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York and North Yorkshire Combined Authority Order 2023

Volume 834: debated on Wednesday 13 December 2023

Considered in Grand Committee

Moved by

That the Grand Committee do consider the York and North Yorkshire Combined Authority Order 2023.

My Lords, the purpose of this order is to implement the devolution deal agreed between the Government and the councils of York and North Yorkshire on 1 August 2022. Since then we have been working closely with those councils on implementation, and on 3 November 2023 they consented to the making of this order.

This order, if approved, will establish the new York and North Yorkshire combined authority and the office of mayor for the area, with the first election to take place on 2 May 2024. The elected mayor will then take up office on 7 May, with a four-year term ending after the next mayoral election in May 2028. Thereafter, there will be elections every fourth year, to be held on the ordinary election day for that year—that is, on the first Thursday in May. Following the enactment of the Elections Act 2022, these mayoral elections will be on a first past the post basis.

The mayor will be chair of the York and North Yorkshire combined authority, which comprises as constituent councils the city of York and North Yorkshire. The combined authority will be established on the day after the order is made, subject to parliamentary approval, which is likely to be before the end of the year. Until the elected mayor takes office there will be an interim chair of the combined authority. The combined authority will appoint one of its members as the interim chair.

The order also transfers police, fire and crime commissioner functions for North Yorkshire to the combined authority, to be exercised by the mayor. Additionally, the mayor and the combined authority will be conferred a range of other significant powers agreed in the devolution deal. These include a concurrent power with Homes England, powers on regeneration and transport, and powers for establishing mayoral development corporations. Education and skills functions, along with the devolution of the adult education budget, will be conferred on the combined authority at a later date, as agreed with the area. This is with a view to the area being responsible for skills and adult education from the academic year 2025-26. This is subject to the area meeting the readiness conditions and parliamentary approval of the secondary legislation conferring these functions.

The order also contains detail on the governance arrangements of the new combined authority, to reflect these powers and the role of the mayor. Each constituent council will have two members on the combined authority, one of these members being appointed by the mayor as deputy mayor. The mayor will also appoint a deputy mayor for policing and crime, who may be any person the mayor considers appropriate.

These governance arrangements include that the PFCC functions and certain other functions—including, for example, the power to designate a mayoral development area or to draw up local transport plans and strategies—are to be exercised by the mayor personally. The mayor may also delegate the exercise of these functions to another member or officer of the authority, with particular specified arrangements for the PFCC functions.

This order gives effect to the provisions of the devolution deal. I will briefly summarise these now. To improve the supply and quality of housing and facilitate the regeneration of York and North Yorkshire, the combined authority will be conferred powers for housing and regeneration, land acquisition and disposal. These powers will be exercised concurrently with Homes England, enabling the combined authority, working closely with Homes England, to promote housing and regeneration. The compulsory purchase of land will be a mayoral function and any decision will require consent from the York and North Yorkshire combined authority lead member whose local government area contains any part of the proposed land.

The order gives the mayor the power to designate mayoral development areas within the combined authority’s area to support the regeneration of strategic sites in the area of York and North Yorkshire. This designation is the first step in establishing a mayoral development corporation and a further order would be necessary to create such a body. The relevant powers concerning MDCs are conferred to the York and North Yorkshire combined authority, to be exercised by the mayor. These decisions will also require the consent of the respective York and North Yorkshire combined authority lead member whose council area contains any part of the designated area, and the North York Moors or Yorkshire Dales national park authorities if any part of the designated area sits within the national park.

The mayor will have control over a consolidated and devolved transport budget, with the power to pay grants to the constituent councils in relation to the exercise of their highways functions to improve and maintain roads. The mayor may pay grants to bus service operators for eligible bus services operating within the York and North Yorkshire area. Grants must be calculated in accordance with any regulations or methods made by the Secretary of State.

