Cities and Local Government Devolution Bill [HL]

House of Lords, 29 June 2015.

Committee (3rd Day)

Lord Shipley (Liberal Democrat)

My Lords, Amendment 42A concerns media and public access to meetings, addressing issues around the right of the press and the public to have access to the meetings of combined authorities. Existing statutory requirements enable the press, the media generally and the general public to attend, view or listen to council meetings, council committee meetings and council sub-committee meetings. These regulations are well understood in terms of their requirements and their spirit. Alongside the right to attend meetings, there are rights to receive advance notice of meetings, to see agendas in advance and to inspect relevant documents.

This amendment seeks to ensure that those rights of access cannot be diminished in the case of combined authorities. It requires reasonable access to be ensured and, in subsection (2), acknowledges the need to ensure that commercial confidentiality is protected and for officials to feel able to give essential advice to those who are charged with making decisions. Both criteria are, of course, within the existing regulations for local government.

Why, therefore, does the Bill fail to make any mention of an obligation on the mayoral authorities which it creates to meet in public? Members of the public and the media currently have a general right to attend council meetings, including those of the local authority executive or the cabinet and their committees. They also have the right to film, audio-record, tweet or blog from those meetings. These rights are primarily set out in the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 and the Openness of Local Government Bodies Regulations 2014. Given the freedom that the Secretary of State will have to set up the new authorities by ministerial order, there is great potential for them to be watered down unless the rights of the public and the press are protected by being placed firmly in the Bill.

Given the importance of overview and scrutiny committees, will the Minister tell us the intention behind Schedule 3, which contains an enabling power allowing the Secretary of State to block disclosure of information to an overview and scrutiny committee and to determine what material it, in turn, can put into the public domain? This amendment seeks to address these concerns. I look forward to the Minister’s confirmation that there will be no diminution of the right of the press, the media generally and the public to attend meetings of combined authorities as they currently do within local government.

Lord McKenzie of Luton (Labour)

My Lords, we are fully committed to openness and transparency in the proceedings of local government and have already moved amendments to that effect. However, as the noble Lord, Lord Shipley, said, we need to be sure that nothing in or arising from the Bill could dilute or disapply existing public rights of access to meetings, records and related documents. The noble Lord has also posed a pertinent question on Schedule 3.

There may be a lack of clarity over the precise circumstances envisaged in subsection (1)(b) of Amendment 42A concerning,

“leaders of a combined authority”.

Presumably, the provision applies when they are meeting as members of that combined authority rather than otherwise. Perhaps that needs clarification. We have generally argued for dealing with matters on the face of the Bill, so we look forward to assurances from the Minister that the issues raised here are already covered. To the extent that they are not, we will work with the noble Lord, Lord Shipley, to fill any gaps on Report.

Lord Storey (Liberal Democrat)

My Lords, this amendment is in my name as well. Yes, it is important to have powerful leadership in metropolitan areas, and yes, it is important that we have transparency. In my own local authority in Liverpool, the elected mayor, in his infinite wisdom, has decided to do away with scrutiny, so there are no scrutiny committees at all. That should not happen in this case, so it is very important to clearly make the point that not only should there be transparency in all actions under the new arrangements but, where papers are relevant, the papers should be freely available to

the general public—to the electors—and, where possible, those electors should be allowed to attend those meetings if they wish. If we do that it will give people real confidence about the new arrangements. They will feel that the arrangements are transparent and democratic and, above all, that nothing is being hidden from them behind closed doors.

Baroness Hollis of Heigham (Labour)

I, too, support the amendment tabled by the noble Lords, Lord Shipley and Lord Storey. I declare an interest. As I am sure Members of your Lordships’ House may know, I was leader of Norwich City Council, but also I was a member of the Press Council for a number of years under Louis Blom-Cooper. So I come at this from both ends.

At no stage in my time on the Press Council do I recall receiving a complaint about the regional press because it was accountable to its local community for everything from advertisements to news, from fetes to weddings, funerals, baptisms and the like. All the complaints that were sensitive or difficult were about the national press, which was essentially promiscuous in the 19th century sense of the term as it was not accountable to a readership, which fluctuated from day to day and of which it had no intimate knowledge. So the regional press served its community in a way that the national press did not, and served it faithfully.

When I was leader of Norwich council an issue started boiling up while I was in Australia. The Eastern Daily Press would not run with the story until it had contacted me in Australia to get a countervailing view. That would have been unthinkable with the national press. That is why the amendment is so important. If we do not support the amendment and encourage the regional press to scrutinise mayoral and other meetings, as it does meetings under the existing local government structure, I fear that reportage of local government, much like reportage of court proceedings, will die on the vine. Twenty years ago we could expect our court proceedings, local council meetings and some of the important committee meetings to be reported. The press would expect to be briefed on them in advance. What we get now—in national newspapers as well—is sketches rather than reports of debates.

Political coverage is shrinking in this country because it is not regarded as sufficiently amusing for people with only 30 seconds’ attention span. The regional press has held on, trying to make both Westminster and local authorities accountable and transparent to the members of their community, to whom it also feels accountable.

At the moment, the leader of a local authority will be monitored by his or her group, the opposition or the press and also by the chambers of commerce and local pressure groups and lobby groups such as the local branch of Age UK, the National Rheumatoid Arthritis Society or whatever, for example, on access to buildings. There must be stringent protection of the right of access of the press. We must not accept one person’s view of what counts as confidential or private, or what he or she would rather was not made public because it might be faintly awkward or embarrassing. Without that protection, I fear that the regional press

will continue to opt out of the coverage that we absolutely need if we are to grow a healthy democracy in our localities.

Lord Brooke of Sutton Mandeville (Conservative)

My Lords, as the speeches so far have come from the opposition Benches, I gently remind your Lordships’ House that the first legislation to allow the general public to attend council meetings in committee was introduced by my late noble friend, Baroness Thatcher. I would not wish my noble friend the Minister to feel lonely at this moment. It is a notable piece of history to which I allude. The Minister for Housing and Local Government at the time was my late noble kinsman, Henry Brooke, who encouraged the new Member of Parliament for Finchley to become involved at an early stage in introducing legislation. It was her first legislative achievement, and he sat on the Front Bench throughout when she took the Bill through the House. I would not wish the metaphor to be misunderstood, but it was a good case of picking out a dark horse before it got into the limelight.

Baroness Williams of Trafford (Conservative)

My Lords, Amendment 42A seeks to insert a new clause regarding access for the press and public to combined authority meetings. Whatever the whys or wherefores of the press’s engagement with council meetings, I am happy to confirm that legislation already exists on these issues. As my noble friend Lord Brooke has pointed out, the Local Government Act 1972 provides that all meetings of a combined authority must be open to the public except in limited, defined circumstances.

A meeting of a combined authority, as with other council meetings, may be closed to the public in only two circumstances: if the presence of the public is likely to result in the authority breaching a legal obligation about the keeping of confidential information; and if the authority decides, by the passing of a resolution of its members, that exempt information—for example, information relating to the financial affairs of a particular person—would likely be disclosed.

The Conservative-led coalition Government made new regulations in 2014 to make it absolutely clear that a combined authority is required to allow any member of the public or press to take photographs, film, audio record and report on all public meetings. This openness helps to ensure that combined authorities are genuinely accountable to the local people they serve. It also ensures genuine transparency in this digital age, where our democracy can be enhanced by the use of social media and blogging to communicate widely and, as the noble Baroness, Lady Hollis, said, to capture the market that does not want to spend more than 30 seconds reading such matters.

These requirements apply equally to any committees or sub-committees of a combined authority, including any overview and scrutiny committees. Sub-section (1)(a) of the proposed amendment refers to a meeting between a mayor and the relevant combined authority. I should clarify that the mayor will be a member of the combined authority—indeed, will be the chairman—so such a meeting would simply be a meeting of the combined

authority and is covered by these rules. Similarly, a meeting of the leaders of a combined authority, if I understand the noble Lord’s meaning, will be a meeting of the members of a combined authority, who are most likely—although not always—to be the leaders of the constituent councils.

The noble Lord, Lord Shipley, asked about Schedule 3. This is an enabling provision which ensures that there is flexibility to decide which information can be appropriately disclosed or must be discussed. For example, certain information may be commercially confidential or contain sensitive personal information.

I hope that, with these reassurances, the noble Lord will agree to withdraw his amendment.

Lord Shipley (Liberal Democrat)

My Lords, can the Minister explain what the Government plan to do if all the members of a combined authority are members of the same political party and hold informal pre-meetings prior to the meeting of the combined authority which is being held in public? Let us say that the meeting of the combined authority ends up being a short meeting and the private meeting beforehand ends up being a long one. What steps do the Government plan to take to deal with such situations should they arise?

Baroness Williams of Trafford (Conservative)

The noble Lord raises an important point, but it has always been thus—informal meetings between people are not obliged to be held in public. The point on transparency is that the decision-making has to be in public and the public can be there to see it. However, informal meetings have never been subject to those rules.

Lord Shipley (Liberal Democrat)

I thank the Minister for her reply. We may need to revisit this issue on Report but, for the time being, I beg leave to withdraw the amendment.

Amendment 42A withdrawn.

Clause 8: Funding of combined authorities

Amendment 43

Moved by Baroness Janke

43: Clause 8, page 10, line 2, at end insert—

“( ) The Secretary of State may by order make provision for conferring on a combined authority, upon the request of that authority in relation to its area, the full retention of business rates, business rate supplements, council tax, stamp duty land tax, annual tax on enveloped dwellings, capital gains property disposal tax, and multi-year finance settlements.”

Baroness Janke (Liberal Democrat)

My Lords, I wish to speak to Amendments 43 and 44. I know that the Bill is important to local government. Coming as I do from the city, I urge everyone to think of the world-class cities we have in our country and how we can make them even more competitive internationally.

The raising of funding locally is important. The developments in the Greater Manchester Combined Authority and the deal that has been agreed are a good step forward. I hope the Bill is the start of a journey in building capacity in our city and county regions, in order to have local economies that flourish

due to the their leadership. I have looked at some of the written material on this subject, which the London Finance Commission took evidence on. One marker it looked at is how much money central governments give to capital cities, particularly London. One report tells us that Madrid gets 37%, New York 30.9%, Berlin 20.5% and Tokyo 7.7%, but that 73% of London’s budget comes from central government, as the Mayor of London made clear. I think Boris Johnson said that in this country we are comparatively “fiscally infantilised”—his quotes are fairly unique.

That shows the gap between the self-sustaining nature of other international cities, particularly capital cities, and our own. The Minister has been the leader of a council and I am sure she has had the same experience as many of us: when we meet the mayors of our twin cities or attend international gatherings, the feeling from that contingent is one of shock at the very few powers that leaders and mayors in this country have in comparison with others. We must look at this issue. When we discussed the local government bond last week, it did not receive as welcoming a response as we had all hoped. I recognise that the Government feel that they must be cautious and satisfied with the capacity of local government to take on these greater responsibilities, but the Bill’s vision needs to include something on what the future may be and what is desirable. There is plenty of evidence. The City Growth Commission fully recognises in its report that not all cities, counties and regions are ready for full powers. Indeed, many are not as ready as the Greater Manchester Combined Authority is. Nevertheless, we must be ambitious and aspire to giving our regions and cities greater powers.

If we look at what is happening in Scotland and Wales, it is understandable that many people in England, particularly in our cities, feel that powers are being given away which are not available to them. The national economy could benefit from more financially independent cities leading their own economies. I urge the Government to give some thought to including something in the Bill—even if it is not as explicit as the amendments—to show what the scope, potential and ambition could be. I hope to hear some more encouraging remarks from the Minister.

I am perhaps not as hopeful about that after previous days, but I hope we can all see the potential of fiscal independence for some of the great cities and counties of this country, and that we will see as a result improved local accountability, and improved ownership and participation from the people living in those regions. Having finance and powers meted out from the centre is not a good recipe for local participation or for pride in one’s area. The leaders and mayors of those international cities will have ample evidence of why we need to set some of our cities and regions free. I beg to move.

Lord McKenzie of Luton (Labour)

My Lords, we agree with the noble Baroness, Lady Janke, that we should give some thought to this issue, although I hope she will understand if we are unable to support the amendment as it stands. I will spell out some of the technical issues

in a moment. But it does provide an opportunity to probe the Government’s intention on the devolution of fiscal resources to local authorities, including combined authorities—that is, where they are going on their journey.

My noble friend Lord Beecham will set out shortly the policy position we reached before the election on the growth of business rate retention. It accords with Amendment 43 in supporting multiyear finance settlements, for the obvious reason of enabling more effective long-term planning. However, we might consider fiscal devolution over three areas. First, we should look at the current funding arrangements: business rates, council tax, revenue support grants and specific grants. Secondly, we should look at how devolution budgets are to be made available—if functions are being transferred, what is happening to the money? Thirdly, we should look at whether any national taxes are to be devolved to local authorities and combined authorities. We seek to understand the Government’s policy on each of these matters.

National taxes are the thrust of Amendment 43, which appears to focus on property taxes, which have an unambiguous attribution to a specific area. This would appear to be perfectly possible for stamp duty land tax, which is levied on the purchase of residential and non-residential land and property, and for the annual tax on enveloped buildings, which applies to UK residential property put in a corporate wrapper. But capital gains tax appears to be more problematic because a tax liability could arise from netting off losses against gains—for example, a loss on a building in Birmingham against a gain on a building in Manchester—and making it more specific would be difficult. Similarly, the use of an annual allowance that is available generally against gains, and the taxation of corporations in relation to capital gains and how that is identified within an overall assessment, could also be problematic.

It would doubtless be possible to introduce rules to govern all of this, but with further significant complications to the tax system. On compliance, these taxes are geared to a national system and it would be necessary to disaggregate such matters. What is the rationale for attributing these taxes to a combined authority: is it the practicality of a ready additional source of revenue being made available, or because the focus of the combined authority’s activity can positively influence the tax outcome? It is presumed, of course, that the proposition is not to change the tax rates.

Nationally, stamp duty land tax raised just short of £10 billion in 2013-14 and capital gains tax just shy of £4 billion. I do not have the figure for corporation tax on capital gains. But these taxes can be volatile. Stamp duty land tax increased that year by 36%. Of course, it is not easy to predict. Is the growth in stamp duty land tax a good thing? The volume of property transactions in an area might be indicative of a thriving local economy—which could attract investment—but in so far as it is attributable to rising prices, it might simply reflect a failure to tackle supply.

We know the total spending power of local authorities in 2014-15 was in the order of £49 billion, including—though we do not have the precise figure—£10 billion-plus

in revenue support grant. If the revenue support grant were, effectively, to be at least replaced by directly accruing property taxes and all business rates were to be devolved, what would be the mechanisms for dealing with the differing needs and resources of the local authorities? Presumably, business rates would continue to have tariffs, top-ups, levies and safety nets, which would help, but it is a little unclear whether the proposed full retention of business rates would be at individual authority or combined authority level. Is the noble Baroness suggesting that this could be done by pooling or by another mechanism? I think it could be done by pooling. The amendment refers to “business rate supplements”. Do these not already accrue to the relevant county or unitary district councils? Does the noble Baroness’s amendment contemplate that additional, erstwhile national revenues would substitute for devolved budgets, or eliminate the revenue support grant?

The Independent Commission on Local Government Finance set out the reasons why local government in England and the services it provides are no longer sustainable in the current form. It called for urgent devolution of powers, funding and taxes to groups of local authorities. We know from the Manchester agreement and our debates the main policy areas that central government appear to be willing to negotiate deals on for transferring functions, but we do not know whether they are willing to do anything on fiscal devolution. Is anything being contemplated, particularly with regard to existing national revenue streams such as stamp duty being devolved to local government? To what extent do the Government plan to adopt the recommendation of the noble Lord, Lord Heseltine, in brigading key national budgets and passing these as single parts to combined authorities, to do with as they see fit? In his No Stone Unturned report, the noble Lord argued the need to bring together separate funding streams which support the building blocks of growth into a single funding pot for local areas. He said that the model could be applied across England, but could not be introduced before 2015-16. We are now there. What are the plans? Is the noble Lord’s advice being rejected?

Will the Minister also tell us whether, as part of the devolution agenda, any fundamental change is contemplated to the current business rate and council tax regimes? Will the reset of the business rate retention scheme not happen until 2020? What is the latest position on the revaluation, which had already been deferred by the previous Government?

On fees and charges, it is estimated that local authorities raise some £10 billion a year. Some of these are locally determined and some are not. Is work under way to remove central government’s control over some of these? What scope would there be for a combined authority to seek increased freedom in this regard as part of a devolution deal? Addressing these fiscal issues is a test of how much central government trust local authorities and combined authorities.

Lord Brooke of Sutton Mandeville (Conservative)

My Lords, this is a brief intervention. One of the most attractive features underlying this legislation is the restoration of local pride up and down the country in the communities and neighbourhoods involved. I have always regretted from my time as Higher Education Minister that the

relationship between universities and their surrounding communities, which had been very strong in the 19th century, gradually declined as the years went on and were not nearly as effective as they had historically been.

In the light of the amendment which has been moved, I wish to make a generic remark rather than a technical one. I can recall the circumstances in which decisions were taken at national level to reduce the amount of money retained by a local authority in terms of the resources raised within it. The local authority’s powers to have that retention were diminished. I recall that those circumstances arose because of the view of local business that it was perfectly possible for the economic situation in which it had to work to be changed overnight by a large switch in the power of an authority. I shall therefore be interested in what sense emerges from the Government, when my noble friend comes to reply, of not going backwards on that consequence of the circumstances which they replaced.

Baroness Williams of Trafford (Conservative)

My Lords, our intention is to devolve far-reaching powers where strong, accountable and transparent governance, delivery and capability can be demonstrated. We are open to discussing proposals from all places, including towns and counties, where there are clear lines of accountability and decision-makers can properly be held to account. Amendments 43 and 44 suggest giving mayoral combined authorities access to a wide range of important taxes and charges. We have always said that we are interested in hearing proposals from authorities, and that nothing is off the table. We have also included provisions in the Bill for a council tax precept to meet the costs of functions undertaken by the mayor. This will be subject to the normal referendum principles as part of the council tax for the area, ensuring that not only will the mayoral combined authority be properly resourced but local council taxpayers will be protected.

Moreover, the Bill will mean that, in future, mayoral combined authorities will become major precepting authorities for the purposes of the local government finance regime. This means that through the existing powers that govern the rates retention scheme, to which the noble Lord, Lord McKenzie, referred, we will already be able to give mayoral combined authorities their own share of local rates income and ensure that they benefit from local growth. We do not need powers to put in place multi-year settlements for authorities; we can already do this administratively, as part of the wider local government finance settlement. Of course, any decision to make use of the existing powers to extend the rates retention scheme or put in place multi-year settlements would be taken alongside part of the wider transfer of powers and functions to mayoral combined authorities.

To devolve the wider basket of taxes referred to in Amendment 43, however, goes further and would represent a significant change to the existing tax landscape, with potentially significant legal, economic and fiscal implications. The other taxes mentioned play an important part in reducing the deficit and restoring the nation’s finances to a more secure footing, so it would not be right to include in the Bill powers to direct these taxes to mayoral combined authorities.

