposals to establish a BID,(b) local residents are represented on BID proposal groups which prepare the business plan,(c) local residents participate in the vote on the establishment of a BID,(d) local residents are represented on BID management bodies, and(e) local planning authorities may veto BID proposals if there is significant objection from local residents.”

My Lords, Amendment 64 seeks to amend the legislation on business improvement districts—BIDs—so that residents have a say in their establishment, policies and management bodies.

There has been widespread criticism of the undemocratic way in which BIDs are established and operate. The Government website says:

“There is no limit on what projects or services can be provided through a Business Improvement District. The only requirement is that it should be something that is in addition to services provided by local authorities”.

As a result, powerful local businesses can push through projects for their own commercial benefit, for which they are willing to pay. In my area, the Royal Borough of Kensington and Chelsea is happy to agree to them if they can be described as “improving the public realm”. Local residents may be affected by these projects—streetscape, street furniture, new advertisements and clutter, narrowing of the carriageway, unwelcome new parking and traffic management arrangements and other anti-motorist measures—but they cannot influence them.

I want to say a few words about two BID schemes in the borough in which I live. The Cadogan estate, for which I have the highest regard—it has done some great developments in Duke of York Square and Pavilion Road, for instance—has initiated and established two BID schemes. Following Committee, I have been asked by the chief executive, Hugh Seaborn, to re-examine the comments that I made about lack of consultation during that stage; I am grateful that he is reading our debates. Having reviewed the matter, I have to correct some of my comments. Residents’ associations—Brompton, MISARA and the local society, the Chelsea Society—were consulted by Cadogan but their views do not seem to have been taken into account in the final decision. In fact, they might as well not have been consulted at all.

I believe that the BID legislation should be amended so that local residents, first, are consulted on proposals for their establishment; secondly, are represented on BID proposal groups that prepare the business plan; thirdly, participate in a vote on the establishment; and, fourthly, are represented on BID management bodies. In addition, local planning authorities—LPAs—should be able to veto BID proposals if there are significant objections from local residents, not just if they conflict with a significant policy of that LPA.

The Minister’s response in a letter on BIDs was that

“the majority of BIDs set Baseline Agreements with their local authority to demonstrate the additionality it will provide over the term of the BID. The Government encourages the use of clear agreements and the fostering of strong ongoing relationships between BID bodies and their local authorities, to make sure each is aware of their obligations towards one another and to agree changes to such agreements where appropriate. The BID itself is responsible for deciding on the mix of representatives to ensure their Governance Board is an effective decision-making body with the right skills. The legislation does not preclude local authorities from being represented on the BID board, nor residents or members of the community”.

My reply to that would be that the Minister’s response did not answer the point. Indeed, the legislation does not preclude residents from being represented on the board of a BID, but what happens at present is that BID promoters make arrangements for their own commercial advantage and exclude resident representation as they know that the views of local residents will conflict with those of the business promoters.

My noble friend Lady Scott of Bybrook did not explain why she opposed the amendment. She said that local authorities are represented on some BID boards and reiterated that

“the legislation does not preclude residents … from being consulted”.

She also said:

“It is right that the businesses that will be required to fund the BID make the decisions on whether there should be consultations”,—[Official Report, 20/3/23; col. 1645.]

effectively concerning their undemocratic nature.

The Knightsbridge BID board of 19 people has one council officer and one RBKC councillor who does not represent any residents living in the area covered by the BID. I fear a repetition of the damage that has already been caused to Sloane Street, narrowing the carriageway so as to create dedicated parking bays and installing large, ugly planters to prevent ram-raiding. This is why I have tabled Amendment 64.

I also wish to speak to Amendment 65, which seeks to prepare a code of practice for major, non-statutory consultations by local authorities to ensure that they are impartial and not manipulative. Within six months of this section coming into force, the Secretary of State must publish a code of practice for major, non-statutory consultations by local authorities. The code must recommend ways to ensure impartiality, including, first, having a consultation conducted by an independent third party; secondly, having the consultation materials and process pre-approved by such a party; or, thirdly, having those materials and process submitted in draft to the main stakeholders for their review and comments in advance of the consultations. The Consultation Institute commends on its website The Art of Consultation, by Rhion Jones and Elizabeth Gammell, as:

“A unique book, essential to those involved with consultations … There’s a multi-million-pound industry out there, currently asking us what we think. Lots of this is public money and much of it is wasted. Whilst a great deal of consultation is effective, some of it is downright dishonest; decision-makers have already made up their minds. If they then consult, it’s a waste of everyone’s time; they are just going through the motions”.