Police, fire and crime commissioner functions will be transferred to the York and North Yorkshire combined authority for exercise by the mayor. The order is clear that decisions around police and fire property, rights and liabilities are the mayor’s responsibility, and there remains a distinct police precept. All money relating to policing must be paid into and out of the police fund, and this money can be spent only on policing and matters that are related to the mayor’s PCC functions.

A new police and crime panel is also to be created, which will exercise broadly the same functions as a police and crime panel under the PCC model. The financial year of the PFCC is to be extended from 31 March until 6 May 2024 to rationalise accounting processes and avoid preparing additional accounts for the one-month interim period.

The order also includes constitutional provisions reflecting the powers conferred and the role of the mayor. There is provision regarding voting arrangements so that certain decisions exercising the functions conferred on the combined authority must include the mayor among the majority of members in favour of that decision. The order also provides for the establishment of an independent remuneration panel to recommend the allowances of the mayor and deputy mayor.

If the order is made, York and North Yorkshire will benefit from significant funding that was agreed for the area as part of the deal. The largest element of this is the £18 million of annual investment funding for York and North Yorkshire for the next 30 years. In total, this will provide £540 million to be invested in the area to drive growth and take forward local priorities. It also includes an additional £1 million to support the development of local transport plans, over £13 million for the building of new homes on brownfield land across 2023-24 and 2024-25, and £7 million to drive green economic growth, along with investment of up to £2.65 million on projects that support the area’s priority to deliver affordable, low-carbon homes.

As other combined authorities have shown, there is good evidence that devolution to geographies that reflect a functional economic area enhances economic performance, fiscal efficiency and policy delivery at both national and local levels. It can make government action more coherent locally and enhance local government’s contribution to solving problems in areas falling between individual policy fields. By conferring the powers on the new York and North Yorkshire combined authority, the provision of local services can be better aligned with locally determined priorities. This will all help the mayor and local leaders to drive economic growth and development for rural, coastal and urban communities across York and North Yorkshire.

I am keen to thank and recognise local leaders and their councils for all that they have done, and are continuing to do, to address local priorities and to support business, industry and communities across York and North Yorkshire, and for coming together to agree to this devolution deal.

Turning to the order-making process, 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 Section 105B report, which provides details about the public authority functions we are devolving to the combined authority, some of which are to be exercisable by the mayor. The statutory origin of this order is in a governance review and scheme adopted by the constituent councils in accordance with the requirements of the 2009 Act. The scheme proposed functions to be conferred on the combined authority, as envisaged in the devolution deal, and specified those which would be exercised by the mayor. The scheme also set out the governance proposals for the combined authority.

The councils of York and North Yorkshire consulted on the proposals in their scheme. The promotion of the consultation included a dedicated website, face-to-face engagement events across the region and widespread advertising. Responses could be made online or directly by email or paper. The consultation ran from October to December 2022, and a total of 2,500 people responded. The councils provided the Secretary of State with a summary of responses in March this year.

Responding to questions as part of an online survey, a majority—54%—supported or strongly supported the proposals for the governance arrangements for the new combined authority, including the election of a mayor for York and North Yorkshire. Specific questions on the powers to be conferred under transport, skills and employment, and housing and regeneration also received similar levels of support, as did the proposal for the transfer of police, fire and crime commissioner functions to a York and North Yorkshire mayor. On the question of finance functions, 49% of responses supported the proposals set out in the scheme.

In laying this draft order before Parliament, the Secretary of State is satisfied that the statutory tests in the 2009 Act are met—namely, that no further consultation is necessary; that conferring the proposed powers would be likely to improve the exercise of statutory functions in the combined authority area and would be appropriate, having regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government; and, where the functions are local authority functions, that they can be appropriately exercised by the combined authority. Furthermore, as required by statute, the constituent councils have consented to the making of this order.

In conclusion, this order, which is supported locally, is a significant step forward for York and North Yorkshire and its businesses and communities. It is key to the future economic development and regeneration of the area and will enable local leaders to invest effectively in, and address, local priorities. I beg to move.