Additionally, such far-reaching powers would have potential consequences not just for the combined authorities but for other authorities, large and small businesses, and taxpayers up and down the country. Given the importance and fiscal character of such matters, we would need to consider whether any proposals would receive the correct level of scrutiny if provided through secondary legislation. I am not convinced, therefore, that it would be appropriate for these matters to be the subject of powers in the Bill or considered outside the Government’s normal fiscal and budget-planning cycle. Nevertheless, we are open to proposals for the transfer of resources as well as power and would give detailed consideration to any scheme that strikes the right balance between encouraging growth and protecting taxpayers.

The noble Lord, Lord McKenzie, asked about any proposals to remove central Government influence on local fees and charges. It would depend on individual deals. The noble Lord also asked about brigading national budgets. I cannot read the writing—

Baroness Hollis of Heigham (Labour)

Go on, be brave—make policy.

Baroness Williams of Trafford (Conservative)

I would not dare. What part of budgets is devolved and how devolved budgets might be handled are all matters for the discussion in reaching each devolution deal. What is clear is that in all cases where powers are devolved, there will be an appropriate devolution of budgets.

In conclusion, and in respect of the other amendments in this group, I assure noble Lords that we will consider all proposals for devolution deals involving the transfer of both resources and powers and that the framework that would allow for funding from business rates retention is already in place, if needed, in addition to the existing powers for a council tax precept.

Baroness Hollis of Heigham (Labour)

My Lords, I suspect I may know the answer to this. Would it be possible for a local authority in the negotiations with the Secretary of State for devolution and financial arrangements to, for example, have the right to include extra tiers of council tax bands when raising their council tax for their area?

Baroness Williams of Trafford (Conservative)

My Lords, I think they would have to have a discussion with the Secretary of State.

Baroness Hollis of Heigham (Labour)

Given everything the Minister has said, that proposal, which has had a fair degree of support in this Chamber in the past, would be one way in which a local authority could raise funds within the existing structure in a way that most of us would think was fair and progressive.

Baroness Williams of Trafford (Conservative)

My Lords, it could indeed and it would be a matter for discussion between that group of local authorities and the Secretary of State.

Lord McKenzie of Luton (Labour)

I know that we deal with situations where the best can happen in the best of all possible worlds, which is where we are on the Bill. However, could the noble Baroness confirm that in a whole range of functions being devolved to a combined local authority and the budgets to go with it, the prospects of those budgets being aggregated—with freedom for the combined authority to spend as it wishes, given those particular functions, and not have to follow the Bill above those amounts—would be perfectly possible, feasible and welcomed?

Baroness Williams of Trafford (Conservative)

My Lords, the noble Lord gives a theoretical example, which I am not in any position to stand at the Dispatch Box and confirm. I know I have reiterated this during the course of the Bill, but it really would be for a group of local authorities to prove that whatever proposal was put forward would result in growth and be fiscally neutral.

Baroness Janke (Liberal Democrat)

I thank the Minister for her response. I am perhaps not as discouraged as I thought I might be. However, I hope that the complexity of the tax system will not be a barrier to giving local powers and local accountability to achieving local projects. Transport is a particular issue in this country. To give a practical example, we in Bristol had to wait something like 15 years to be told that we were not going to get a tram whereas our twin city of Bordeaux not only conceived of its tram but built it and had it in operation within a fraction of that time.

I understand from the Minister’s remarks that should a combined authority wish to make proposals that might include a tourist tax or differentiated VAT or some kinds of local tax, these would all be considered. At the moment, while there is a central allocation determined by government, there is not a great deal of incentive for those who are more entrepreneurially minded in local authorities to create revenue streams to pay for important projects. That is what I have understood. Equally, the equalisation element would need to be looked at. We have very different circumstances in different parts of the country but, again, it should not be a barrier, and we need only look at our international competitors to know that this is the case.

I hope that we can pursue this a little further and that we might revisit it on Report. In that case, I beg leave to withdraw the amendment.

Amendment 43 withdrawn.

Amendment 44 not moved.

Amendment 44A

Moved by Lord Beecham

44A: Clause 8, page 10, line 2, at end insert—

“( ) The Secretary of State may by order make provision for conferring powers on a combined authority to set multi-year finance settlements and retain business rates revenue in relation to its area.”

Lord Beecham (Labour)

My Lords, I find myself in the somewhat unusual position of agreeing with the Minister in her analysis of the impact of what the noble Baroness, Lady Janke, proposed in Amendment 43. As my noble friend Lord McKenzie pointed out and as the Minister

implicitly confirmed, the impact of allowing the combined authorities to retain money on what is essentially a nationally based taxation would be formidable and difficult for the Wigans and Kirkleeses of this world as compared to the Westminsters and Kensington and Chelseas, and I was very glad to see her not adopting that position.

Having said that, I must say that there is a certain synergy between the amendments that we have just debated and the one that I am now moving, particularly in relation to multiyear finance agreements, which must be common sense, and to business rates growth. However, I am in another unusual position in having to confess that Amendment 44A as printed is actually in error, because it should have referred to the growth in business rates rather than the implicit retention of an entire business rate. In that way, we are agreeing again with only a part, but an important part, of the amendment that we have just debated. However, the critical factor here is that of the fairness or otherwise of the distribution of the funding. That is the subject of Amendment 44B. Of course, if we had suggested, as it appears on the Marshalled List, that the entire business rate would revert to individual councils, it would be disadvantageous. Even the 50% retention rate is inequitable, unless there are other measures to compensate those authorities in need.

The Independent Commission on Local Government Finance has illustrated this position by comparing Hillingdon, which currently collects £101 million of business rates, and Wigan—and my noble friend Lord Smith will be conscious of the fact that Wigan collects just one-third of that, at £34 million a year in business rates. If we had a more equitable system, and if it was based on need, that would result in Hillingdon receiving £42 million and Wigan £62.9 million. That was the finding of the independent commission. That is an illustration in respect of only that one area of financing, because action is desperately needed across the whole system of local government finance. Local authorities have suffered massive cuts as a result of government policy, which singled out the sector for the biggest cuts in public expenditure in the last five years, a process that is far from complete—and we may hear more next week about what is in store. In any event, even the cuts that are still inchoate and beginning to take place will lead to substantial further difficulties.

What is particularly galling is the unfairness of the way the burden has fallen on those areas with the greatest need. The 10 most deprived councils in the country, as defined by the department’s own measure, have suffered cuts 10 times greater than the 10 least deprived. Liverpool, the authority with the highest deprivation score of all—I repeat that these are on the department’s own measure—has suffered a loss just under 30 times greater than Hart District Council, the least deprived authority.

Interestingly, 14 councils were lucky enough to receive an increase in government funding over the past few years, and by sheer coincidence all but one of these have Conservative MPs, including Michael Gove, Chris Grayling, Philip Hammond and Jeremy Hunt. Some of us think that one or two of those have been lucky to have been in the Cabinet for these past few years, but certainly their constituents have been lucky to have received this benison from the Government.

If the Government’s ambitions for cities in the context of devolution are to be carried out and are not to suffer the same signal failure as their northern rail transport policy, as was revealed last week, or, in the light of last week’s belated disclosure of a three-year-old report, the fate that may be awaiting HS2, their philosophy about devolution must be accompanied by a needs-based funding formula and not rely on a continuation of the present system, which is so damaging to so much of the areas that could most benefit from the Government’s well-intentioned approach to devolution. That is why Amendment 44B calls, initially at any rate, for a report on the fairness of the distribution of funding, taking into account the cumulative cuts so far—and, indeed, those that are pending—in spending power and resources per household. I beg to move.

Baroness Hollis of Heigham (Labour)

Will my noble friend read into the record, if he happens to have the information to hand, the 10 most rewarded local authorities and the 10 most deprived, in terms of grant, and their political complexion?

Lord Beecham (Labour)

I am afraid that I am going to have to follow the usual ministerial procedure and say that I shall have to write to my noble friend. I do not hae the information. I copied the report to my noble friend this morning and I think it runs to 163 pages. I do not have it immediately to hand, or anything big enough to contain it, but I will communicate with my noble friend.

Lord Shipley (Liberal Democrat)

My Lords, I am grateful to the noble Lord, Lord Beecham, for clarifying the wording of Amendment 44A: that it is about the growth of business-rates revenue. I was slightly disappointed that these two amendments were degrouped from the two amendments moved a moment ago by my noble friend Lady Janke, because they are all in the same area. They all relate to the question of whether we are dealing with decentralisation or with devolution. I have heard the Minister say that this Bill is primarily to do with decentralisation, but there is an overall context that is to do with devolution. However, I do not think that fiscal powers are about decentralisation where they can be varied from a national norm, so we are talking here about fiscal devolution.

I agree with the noble Lord, Lord Beecham, that this is set in the context partly of multiyear financial settlements, which I think all parties would benefit from, but also, crucially, of fair funding. It is therefore in part about the level of cuts that have been imposed on poor authorities, but it is also about the absolute level of funding. The issue of needs-based allocation will not go away, however much fiscal devolution we have, because even with the powers that we have set out in Amendments 43 and 44, there would clearly need to be some needs-based reassessment of the total sums involved. That is why, of course, Amendments 43 and 44 use “may” rather than “shall” in relation to the powers of the Secretary of State, as clearly there would need to be significant flexibility in those powers.

I have talked previously in your Lordships’ House about the difference between powers and responsibilities. It is one thing to give local authorities and combined authorities increased powers, but this is about them using those powers to take on additional responsibilities. We have heard the suggestion a number of times in your Lordships’ House that there should be a local government finance commission. I have come to the conclusion that that is the right thing to do, because I do not think that we would get full agreement otherwise about what the devolved powers of combined authorities might be compared with those in other levels of local government. We also need to think about how we ensure that the money from central government is fairly distributed on a needs-based allocation, the basis of which everybody understands.

I hope very much that we will return to this issue on Report. Perhaps in the next two weeks we can look more broadly at this area to see what might be possible for all parties to agree on. I hope that it might be possible for the Government at least to think again about whether the issue of fiscal powers should be in the Bill. There is not much willingness to put things into the Bill. I think there should be something in relation to Amendments 43, 44, 44A and 44B in the Bill, and I hope it will be possible to enter into discussions to see how there might be agreement in all parts of your Lordships’ House to deliver that.

Lord Smith of Leigh (Labour)

My Lords, one of the amendments put forward by my noble friend Lord Beecham has reminded me that in Greater Manchester we had an argument with the Government about getting back our share of growth in business rates for the actions that we were taking. Through the city deal process we managed to convince Ministers that it would be a good scheme to take up, but unfortunately we then had to go to the Treasury and it took 18 months or more to get agreement on that. However, it is a model by which we can clearly demonstrate that the growth created through the work of the combined authority could be used for further investment to benefit and create further growth in the area.

I am certainly a supporter of fiscal devolution, which in a sense is the missing clause in this Bill. We need to think about what it is and what we mean to achieve. However, if we are to get the allocations of money from central government, which is a form of decentralisation, we need further freedom to agree with the Government what would be provided by the money. We can transfer funding from one field to another in a different and more effective way in some areas, provided that we do what was agreed in the deal with the Government.

I have said a number of times in this House—sometimes late at night a couple of years ago when my noble friend Lord McKenzie and I were talking to the Government about the change to business rates—that our system of local government finance in the UK is now a busted flush. There are two main taxes that we rely on. The revaluation means that business rates are no longer justifiable. There needs to be a major review and I am pleased that the Government are carrying

that out. The other main form of taxation—council tax—has not been revalued since 1991, so a new house built in 2015 has to be valued as though it was built in 1991. A connection to broadband would not be a feature, because clearly in 1991 such things were not invented. There obviously has to be all-party agreement on this, because we do not want a system that is going to be changed when there is a change of government. We have to have a system, built for the 2020s, that gives local authorities the independence and freedom they need.

On fair funding, I am surprised that my noble friend Lord Beecham and the noble Lord, Lord Shipley, did not quote their former council, Newcastle City Council. It has done some wonderful work on this and produced what it referred to as a “heat map”, which shows in red the areas that have had the greatest reduction in council funding and in green those that have had the least. Guess what: most of the red areas are in the north or in urban areas, and this could be substituted for political control.

Lord Scriven (Liberal Democrat)

I wish to emphasise what my noble friend Lord Shipley and the noble Lord, Lord Smith, have just said. In Committee last week, I said that the real elephant in the room was the issue of fiscal devolution; otherwise the Bill is about decentralisation. I listened to the Minister and I agree with my noble friend Lord Shipley and the noble Lord, Lord Smith, that this will ultimately get lost unless there is something specific in the Bill. I hear what the Minister says about this being an enabling Bill, but there needs to be something in it that gives a framework—not a straitjacket—to understand the kind of fiscal autonomy that local authorities could have. If there is not, then we are, fundamentally, talking about a local government finance system that is not fit for the 21st century possibly being reallocated in a different way.

I accept that there is talk about TIF or business rate growth being able to be held at local level. However, it is fundamentally much more than this. As my noble friend Lady Janke said, it is about different approaches. Last week, the noble Lord, Lord Heseltine, spoke about the Mayor of Tokyo talking to potential international investors in his city. I am a former council leader who talked to international investors. As I said last week, they do not necessarily ask about the nameplate on your door. They want to talk about what tax incentives my area can give compared to elsewhere, rather than there being a national scheme. In the real world, those are the kind of issues being looked at.

So I ask the Minister to reconsider. This is so important; we are talking about a brand new deal for devolution and for local areas to become much stronger and authors of their own destiny. But we need some framework in the Bill. Otherwise, like the noble Lord, Lord Smith, I fear that when the Treasury gets hold of this, it will not treat it, as the Minister wishes, from a local government perspective.

Baroness Hollis of Heigham (Labour)

My Lords, I support the comments made by my noble friend Lord Smith about the increasing frailty of the existing council tax

structure to bear the responsibility we ask of it. I believe I am right in saying that, had the older rates system remained in place, the most expensive properties, compared to the median average, would be in a ratio of something like 20:1. In fact, the ratio of the top band to band D—the fulcrum point on the council tax scale—is only 3:1. That shows just how narrow the redistributive effect of council tax has become.

In the past, the Government have resisted looking at council tax revaluation, even though a full-scale revaluation went through fairly smoothly in Wales, without any great hiccups in the procedures. A few years ago, some of us did some work on this. It was clear that it would be desirable to revalue all properties—but at the very least, you could fish the top band. I was advised, by the Valuers’ Association and the Government’s valuation service that that would represent less than the valuations which happen now whenever a flat becomes a shop, a shop becomes a flat or a house is sold and is given a new valuation. So the amount of work required to allow local authorities to increase the bands above the current top band would be quite modest—I am assured of that by the district valuers who carry out this work, day in, day out, on other use changes and so on and so forth—and would allow us to stretch more fairly and produce more revenue in a way that was more reasonable.

Certainly the compression that has come from council tax bands compared to the old rate bands is probably, in my understanding, the narrowest in the OECD. In America, Australia and most of the countries in Europe, the property range of bands is far wider than we now have in the UK as a compression of council tax. As I said, we have only about three or four bands above the band D fulcrum compared to the 20:1 ratio that we used to have under the old rates system. So it is a perfectly serious proposition that this would be a fair and appropriate way to increase revenues to local authorities and to reflect local need and local ability to pay.

Lord Beecham (Labour)

My Lords, perhaps my noble friend would agree with me that a major part of the problem is that the council tax embodies a significant element of the poll tax, and that that is what leads to such narrow banding.

Lord Liddle (Labour)

I agree with my noble friends on our side of the House who have spoken about these issues. Council tax is in urgent need of reform. As for anyone who defends its existing basis—it is indefensible. It needs reform, as my noble friends Lady Hollis and Lord Smith have suggested.

I applaud the Government’s commitment to devolution, as I have said before in this House. But the elephant in the room is how to devise a scheme of fiscal federalism within the United Kingdom and within England. That is a very tricky question. It is tricky politically because once we start to look at these issues we see that London and the south-east are transferring considerable amounts of money to the rest of England. The transfers within England are probably much greater than the much talked-about transfers under the Barnett formula to Scotland and Wales.

Some years ago, in my own area of Cumbria, a study was done of all government spending and the estimated tax contribution from all sources. It came to some pretty alarming conclusions. In terms of total government commitment to Cumbria, roughly twice as much money was being spent by the Government in one form or another—this includes the nuclear plant at Sellafield, not just local government—as we were paying in. This issue has to be honestly addressed.

It is also the reason why there is an absolutely compelling need for local authorities to have the powers to contribute to local economic regeneration. That is the way to start building a tax base, rather than living off this drip-feed from London and the south-east.

Some very big issues are being touched on here. It would be interesting to hear from the Minister whether there is any interest from the Government in launching a major study of these questions—royal commissions are rather out of fashion, but I suggest that this would be a suitable subject for one—or whether we will continue with the terribly unfortunate “ad-hockery” that we have. I am sure the Minister agrees with me about the unfairness of the current local government arrangements. I remember, in a meeting in Cumbria County Council when the last settlement came out, quoting that the authority that did best of all was Elmbridge in Kent.

Lord Liddle (Labour)

My apologies—I meant Elmbridge in Surrey. I looked on my iPad at the description of Elmbridge, which started by saying that that part of Surrey,

“is known as the ‘Beverly Hills’ of England”.

The Minister, who is a fair person, must admit that such extraordinary unfairness is where we end up. We need a much more independent and objective look at these questions, and that is of real importance if we are to get an effective devolution of power in this country.

Baroness Williams of Trafford (Conservative)

My Lords, as worded, Amendment 44A would allow the Government to confer powers on a combined authority to set multiyear finance settlements and to retain business rates. In introducing this amendment, the noble Lord made clear that the intention behind it is to allow central government to put in place multiyear finance settlements, thereby allowing a combined authority greater certainty over its budget-setting process. In fact, we already have the powers we need to do this administratively as part of the wider local government finance settlement.

A combined authority is already able to set a multiyear budget; it is not necessary for central government to confer powers upon it allowing it to do so. Nor, as I have made clear in responding to Amendments 43 and 44, do the Government need new powers to allow a combined authority to retain some of its local business rates. The Bill will already set up a mayoral combined authority as a major precepting authority, and therefore

we will be able to use our existing powers under the Local Government Finance Act 2012 to give the authority a share of its locally raised business rates, should we decide to do so.

Of course, any decision to make use of the existing powers to put in place multiyear settlements or to allow the retention of local business rates, or business rates’ growth, would be taken alongside any wider transfer of powers and functions to mayoral combined authorities. I further assure noble Lords that we will consider all proposals for devolution deals involving the transfer of both resources and powers.

Amendment 44B would require the Government to publish a one-off report about the impact on combined authorities of how resources had been distributed through the local government settlement, particularly with regard to levels of deprivation. I do not think the amendment would add anything to the information that we already provide. By looking only at the resources distributed through the settlement, the reports required by this amendment would separate government funding from other sources of income available to local authorities. By isolating deprivation from other drivers of spend—for example, the impact that population sparsity plays in rural areas—it would fail to present a properly rounded picture of the settlement.