There have been a number of examples of consultations by RBKC designed to endorse a project which the council has already decided it wishes to implement, with manipulative questions and no attempt at impartiality. One such was the RBKC consultation on the Cadogan Estate’s scheme to narrow the carriageway on Sloane Street so as to create parking bays outside its high-end designer shops, which will increase already high levels of congestion and pollution on the street and disfigure it with 52 ugly planters, believed to prevent ram raiding. This was taken up by the council and rebranded as a scheme to “improve the public realm”. Among the consultation materials—to give but one example—was a question on whether people wanted “more trees and planting”, which was welcomed as people generally like more trees, instead of separate questions about trees and planters, which might have seen the planters rejected. The request by the main local residents’ association that the consultation be conducted by an independent third party, failing which it sought the opportunity to review and comment on the consultation materials in draft before being issued, received no reply. I emphasise strongly that I am not criticising in any way the Cadogan Estate’s pursuit of its commercial objectives, merely the way in which the council chose to conduct its consultation.

During the debate in Committee, the noble Baroness, Lady Hayman, wondered whether existing Cabinet Office guidelines could help, and the noble Baroness, Lady Pinnock, said that she thought there were already guidelines for consultations by local authorities. I have discovered, unfortunately, that the Cabinet Office guidelines do not help because they refer only to consultations by the Government. There is a code of practice on publicity issued by local authorities, but this does not extend to consultations. There is some LGA guidance on the technicalities of conducting a consultation, but this does not address the issue of impartiality. I have asked the Consultation Institute whether it is aware of anything authoritative that does.

The Minister, the noble Baroness, Lady Scott of Bybrook, objected that a requirement for all consultations to be carried out by third parties would increase additional costs on local authorities. That is a fair point, so I have recast the amendment to include

“(c) having the consultation materials and process submitted in draft to the main stakeholders for their review and comment in advance of the consultation”.

I believe that option (c) would normally be the cheapest and most effective.

It should be noted that major non-statutory streetscape schemes such as the Sloane Street scheme can be every bit as contentious as and more significant than the vast majority of planning applications. However, streetscape schemes do not require planning approval. Everyone accepts that planning applications must, by law, go through a form of consultation involving the local community; the same should apply to major non-statutory schemes. I have not sought to define “major”—that can be left to the Government.

I have been asked again by the Cadogan Estate to say that a consultation on the scheme took place, with information being sent to nearly 13,000 properties, but only 1,170 responses were received. I beg to move.

My Lords, I thank the noble Lord, Lord Northbrook, for the two amendments in his name, which relate to a specific issue that he also raised in Committee. On the face of it, Amendment 64 is a general plea to make business improvement districts more responsive to the views of the residents that they affect.

The noble Lord, Lord Northbrook, has used as an example an area of London of which I know little, so I will not be able to respond or comment in any way on the specifics of that. However, on the generalities of business improvement districts and the amendment in the noble Lord’s name, business improvement districts play a significant role in economic development. They are a tool that local authorities can use to stimulate business enhancement in parts of the local authority district, so that is important.

Business improvement districts vary considerably across the country. Some, as my noble friend Lady Thornhill has told me, work very well, such as in her area of Watford. However, in some areas of the country they have been perhaps more disruptive and less effective. The noble Lord, Lord Northbrook, made a very important point about always taking local residents with you. That is important in a democracy: if you upset the local residents, I can tell you that they now have many tools by which to make their views known. I am really pleased that the noble Lord has brought the generality of business improvement districts and their relationship with residents that are impacted by them to the attention of the House in this Bill, along with the importance of always listening to local people and responding effectively to what they have to say.

I appreciate that in Committee the Minister was—how do I put this?—lukewarm in her response. I wonder whether today she could be tepid or warm in her response, because that would help resolve the issue that the noble Lord has identified. I am sure it will have to be replicated in other parts of the country, but not everywhere, because some BIDs work very well.

My Lords, I am very grateful to the noble Lord, Lord Northbrook, for bringing both these amendments forward. It enabled a lot of thoughtful discussion in Committee and again now on Report.

It is disappointing that there has not been adequate consultation on the particular BID and the programme that the noble Lord, Lord Northbrook, spoke about. I did some work in the Royal Borough of Kensington and Chelsea after the Grenfell disaster. The Grenfell disaster was literally the worst example of a council not listening to its residents. It had been told for many years of the concerns that residents had and had not listened to them. Of course, that has changed the way that many councils now listen to their residents—for example, through resident programmes. I had hoped that was the case there, but perhaps it is just this example where it is not. Let us be hopeful and optimistic that that is the case.