My Lords, I remind the Committee of my interests as a councillor in the adjacent West Yorkshire area and a vice-president of the Local Government Association.

Devolving powers on local decisions to locally elected representatives has been an aim of the Liberal Democrats for a very long time. It is very important that there is strategic thinking and decision-making across regions and subregions. Perhaps the Minister will therefore expect wholehearted support from the Liberal Democrats for the proposals before us, but she will be only partially right. I will detail the reasons for that.

First, mayoral combined authorities have delegated powers rather than devolved functions. Functions such as transport, housing, regeneration and planning are currently exercised centrally and delegated to the mayoral authority with, as we heard, skills following later. This particular mayoral authority will be granted, from Westminster, the grand sum of £18 million a year, which is specifically referenced within the order, as is the offer from the Government, as part of this deal, of £540 million over the next 30 years, plus additional sums which the Minister referenced. There is no mention of whether these are fixed cash sums, as they appear, or whether they will be index linked. Over 30 years, that potential £540 million will buy a lot less than it will now and be a lot less attractive than it appears within the order. Maybe the Minister can comment on that and say whether it will be index linked.

I acknowledge that this order enables a greater degree of local input in, for example, determining major highways schemes. However, the act of creating a mayoral authority is not a game-changer for more locally determined decision-making, as would occur in comparable local areas across western Europe.

My second point is the loss of democracy. The proposal before us is for the election of a single person to represent the whole of the City of York Council and North Yorkshire Council. The elected mayor will chair the combined authority of the two councils. The Schedule to this SI confirms that two representatives from each of the constituent authorities are required, with a third person acting as a substitute member. No other existing mayoral combined authority that I can think of has so few constituent member councils. It will be interesting to see how effectively this arrangement works in practice. There will be five people making decisions for the combined authority, on these very important functions that have been referred to.

This is a bit of a leap in the dark because of the small number of councils and, therefore, the small number of members on them. My second question is will there be a review of these constitutional arrangements, say within three years, to evaluate its success or otherwise? I think that is important.

The extension of the mayoral model to very rural areas, when the model does not recognise the very significant differences with urban areas, makes this a bit of a leap in the dark. I do not know whether the Minister has been to North Yorkshire. I live next door to it, so I know North Yorkshire and it is a very rural area. It has a population of 615,000, in—importantly—an area of 3,340 square miles, of which 40% is designated as the national parks North York Moors and the Dales. It is huge. With the City of York Council, which deals with a population of 142,000, the mayoral authority will be responsible for just about three quarters of a million people in a vast rural area, from the coast of Whitby to the border with Lancashire, and from the border with Northumberland to the border with Leeds. It is huge. There will be a single person directly elected to take responsibility not just for the mayoral functions but, in this instance, for both the role of police and crime commissioner and fire and rescue, for this vast county and historic city.

Of course, this is too large a range of responsibilities for one person. The arrangements in this order therefore allow for the appointment of a deputy mayor, who will presumably be responsible for police and fire. The upshot of that arrangement is that there is no longer a directly elected commissioner for policing or an elected councillor taking responsibility for the fire and rescue service across this vast county and the city of York. The conclusion I reach is that the Conservative experiment of police and crime commissioners has failed; otherwise, there would still be a directly elected police and crime commissioner for North Yorkshire and the city of York. At the minute, they are going to be appointed. Can the Minister explain whether there is now a policy of gradually removing elected PCCs?

The order states the expected allowances for the mayor, which will be determined by an independent panel. The scale of remuneration packages for combined authority mayors is instructive. In West Yorkshire, the mayor receives £105,000 per year while the appointed—I emphasise that word—deputy mayor receives £72,000 for taking responsibility in West Yorkshire for policing, but with no direct accountability to the people whom they are there to serve. Do not say “scrutiny” to me because it is ineffective.