As noble Lords know, we already publish annually an assessment of the impact of the settlement on authorities’ wider spending power and an equalities statement on the settlement’s effect. Moreover, the settlement is subject to wide-ranging consultation and comes before Parliament for approval. I am not persuaded that anything further is needed.

The noble Lord, Lord Smith of Leigh, talked about Manchester’s gains from economic growth. The devolution deal for Manchester illustrates what the city has gained as a result of its growth. A reformed “earn back” deal can earn up to £900 million over 30 years.

The noble Lord, Lord Beecham, talked about the relative impact of cuts in different areas. I know we could argue about this all day and all night. People have different views about cuts, but comparing regional spending in terms of spending power per household shows that in the north-east it is £2,154, in the south-east it is less, at £2,023, while in the north-west it is £2,230.

The noble Lord, Lord Smith, and the noble Baroness, Lady Hollis, talked about the revaluation of council tax. I understand the comments about this but, in practice, since 2010-11 council tax in England has fallen by 11% in real terms, and a total of £5 billion has been provided for five successive years of freezes that are worth up to £1,059 for average households. The noble Baroness mentioned the revaluation of just one band, the top band. As far as I can recall from my local government days, a simple revaluation has to be revenue-neutral. In the light of those comments, I would ask the noble Lord to withdraw his amendment.

Baroness Hollis of Heigham (Labour)

I understand that a revaluation would have to be revenue-neutral, and obviously it is up to the local authority to make the total proceeds exactly the same, so that if you get more from X you can reduce the imposition on Y. However,

I do not think that the noble Baroness should rejoice on behalf of local government for the freeze in council tax over the past few years. Obviously, it has helped council tax payers, but what they have gained by not having to pay council tax increases, they have lost in the social wage of the services that have been cut as a result. You need only go to cities to see exactly what that means when children with no books at home no longer have a library to which they can go because it has been cut. Their hopes of social mobility have, to that extent, been depressed. I think that was a much more contentious remark than perhaps the noble Baroness intended.

Baroness Williams of Trafford (Conservative)

My Lords, I do not rejoice and I did not intend to be contentious. I was simply illustrating the effect of the council tax freeze and the money the Government have given to that. In difficult times, council tax payers will have been glad of lower council tax.

Lord Beecham (Labour)

My Lords, while individual council tax payers might well feel a little more comfortable, of course the impact on services for their communities has been very marked, particularly in adult care and children’s services, as we are increasingly seeing. In any event, most of the £5 billion has been top-sliced from moneys that would have gone in the local government finance settlement in any event. It is a bit much for the Government to claim credit for the freeze. It is more than a freeze for some services because it is actually inflicting a cut.

That brings us to the central question about the impact of these devolution proposals between different areas. One of the objectives of the amendment, although perhaps we will need to look again at the wording, is to ensure that in the process of devolving functions and resources to the combined authorities, both of which would be welcome, fairness in respect of other areas and between the combined authorities themselves is a cardinal objective and is something that the Government will address. It is that which we want to see in terms of the report that Amendment 44B seeks to advance. Looking at it again and listening to the Minister, perhaps the objective was not made sufficiently clear in the amendment, so it is something to which we may have to return on Report.

Unless we have a fairer funding system for local government services and the people who depend on them across the piece, including those in combined authority areas, then, in our submission, the talk about devolution will prove to be more of process than of outcome, and that would be unfortunate. Let us credit the Government, and particularly the present Secretary of State, with good intentions in this respect, but unless this is accompanied by a much more rigorous examination and the necessary change in the funding of local government, including the combined authorities, those objections will not be met. Having said that, I beg leave to withdraw the amendment.

Amendment 44A withdrawn.

Clause 8 agreed.

Amendment 44B not moved.

Clause 9: General power of competence

Amendment 44C

Moved by Lord Beecham

44C: Clause 9, page 10, line 7, leave out “may” and insert “shall”

Lord Beecham (Labour)

My Lords, Members of your Lordships’ House will have observed that I am short. I intended this speech to be equally short, but I will give it a minute or two, in order to allow this debate to be kept to five minutes or thereabouts. Then we can proceed with the very important Statement which is to follow. Between us, the noble Baroness and I will no doubt get the clock to 4.30 pm.

It would be anomalous if the existing general power of competence which applies to local government in its manifestation across the country was not to be matched with a similar power for the combined authorities. The whole point of the combined authorities is to give them a wider range of functions than local government generally enjoys and for them to take on a wider role across the provision of a range of public services. Therefore, a general power of competence would facilitate the implementation of the Government’s objectives, which are shared by Members on all sides of your Lordships’ House. I hope that the Minister will concur with that view at some little length. I beg to move.

Baroness Williams of Trafford (Conservative)

My Lords, the Localism Act 2011 provides that local authorities have the general power of competence. This is the same power to act that an individual generally has. All principal councils and eligible town and parish councils have this power. The provision in this Bill is designed to give the Secretary of State the discretion to decide whether or not to confer this same general power of competence to a particular combined authority. This is likely to go hand in hand with an arrangement in which the combined authority is to take on wider powers and functions, thus supporting the case for a general power of competence.

Flexibility, however, must remain in conferring this general power of competence to combined authorities, as it may not be appropriate to give the full power to act that an individual has to all combined authorities. For example, for combined authorities with relatively limited specific powers, it may not be appropriate to grant them a wide general power of competence. This is so given that Section 113A of the 2009 Act already gives them a power to do anything they consider appropriate for the carrying out of the specific functions that have been conferred on them.

This amendment is a further example of moving away from the enabling character of the Bill. It is an example of another centralised requirement which an area may not want, recognising that in its circumstances this would not be appropriate. So I ask the noble Lord to withdraw the amendment.

Lord Beecham (Labour)

My Lords, if the noble Baroness is right, the general power of competence would seem to be more limited than, on the face of it, it appears to be. Certainly it might inhibit a kind of development

across a combined authority area that might be thought to be most appropriate. For example, in another area in which I have an interest, the justice arena, a combined authority might be in a good position to develop schemes for assisting the rehabilitation of offenders. That is not a duty of local authorities at the moment but, particularly given the area involved in a combined authority, they might well have something to offer which they should be able to carry out. Their potential partners in the Prison Service or the probation service might want to join them in such an effort. I am a little puzzled as to why the noble Baroness should be reticent about extending a power in that sort of area.

Baroness Williams of Trafford (Conservative)

My Lords, I do not think that it is reticence; it is about flexibility and what might be appropriate in different circumstances. I hope that the noble Lord does not take it as reticence.

Lord Beecham (Labour)

With that, I beg leave to withdraw the amendment.

Amendment 44C withdrawn.

Clause 9 agreed.

House resumed.

Committee (3rd Day)(Continued)

Lord Berkeley (Labour)

Amendments 44DA, 44DB and 44DC are probing. They mirror similar texts in the Greater London Authority Act 1999. Why do the Government not propose to include these important safeguards for devolution outside London that the 1999 Act provides for within London? That is particularly important in relation to the concentration of power that is proposed for mayors. It is also relevant to the exercise by combined authorities of the general powers of competence.

Amendment 44DA requires the combined authority to have regard to the effect on the health of persons in its area and to the achievement of sustainable development. I would have thought that the Government were keen to see those things promoted and would be in favour of the provision in proposed new subsection (3), which states that,

“the reference to promoting improvements in health includes a reference to mitigating any detriment to health which would otherwise be occasioned by the exercise of the power”.

Amendment 44DB relates to consultation. All Governments say that they do not like lists of people who have to be consulted, but the list in my amendment seems reasonable. Amendment 44DC refers to transport strategies. The London mayor has produced many

strategies—most of them are good, some less good—and people in the London area have been consulted on them. I was in Liverpool last week hearing people’s views on the northern way, or northern powerhouse or any of the other names for the new area for development across the Pennines—from the Humber to the Tyne and Tees to Liverpool and most places in between. It is good, and surprising, that the authorities have got together and appear to be coming up with a joint strategy for the whole region. Only a few years ago, as the Minister will know from her experience there, such a strategy was a bit of a pipe dream, but it is happening now. It will need funding and it will need more detail, but it is happening.

The key is to achieve consensus without any one mayor thinking that he or she is in charge. A couple of years ago I was told that the people of Liverpool had to run everything because they were better. Perhaps Manchester is supposed to be better now, but in fact everyone is working together.

Amendment 44DA is a probing amendment to find out why the Government have not felt it necessary to replicate the text from the Greater London Authority Act in this Bill. Is it seen as an unnecessary constraint on the mayor’s powers? We need some constraints, especially on health and sustainable development. The measure has not been entirely successful in London because, before the Olympics two years ago, the mayor managed to hide the statistics for air pollution by covering up the monitors. It was an easy way of doing it and he seemed to have got away with it. We were certainly said to have better air quality than Beijing, which would not have been the case if the monitors had not been covered up.

I shall be interested to hear what the Minister has to say. She may say that the amendment is not necessary, but if it is good for London, why is it not good for the rest of the UK in the circumstances that the Bill covers?

Lord Teverson (Liberal Democrat)

I support the amendment. A question has come from a number of Benches and the Minister about the problem of trying to recreate London devolution in the north and elsewhere in the country. I understand that and I concede that there might be differences in the way it is implemented which are more relevant to those areas. However, I suspect it is dangerous to talk about the north because those cities to the left of the Pennines might not see it in the same way as those on the eastern side. The fundamental thing is not necessarily to make it the same—as the noble Lord, Lord Berkeley, said, this is a probing amendment—but why should metropolitan areas outside London have a second-division method of governance in comparison to what has been trialled and used in London, to a degree successfully, although not completely?

The areas of particular importance in this are sustainable development—which ties up completely with the outline planning rules introduced by the previous Government—and transport. When we discussed the Infrastructure Act last year we asked for a transport strategy—particularly around cycling and pedestrians—

which I hope the Government and the Secretary of State are developing. It is important that this becomes part of the work of combined authorities.

This may not be the perfect amendment but it is necessary to include this kind of framework in the Bill for northern cities and combined authorities. Even though a direct comparison with and a copying of London legislation and regulations may not be completely appropriate, it is important to find something that fits the situation of combined authorities in the north and elsewhere that enables them to be successful. In that sense, I hope the Government will come forward with a different formula that meets those objectives.

Lord Deben (Conservative)

My Lords, I know that opposition to motherhood and apple pie is always disliked in this House, but the impression put forward by these amendments is very worrying. Do we have any indication that the governance of London has been affected by this, because any sensible mayor of any denomination would do the useful things that are listed here? However, some of them mean very little. For example, what can we take from subsection (2) of proposed new Section 117B, which states that any body or person a combined authority considers consulting must include any council within its area and,

“bodies of each of the descriptions specified in subsection (3)”?

Those bodies in subsection (3) include:

“(a) voluntary bodies some or all of whose activities benefit the whole or part of its area;(b) bodies which represent the interests of different racial, ethnic or religious groups in its area;(c) bodies which represent the interests of persons carrying on business in its area”.

Are there any bodies of any kind whatever not covered by that? It makes no sense. It is a list of things. Will a decision by the mayor be illegal which did not follow a discussion with a particular body providing for the interests of a small number of people in a particular ethnic group for whom it was not appropriate? This is a list of things which are good, valuable and helpful but totally not useful in the activities which we envisage the mayor carrying through.

It would be perfectly reasonable to say that the mayor should have serious concern about sustainable development; that he should have appropriate consultation; that it would be a good idea to ensure that transport strategies were,

“consistent with national policies and with such international obligations as the Secretary of State may notify to the mayor for the purposes of this section”.

However, I have my doubts about whether it would make any difference. If there are things to be said, they should be said when they are necessary. There should not be merely a list of things about which we can all feel warm because we have voted in favour of reminding people that it is a good idea to consult.

Lord McKenzie of Luton (Labour)

My Lords, the amendments of my noble friend Lord Berkeley reasonably probe the Government and focus on issues which should underpin a combined authority’s operations and strategies. There are issues around the health of people in the area and around sustainable development, about which my noble friend always speaks with passion.

I know the Minister’s answer will be, “You can ask for all these things; you may well get these things in a deal; but you do not have to have them in the Bill”

The consultation requirements in these amendments are a little more specific than one would like, even if one were in support of putting them in the Bill. The issue here is to encourage all the deals that take place under these devolution proposals to have, as their underpinning, issues around sustainable development and the health of people in the area. I am sure the Minister will tell us there is no reason why those issues should not feature in any deal that might be entered into. If that is not the case, there is a stronger case for putting something more specific in the Bill.

As to the strategic view on transport, if there is an argument for putting measures in the Bill it might be to hold the Government to account so that we do not proceed on an assumption of a northern powerhouse, with a big debate around connectivity, and hear a few days later that the funding is not there to deliver on it. That does not help trust between government and local authorities in creating an environment where devolution can work and where issues around sustainable development and the health of people in an area are at the forefront of the strategic operations of a combined authority.

Baroness Williams of Trafford (Conservative)

My Lords, these amendments seek to introduce into the Bill new clauses that would place on combined authorities prescriptions and requirements about how they exercise certain powers which may be conferred upon them.

Amendments 44DA and 44DB place requirements on how a combined authority which has been given the full general power of competence through the provisions of Clause 9 of the Bill is to exercise these powers. These requirements are about having regard to certain matters and having to undertake consultation with various specified authorities and other bodies. The intention of new Section 113D, which Clause 9 inserts into the Local Democracy, Economic Development and Construction Act 2009, is to allow the same power of general competence that is available to local authorities to be conferred on combined authorities. The purpose of such a general power is to give the authority concerned the same scope and freedom of action as is available to any individual, such as you or me, subject to any specific legislative restraints applying to that authority.

To seek to prescribe to combined authorities how they should exercise this power would seem to be contrary to the essence of the general power of competence. It would place combined authorities in a more restrictive regime than that which applies to local authorities generally. There are no grounds for doing this in those situations where, as part of an agreed deal, it is considered right to give a combined authority the full general power of competence.

I recognise that these amendments appear to mirror some of the provisions that apply to the Greater London Authority. In the London context, the authority has the power to do anything which it considers will further any one or more of its principal purposes. In

exercising this power the authority is required to have regard, for example, to its effect on the achievement of sustainable development in the UK and on the health of persons in Greater London. However, these specific powers which are given to the Greater London Authority are of a very different nature to the general power of competence, which, as I said, is the power for an authority to do anything which an individual can do, unless it is specifically prohibited. These are particular powers about promoting economic development and wealth creation in Greater London, promoting social development in Greater London and promoting the improvement of the environment in Greater London. It may be in a particular deal that similar powers are conferred on a combined authority, using the powers in the Bill under Clause 6.

Amendment 44DC provides that in preparing or revising any transport strategy a combined authority shall have regard to the health of persons in its area, the achievement of sustainable development in the UK and certain matters relating to national policies, international obligations and the available resources for that strategy. This amendment mirrors provisions which apply to the London mayor in respect of his general duties in relation to his strategies. However, such provisions are not appropriate to be included in an enabling Bill, which does not refer to any particular powers or duties a combined authority and its mayor may have. If, as part of a particular deal, a combined authority mayor is given a power similar to the Mayor of London’s in relation to certain strategies, then it may be right that, in the case of that combined authority, matters such as sustainable development and the health of the people in the area could be relevant considerations to be taken into account by the mayor when drawing up those strategies. The orders creating such an arrangement would be able to reflect this.

Whatever the importance of particular issues, and clearly the health of people in an area is of the upmost importance, it is not for this Bill to include either references to specific powers, or provisions which can relate only to specific powers. This is an enabling Bill and in our previous debates I have made very clear that the Bill is not a vehicle for setting out lists or descriptions of powers which may or may not form part of an agreed deal with particular areas. Accordingly, I hope the noble Lord will agree to withdraw his amendment.

Lord Berkeley (Labour)

I am very grateful to the noble Baroness for her comprehensive explanation, which might be summed up with “good try”. As I said, it is a probing amendment. It has been an interesting debate, and I accept the comments of the noble Lord, Lord Deben, about the detail. The amendment was basically copied from a GLA Act, which seemed a good place to start, but he has made some very good points.

The noble Lord, Lord Teverson, reminded the Committee that we are still waiting for the Government’s strategy on cycling and walking, which came in earlier this year, and that will be good. My noble friend Lord McKenzie hit the nail on the head by saying that all this is fine but unless it is accompanied by funding—and, one could even add, an ability to raise funds locally—how

important will it actually be? I will read the Minister’s comments with great interest. I may come back on this again, or I may not. I beg leave to withdraw the amendment.

Amendment 44DA withdrawn.

Amendments 44DB and 44DC not moved.

Amendment 44DD

Moved by Lord Warner

44DD: After Clause 9, insert the following new Clause—

“NHS responsibilities

(1) The Secretary of State may transfer to a combined authority any NHS responsibilities provided for in the Health and Social Care Act 2012 if he considers—

(a) that it is in the best interests of the authority’s population in terms of health outcomes; and

(b) that it will help fulfil his duty in section 2 of the 2012 Act (the Secretary of State’s duty as to improvement in quality of services) to improve the quality of health services.

(2) In making a transfer of responsibilities to a combined authority under subsection (1), the Secretary of State shall request that a memorandum of understanding between NHS England and the combined authority be agreed.

(3) The memorandum of understanding shall—

(a) be consistent with the duties and powers of the combined authority under the 2012 Act, and

(b) last for a minimum of 5 years, unless the combined authority fails to discharge its responsibilities under the memorandum, including its mandate from the Secretary of State.

(4) Any memorandum under subsection (2) shall have regard to the Secretary of State’s duty under section 5 of the 2012 Act (the Secretary of State’s duty as to promoting autonomy) by—

(a) promoting autonomy and avoiding placing unnecessary burdens on the combined authority, and

(b) specifying the key health outcomes to be achieved by the combined authority.

(5) The requirements in the memorandum shall be set out in regulations by the Secretary of State.

(6) A combined authority assuming NHS responsibilities under the provisions of this section shall publish an annual report on how it has discharged its responsibilities on the basis set out in the memorandum of understanding.”

Lord Warner (Labour)

My Lords, we return to the issue that we discussed last Wednesday, namely the ability of combined authorities to assume NHS responsibilities under this Bill. Several things emerged in our last discussion. The first was that the Government currently have no intention of making any clear provisions in the Bill for combined authorities to assume NHS responsibilities. Instead, they wish to proceed on the basis that a combined authority could negotiate a deal with NHS England that would be enshrined in a memorandum of understanding covering a number of years. However, the Secretary of State would retain all his powers in the Health and Social Care Act 2012 to overrule actions by the combined authority in accordance with the memorandum of understanding, if he disagreed with those actions. No matter how much agreement there was between local bodies such as clinical commissioning groups, health and well-being boards and a combined authority, it would still be the Secretary of State’s view that prevailed. The Minister made it

clear when I taxed her on the issue of local bodies replacing acute hospital beds with more preventive and community-based services that that was the position. I have reread

Hansard

to make sure I did not misunderstand her and I did not.

The second point which now seems apparent is that this position sits rather oddly both with the NHS’s Five Year Forward View, endorsed by the Government, and the devolution claims by the Chancellor for the Greater Manchester deal, announced with much fanfare in February. The Five Year Forward View made it absolutely clear that:

“England is too diverse for a ‘one size fits all’ care model to apply everywhere”.