On these Benches we absolutely support the principle that residents should be engaged in key changes to their local areas, including business improvement districts. It is just as important that residents in an area are engaged as it is for the businesses participating in the zone concerned. We are in the process of a £1 billion town centre redevelopment in my area. Every step of the way, we have taken the trouble to consult extensively with residents. I look forward to hearing the Minister’s comments on how there may be some more specific consultation for BIDs and how the Government might further consider that.

In relation to the other amendment the noble Lord spoke to, in principle we fully support the full engagement of residents in decision-making, although we have some concerns about the financial implications of the proposals to compel the use of outside agencies. I think the noble Lord used the term third parties—that might be a different independent third party, and sometimes could be interpreted as outside agencies and consultants, which are notoriously expensive when they do this work on behalf of councils.

I draw attention to the report pulled together by the RSA and the Inclusive Growth Network called Transitions to Participatory Democracy: How to Grow Public Participation in Local Governance. It makes a number of recommendations on growing the engagement of local people so that you have a more sustained participation journey, rather than these out-of-the-blue consultations on planning and other things happening at decision-making points, in which people come to the table with a negative view right from the start. It is much better if people feel that they have more permanent engagement with their local authority.

The report recommends that these routes should be developed over time, strongly based on meeting people and local organisations where they are and not expecting them to engage on council territory. We need consultation to take place earlier in the process—so that people are engaged in the design of schemes or projects and they are not produced like a rabbit out of the hat for people to comment on—and never when decisions have already been taken. If you have already taken the decision, do not tell people that you are consulting on it because they will see through that straight away. That is really important.

This has been a very useful prompt to think these issues through. We look forward to hearing the Minister’s comments.

My Lords, Amendment 64 in the name of my noble friend Lord Northbrook concerns a review of business improvement districts. I have listened very carefully to this debate and the debate in Committee. We want BIDs to work with and alongside residents and members of the local community. It is important that the projects and activities that a BID delivers benefit the local area and encourage more people to visit, live and work there. Residents and members of the community are not prohibited in legislation, as I said in Committee, from being consulted on a new BID proposal. I know many BIDs that include many stakeholders, including the communities they serve. There is nothing to stop a local authority doing that.

It is clear that we need to explore how BIDs can work better with residents and communities, but I do not believe that legislating for a review in this Bill is the right approach. I therefore ask my noble friend to withdraw this amendment, but with my reassurance that I will take this away and consider the proposition of a government review of the BID arrangements. I would welcome further conversations with interested noble Lords to take this forward.

On Amendment 65, there is a statutory framework, and clear rules for consultation already exist in some areas, such as planning. There is also a statutory publicity code which is clear that all local authority communications must be objective and even-handed. There is support and guidance for local authorities on how they should do this. As I said, councils also carry out non-statutory consultations to allow residents to shape local decisions and plans.

I absolutely agree with the noble Baroness, Lady Taylor of Stevenage, that this should not be a one-off; it works much better when local authorities have a good ongoing relationship and conversation with their communities. It is then much easier to deal with issues such as those my noble friend Lord Northbrook raised in Kensington and Chelsea, because it is a continuation of an ongoing conversation. I encourage all local authorities to look at how they can do that better. Greater involvement for local people can be only a good thing. We do not think it is for the Government to tell councils how to do it. Most councils know how to do it; they know what works best in their area and get on with it.

I agree with the noble Baronesses opposite that the concern over the requirement for all consultations to be carried out by third parties is that it would impose additional costs on local authorities and may encourage less consultation and engagement rather than more because they just cannot afford it. I therefore hope my noble friend will agree not to press his amendment.

My Lords, I am most grateful to all noble Lords who participated in debates on these amendments. I particularly appreciated the offer of the noble Baroness, Lady Scott of Bybrook, to look at the way bids work to ensure better relationships with residents.

On Amendment 65, I appreciated the noble Baroness, Lady Taylor of Stevenage, talking about the costs of outside consultants. I was hoping that

“having the consultation materials and process submitted in draft to the main stakeholders for their review and comment in advance of the consultation”

would cover that point.

In the meantime, having thanked all noble Lords, I wish to withdraw my amendment.

Amendment 64 withdrawn.

Amendments 65 and 66 not moved.

Consideration on Report adjourned.

House adjourned at 5.16 pm.