The order also allows for the employment of a political adviser. I would like some explanation of that. From what I know, those do not exist in other mayoral combined authorities within the orders, so that is an interesting addition here.

In conclusion, a strategic political and democratically elected role is important. However, we Liberal Democrats cannot condone this cynical approach to removing elected police and crime commissioners—they are elected with responsibility for the fire and rescue service—and replacing them with appointed political people where there is no direct accountability through the ballot box, which is the least that taxpayers can expect in a democracy.

Given all that, I look forward to the Minister’s response.

My Lords, I remind the Committee of my interests as a serving councillor at both county and district level. I am also a vice-president of the Local Government Association.

As a councillor for almost 27 years, a former leader of my council for 16 years, one of the instigators of the Hertfordshire Growth Board and a local enterprise board member since its inception, I am a great believer both in the transformational powers of local government and in far deeper and broader devolution. I see this, as does my party, as the quickest and most effective way of creating economic growth tailored to local circumstances, as well as of providing the levers of economic, social and environmental well-being where they can best be deployed flexibly, speedily and to the greatest benefit of the area concerned.

So, as a passionate advocate of devolution, it would be churlish of me not to welcome an agreement between York, North Yorkshire and the Government where all believe that it is in their interests. If I needed further convincing, it was pleasing to see that one of my local government colleagues—Councillor Mark Crane, the leader of Selby, who had always been deeply sceptical of such a deal for North Yorkshire—now welcomes the proposals; I am pleased to see that. I thank all the leaders and officials from that area who have done so much work to get this deal over the line. My comments concern the principles, with some specific questions about this deal, and are not intended to intervene in this two-year-long process between the councils in York and North Yorkshire, the people whom they represent and the Government.

We have seen highly effective outcomes from devolution in Greater Manchester—with which I worked extensively as part of the Co-operative Councils’ Innovation Network—and in West and South Yorkshire, but no one could argue that the progress of devolution has not been slower than a snail’s pace. It remains fragmented, patchy and piecemeal, with large areas of the country not subject to deals at all, even where they have worked carefully to draw together political, business and social partnerships, because they have clearly not passed the mysterious and indeterminate tests set by the Government. I cite Hertfordshire as an example here. I was very pleased to hear the Minister in the other place reiterate yesterday that a mayor is not the right solution for everybody, but it seems that, if your proposal does not include one, you are far less likely to shimmy under that government bar.

We would like to see a presumption in favour of handing back powers to our towns, cities and communities, with everywhere having the powers and flexibility to turbocharge the growth that works for their area and to attract investment, with the ability to negotiate longer-term finance settlements from government. That would give every area the ability to be ambitious for their residents and businesses and to deliver the real changes on the ground to deliver that ambition.

Too many areas are held back by our antiquated, struggling and definitely not fit for purpose local government funding system. It has been further weakened by years of cuts, use of outdated data that is out of touch with changes in local areas and, more recently, the further blow to finances caused by runaway inflation following the mini-Budget just over a year ago. To authorities in such straitened financial times, a devolution deal can bring some much-needed financial relief, so it is perhaps not surprising that local leaders are tempted. However, we need to see this in context. The York and North Yorkshire deal, for example, apparently equates to £20 per resident of the region per year over the term of the 30-year deal—incidentally, that is more than West Yorkshire but less than Liverpool, the Tees Valley and South Yorkshire, so I hope that local government colleagues working on deals are tough negotiators.

However, IPPR North tells us that the north of England has seen a £413 reduction per person in average annual council spending in each year between 2009-10 and 2019-20, so the deal does not come close to the losses that communities in the north have experienced due to austerity. Does the Minister see this as such a marvellous deal in that context? Is it envisaged that further money might be on the table as plans for the area develop? That was a bit ambiguous in the SI, so I am interested to know whether it is the case.