That clearly means that NHS England expects variations between areas. Its five-year plan is very clear that the NHS balance should shift to preventive and community services and that funding incentives and systems should change. That was the purpose of my question to the Minister—what would happen if those sorts of changes took place and proved uncomfortable and controversial in some parts of the country? This is clearly a plan that moves activities and funding away from in-patient hospital care on an agreed local basis. That is very much reflected in the Greater Manchester plans, and the memorandum of understanding is consistent with that. It certainly gives the impression that once a deal is finalised with NHS England and local interests have agreed it, there will be no political interference from the centre.

The Minister’s utterances last Wednesday suggested something quite different. They also suggested a total muddle in the Government’s thinking on how this Bill sits with the Health Secretary’s powers under the Health and Social Care Act 2012. I can understand that the Government do not want to amend the 457 pages of that Act. Who would want to go through that agony again? What I cannot understand is why they want to undermine this broadly sensible Bill by failing to make it clear how NHS responsibilities can be transferred to combined authorities on an agreed basis that is consistent with the 2012 Act. All we have to go on regarding how things might work in practice is the current memorandum of understanding between NHS England and the Greater Manchester Combined Authority, which is not even the finished article—it refers to it being the build-up year—and the prospect of a ministerial order, the terms of which we have not seen. Even if we saw such an order, as I understand it from the Minister, there is no guarantee that the same arrangements would apply to subsequent deals. These would all be bespoke negotiations. What we do have is the Minister’s expressed view, which causes me the greatest concern, that the Health Secretary could overturn local agreements if he thought them wrong—or “bad”, in her words. In other words, agreements hammered out locally could be overturned by a Minister in Whitehall because he did not like the look of them or he had been got at by an adversely affected particular interest. I can assure the Minister, having been a Health Minister who sat in Whitehall and dealt with hospital closures and changes, that there is no shortage of people coming forward to tell you it is a thoroughly bad idea.

That is the position we are in and it is not particularly satisfactory. I do not believe that we need to get to a point where we rewrite the Health and Social Care Act 2012 but this House is a scrutinising House. We should not allow muddled legislation to leave it without attempting to make clear how it relates to earlier relevant legislation. This means that we have to look at the Bill before us, which is concerned with the functions of combined authorities, and be clear about how those authorities could assume NHS responsibilities if that is what people at the local level wanted to do. This is very important, given the size and prominence of the NHS in British life, and means putting in the Bill processes that could be adopted across the country, not just in Greater Manchester, that are as consistent as possible with the terms of the Health and Social Care Act 2012. We should not pass the Bill with the current level of uncertainty and lack of transparency on those processes. That can only lead to confusion in the minds of the public, the NHS and its staff, and indeed in local government, and will inevitably lead to legal challenges when some interest or collection of interests does not like the look of particular local changes and tries to challenge those given the Health Secretary’s powers. In all likelihood, that would mean leaving it to the courts to try to work out what Parliament intended.

This is the context in which I have drafted my amendment, which has several subsections. It starts by clearly stating that the Health Secretary has the power to,

“transfer to a combined authority any NHS responsibilities provided for in the Health and Social Care Act 2012”—

so a link is established between the two bits of legislation. However, he must be satisfied that,

“it is in the best interests of the authority’s population in terms of health outcomes”,

and it must be consistent with,

“his duty in section 2 of the 2012 Act … to improve the quality of health services”.

I am sure the Minister is totally cognisant of all the provisions of that splendid piece of legislation. In making such a transfer,

“the Secretary of State shall request that a memorandum of understanding between NHS England and the combined authority be agreed”,

that is consistent with his duties under the 2012 Act and which will last,

“for a minimum of 5 years, unless the combined authority fails to discharge its responsibilities under the memorandum”.

The proposed new clause goes on to say:

“Any memorandum … shall have regard to the Secretary of State’s duty under section 5 of the 2012 Act (the Secretary of State’s duty as to promoting autonomy) by … avoiding placing unnecessary burdens on the combined authority, and … specifying the key health outcomes to be achieved by the combined authority”.

Finally, the amendment requires the Health Secretary to make regulations setting out the requirements in the memorandum of understanding, and requires the combined authority to publish annually a report on how it is discharging its responsibilities.

I am neither a proud author nor make any claims to being a parliamentary draftsman. This amendment was crafted rather rapidly after Wednesday’s discussion before I had to travel from London early the next day.

I am sure it can be improved. It is designed to outline the kind of provision that needs to be in the Bill setting out a process for transferring NHS responsibilities to combined authorities that both reflects the spirit of the Bill and is as consistent as possible with the Health Secretary’s duties under the 2012 Act. I have retained the idea of a memorandum of understanding between NHS England and a combined authority, à la Greater Manchester. I relate the Health Secretary’s powers to transfer responsibility by order to his duties under the 2012 Act. But once he has signed off that order for five years, which is the period I am suggesting, he should not interfere with the authority’s actions unless it is failing to discharge its duties under the memorandum of understanding.

If we are to make a success of devolution, we cannot have agreements made in good faith between people at the local level and the centre being abrogated because of a bit of pressure put on a Health Secretary by a number of particular interests—often vested interests, some would say. It is essential to have an amendment of this kind in the Bill. I hope the Government will be prepared to discuss such a provision across the Benches. It is not intended to be a partisan amendment. Indeed, I do not even know at this stage whether it finds favour with those on the Labour Front Bench in the other place—they seem to have one or two other things on their minds. I support the purpose of the Bill and more devolution of health responsibilities to combined authorities but that has to be done through a transparency process consistent with the 2012 Act until such time as that legislation is amended. I beg to move.

Lord Hunt of Kings Heath (Labour)

My Lords, I warmly welcome my noble friend’s amendment. I read with interest the debate in Committee last Wednesday about this very important issue, which goes right to the heart of the relationship between the combined authority and the National Health Service, and the integrity of the NHS as a national service providing uniformity of services across the nation.

Of course, our debate is mostly about Greater Manchester. I very much support the thrust of what is happening in Greater Manchester. I want to see the same in greater Birmingham. But we have to get to the bottom of the essential relationship between local authorities, the combined authority and the NHS. This is not an academic exercise. It would be all too easy for a Chancellor faced with enormous financial pressures, as he is, to transfer responsibility to local government or combined authorities and then deny responsibility, putting the blame firmly on local government and using local government legitimacy to defend the rationing of services to an extent that the NHS has never seen.

Of course, one can go back to the foundations of the NHS, to the arguments in the post-war Attlee Government between Morrison and Bevan. Morrison had been leader of the London County Council, which before 1948 had been the largest hospital authority in the world, and wanted local government to run the NHS, but Bevan was concerned that it would be a very patchy service. Bevan won the argument and we had a national NHS. So the arguments we are having today

will be very familiar throughout the history of the NHS. The key question is: how do we get the advantage of local government leadership and democratic legitimacy while ensuring that we have what we would recognise as a national NHS? That is why this is such an important debate and why the Bill lacks clarity.

The Minister was very helpful on Wednesday and spelled out a number of principles. She said first that healthcare services,

“must remain firmly part of the NHS … and the position of NHS services in the area in relation to the NHS constitution and mandate cannot change”.

She said that,

“all national standards for health services … must … be complied with”.

I take that to mean that the NICE technology appraisals will be fully complied with as well. She said:

“The Greater Manchester deal does indeed put health as a function of the combined authority and not of the mayor”,

but that it will not prejudice arrangements elsewhere, which is a very important factor—for me, certainly—in relation to greater Birmingham, although very few of us in greater Birmingham actually want a mayor and very much object to the blackmail that is being put upon us by the Government forcing us to have a mayor in order to accept the greater responsibilities that would be given. We had a referendum in Birmingham not so long ago when we voted very clearly not to have an elected mayor. It is highly objectionable for the Government now to come along and say, “We don’t really care what the public thought, we insist that you have a mayor”. Significantly, the Minister went on to say that,

“in the field of health and social care, all decisions about Greater Manchester will be taken with Greater Manchester”,

with,

“clinical commissioning groups … providers, patients, carers and partners to shape the future of Greater Manchester together”,

and that the Bill will give local authorities within the combined authority,

“the powers to participate in … strong, collaborative partnerships”.—[ Official Report , 24/6/15; col. 1672.]

I would just say that they already have statutory freedom to enter into those partnerships.

In principle, the key issue is that all decisions about Greater Manchester will be taken by Greater Manchester. The Minister referred to the two governance bodies which will prepare a strategic plan and commission Greater Manchester-wide services, but what is unclear is who on earth the decision-maker in Greater Manchester is. Where do decision-making authority and accountability lie? Which of the many bodies in that great region will be held accountable for NHS services and planning and strategic direction? One of the real risks here is that, far from giving Greater Manchester a huge opportunity to lead change in the health service and integration with social care using the fantastic life science base in the city of Manchester, an additional bureaucratic tier is being added.

No decision about Greater Manchester can be taken without Greater Manchester—but what does “Greater Manchester” stand for? Is it the Greater

Manchester Combined Authority or is there a different definition of Greater Manchester? Does the Greater Manchester Combined Authority have a power of veto over the strategic plans and Greater Manchester-wide commissioning decisions of NHS commissioners? If it does not, does that mean that NHS bodies in Greater Manchester can ultimately ignore what the combined authority says? Does NHS England have a performance management relationship with the Greater Manchester Combined Authority?

We come to the point raised by my noble friend Lord Warner. The Minister said that if the Manchester authorities made a wrong decision, she was sure that the Secretary of State would have to intervene. The question is how. I remind the noble Baroness of Section 47 of the Health and Social Care Act 2012. This amends Section 253 of the National Health Service Act 2006, which relates to the Secretary of State’s power to direct NHS bodies and so is the crucial relationship. The 2012 Act does not give a general power to give directions to NHS bodies and an amendment was necessary to enable the Secretary of State to give power to direct NHS bodies—by reason of an emergency—in order to ensure that a service under the Act is provided. My assumption is therefore that if the Secretary of State transferred a function from an NHS public authority to a combined authority under Clause 6, the emergency power of direction in Section 47 of the Health and Social Care Act 2012 would and could be used in relation to the combined authority. However, this can happen only by reason of an emergency. The Government deliberately set the bar very high in the 2012 Act. I am not aware that this has yet been tested in the courts but my reading of the Act is that the power of intervention by the Secretary of State in relation to the combined authority is actually going to be very limited.

The Minister said on 24 June at col. 1672 that for the purposes of the Bill, NHS bodies are covered by Clause 6. That is highly significant because Clause 6 provides a very wide order-making power. Indeed, the second report of the Constitution Committee said that Clause 6 is broadly framed. It,

“would allow the Secretary of State to reallocate very extensive powers from central government to local government, … This equates to a significant extension of Ministers’ powers—powers which are so broadly framed that they could potentially involve the amendment of primary legislation by order, known as Henry VIII powers”.

That is why I am very suspicious of Clause 6. My reading of it is that the commissioning responsibilities in their entirety could be transferred to the combined authority and CCGs abolished. That may be a good thing—I am not arguing against it—but I want to know what the intention is. Can the Minister help with a definition of “public authority”? The clause defines public authority as including,

“a Minister of the Crown or a government department”,

but,

“does not include a county council or a district council”.

Can the Minister tell me which NHS bodies are included in that definition? My reading is that it would be quite possible to abolish the Department of Health, and with it, of course, Department of Health Ministers, simply by taking an order through both Houses of

Parliament. My noble friend Lord Warner and I may say there is an argument for that—indeed, there is a strong argument for pulling the Department of Health and the DCLG together; I remind your Lordships that Nye Bevan was Minister for Health and Housing—but a simple order-making power which could have such a draconian impact on the way the NHS is organised does not seem to me to be the way forward.

My noble friend Lord Warner elegantly sets out the kind of strategic framework that is necessary to enable this devolution and delegation to happen. The Minister must be clear about what is likely to be delegated or potentially devolved. For instance, is national speciality commissioning to be delegated or devolved to the Greater Manchester Combined Authority? Would that also involve the cancer drugs fund? Will that be devolved to Greater Manchester? Is resource allocation to CCGs to be devolved to Greater Manchester? Is CCG performance management to be devolved or delegated to Greater Manchester? What specific powers are going to be handed over by NHS England to Greater Manchester? The memorandum of understanding is clear that it is about devolution and the eventual delegation of responsibility. It is the duty of the Government during the passage of the Bill to spell out exactly what is going to be devolved and delegated.

It would be wrong of this House to allow Clause 6 to pass in the current state of uncertainty when it could have such a dramatic effect on the National Health Service. I very much hope that the Minister will reflect on this before Report so that we can come back for a fully informed debate and deal with it broadly in the way suggested by my noble friend Lord Warner.

Lord Shipley (Liberal Democrat)

My Lords, when I read the announcement about the decision for Greater Manchester and the fact that £6 billion of NHS funding would be devolved to that area, I asked myself two questions: how do they know it is £6 billion and who will make what decision as a consequence of this announcement? After listening to the last 20 minutes or so, I have come to the conclusion that I am none the wiser.

I pay tribute to the noble Lords, Lord Warner and Lord Hunt, for having so succinctly explained what the problems are and could be. I understand that there would inevitably be variations area by area and there needs to be some flexibility in the hands of Ministers to meet what is deemed to be right for a particular local area, but one cannot permit a situation to continue in which there is simply nothing in the Bill in relation to the powers of a combined authority. I think I noted the words of the noble Lord, Lord Warner, correctly when he said that we must make it clear how NHS responsibilities can be transferred to a combined authority and remain consistent with the 2012 Act. That seems to be one of the key points that we have to be clear about. Otherwise, a whole set of problems could arise as a consequence of that lack of clarity in the Bill. I sincerely hope that between now and Report the Minister considers the questions posed today so that we can have a set of amendments that the House might be able to agree upon.

Lord Bradley (Labour)

My Lords, very briefly, I support this probing amendment which has been so eloquently moved and spoken to by my noble friend Lord Warner and Lord Hunt. I said in our debate last week that I suspected that we would need a second debate for clarification of NHS responsibilities and their relationship with the combined authority. I know that the Minister will be anxious to come to the Dispatch Box to give us much clarification this evening, because that relationship needs to ensure that there is no confusion at local level between the combined authority and the NHS.

In our debate last week, I raised 10 questions with the Minister, which I am not going to repeat. I am sure that she will be writing to me with detailed responses, but I want briefly to refer to two of the questions which my noble friends raised again tonight. First, I said that we do not want to leave NHS organisations and their boards, which implement policies by the combined authorities, open to legal challenge that they are acting outside or in conflict with legislation. I am sure that the Minister will want to clarify that point again.

Secondly, I raised the issue of whether the Greater Manchester strategic health board and its relationship with the combined authority needed any statutory powers and whether there was any requirement to amend the Health and Social Care Act 2012. Again, the issue in that general relationship has been raised tonight and I am sure that the Minister will want to clarify that point further. This probing amendment is surely to ensure that the devolution which we all support for Greater Manchester in health and social care can be effected efficiently. We will reflect further on the questions raised tonight in the light of the Minister’s response as we move towards Report.

Baroness Williams of Trafford (Conservative)

My Lords, I thank all noble Lords who have made remarks this evening. A number of questions have been raised. Perhaps I might address the amendment generally and then come to specific questions that noble Lords asked.

Amendment 44DD makes specific provisions about the transfer of health and social care NHS responsibilities, as noble Lords have said, including a requirement for an annual report by a combined authority which has assumed NHS responsibilities. It is important to reiterate this evening what I have said in earlier debates. The Government are committed to the view that health and social care services in any area, whatever devolution arrangements are entered into, must remain firmly part of the National Health Service and social care system—the noble Lord, Lord Hunt, alluded to this—that all existing accountabilities and national standards for health services, social care and public health services will still apply, and that the position of NHS services in relation to the NHS constitution and mandate cannot change.

As we have discussed throughout our debates on the Bill, the context in which the Bill’s powers will be exercised is that of implementing bespoke devolution deals, agreed with individual areas and reflecting each area’s proposals and ambitions for devolution. The

Bill is an enabling Bill and I do not believe that it is necessary to include specific requirements about how particular powers will be devolved. However, I hope that tonight I can provide more clarification on specific questions that noble Lords asked.

Within the legislative framework that the Bill is creating, the safeguards are to be provided by not making specific provision in the Bill, such as provision about any memorandums of understanding and their relationship with the National Health Service Act 2006, as amended by the Health and Social Care Act 2012. Safeguards are in fact provided by the requirement that the implementation of any particular devolution deal must be debated and approved by both Houses of Parliament.

Lord Hunt of Kings Heath (Labour)

My Lords, if I may intervene on that, of course I understand that an affirmative order allows Parliament to have a debate, but so what? Nothing else happens. I think that the number of affirmative orders that have been rejected is seven. It is certainly a handful, so in reality we are giving executive power to Ministers to make absolutely any decision they like. The fact is that parliamentary scrutiny is virtually nonexistent. Of course, if we were able to amend or delay statutory instruments, as the royal commission on Lords reform argued some years ago under the noble Lord, Lord Wakeham, that would be different—but we are not, so I am afraid that saying that an affirmative order is a protection simply is not true.

Baroness Williams of Trafford (Conservative)

My Lords, we have talked about the Secretary of State’s ability to intervene, which in itself is also a check and a balance. The orders will be debated through both Houses of Parliament. I will make some progress on this, and if the noble Lord wants to intervene further, he is very welcome to.

For the debates it will be important that full details of the deal concerned, how it was arrived at and the outcomes expected of it will be fully available to Parliament. As I said in the earlier short debate, I am ready to consider whether the standard Explanatory Memorandums are sufficient to ensure that Parliament has all the information it needs in this unprecedented process of devolution. As to a requirement for a combined authority to publish an annual report on its deal in relation to health, there will be a process, as I said in one of our debates last week, for evaluating the progress on each deal agreed with each area. For example, the Greater Manchester deal has an extensive programme of evaluation, with evaluations being public documents available to all with an interest in the area and the progress being made. I do not believe that it is appropriate to make a requirement about the reporting or evaluation of some particular aspect of a deal—an aspect which may not be in all the deals that are agreed.

I turn to some specific points that noble Lords have made. The noble Lord, Lord Warner, talked about the Secretary of State for Health overturning decisions if he did not like them. It is a bit more than that. I think he could intervene if he thought that

decisions would be detrimental to people’s health or well-being. That was the point I was hoping to convey, but perhaps I did not do it articulately enough.

Lord Warner (Labour)

I am being totally confused by the Minister. If she is saying that the detail of a deal is enshrined in regulations, the Secretary of State has signed off that deal. That implies that if there are any controversial issues around in, say, Greater Manchester, they will be dealt with in the orders that come before both Houses of Parliament and which he will have signed off. If he has signed off those orders and they have covered the transfer of resources, for example, from hospitals to preventative services, why should he need to intervene on such a transfer from a hospital to these other services? The Secretary of State seems to want to have it every which way: you agree the deal, you put it in an order and you still reserve the right to veto things on a subsequent level. That is what the Minister seems to be saying.

Baroness Williams of Trafford (Conservative)

My Lords, it is what I am saying but I am also saying that the detail of the deal, which noble Lords have requested full sight of, will go through both Houses of Parliament. It is important that the Secretary of State, of whichever department, can intervene in any matter which he feels is to the detriment of the public. That is what I am saying but maybe we mean different things by “intervene”.

Lord Warner (Labour)

My Lords, this really goes to the heart of this matter. The Secretary of State under my amendment would have to assure himself that having a deal in the first place was for the benefit of the population of the combined authority. He is actually guided in that—also by the 2012 Act—so he cannot agree a deal that is likely to adversely affect that population. He would be in breach of his own duties and responsibilities. If he has then agreed a deal that is not abrogating NICE responsibilities or access standards or anything else, but is merely shifting the balance of resource provision and service provision between one set of services currently and another set of services that better meet that population’s need—which is indeed what the Five Year Forward View says should be done—and he signed that all off in an order, why does he need a power to intervene again during the duration of that order because he thinks something is wrong? He has agreed what they are going to do.

Baroness Williams of Trafford (Conservative)

Perhaps I have not articulated this—in fact, I wonder if the noble Lord and I are talking at cross-purposes. I am not talking about the Secretary of State intervening in the process of the deal and of the order going through both Houses; I am talking about subsequently, if matters went awry in a particular area. However, that would be the obligation of the Secretary of State whether it was for local government or health or whatever area we will be talking about. Perhaps we can leave that there and return to it in due course.

The noble Lord, Lord Warner, also made the point that it will always be the Secretary of State’s view that prevails. The noble Lord suggests that however great the local consensus might be, the Secretary of State has the power to override this. This argument lacks the

essential element, which is how the Secretary of State will exercise his powers. These powers will be exercised reasonably, having regard to all relevant considerations, including local views and the NHS’s own plans in the forward view. In terms of service reconfiguration, the Government have pledged that all service changes should be led by clinicians and patients and not be driven from the top down. The Government have outlined strengthened criteria that decisions on NHS service changes are expected to meet. The criteria are: support from GP commissioners; clarity about clinical evidence bases underpinning proposals; arrangements for public and patient engagement, including local authorities being further strengthened; and the need to develop and support patient choice.

The MoU between the NHS England and Greater Manchester makes it clear that plans for devolution will align and support the objectives set out in the Five Year Forward View. The forward view sets out the NHS’s own plan for the next five years, supporting local areas to take forward plans for transformation, including an increased focus on prevention and integration of services. On the aspect of the 2012 Act that noble Lords have asked about, we have been very clear that existing NHS standards and accountabilities will be upheld. The NHS Act 2006 as amended by the 2012 Act sets out clear duties held by the Secretary of State in relation to the health service. For example, the 2006 Act puts a duty on the Secretary of State to,

“have regard to improvement in quality and reducing inequalities”,

and the duty is exercised in a way that supports local areas. He and other noble Lords asked about the compatibility between the 2012 Act and what has been proposed here. I can confirm that they are compatible with each other.

The noble Lord, Lord Hunt, asked who actually takes the decisions in Greater Manchester. The memorandum of understanding between NHS England and Greater Manchester provides that decisions are to be taken by the partnership between the local authorities and the health bodies—in other words, the Greater Manchester joint commissioning board as a board would operate. This reflects the principle that decisions are devolved to the most local level that is most effective and beneficial for patients and communities.

Lord Hunt of Kings Heath (Labour)

Who do I sue then? Who is accountable in this great mushy edifice that has been created? Who is the accountable officer? That is what we are trying to get to—who can you point the finger at and say, “You are responsible ultimately for what happens in Greater Manchester’s health system”? That does not seem to be coming through at all in this.

Baroness Williams of Trafford (Conservative)

My Lords, there is a partnership board. Who you would actually sue on that board I do not know. It might be the chairman. I imagine that the ultimate accountable person, who you would actually sue, is the board itself because it is jointly responsible for the decision-making. It is a partnership board.

Lord Scriven (Liberal Democrat)

In a previous life I have been both a senior NHS manager and a leader of a council. This is as clear as mud. If, for example, the partnership board decided it wanted to reconfigure local healthcare

and a hospital was to be closed, who would be held responsible ultimately by the public for that decision? Would the Secretary of State ultimately be able to stop that decision? Coming back to what the noble Lord, Lord Hunt, said, where would specialised commissioning fit in? It would not be a national standard, but would what the Minister calls the health partnership be able to move away from decisions made by NHS England on specialised commissioning? If it did, who would be able to overturn that decision? Who would be able to ask for a review of that decision, and to whom?

Baroness Williams of Trafford (Conservative)

My Lords, I can confirm that the accountable body is the partnership board.

Lord Warner (Labour)

We are going nowhere, my Lords. Let us have another go. Let us follow up the issue of the closure of 50 beds in a Manchester hospital because the money is going to be used for preventive services and more services in the community. The partnership board has agreed that, and the consultants in the hospital affected take umbrage at that. They wind the public up—this is a well-tried and tested form of action in the NHS—get some money from a pro-bono lawyer and, under the provision of the noble Lord, Lord Hunt, they sue somebody. The Secretary of State has signed off the partnership board’s deal. Are they going to sue the partnership board? Are they going to sue the chairman of the trust affected for letting his 50 beds go? Are they going to sue the Health Secretary? Or are they going to sue the chairman of NHS England for agreeing this deal? I think we need to know who. This is not an implausible case I am giving; it is everyday bread-and-butter stuff in our British NHS.

Baroness Williams of Trafford (Conservative)

My Lords, as I understand it, it is the partnership board. I cannot add any more to this. As I understand it, the accountable body is the partnership board.

Lord Scriven (Liberal Democrat)

Is the partnership board a statutory body?

Baroness Williams of Trafford (Conservative)

Sorry, could the noble Lord repeat that?

Lord Scriven (Liberal Democrat)

Is the partnership board a statutory body or a corporate board in law, or is it just a partnership?

Baroness Williams of Trafford (Conservative)

I would imagine it is a statutory body. May I confirm that, because I am not entirely certain? I will confirm that either during this debate or after the dinner break on subsequent amendments.

Lord Beecham (Labour)

I would like to help, if I might, because the noble Baroness is obviously in difficulty. This question is a health issue and not her department. When we are talking about suing, we are talking not about suing for damages; we are talking about judicial review. I therefore suggest that somebody gives the Minister some advice, not necessarily now but certainly before we get to Report, on where and against whom action for judicial review might be issued in relation to decisions taken around the health service by whomever is responsible under these deals.

That is the best way to clarify the position. I do not expect the Minister even with the assistance of the Box to be able to answer that now, but it should be answerable before we get to Report.

Baroness Williams of Trafford (Conservative)

I thank the noble Lord very much indeed for that intervention.

Finally, the noble Lord, Lord Hunt, asked me to define “public authority”. It is any authority in the public sector, including all public bodies and NHS bodies, Ministers of the Crown and government departments. New subsection (4) in Clause 6 provides that, in the case of the Bill, it,

“does not include a county council or district council”.

With that, I ask the noble Lord to withdraw his amendment.

Lord Warner (Labour)

My temptation is to say, “You must be joking”. This has been a very interesting and illustrative debate. I do not think that many people, not just on the Labour Benches but on this side of the House, have found illuminating some of the answers to the questions that we asked. I want to make a helpful suggestion to the Minister. I strongly suggest that she facilitates a meeting between some of us with herself and Health Ministers—and possibly even NHS England—to explore this issue as quickly as possible. We are in danger of creating total confusion, not just among ourselves but among people in the outside world and in the NHS, who will read these debates and be thoroughly confused as to what is going to happen to them in the coming years. I suggest that we have a meeting and, on that basis, I beg leave to withdraw my amendment.

Amendment 44DD withdrawn.

House resumed. Committee to begin again not before 8.31 pm.

Committee (3rd Day) (Continued)

Lord Teverson (Liberal Democrat)

My Lords, I speak on this amendment put forward by my noble friends Lord Shipley, Lord Scriven and Lady Pinnock. As we know, one of the key tasks of combined authorities—and one of the key areas where we expect there to be strong synergies, better co-ordination and economic stimulus—is transport and changing transport arrangements. We have seen how in London transport is absolutely essential, and an important part of the mayor’s role; in fact, many people would say it is perhaps the only effective part of the mayor’s role in London. Although we are not comparing London with the other metropolitan areas, it is still a very important area—we have seen that from the recent debate in terms of the northern powerhouse and all the transport arrangements around the Greater Manchester authority, and the others proposed in the north, and indeed joining up those combined authorities that are likely to happen in the north of England.

The purpose of this amendment is simple. Given that this is such a core element of any proposal for combined authorities and the relationship between the Government and those authorities, there should be a very clear form of communication, consultation and exchange of information between those authorities and the Secretary of State. As and when those combined authorities come about, there is then an obligation, once it has been entered into, for the Government and the Secretary of State to communicate transport issues—whether that be rail, roads, airports, or ports—with the combined authority, and for a consultation to take place. Clearly, this is important and part of what will happen.

This has been shown to be very important because, since we had the debate on the northern powerhouse and the transport elements and connectivity of that, already we have had a major change. The following week we heard that a core part of the northern powerhouse strategy—the electrification and improvement of the line on the TransPennine Express between Manchester and Leeds—is postponed. We hope that it is only postponed but it appears that we will all have to catch our breath and wait during the whole of the summer until Network Rail, in conjunction with the department, decides the fate of something that was seen to be absolutely core to the northern powerhouse and the new potential combined authorities.

There is no better illustration than this of why such a change in the Bill is required, in order that there will be real communication, advance warning and consultation between those authorities, the Secretary of State and the department, let alone all the public who are affected. That announcement, which was made so soon after we had the debate, and was apparently a surprise and a new announcement, came very soon after all the big promises and the energy that the Chancellor and others put into the concept of the northern powerhouse. This amendment is nothing more than a sticking plaster but we hope that it would work better for the future and ensure that such an incident does not happen again. I beg to move.

Lord Beecham (Labour)

My Lords, there is a good deal of sense in this amendment. Of course, there are areas—my own is one of them—in which transport issues were effectively run, so far as the Metro system is concerned, for many years by the local authorities before the combined authority came into being. The combined authority currently oversees the function. In relation to roads in particular, I said at an earlier stage of the Bill that, in my part of the world at any rate, the experience of local authorities with Highways England—as I now understand it to be, as opposed to the Highways Agency—is far from satisfactory. What would be the relationship there? Would it be a direct relationship with the combined authorities—Highways England is not really organised on a basis comparable to local government—or would it be via the Secretary of State? It is a matter that needs clarifying. The general thrust in this is one which we would support.

Lord Scriven (Liberal Democrat)

My Lords, I am pleased to put my name to this amendment and I thank my noble friend Lord Teverson for outlining the reason why it is

necessary. On the face of it, it would not seem necessary to have such an amendment, apart from the announcement made last week with regard to major transport infrastructure and electrification of all the rails in the north of England. Let us assume that we have this new system of decentralisation or devolution, and a number of combined authorities and mayors are making significant investments in their areas with regard to the environment and the economy, having been promised that major infrastructure will be invested in to make their rail system faster and the major cities of the north connected, and to help economic activity and to speed up the way in which commuters and people can travel.

Let us further assume that, with no consultation or prior warning, the Government pull that major investment, or pause it or kick it into the long grass—whatever phrase is used. For several years, combined authorities and mayors might have been making strategic investments about the location of economic zones or other infrastructure that fits on to the railways in which the Government said that they would invest. That is why the provision needs to be in the Bill. The Minister said that such things would of course be discussed and a requirement did not need to be written into the Bill, but we now have a real case in which dozens of leaders in the north of England have not been consulted about a major change in government infrastructure funding.

We have gone from the northern powerhouse to the northern power cut in the blink of an eye. We are talking about devolution and decentralisation in which significant responsibilities and money for transport will be handed down to local areas, and strategic decisions will be made not in a vacuum but in relation to national government infrastructure. Local areas will be not only consulted but seen as equal partners so that their investments and plans are taken into consideration when the Government invest; and so that the Government keep local areas informed truthfully, openly and honestly about decisions on infrastructure, whether roads, rail, ports or aviation. This is not a made-up scenario; it is a real scenario that happened last week. It is important that it is written into the Bill that areas that have devolved powers should be consulted or warned about government transport infrastructure decisions, and that the area’s ideas are fed into the national plan.

I am happy to support the amendment and I ask the Minister to accept it. Last week shows exactly why the amendment needs to be in the Bill. We need to enable not just the Government but combined authorities, which will be making significant decisions about their local transport systems, to make strategic decisions.

Baroness Williams of Trafford (Conservative)

My Lords, I will respond first to the point made by the noble Lord, Lord Scriven. I will talk later about the Northern Hub and my perspective on it, having worked on it some years ago.

The amendment is not necessary because existing legislation already enables the Secretary of State to confer by order transport functions on a combined authority. In such circumstances, a combined authority

with strategic responsibilities is able to make representations about decisions that are likely to impact on its area and how it exercises those transport functions should it decide to do so. On the point about combined authorities being consulted, I can confirm that, wherever appropriate, the Government would expect to consult all local authorities, not just combined authorities, on new infrastructure in their area, whether that be transport or otherwise.

However, the Government must have discretion to take decisions about the future and prioritisation of national assets across the country, some of which—for instance rails and roads, to which the noble Lord, Lord Beecham, referred—run through many local authority areas. Of course we would expect to engage with local areas on the impact of such changes. One of the advantages a combined authority brings is that it enables the Government to focus their engagement on issues such as transport with a single body that can represent its constituent authorities on strategic responsibilities across a wider area.

The noble Lord, Lord Beecham, asked about the relationship with Highways England. The relationship would depend on the deal. For example, with the Sheffield deal agreed in December, the combined authority and the local enterprise partnership will have a key role in developing strategy with Highways England and Network Rail.

Returning to the Transport Secretary’s Statement of 25 June, this followed the publication of Network Rail’s annual report. To secure growth for the future the Government have set out the most ambitious programme since the Victorians—a £38 billion programme for enhancing and maintaining the current network. However, important aspects of Network Rail’s investment programme are costing more and taking longer and performance should have been better. The Transport Secretary has been clear that he wants it sorted out. This is not a process about cuts: after years of long-term underinvestment the Government are focused on securing the vital benefits that these schemes will provide. The Government’s enhancement programme is ambitious and stretching and needs to be replanned over a longer timescale to ensure that it remains deliverable and affordable. The Secretary of State has asked the new chair of Network Rail to report back to him in the autumn and he will update the other place.

I do not remember which noble Lord—I think it may have been the noble Lord, Lord Teverson—said that this scheme was announced very recently and has now been scrapped. As I said, I worked on the Northern Hub scheme some three or four years ago. The announcement was made in 2012 and some of it has been delivered. The noble Lord is right that it has been paused—not indefinitely delayed—at this point and I hope that there will shortly be a statement about its continuation.

Lord Teverson (Liberal Democrat)

No one more than me welcomed the ambitious £38 billion investment which has been shown to be overambitious. Part of that investment programme was introduced during the coalition Government and, no doubt, there were creaks in it even at that time.

The Minister has tried to assure me that this is not necessary but was the Midland main line and the TransPennine Express announcement as much news to the local authorities as it was to us? The momentum and rhetoric of the Government since the election, particularly out of the Treasury, has been about pushing this programme forward. This makes it even more incredible that suddenly it has hit the buffers, to use the cliché, literally within a week of this amazing government rhetoric. Did the local authorities get any inkling of this before the public and the House?

Baroness Williams of Trafford (Conservative)

I cannot confirm that those local authorities had any inkling—there is no one from Manchester or Leeds here this evening—but, as I tried to say earlier, the Northern Hub, as a project, is well under way. This aspect of it has been paused—not stopped—and I fully expect it to continue.

Lord Scriven (Liberal Democrat)

The purpose of the amendment is not to say that it has not altered. Let me give a practical example. If a local authority, LEP or combined authority agreed with a multinational investor a decision about the placing of a factory or economic unit and then out of the blue, without any consultation or pre-warning, this major transport electrification on which the investment is predicated was postponed, what would that look like to the international investor? How do the combined authority and the mayor respond? The whole purpose of this Bill is for the mayor to have some form of accountability and authority to deliver on the powers that are handed down or in partnership with national bodies.

The amendment does not ask for them to override. It says that if something like this happens, it is in the Bill that the Government, as a matter of courtesy and of strategic planning with that combined authority and mayor, will pre-warn and discuss some strategic changes that may be made so that they can reassure people who are either investing there, or there already, rather than being left startled and unable to answer the significant questions that investors will be asking.

Baroness Williams of Trafford (Conservative)

I take the noble Lord’s point that if an international investor was reliant upon the fact that the Government had made an announcement about something and then a mayor or combined authority proceeded in that way, it would be very difficult. I have just been passed a note about the Transport Secretary, who gave evidence to the Transport Select Committee in March. He was at that point raising concerns about the cost and the programme delays on the TransPennine link and First Great Western. Transport Ministers answer questions on rail issues all the time. Uncertainty is a natural part of a huge programme; I think that all noble Lords would accept that. The timetable is subject to continuous review as plans develop and the Transport Minister has set out his plan for addressing, not scrapping, the situation. I hope that that comforts the noble Lord.

Lord Teverson (Liberal Democrat)

My Lords, I thank the Minister for her reply. There is a real problem here and it is something that needs to be fixed. I do not in any way question her or her department’swill that this project happens or

that they will communicate with the combined authorities, but the track record shows there is a need here. I will think about that further. In the mean time, I beg leave to withdraw the amendment.

Amendment 44DE withdrawn.

Clause 10: Governance arrangements etc of local authorities in England

Amendment 44E not moved.

Amendment 44F

Moved by Lord Shipley

44F: Clause 10, page 10, line 25, at end insert—

“( ) Where regulations under subsection (1) apply to local authorities in areas not part of a combined authority, the Secretary of State may allow for the local authority to enter into collaborative working arrangements with a mayor or other appropriate governance structure operating in a city or metropolitan area.”

Lord Shipley (Liberal Democrat)

My Lords, I will speak to Amendment 44F very briefly. We had a helpful debate last week about the nature of a combined authority which had close to it less populated and rural areas that nevertheless were part of the urban area in terms of service provision. What we have here is a form of words which I hope the Minister may find helpful, in that it enables maximum flexibility but protects the rights of rural areas. It is a statement of principle about the opportunity for local authorities, which are not part of a combined authority but may be close to it, to enter into collaborative working arrangements with a mayor or other appropriate governance structure which operates in a city or metropolitan area. I hope the Minister finds it a helpful amendment because it is a statement of principle and would enable rural areas to feel more integrated, rather than taken over by urban areas. I hope she is able to think about this amendment and that we can pursue the matter further on Report.

Lord Liddle (Labour)

My Lords, Amendments 44H, 44J, 44K and 44L are in my name. They are probing amendments, and in speaking to them I am very proud to declare an interest as a member of Cumbria County Council. I speak to these amendments with the full support of the Labour leader of Cumbria County Council, Stewart Young. I very much hope that the outcome might be some kind of constructive cross-party—I emphasise that—dialogue between the county council, the generality of local government in Cumbria and DCLG Ministers about how best to streamline what are really cumbersome arrangements for local government in our county in the wider public interest.