On the consultation process, I can see from the papers that extensive efforts were undertaken—which the noble Baroness, Lady Penn, went through—to elicit responses from the public on these areas, but does the Minister consider that just over 2,000 responses from a population of almost 1 million people represents a clear mandate? What work have the Government done with the Local Government Association on how we might improve these consultation processes in future? I appreciate that the structure of local government can be confusing, particularly in areas with two or three tiers of local government, but introducing changes of such magnitude on the basis of a mandate of just over 50% of such a tiny percentage of the local population surely suggests that we need more innovation in the consultation processes.

On general questions of governance, the Minister will be aware that we tried very hard to ensure that every place in the area would be represented on the combined authority during the levelling-up Bill, but that was not the outcome. Like the noble Baroness, Lady Pinnock, I remain concerned about so many powers being vested in one person. It has been the practice in mayoral authorities for mayors to appoint deputy mayors and for them not to be elected. This also applies to police commissioners. These are very important roles, so does appointment rather than election impact on accountability? This is especially the case if the mayor cannot fulfil their role, as it is then delegated to an unelected deputy mayor. Why do the Government consider appointment the best model here and, to go back to my earlier point, why do appointed deputy mayors enjoy a role on combined authorities which is denied to locally elected council leaders?

Have the Government given any thought, for example, to local public accounts committees to mirror their function in the other place? This would widen the scope of the police and crime commissioners, which, I agree with the noble Baroness, Lady Pinnock, have not proved terribly effective, and would provide joined-up accountability for the mayor.

We note that for this deal the adult education budget transfer is to come later than the introduction of the combined authority in May 2024. I appreciate that this has been agreed with the partners in this devolution deal, but with skills and training so essential to economic growth, why are they not an early priority for all devolution deals?

I have carefully read Part 5 of the order, which means the authority may introduce bus franchising if it chooses to do so. How would the Government, including the Department for Transport, support the combined authority if it chooses to exercise this power? Do the Government envisage any issues arising from the different transport roles of the mayor, the York and North Yorkshire Combined Authority and the constituent authorities in relation to local transport plans, bus partnerships and highways and traffic authority functions?

In July, the BBC reported that £1 million would be given to support the set up of the new combined authority in addition to £582,000 already spent. Can the Minister update the Committee on funding the direct cost of the combined authority after the inaugural mayoral election? That is not the money allocated for spend for the authority, but its direct set up cost.

In conclusion, we strongly support the principle of devolution to local areas and congratulate all local areas that have navigated the current complex system to get their deals over the line. We will certainly not be opposing a deal negotiated at local level, however we urge that the Government consider how they will accelerate the devolution process and how some of the questions that have come up under this deal and others are to be answered in future.

My Lords, I thank both noble Baronesses for their contributions. I will seek to address as many of their points as possible. First, it is worth recognising the in principle support for this deal and the process overall.

Like the noble Baroness, Lady Taylor, we recognise the work that has gone on among local councils, representatives and others in making this happen. To pick up the point about consultation, it is important to place that consultation in the context of the involvement of a great many people within the York and North Yorkshire area who are representatives of their communities and constituents. Given the diversity of the areas covered, the broad support for it among councils, MPs and others involved means the reach for how we have gone about agreeing the devolution deal process is not represented just by the consultation. However, I think we should always look at how we can better engage local areas and people as we go through this process of devolution, so we would always open-minded about how we can improve on that process.

I will address the other, broader point around the process of devolution about how far this deal goes in terms of delegation versus devolution and how much of the country benefits from either and should in future. We are absolutely committed to having every area that wants it benefitting from more devolved government. Since we set out our ambitions for this in the levelling up White Paper, we have moved at a faster pace than we would expect. I think that more than half of England’s population will be covered by a devolution deal.

We are also keen to reflect that devolution deals can work for rural areas as well as urban areas. The noble Baroness, Lady Pinnock, is right that this deal is in some ways a trailblazer for that. However, I do not think that that is a reason not to go ahead. If we want devolution to be available to every area of the country, we need to find the geographies and structures that work that mean that it can be extended.