We desperately need a simplification of the present structures to provide better value for money at a time when things are very tight and will possibly get a lot worse; to make local government more effective at doing its job with limited resources; to improve democratic accountability and closeness to the people for the entirety of the services that we deliver; and, most importantly in the context of the Bill, to enable the people of Cumbria and the new authorities in Cumbria

to seize the opportunities for devolution of power from an overcentralised Whitehall that the Bill is all about.

The amendments are to Clause 10. We are quite far along in our deliberations but it is the clause that justifies the inclusion of “and Local Government” in the title of the Bill because it widens the scope of what we are talking about from what I think in reality initially started out as a big cities government Bill into something that can transform local government in many of our smaller city and county areas. I remind my Labour colleagues that I think this is in line with the party policy at the last election, where we stressed the importance of devolution to county regions as well as city regions.

Clause 10 does not seek to impose a single model on local authorities, and that is very welcome. That flexibility is right but the aim of the amendments in my name is to remove what we in Cumbria believe will be an insuperable obstacle to the necessary transformation of structures; that is, the requirement in Clause 10(3) that regulations can be made,

“only with the consent of the local authorities to whom the regulations apply”.

This requirement for local government unanimity—in my view and, I venture to say, in the view of many people in Cumbria—gives far too much weight and leverage to what I would describe as the forces of small “c” conservatism. I hasten to add that the position I am putting forward is supported by many large “C” Conservatives in the county. This is not a party issue; this is a view that unites people across the parties in my county council.

My amendments try to offer a number of options for what could take the place of Clause 10(3) to facilitate the creation of new single-tier councils in what are at present two-tier local government areas. I emphasise that in Cumbria that would not necessarily be a single, unitary council but it would be a streamlined model of authorities. In our view, substantial consensus in the community would be necessary to support such a measure but not unanimity, which experience has shown over 25 years—it has been 25 years since this was first discussed—is impossible to achieve. I am putting these amendments forward as options. Some are mutually contradictory. We are interested to hear what the Government think and whether they are prepared to move on this question.

We are putting forward what I would describe as a proposal to enable the Government to be permissive. It would allow progress, which is so important, and I would like briefly to concentrate on the reasons why.

First, in the age of austerity that we are in, unifying councils will save considerable amounts of money. We have to be grown-ups. We know that there is going to be an intensification of austerity, probably starting with the Budget next week. It is our duty as elected representatives in our county to try to safeguard front-line services as best we can in these circumstances. I am not trying to generate a political argument. I just think that it is the clear duty of everyone, of whatever party, to try to do their best to maintain front-line services.

We commissioned a study from EY, which said that having a unitary authority for the whole of Cumbria would save at least £28 million a year in operating costs, which is about 6% of the revenue budget of the county and district authorities combined. That is a substantial saving. Even if the necessary savings might be double—or in the worst-case scenario, triple—6%, that would be a substantial chunk of the savings that the county would have to make in the process of fiscal consolidation, and I am told that the evidence is that where unitary authorities have been established the savings have been rather larger than initially anticipated.

Secondly, it is important to concentrate functions in a single authority if we are to be effective in local government. It really is a nonsense to have planning in one place and economic development in another, to have rubbish collection in one council and environmentally sustainable disposal in another, or to try to have a transport plan if one council is in control of highways and another of off-street parking. There are innumerable instances of this kind. So, for effectiveness, this change is desirable.

Thirdly, it would improve democratic accountability. The great problem with the present arrangements is that it is the under-resourced, tiny district councils that see themselves, and are seen by the public, as the local voice of the people, although they are largely powerless in reality to turn that voice into action, while the county council—which has 85% of the resources—is by definition seen as remote and people do not understand it. It is unhealthy for local democracy to have this division between a pretty meaningless local accountability and a council that is remote from the people, and it is bad for the attitude of the people who work in the authorities.

Fourthly—this is the key point in relation to the Bill—it is only through having a scheme of local reorganisation that we will be able to take advantage of the further opportunities for devolution in the Bill. I think the Minister had an exchange last Wednesday with my noble friend Lady Hollis. She outlined how there could be a local level combined authority, which could then be part of another combined authority, which could then be part of another combined authority. The Minister was very clear that this Russian doll model would not work. If in Cumbria we are to play a part in the devolution of power, we have to find a way of simplifying our local government structure. That is vital if many local problems are to be addressed. For instance, a unified council in north Cumbria could ask to become part of the combined authority being established in the north-east to try to improve east-west communications, or we could try to extend the remit of our LEP outside Cumbria by partnering with others to address issues such as regeneration, business growth and skills, where we are just too small to get a handle on those things.

One of the biggest problems, although it is outside the Minister’s remit, is that we have some of the worst-performing health bodies in the country in our county. They are running up very big deficits. The solution to all the bed-blocking and the problems that exist has to be much closer integration with social care. There has to be a way of doing that, but it would be very difficult to do it with a two-tier structure.

For all those reasons I am hoping that this set of amendments will generate a discussion. I know that the argument has previously been made that, “We don’t want to waste time on local government reorganisation, and anyway we will only consider proposals for its reorganisation if everybody is agreed on a way forward”. I think that many of the noble Lords in the Chamber come from metropolitan areas. Although there have been strong competing rivalries between councils in metropolitan areas in the past, a strong mutual interest has prevailed in those rivalries. In two-tier areas, it is different. There is an inbuilt structural tension between the authorities and conflict between them. There is a debate which is existential for quite a few people, and you will never get agreement. That is why I am asking not for the Secretary of State to dictate but for an openness to incentivise local authorities to talk to each other and begin to reach an agreement by saying, “There are circumstances in which we could go ahead and streamline local government even if we don’t have unanimity”. I leave it there for now, in the hope that the Minister will take on board some of this unsolicited advice.

Baroness Royall of Blaisdon (Labour)

My Lords, it is a pleasure to follow my noble friend. I agree with much of what he was saying, especially in relation to county regions. I apologise for not having participated in the debate beforehand, but much of it has of course been about metropolitan areas and the growth spur needed for them. I fear that in county areas we will be left behind even more, so I hope that the Government will soon come out with some ideas about what they will be doing about county regions, because those are fundamental to the well-being of our country as a whole.

The Explanatory Memorandum clearly states that the Bill is to,

“support delivery of the Government’s manifesto commitment to ‘devolve powers and budgets to boost local growth in England’, in particular … ‘economic development’”.

That is absolutely fine and we could agree with it all over the Chamber. However, the potential of devolution is far more than economic. It should be about much more than our economic well-being. It should be about the devolution of power not just to local politicians but to communities and citizens. It should be about the devolution of functions and powers to the lowest possible level, and about empowering citizens. It is an opportunity to reconnect people with politics and to help restore trust in our system of governance. Like all noble Lords, I am concerned about the rise of populism in this country—indeed, throughout the European Union—and my amendment seeks to address people’s feelings of distance and alienation, albeit in a very small way. This is about a new politics, a new way of doing politics, which I believe is necessary for the democratic well-being of our country.

I draw noble Lords’ attention to an excellent publication by Claudia Chwalisz of the Policy Network and the Barrow Cadbury Trust entitled The Populist Signal: Why Politics and Democracy Need to Change. Drawing on new survey data in the UK as well as interviews and case studies, the publication shows that people are concerned with the process of politics, not merely

its performance, and that they have genuine desire for greater political participation in the decision-making process. It cites examples of interactive forums such as citizens’ assemblies, which allow political institutions to involve citizens in making decisions that affect them. These are not a threat to formal systems of government but much-needed additions to enrich democracy. People might not trust politics, politicians and policies, but they do want to be engaged in decision-making about the services that most affect them.

Young people in particular want a different way of doing things in place of the hierarchical, top-down ways of traditional politics and governance. It seems to me that the Bill could provide an opportunity to encourage local government to devolve powers to local communities and citizens. When people feel, as they do, that the current system does not work for them, populism comes to the fore. The devolution of power to the people is a means of countering the simplistic attractions of the populists, who are feeding off anger and a politics of grievance. This means that politicians at local as well as national level must loosen their grip on power, not just between different levels of government but directly to communities and to individuals as well. It means empowering people and giving them a voice. By this I do not mean consulting local people and then taking no notice of their views; I mean involving them in making important political decisions and enabling them to shape their local services.

There are already some excellent examples of where this sort of policy has been successful. I am sure that many noble Lords can cite examples. I know that my honourable friend Steve Reed, when leader of the council in Lambeth, shared power with, for example, tenants on local estates and with young people in respect of youth provision in their locality. I know that Councillor Sharon Taylor, the excellent leader of Stevenage Council, is doing likewise.

I recognise that it will take some time to familiarise people, including elected politicians, with the idea that “ordinary citizens” can and should be involved in making important political decisions and being properly empowered. Voting, in terms of engagement, is not working, and we have to find new ways of engaging people. It is all very well for us to consider the devolution of power and budgets, but it is the citizens of our country whose views must be taken into consideration. Their voices must be heeded. In doing so, the Government and local government would help to bridge the widening gap between people and politicians, as well as improving their citizens and their lives. The amendment before us now would go some way to addressing these problems, and I hope that the Government will take it into account.

Lord Scriven (Liberal Democrat)

I will very quickly say that I fully support everything that the noble Baroness, Lady Royall, said. When I was leader of Sheffield City Council, we did things such as devolution down to citizens and communities, participatory budgeting, restorative justice—all the things that gave people not just power but actually a stake in the community—and they became authors of a better communities and better well-being where they are. I fully support that,

because at times we talk about devolution but we talk about it to a body rather than actually empowering our citizens and our communities to be part of that.

Following on from that, I would just like to comment on some of the things that the noble Lord, Lord Liddle, said. He talked about not wanting to impose, but then spoke for quite a long time about one county—his own—coming around to a unitary authority, and what that might mean. He said that he did not want the Secretary of State to dictate, but that is exactly what Amendment 44L would do. The Minister has heard me for the last few days talking about things that I want in the Bill. This time I shall probably support her saying that she does not want this in the Bill. Amendment 44L would completely change everything about an empowering and enabling Bill. It says that,

“where there is no agreement by all the local authorities to whom the regulations are to apply on the arrangements under subsection (1), the Secretary of State may make provision for unitary governance arrangements based on recommendations of a body appointed by the Secretary of State”.

That basically means dictation if there is no agreement in that area. That is what the amendment actually says.

I would say to the noble Lord, Lord Liddle, in terms of the things that the noble Baroness, Lady Royall, said, that there are governance issues there. He said that there was confusion and that power needs to be as close to local people as possible. One thing that could happen is that you could devolve from county down to district. There is nothing stopping that, and it would be within the remit of a devolutionary-type Bill that that could happen.

Lord Liddle (Labour)

Could I just make clear what I thought I had made clear in my speech? I was not saying that the only model that was possible was a unitary authority for the whole of Cumbria.

Lord Scriven (Liberal Democrat)

I understand what the noble Lord says, but the Bill says that when there is disagreement you would be pushing for unitary authorities or an authority—one or more—in an area where that might not be needed. That is what Amendment 44L would dictate would happen if there was no agreement. It could be one unitary or two or three unitary authorities within the area. The principle of having an amendment that forces unitary authorities on areas that do not want them is not in the spirit of how I see devolution.

Lord McKenzie of Luton (Labour)

My Lords, we have Amendments 44G and 45A in this group, to which I shall speak first. Amendment 44G is an attempt to address in part the concerns expressed by the Delegated Powers and Regulatory Reform Committee at paragraph 17 of its first report this Session. Again drawing attention to the wide powers in Clause 10, the committee states:

“We are not convinced that requiring the consent of the local authorities affected is by itself a sufficient control over the very wide powers conferred by clause 10. In our view the delegation is inappropriate without the exercise of the powers being made

subject to similar constraints and protections as those which apply to the establishment of a combined authority under Part 6 of the 2009 Act”.

The amendment that we are talking about requires that when exercising the power under Clause 10 the Secretary of State must,

“reflect the identities and interests of local communities and to secure effective and convenient local government”.

It is difficult to see why the Government should object to any of that. Since then, and only today, just before the Committee met, we had the opportunity to see the Government’s reply to the committee’s deliberations, in which the Minister says that these regulations are not of themselves establishing new structures or governance arrangements but modifying where all the councils concerned consent to processes for merging authorities, creating unitary authorities and reducing the number of councillors to fast-track these processes. This is not a sufficient distinction to say that we should eschew the recognition that these processes should reflect the identities and interests of local government.

Amendment 45A is also addressed by the DPRR report and would remove the subsection that removes the denial of the hybrid procedure. We know that this is not unusual in legislation. Indeed, in the case of Ebbsfleet, for a limited period, with our reluctant agreement, it was instigated, but there is normally, surely, an alternative mandatory consultation process that is laid down as a substitute. That is what happened in the case of Ebbsfleet. Where is the process in that situation? On what basis is the hybrid instrument process, if applicable, to be denied if there is no alternative procedure on offer?

Amendment 44F, in the name of the noble Lord, Lord Shipley, seems entirely reasonable to us, and the Minister may say whether it is necessary to provide specifically for this in legislation. Are not associate membership arrangements already in operation in certain circumstances?

Amendment 46A, in the name of the noble Lord, Lord Shipley, in part mirrors an early amendment that we tabled. We have no great objection to the establishment of an independent commission to review and advise on the progress of devolution, but we need to be mindful of not creating another tier of bureaucracy and a process that might drive uniformity on these matters. My noble friend Lady Royall is right to focus on how devolution is working for communities and individuals. Putting decision-making and policy formation closer to communities and individuals and getting their engagement is one of the fundamental reasons for embarking on this process, or should be. Of course, it will be an evolving process and nowhere near complete in six months, although we need to give it impetus from the beginning.

As for the issues raised by my noble friend Lord Liddle, I fully understand the desire to have a single-tier or unitary authority. I know that in our own local case in Luton it has transformed the opportunity to deliver and join up services in the town. The difficulty that we face, whether it is a county council seeking unitary status or the reverse, is that just one council holding out and not agreeing negates the opportunity of Clause 10,

but I say to my noble friend that it operates in two directions. If our noble friend Lady Hollis were here she would say in no uncertain terms that having the need for unanimity has destroyed the opportunity for Norwich to get unitary status.

I think I may have a way through this, and perhaps the Minister might comment. I am not sure that the provisions are still in operation, but about six years ago there were successful attempts to get unitary status for Exeter and Norwich. The enlightened Government of the day supported it, but unfortunately it was judicially reviewed, and when the coalition Government—the coalition of Liberal Democrats and Conservatives—came in they overturned the decision. There is a serious point here: there are big towns and significant cities, such as Cambridge, Norwich and Exeter, that believe that any decent economic analysis shows that they can deliver more effectively for their communities if they are part of a unitary authority. In a sense, my noble friend’s amendment to deny the need for unanimity would have its problem in one direction or the other.

I entirely accept the point that we would not want to leave it up to the Secretary of State in any unfettered way, but should we not be thinking perhaps of establishing some criteria such as those that were certainly applicable at that time, as I recall: an assessment of whether the cities involved could benefit from unitary status and whether it added value to their communities? Certainly, that was the initial assessment in the case of Norwich and Exeter. Perhaps revisiting some such criteria, if those procedures are not still around, might be worth while. I accept entirely that devolution to county regions is party policy, and heaven forfend that I should not support party policy. We can see the benefit of unitary status for counties, but it is a two-way street and it can have an impact in the other direction.

My noble friend referred to “tiny district councils” being largely powerless, but they are seemingly not so powerless when they can stop a unitary authority. However, we are not talking about tiny district councils; we are talking about significant district councils that are being denied the opportunity of unitary status and all that that could bring, just as it could to a unitary county council in Cumbria.

Lord Woolmer of Leeds (Labour)

My Lords, I will address this issue in relation to combined authorities and take up the points raised by my noble friend Lady Royall. In relation to combined authorities, in reality a lot of the deals are being done in discussions between leaders of authorities, the department and the Treasury. There is a danger of a democratic deficit: that is, the deals that are being done are not necessarily devolution with the wholesale endorsement and support of the wider population. They are being done behind closed doors, with detailed and close negotiations, and afterwards people are being invited to accept that—indeed, not only to accept that but to accept an elected mayor, which in some cases fairly recently they have rejected.

So there is a problem: in order to make haste with the underlying drive of this legislation, there is a strong temptation to consult and persuade people

after the event rather than beforehand. That is probably inevitable. However, I say to my colleagues, certainly in my part of the world, that ensuring that people accept this, agree with it and are enthusiastic about it will be an enormous job. They will be faced by what is pretty well a take it or leave it situation. They will not have played a great part in this. Of course, their elected representatives will have done—that is, indirect democracy—but that does not necessarily mean that people at large will have done. I said earlier that I am very enthusiastic about a combined authority for the whole of Yorkshire, which has 5 million people. However, it is enormously difficult to involve 5 million people beforehand and to find out whether they agree. Indeed, there will always be people who strongly disagree.

Therefore, there is a problem here that not merely the leaders of authorities but government Ministers have to deal with. To say to people, “We’ve done a deal behind closed doors and this is what the devolution package looks like”, is hardly taking people with us. I say to my colleagues around Yorkshire—we have the former leader of Sheffield here—that there will be a big job to do in making the move from doing a deal with the Government to forming a large combined authority and it being something that people are enthusiastic about. I hope that in the fullness of time this will have the enthusiastic endorsement of the wider electorate and that they will be given an opportunity to express their opinion at the ballot box. There is no suggestion that there should be a referendum on a large combined authority or on a mayor, so there will be, in my terms, a democratic deficit. People will have to work hard to ensure that there is gradual and significant support for the driving aim of this legislation in the large metropolitan areas.

Baroness Williams of Trafford (Conservative)

My Lords, I thank noble Lords who have all made interesting points this evening. On Amendment 44F, I can confirm that there is nothing at all which would prevent a local authority from working in partnership or collaborating with other authorities in its area, or across other areas. Indeed, the Government encourage collaborative working as an integral part of providing better services for local people and providing value for money for local taxpayers. However, we do not see that it is necessary for the Secretary of State to provide for any such collaborative working by order. It is for local authorities to enter into partnerships where they consider that it would be mutually beneficial and provide value for money for the taxpayer, and it is not necessary for such arrangements to be established in statute.

Amendment 44G seeks to insert a new paragraph into Clause 10(1), requiring the Secretary of State to have regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government. In response to the debate we have just had on this, and the number of interesting points that have been raised, I hope that it may be helpful to noble Lords if I set out briefly how we envisage that the Government may use the powers being taken under Clause 10 in support of any proposals that are submitted to us in the context of devolution deals.

The regulations in Clause 10 are not themselves about creating new governance structures, for example creating new unitary councils or merging councils. Rather, the regulations are about modifying the processes in particular cases. An example would be enabling, in the case of a particular deal, the processes for establishing new governance arrangements to be fast-tracked if all the councils involved consent. The processes for establishing unitary councils and merging councils are currently set out in Part 1 of the Local Government and Public Involvement in Health Act 2007. It may be that a bespoke devolution deal is agreed with an area which involves changing the governance arrangements in the area in a way that results in a move to more unitary structures, perhaps also involving some merging of authorities.

All the councils involved have agreed these changes. Furthermore, all these changes will have been developed as part of the discussions, negotiations, and engagement by councils with their areas, which have led to the development and finalisation of the deal. With the deal agreed, all will want to see it implemented as quickly as practicable. The regulations under Clause 10 can help fast-track the processes. These regulations can modify the application of the 2007 Act processes for bringing about these governance changes in the particular circumstances of this agreed devolution deal. Such regulations, which would require the approval of both Houses of Parliament, can be made only with the consent of the local authorities to whom they apply.

However, we do not see these regulations bringing into play different fundamental principles underpinning the Secretary of State’s consideration of matters as provided for by the existing statutory processes for making governance changes. We see them modifying such processes, such as the processes in the 2007 Act which I have mentioned in the example I have just described. Where the processes of governance change involve the Secretary of State being required to have regard, for example, to the need to reflect the identities and interests of local communities, and to secure effective and convenient local government, this will continue to be the case. Accordingly, the amendment proposed is not necessary and I would hope that, given this explanation, the noble Lord will agree to withdraw it.

Amendments 44H, 44J, 44K and 44L appear to envisage a situation in which a change to unitary governance arrangements is supported by the local authorities that have agreed that such restructuring should form part of a devolution deal, and in relation to which the Secretary of State would then make regulations, but they cannot agree on the detail of such restructuring. In these circumstances, it provides that the Secretary of State may nevertheless make regulations, either with the consent of the principal authorities to whom the regulations are to apply; or after consideration of any demonstration of support from key organisations and citizens in the affected area; or, where provided, on the advice of the Local Government Boundary Commission for England. On the face of it, this amendment would provide the Secretary of State with some flexibility to determine the arrangements to be put in place where these cannot

be agreed by the affected council, and to do so by drawing more widely on the views of others within the authorities or, indeed, other bodies.

However, this is to suggest that it is the Secretary of State himself who in some circumstances should be determining the aspects of the devolution deal. In reality, and as we have discussed, the process that we are putting in place and the flexibilities we seek to provide are all focused on ensuring that any proposals for a devolution deal put to the Government, and which may or may not include structural change, are negotiated and agreed with the Government by all the councils concerned. The purpose of any subsequent regulations made by the Secretary of State is to implement the proposals that have been agreed as quickly and effectively as is practicable and with the consent of the local authorities to which those regulations would apply. It is not the role of the Secretary of State to use the regulations he makes to paper over any cracks or to impose any kind of solution that does not reflect the deal that has been agreed.

At this point, I say that I have a lot of sympathy for the points made by the noble Lord, Lord Liddle. I can see exactly the problems to which he is referring. In a way, it is a test of the leadership in that area to agree. To amend that in some way undermines the whole process of devolution and the fact that this is an enabling Bill. I think that we had a corridor conversation at one point, and I am very happy to talk to the noble Lord on a one-to-one basis—if he was running Cumbria, he might have sorted something out by now because he seemed to have it absolutely right on how to do it. However, it does have to be locally led, but I am very happy to sit down with him and perhaps discuss some of the issues and see whether there are other mechanisms by which Cumbria’s ambitions could be realised.

Amendment 45A seeks to delete the provisions in the Bill providing that any regulations made under this clause are not to be considered to be hybrid. This approach of disapplying the hybridity processes from secondary legislation that makes provision about particular areas is well precedented. Our aim, as I have explained to the House, is to agree bespoke devolution deals with particular areas. To do this, we envisage following a process that begins with the Government having conversations with areas about their proposals, their ambitions and the aspirations of their communities. Through these conversations, agreement will be reached between the Government and an area on the deal; that is, the agreement about the powers and budgets to be devolved to the area and about the governance arrangements to be put in place to support these powers being confirmed on the area. Strictly, of course, those arrangements will be with the democratically elected representatives of that area. In developing their proposals and reaching agreement, those representatives will engage with businesses, communities and local people in that area; in short, they will engage with those who will be affected by and will benefit from the devolution deal.

The parliamentary process is to provide Parliament with the opportunity to agree or, if it sees fit, reject the devolution deal that the Government and an area have concluded. Parliament will have before it in the

Explanatory Memorandums details of the devolution deal that the secondary legislation under consideration is seeking to implement. As I said in debates last week, I am prepared to consider whether it might be appropriate for further information to be made available about any devolution deal under consideration. In these ways, Parliament will have available to it all the information it needs to reach a decision on the secondary legislation, and those affected by the legislation will, through the local deal-negotiating processes, be able to make the inputs they may wish to the deal. There is thus no need in the case of these instruments to apply the hybrid procedures.

Further, and as we have discussed in previous debates, once the negotiation of any devolution deal has been concluded, we are anxious to ensure that the proposals can be implemented quickly and to the benefit of all concerned. The hybridity process would delay the delivery of those benefits. I hope that the noble Lords will agree not to press this amendment.

Amendment 48B would insert a new clause placing a statutory duty on the Secretary of State to provide a report to Parliament on the involvement of communities and local electors in the process of devolving power from central government to local and combined authorities. I completely agree that devolution proposals should show how communities will be engaged. However, the important thing here is not putting in place a tick-box requirement in legislation. Instead, the key issue is how central and local government work together to make sure that all deals include agreement on how power and responsibility will be shared with communities and individuals to mutual advantage. As with other aspects of a bottom-up exercise, obviously we would welcome applications from areas with ideas for incentives for this as part of any deal. The noble Baroness, Lady Royall, talked about the importance of counties; naturally we would love to hear from counties.

We believe that devolution to neighbourhoods can deliver better outcomes and more efficient services in many cases. We are aware of lots of examples of neighbourhoods and parishes taking on services. Cornwall, for example, has set out a framework for devolution to town and parish councils and community groups. We will be actively asking how local authorities will work with communities and neighbourhoods in delivering devolved services, and I have asked my officials to work with places in developing further ways to incentivise this.

There are already mechanisms—for example, parliamentary Questions and debates—by which Parliament can call Ministers to account. The secondary legislation to complement each deal will be scrutinised by both Houses of Parliament and approved by them. This is a process that involves a detailed Explanatory Memorandum being laid before Parliament.

A process for evaluating the progress on deals will be discussed with each area on a case-by-case basis. For example, as part of its devolution deal, Greater Manchester will be required to put in place an extensive programme of evaluation, agreed by the Treasury. Evaluations will be public documents, available to all

Members of the House. Accordingly, I do not believe that it is necessary to place a statutory duty as per these amendments.

I have a final point in response to the noble Lord, Lord Woolmer, who made a crucial point about wider endorsement by the public. While this is not the London mayor, and Greater Manchester and Cornwall are not London, I see the London mayor as an example of where, as time has gone on, not only has the mayor been better understood by the public but the engagement of both Mayor Livingstone and Mayor Johnson with the people of London has enhanced that role and made it a very compelling one. In previous years it was a question of, “Who will we get to stand as mayor?”, but it has now become an attractive and competitive thing to do—witness the number of people from all parties who are putting themselves forward for it. I take the noble Lord’s point, and I do not think we should forget it in these discussions.

With these explanations and assurances, I hope that the noble Lord will feel content to withdraw the amendment.

Lord Shipley (Liberal Democrat)

My Lords, I am grateful to the Minister for her response to Amendment 44F, and in particular for her reassurance that collaborative working arrangements between a rural area and a combined-authority urban area would not be impossible if an amendment was not approved as part of the Bill.

I thank the noble Lord, Lord Liddle, for giving a very good example of what I was talking about relating to the transport corridor between north Cumbria and the north-east of England. We just need to be certain that we do not need statutory arrangements in place with a combined authority in the north-east that would enable, or make it easier for, the north of Cumbria to engage with that.

Mention was made, I think by the Minister, of the work of Cornwall. Tribute should be paid to Cornwall not only for what it has done with its governance structure—it is now a unitary council—but for the way in which it has moved forward with the devolution agenda. I hope that in the course of the next few years other areas will see that as something that can be followed. I welcome the debate that we have had on this and beg leave to withdraw the amendment.

Amendment 44F withdrawn.

Amendments 44G to 44L not moved.

Amendment 45

Moved by Lord Shipley

45: Clause 10, page 10, line 30, at end insert—

“( ) Before making regulations under subsection (1), the Secretary of State must be satisfied that the local government electors in the appropriate local authorities have been properly consulted by the local authorities who are consenting to the regulations under subsection (3).”

Lord Shipley (Liberal Democrat)

My Lords, I can be brief because the noble Lord, Lord Woolmer, has addressed part of the aim behind this amendment. As it stands, the Bill gives the power of consent on governance arrangements to local authorities. Amendment 45 requires that,

“the Secretary of State must be satisfied that the local government electors … have been properly consulted”.

In one sense and at its simplest, that could be a referendum. However, it is not quite the same thing as a consultation because that enables a debate without there necessarily being a vote to follow it. But if there is not to be a referendum, and I understand the arguments against, we need to be clear that there has been a consultation which is extensive, meaningful, and results in the proposal commanding broad public support. I beg to move.

Lord Beecham (Labour)

My Lords, I have to say that I regard this amendment as somewhat unreal. I had the pleasure of working in three places during the recent general election: first, in my own authority of Newcastle; secondly, in the only seat that Labour retained in Scotland, clearly thanks to my superhuman efforts; and thirdly, in Stockton-on-Tees. The relevance of the last is that more posters were exhibited in Stockton-on-Tees for the Thornaby Independent Association than there were for all the other political parties put together; it is an association for the Thornaby part of the constituency.

The notion that electors are committed to the structures which have been created over time is somewhat fanciful. The good residents of Clara Street, in the ward of Benwell in the west end of Newcastle, which I have represented for approximately a fortnight longer than the Minister has graced this earth—that is, dare I say it, just under 50 years—are not consumed with interest in the governance structures of the local authority. I shall use the phrase again: it is quite unreal. Of course they talk of nothing else but the constitution of council committees in my ward and other places. What the amendment seeks to do is prescribe that, in some undefined way, the Secretary of State has to be satisfied that local government electors have been “properly consulted”, whatever that means, on the details of the procedures laid out in Clause 10. The clause covers the governance arrangements of local authorities, their constitution and membership, and the structural and boundary arrangements in relation to them. It goes on to state,

“‘governance arrangements’ means the executive arrangements, committee system or prescribed arrangements operated by a local authority under Part 1A of the Local Government Act 2000”.

In those 48 years, I have not had a single question addressed to me by a constituent on any of these matters. It may be that I am in an unusual position, but I suspect not. It may be that the constituents of the noble Lord, Lord Shipley, in another part of Newcastle where he was a long-serving councillor, were somewhat more engaged with the minutiae of governance structures, but I am somewhat sceptical that that occurred even then. What is suggested in the amendment is effectively undefined and unworkable, and it is not something we can support. I regret to say that when the Minister, as I expect she will, says that it is not necessary or that she does not understand it, or possibly both, I will concur with her entirely.

Baroness Williams of Trafford (Conservative)

I am sorry to hear that the noble Lord will regret that we concur; we quite often concur. It is not at all unreasonable to

consider that, as the elected representatives of those areas seeking devolutions work up their proposals, they will have considered carefully what the communities, local people and businesses in their areas want and expect. It is not at all unreasonable to believe that those elected representatives will have thought deeply about how to implement the proposals they are seeking, what those proposals will mean for those areas, and how those proposals will affect the local people who live or work in those areas. We can be confident that local representatives have ensured that they have engaged with their communities and their electorate to whatever degree, and in whatever manner, they judge necessary in respect of the many different elements that may be in the proposals they put to the Secretary of State.

In these unprecedented processes to deliver devolution, it is not right that we start inserting detailed requirements about the Secretary of State having to second-guess those democratically elected locally, or to be required to form a view as to whether, in his opinion, those democratically elected local representatives have acted as they should. Therefore, I hope that the noble Lord will withdraw this amendment.

Lord Shipley (Liberal Democrat)

I am grateful for the contribution of the noble Lord, Lord Beecham. I will say two things in response. First, perhaps he would like to have a conversation with the noble Lord, Lord Woolmer, who took a very different view a moment ago about the importance of consulting local people. I agree with the noble Lord, Lord Woolmer. If you want a government structure to stand the test of time with public support, the public has to be engaged at an early stage rather than a later stage. The second point I make to the noble Lord, Lord Beecham, is that some combined authorities are now undertaking the very same consultations that I was talking about. Indeed, the one very close to the noble Lord, Lord Beecham, in the north-east of England is undertaking a public consultation about future governance arrangements. I welcome that. It is hugely helpful that it does.

We will reflect on what has been said and possibly come back with something on Report, but for the moment I beg leave to withdraw the amendment.

Amendment 45 withdrawn.

Amendment 45A not moved.

Clause 10 agreed.

Amendment 46

Moved by Baroness Janke

46: After Clause 10, insert the following new Clause—

“Referendums to undo change to mayor and cabinet executive

In the Local Government Act 2000, omit section 9NA (effect of section 9N order).”

Baroness Janke (Liberal Democrat)

My Lords, I draw your attention to this anomaly because it relates to my own city of Bristol. By way of explanation I will give you an account of the circumstances that have led up to this. In 2012, there was a referendum held by order of the Secretary of State in 12 English cities about whether they would have an elected mayor. Bristol was the only

city that said yes to the elected mayor. In Part 1A of the Local Government Act 2000, the different permitted forms of government and the ways that local authorities can change these forms of government are set out. Section 9N refers specifically to a referendum conducted by this order. These provisions state that if people vote in favour of the mayor and cabinet at a referendum, then the local authority may not move away from that local government model. Bristol is therefore the only authority that may not change its system of governance.

I believe, as do many colleagues of all parties in Bristol, that this is singularly unfair. It is not a question of whether the mayor should be there or not: it is a question of the rights of the local population. Some were saying earlier that people are perhaps not interested in the form of governance. I say to noble Lords that people in Bristol are extremely interested in it. History tells us that not all elected mayors have been a success. Local referendums have been held; petitions have been put together; and mayors have been either reinstated or the system has been changed to ones that people feel are more suitable, more transparent or more appropriate to their area. The people of Bristol should not have that right taken away from them. If we want to be fair, consistent and transparent as we talk about this Bill, this part of the Act needs to go. If Bristol and the surrounding authorities become a combined authority, there will be very many mayors and a lack of clarity as to the roles of the different mayors. I am not against a metro mayor—a strategic mayor—but there needs to be the support of the local population and clarity about who does what, and what the powers of the people are.

We talked about trust with the local electorate and restoring the trust of politics. Many people in my city feel that they have been deceived by the Government. At the time of the referendum, they were not told that they would have no way to alter this system. They were made many promises, which turned out not to be delivered by the then Government, because only one city opted for the elected mayor. I move this amendment in the interests of correcting the situation and making the situation in Bristol as it is in all other English cities. I hope that I might find support for it. I beg to move.

Lord Beecham (Labour)

My Lords, on this occasion, I am happy to support the amendment from the Liberal Democrat Benches. The noble Baroness has made a perfectly sound case and, indeed, one that should be extended wider in the sense that, as I understand it, the deal that will be offered to local authorities will be the kind that was imposed on Bristol; namely, that once a mayoral system is adopted, it will be permanent. That is wholly unsatisfactory.

If the previous amendment we debated had been confined to the issues of mayoralty, for example, as opposed to the internal workings of the authority, I would have been a great deal more sympathetic to what the noble Lord, Lord Shipley, was moving. However, it seems indefensible that a structure can be created and imposed, effectively, on a local community and its electorate with no possibility of change as the price for whatever deal the Government agree to negotiate with

the combined authority. I hope again that the Government will think twice before locking local government into a system without not merely having consulted the electorate but without having their approval, let alone that of the constituent authorities.

Baroness Williams of Trafford (Conservative)

My Lords, I have listened with interest to the comments of the noble Baroness, Lady Janke, and the noble Lord, Lord Beecham. I know that the noble Baroness feels strongly about providing the people of Bristol with the same opportunities to change their system of governance should they so choose by means of a valid petition for a governance referendum to the council. I am aware that during the passage of the Deregulation Bill through this House in February 2015, she tabled a similar amendment. I am also aware that she introduced on 8 June a Private Member’s Bill, the Referendums (Local Authority Governance) Bill, that would have the same effect.

As we have discussed in the past, we cannot accept this amendment on the grounds of both precedent and principle. The precedent for introducing mayoral governance following a referendum instigated by Parliament was set when the London mayor was established. In this case, Parliament instigated a referendum through enacting primary legislation. The electors then voted for London having a mayor and, by a further Act of Parliament, the arrangements were introduced. There is no provision in these arrangements for the people of London to vote that they no longer want a mayor.

The Government followed the same broad precedent in putting in place the legislative arrangements that have led to the establishment of mayoral governance in the city of Bristol. In this case, Parliament, through approving by a resolution of both Houses an appropriate order under the Local Government Act 2000, instigated a referendum. The people of Bristol voted for a mayor, and that form of mayoral governance was established under the Local Government Act 2000. As in the case of the London mayor, mayoral governance in Bristol can be changed only by an Act of Parliament.

The amendment would change that. It would mean that the electors of Bristol could have a referendum by petitioning for one and if they voted to end the mayoral model, it would end. This is indeed the position where a mayor has been introduced wholly by local choice, and it is right that this is so. If it is a wholly local choice to establish the mayor, it is right that wholly local choice should be able to end mayoral governance. However, it would be wrong in principle to create circumstances in which a mayor established through a specific decision of Parliament and local choice together could be ended simply by local choice. I do not suggest that Bristol should for ever have a form of mayoral governance, but the decision to change the governance of Bristol, having been instigated in part through a decision of Parliament, should involve some parliamentary consideration of the issue and not be simply a matter of local choice.

It might be said that passing the amendment would provide the parliamentary input into such a decision, but that is a spurious argument. Whatever considerations

we are giving today, it cannot be said that we are giving serious consideration to the circumstances of a particular place—in this case, Bristol. Therefore I urge the noble Baroness to withdraw her amendment.

Lord Beecham (Labour)

What particular knowledge does Parliament have about the condition of Bristol? Whence does it derive its intimate knowledge and concern for the residents of that city? Why should Parliament refuse to allow them a voice? The Government contrived a referendum, and it went the way they wanted, but is that to remain immutable? It seems a terrible proposition when Parliament can release the authority and return the decision to the people of the city.

Baroness Williams of Trafford (Conservative)

The point that I was making was that Parliament had created this situation so it would be for Parliament to undo it. That is not to say that it could not be undone, but it would have to be undone by Parliament.

Baroness Janke (Liberal Democrat)

I thank the Minister for her response. I am clear that Parliament cannot bind itself to future legislation. I am grateful that the Minister has made the case clear. I should like to be advised what parliamentary action could be taken, certainly before Report. It is important to gain trust in moving to the new combined authorities, so will the Minister consider ways in which we might change this anomalous situation and move forward on the same basis as everyone else? I beg to withdraw the amendment.

Amendment 46 withdrawn.

Amendment 46A

Moved by Lord Shipley

46A: After Clause 10, insert the following new Clause—

“Independent review, support and governance

(1) It shall be the duty of the Secretary of State to lay before each House of Parliament each year a report about devolution within England and Wales pursuant to the provisions of this Act (an “annual report”).