The Government are going further: we have the two trailblazer areas of Greater Manchester and the West Midlands Combined Authority as regards moving towards that next stage, where you will get closer to a single settlement for the combined authority with much greater flexibility. Those are intended to be trailblazers for other areas that wish to go further in this process—so I think we agree on the direction of travel as regards those aspects of it as well.

To address a few of the other specific questions, the noble Baroness, Lady Pinnock, asked about the £18 million per annum. That is a cash sum and is not index linked; I hope that provides some clarity on that point. On the question about the provision for the appointment of political advisers, I am told that that is not novel and that it exists in previous combined authority and devolution deals, so it is not unique to this deal.

The noble Baroness also asked about a review of this deal or its outcomes. There will be an evaluation as part of the devolution agreement, as agreed with the Treasury. That is set out in the Explanatory Memorandum. This could cover the constitutional arrangements if needed or if the area wishes, as well as the financial and economic elements of the devolution deal that go alongside it. We would expect that to take place roughly every five years, so not within three years but around that timeframe.

The noble Baroness also asked about the function of the directly elected police, crime and fire commissioner and whether this is part of a process of replacing or removing them. The mayor is the directly elected police, crime and fire commissioner in this example. That model has been successful in London; it is also in place in Greater Manchester and other areas. The mayor is the directly accountable person for those functions but they also have had the ability to appoint deputies to help them carry out those functions. We have seen that model work well; it is not replacing or indicating a failure of the PCC model but integrating it into the wider devolution picture for someone directly elected and directly accountable for those functions. That makes great sense, as they have a greater ability to join up delivery on tackling crime and securing public safety. As I said, those functions were transferred to the mayor in Greater Manchester in 2017 for the PCC functions, and in 2017 the combined authority became the fire and rescue authority, with those functions to be exercised by the mayor. In West Yorkshire, the PCC functions were transferred to the mayor in 2021, so we see a similar process here.

The noble Baroness, Lady Taylor, referred to funding, addressing the point about cash and the broader context of local government funding. In recent years, local councils have received above-inflation increases to their core spending power, even taking into account higher inflation than anticipated. We recognise the greater pressure that local councils are under and remain in close dialogue with them on that.

I am sorry to interrupt, but government Ministers continually say that above-inflation grants have been provided to local authorities in the last year or so. However, for those local authorities that have social care responsibilities, the social care precept is an additional burden on council tax payers. It is not exactly the case that more money has been provided; it has, but the Minister should give the addendum that part of it is provided by an additional burden on council tax payers. In my local authority, it costs council tax payers £200 extra a year to provide for the social care precept.

I absolutely acknowledge the point made by the noble Baroness. I think I referred to an increase in core spending power, and my understanding of that metric is that it reflects the government grant, the council tax and the additional social care precept. I did not refer only to the government grant. I am sure she will be well aware that additional grant funding has also gone into social care over the last two years to reflect additional pressures in that sector.

I was simply making the point that, since 2019, I believe, above-inflation increases to the core spending power of councils have been made available. The terms of the devolution deal and the money attached to it are as set out. The noble Baroness, Lady Taylor, asked about further funding. I will not speculate on that, but I point out to all noble Lords that the Government have made significant amounts of funding available for levelling up through the levelling up fund, the towns fund and the future high streets fund. We are working to simplify that funding landscape, but there is an ongoing commitment from this Government to make funding available for local economic development and regeneration. We have seen that in the significant amounts made available in recent years and the ongoing commitment from the Government in that area.

I am conscious that I have not addressed a couple of the questions, in particular on transport, which the noble Baroness, Lady Taylor, asked. If both noble Baronesses will forgive me, I will write to them with further details.

Motion agreed.

Committee adjourned at 6.37 pm.