(2) An annual report shall be laid before each House of Parliament as soon as practicable after 31st March each year.

(3) The Secretary of State may by regulations make provision for an Independent Commission or Advisory Board to undertake a review and perform an advisory role in relation to—

(a) reviewing orders and procedure arising from the Secretary of State’s decisions; and

(b) requests for orders received from combined or single local authorities.”

Lord Shipley (Liberal Democrat)

My Lords, the amendment aims to help drive forward positive progress on devolution within England. It says that the Secretary of State should

“lay before each House of Parliament each year a report about devolution”.

It suggests that:

“The Secretary of State may by regulations make provision for an Independent Commission or Advisory Board”,

to undertake a review and perform an advisory role in assessing at a national level and across Whitehall what has been achieved.

Broadly speaking, the amendment derives from the conclusions of the City Growth Commission, which established five progress tests on devolution in England—the first on funding, the second on Civil Service and parliamentary reform, the third on partnerships, the fourth on speed and direction of travel and the fifth on cities’ capacity. The aim of our amendment is to help the process and the aims that the City Growth Commission put in place. I beg to move.

Baroness Williams of Trafford (Conservative)

My Lords, this is an enabling Bill to put in place the primary legislative framework for the devolution of powers and budgets in England to boost local growth in England. Devolution in Wales is to be subject to separate legislation which the Government are committed to bringing before the House. The question of the devolution of powers to areas within Wales will largely be a matter for the Welsh Government and the National Assembly for Wales.

More fundamentally, as we discussed in earlier debates on this Bill, while it is important that Parliament should be able to question and hold the Government to account both on their pursuit of devolution and decentralisation and on the progress being made in those areas which have agreed devolution deals, a statutory requirement on the Secretary of State to report annually is not necessary. There are already mechanisms by which Parliament can ask Ministers to account for anything within their remit. These are opportunities that both noble Lords and Members of the other place take regularly.

A process for evaluating the progress of devolution deals will be discussed with each area on a case-by-case basis. For example, as part of its devolution deal, Greater Manchester will be required to put in place an extensive programme of evaluation agreed by the Treasury. There will be public documents available to all with an interest in the area on the progress it is making. Accordingly, it is not necessary to place statutory duties on the Secretary of State, which would be a duplication of a well-tried process.

With that explanation, I hope the noble Lord will feel able to withdraw his amendment.

Lord Shipley (Liberal Democrat)

My Lords, I am grateful to the Minister for her response. We will look carefully at what she has said and consider whether there is a need to pursue this matter further on Report. For the moment, I beg leave to withdraw the amendment.

Amendment 46A withdrawn.

Amendment 47

Moved by Lord Shipley

47: After Clause 10, insert the following new Clause—

“Governance arrangements of local authorities in England: election of councillors

(1) Section 36 of the Representation of the People Act 1983 (local elections in England and Wales) is amended as follows.

(2) After subsection (1) insert—

“(1A) Rules made by the Secretary of State under subsection (1) must ensure that each vote in the poll at an election shall be a single transferable vote.

(1B) A single transferable vote is a vote—

(a) capable of being given so as to indicate the voter’s order of preference for the candidates for election as members for the constituency; and

(b) capable of being transferred to the next choice when the vote is not needed to give a prior choice the necessary quota of votes or when a prior choice is eliminated from the list of candidates because of a deficiency in the number of votes given for him.”

Lord Shipley (Liberal Democrat)

Amendment 47 takes us to the heart of an issue that we have talked a great deal about over the three days in Committee. We have discussed the creation of one-party states; the need for accountability and legitimacy, and for properly functioning overview and scrutiny structures; and the need to ensure that the public back devolution and the powers and responsibilities that come with it.

We have expressed many concerns in Committee about the creation of the one-party state. One solution to the problem is to introduce proportional representation, using the single transferable vote, into local government. It would strengthen governance, increase transparency and improve accountability because there would be more opposition councillors. That might change the membership of the combined authority and would certainly alter the make-up of overview and scrutiny committees.

Amendment 47 would prevent a one-party state from arising. As more has been devolved in recent years across the UK, so the powers devolved have been accompanied by changes to more proportional voting systems. As more political parties exist and grow stronger, so our governance structures need to reflect that. Proportional representation enables that. They have it in local elections in Scotland. In England, five parties have significant public support in local elections and it is right that the electors who support those parties all feel represented. A system of proportional voting helps not only in delivering fairer overall representation but also, through STV, enables voters to choose an individual as their preference within their party of choice rather than simply having to vote for the candidate selected by that party in their ward.

Earlier, I mentioned Scotland, where the single transferable vote was used in council elections in 2007 and 2012. In Scotland there are no longer uncontested council seats and there are no one-party states that do not reflect that party’s share of the vote. In England and Wales there are more than 100 councils where one party has more than two-thirds of all seats. Scotland has none. In England in 2011, 24 councils saw 10% or more of their seats uncontested. Scotland has not had an uncontested election since STV was introduced in 2007.

I want this Bill to succeed in its broad strategic ambitions but I do not think it will without public support for the governance structure. Hence our concern that local government, combined authorities and elected mayors should all command public support. The elected mayor in this Bill is to be elected by the supplementary vote system. But more broadly, the use of the single transferable vote system in elections would help us to

achieve public legitimacy and accountability in the structure of governance. It will prevent a one-party state arising and it will ensure adequate overview and scrutiny. It will almost certainly increase voter turnout because everyone’s vote will count. This amendment is a solution to the problems that we have identified with the democratic legitimacy of the combined authority structure. I hope it will command the Government’s support. I beg to move.

Lord Tyler (Liberal Democrat)

My Lords, I am delighted to support my noble friend. In recent years, Parliament has been prepared to find fairer voting systems for everybody else: for Northern Ireland, for Scotland and for Wales, and even for the European Parliament. But of course the House of Commons has been a step too far. That does not mean that your Lordships’ House should not look carefully, in the context of this debate, at the failure of the present system to provide effective and representative local government. In recent weeks a number of Labour Peers, who have previously been opposed to electoral reform, have expressed support for it. I was taken by the contribution of the noble Lord, Lord Cormack—I am sorry he is not still here—who said in our debate on 15 June, expressing some support for my views, that,

“at the beginning of a new Parliament, there is a strong case for a commission or committee of both Houses—I am a great believer in committees of both Houses—to look at our electoral system thoroughly, dispassionately and in an unbiased way to see how we can improve it and make it clearer and more consistent, with the fundamental aim of engaging the interest of people, particularly young people and those who do not necessarily have a long history of residence in this country”.—[ Official Report , 15.6.15; col. 1061.]

The noble Baroness, Lady Royall, made a similar point about disengagement and re-engagement a few minutes ago.

Local elections in England and Wales are so badly distorted by the system, as my noble friend said, that, in theory at least, we have to look carefully at what they are doing to the confidence that our fellow citizens have in the system. But we now have hard evidence of what can be done by an improvement to the system, as my noble friend has said. Thanks to Dr Lewis Baston, who has undertaken an analysis of the two rounds of STV votes in Scotland, there has been a considerable increase in fair-minded assessment. Under the STV system in 2007 and 2012 for local authorities in Scotland, the immediate increase in the number of those who actually had an impact on the result was dramatic, going from 40% or 45% to 75%. In Dr Baston’s terms, these are “happy voters”—they have had a result. Even more significantly, he goes on to show that if second and subsequent preferences are effective, the percentage of those who are satisfied can rise to 90%. There will be control freaks, in all parties, who take the view that this is dangerous territory because it gives so much choice to the electorate. Frankly, I think it is the consumers of the local democratic process who we should be interested in. It is clear that they are extremely satisfied with the way in which it now operates in Scotland. When he or she votes they get a much more representative outcome and, I think, a resultant quality of service and accountability. From an elector’s point of view, this is surely the moment we have to move on.

I draw your Lordships’ attention to the fact that a large number of the cities, boroughs and counties in England where a majority has been given, on a minority vote, to one particular group or party for a very long time have been the ones that have failed. That is why it is extremely important that we listen to those who have identified these problems in England and Wales and we should look particularly at the evidence given by the Electoral Reform Society to us—all those involved in this Bill—that there is a real danger of a rise in cronyism, petty corruption, undue secrecy of decision-making and widespread disenchantment with the whole political process. Unless we make some change to this Bill, that will extend to the constituent authorities and the combined authorities under the Bill.

The experience in Scotland shows that the weakening of one-party hegemony has been wholly positive in reviving local democracy. If in England we could move as well, if in Wales we could move as well, I believe we can avoid what long-sighted and wise parliamentarians from Lord Hailsham to Robin Cook described and warned us about as “elective dictatorship”. Persistent monopoly council control by one party over many years, often with a minority of the total vote, is a recipe for inefficiency, partisan patronage and minor corruption, just as it would be in Westminster. Good governance at all levels requires good scrutiny.

I was fascinated by the contribution of another noble Lord a few days ago, on 22 June. I will read it straight from Hansard:

“We hear about accountability. What accountability is there in local government today? The noble Lord referred to a ‘one-party state’ but two-thirds of the constituencies that elect another place never change allegiance. The battles are fought in the marginal constituencies. In a vast number of councils in this country, the councillors never change from one party to another. A significant number of councils do not change allegiance either. So if one is talking about changing, the present system does not do it”.—[Official Report, 22/6/15; col. 1397.]

That was a very authoritative assessment and I suspect that the noble Lord, Lord Heseltine, who I am delighted to see in his place, may recognise those words because they came from him. He said, and I believe he is right, that the present situation is creating a very unpopular and inefficient system of local democracy. We have an opportunity with Amendment 47 to make a really serious attempt to remedy the very sorry state of local governance today.

Lord Beecham (Labour)

Would the noble Lord like to comment on the situation in the Greater Manchester Combined Authority, where most of the councils— Manchester, Wigan, whose leader is no longer in the Chamber but is a Member of this House, and indeed Trafford—have been of a particular political colour for very many years, and yet they are the origin of the Bill that is before us?

Lord Tyler (Liberal Democrat)

Whether or not they are the origin of the Bill that is before us, I think the noble Lord will recognise that there are authorities in the country—he and I could both name them—where the fact that one party has controlled it for ever and a day without effective scrutiny or opposition has not been conducive

to good governance. Again, as Robin Cook said—and I worked very closely with him—good governance requires effective scrutiny and good opposition.

Baroness Hollis of Heigham (Labour)

My Lords, is that not the privilege of the local electorate? If they choose to return a particular colour of politics, that is their choice. Is the noble Lord not saying that he would overrule that choice in the name of some abstract transparency that is easily available through other means?

Lord Tyler (Liberal Democrat)

My Lords, that is nonsense. The noble Baroness should simply look at what has happened in Scotland. We now have a practical example. There no longer are these one-party states in Scotland. There are now far more effective local authorities as a result.

Lord Kennedy of Southwark (Labour)

My Lords, I declare that I am an elected member of Lewisham Council in south London. This has been an interesting debate but changing the voting system to a form of PR is not something that I am in favour of, although this would be only for the election of councillors in England.

In 2011, we did of course have a referendum on moving to a new system for elections to the House of Commons. The system put forward was AV. I know that that is not a proportional system but it was the system agreed by the then coalition Government, put to a referendum of the voters of the United Kingdom and rejected. There is nothing that I have heard in this debate or elsewhere that makes me think there has been a change in the heart of the voters in England and that what people want is to elect their councillors by single transferable vote, having stuck with first past the post elections to Westminster only three years ago. I did, however, agree with the noble Lord, Lord Shipley, when he talked of looking at governance structures from time to time. I think that that is right. That does not take me down the road of moving to single transferable votes for the election of councillors.

There are issues, as the noble Lord, Lord Tyler, referred to, about the number of voting systems that we use to elect people to various public bodies, positions and Parliaments in the United Kingdom. Where a body is elected by a proportional system, it should remain a proportional system, but I would like to reduce the number of systems we use. It is very confusing for the voter to elect people when we are using, at least, first past the post, single transferable vote, closed list systems, top-up lists and the supplementary vote. Supplementary vote is one of the worst voting systems we use. I have been to many counts where the supplementary vote system was used. There are often a considerable number of spoilt ballot papers because people put the X in the second column instead of the first column so the vote is completely discarded, which is a bad thing. I do not think that these people intend to spoil their ballot papers; it is just that they have not understood that they need to put an X in the first column and then one in the second column as well.

Could the noble Baroness in her response make reference to the myriad voting systems we now have in the United Kingdom and how that could be a little less

confusing for the voter? I am sure that from the Dispatch Box we are all agreed that changing the system for the election of councillors in England is not something that either of us supports. Nor is there evidence that it is something that the public want. At this stage, there is no need to move down that road.

Baroness Williams of Trafford (Conservative)

My Lords, we debated this previously in earlier debates. Amendment 47 would amend the Representation of the People Act 1983 to provide that all local elections in England and Wales would be by single transferable vote.

For the single transferable vote system to function effectively, multi-member electoral areas would be required. As many existing electoral areas in England have only one councillor representing them—for example, nearly all county councils—it would require a review of local government electoral areas in England by the Local Government Boundary Commission for England. It could therefore not be introduced, even if it were desirable, within any short timescale. It would also cost more and take longer to achieve a result because of the more complicated count processes.

The noble Lord, Lord Kennedy, asked me to list the myriad electoral systems. The Mayor of London is elected by the supplementary vote system. European elections use the d’Hondt system of PR and local government is first past the post. That is three that I can name; I am sure that there are more. But I hope that on the basis of this short debate, the noble Lord will feel content to withdraw the amendment.

Lord Shipley (Liberal Democrat)

My Lords, I listened to the very brief response from the Minister. This will be an issue that we will want to come back to on Report. I find it difficult to understand why this is deemed a step too far in England and Wales when it is not a step too far in Scotland and has proved to be an enormous success. There are occasions when we should learn from the Scottish experience, for example with participation rates, an abolition of uncontested elections and an end to one-party domination. Of course, in the context of first past the post at parliamentary level, we have a one-party state out of Scotland with all but three seats in the hands of one political party. If we had proportional representation using an STV system in the parliamentary elections in Scotland, that would not be the case. In local government there is STV and it has had a profound and positive effect.

Our concern throughout this Committee has been to prevent absolute power, through the elected mayor, combined authority and the overview and scrutiny function lying with the same political party. In some cases, a combined authority would have no opposition councillors of any kind on it, caused by the voting system that we are using. I give notice that I think we will come back to this on Report—but, having said that, I beg leave to withdraw the amendment.

Amendment 47 withdrawn.

Amendment 48

Moved by Lord Tyler

48: After Clause 10, insert the following new Clause—

“Governance arrangements for local government: entitlement to vote

In section 2 of the Representation of People’s Act 1983 (local government electors), in subsection (1)(d) for “18” substitute “16”.”

Lord Tyler (Liberal Democrat)

My Lords, this House will do itself a real disservice if it is not prepared to look at the example that is already taking place in Scotland. This happens to be exactly my message on this amendment, too, but my noble friend Lord Shipley made that point very well just now.

I start by reminding the House of these words:

“We have heard arguments for a change in the voting age. However, my concern is that that is part of a wider debate and it would not be appropriate—as the noble Lord, Lord Beecham, said—for any such change to be implemented in these quite specific circumstances. I have concerns as well about the administrative complexity of running an election in an area based on a register that would include 16 and 17 year-olds and running other council elections or referenda in the same area, quite likely on the same day, on a different basis with a different franchise. These are circumstances in which the risk of confusing the electorate is very real and this can only weaken, rather than strengthen, our local democracy”.—[Official Report, 22/6/15; col. 1464.]

I am sure that the Minister recognises those words, because they are hers. I compliment her not only on the wisdom of that contribution but on the fact that she used the word “referenda”, which sounds much nicer than referendums.

I thought that the noble Baroness, Lady Williams, was giving an infallible answer to the Labour Front Bench about the franchise for the mayoral elections. It would indeed be confusing if 16 and 17 year-olds were allowed to vote for a mayor but not in the general or local elections that might well be taking place on that same day. I and my Liberal Democrat colleagues entirely agree. We believe that all our fellow citizens should be enfranchised on the same basis for all local authority elections. Our amendment would deal neatly with all the Government’s very proper objections of practicality and potential confusion. On that basis, we can now move forward with the amendment by consensus.

Of course this will not satisfy all our fellow campaigners, since our ultimate objective is to expand the electorate in all elections in this way, but it would mean that we would have some logic, symmetry and standardisation in the continuing reform process. I have been campaigning for this extension of the franchise for many years. I have presented Private Member’s Bills in a succession of Sessions and in the current Parliament. They have enjoyed widespread support across the House. I am especially grateful for the consistent support of the noble Lord, Lord Lucas, on the Conservative Benches, the noble Lord, Lord Adonis, on the Labour Benches and the noble Baroness, Lady Young of Hornsey, on the Cross Benches. Most recently, the Labour Party has officially endorsed this campaign and we are delighted that noble Lords on the Opposition Front Bench have co-signed our amendment.

I admit that my original enthusiasm for this extension of the franchise was based on my own experience of the growing maturity of this age group, their increased responsibilities and their acknowledged fact that their citizenship course should lead inexorably to voter registration and then participation in the democratic

process. There is good reason to think that young people are more likely to register to vote, and to start a lifetime of actually voting, if they are still in the home environment. Once they leave home, whether for jobs or further education, they often become more elusive. All the other distractions kick in and their involvement in the life of their home area weakens or ceases altogether. Those in the 18-plus age group all too often disappear off the electoral scene.

Of course, on average, the first vote cast by a 16 year-old in a general election would probably take place when he or she is 18. Nevertheless, once registered at 16 the likelihood is that they will continue on the register, if only because the ERO will be responsible for keeping them there and there is an obligation, backed by a fine, to continue giving the regular information needed to stay there. As the well-respected Intergenerational Foundation has identified, there is a growing democratic deficit caused by the increasing longevity of the UK population, which is well represented in this House. Quite simply, the young citizens with the most long-term interest in the consequences of their vote are outnumbered by ever larger numbers of pensioner electors.

Of course, since September last year we have had hard empirical evidence from Scotland. I hope at least on this issue that colleagues on all sides of the House will be prepared to accept that this is extremely relevant to the present Bill, because in Scotland the readiness among young people for taking on this vital civic function was demonstrably most impressive. The huge success of the extension of the vote to 16 and 17 year-olds in the referendum, negotiated by my right honourable friend Michael Moore but agreed to by the whole coalition Cabinet, was thought by some to be a step too far.

I suspect some guessed that Alex Salmond was characteristically so in favour of it was because he believed it was going to help him. The interesting thing is that it did not, not in the least. In fact, the very successful levels of registration among that age group, and then their actual vote, demonstrated that those young voters took the whole democratic opportunity very seriously. There has been lots of evidence of that from other Members of the House who witnessed what happened. It is also true that that 16 and 17 year-old cohort voted very responsibly. They voted in a more mature and balanced way than some of their elders, and the blandishments of the separatists fell on very deaf ears. It was middle aged men who actually went the way of the separatists, not the young voters.

In summary, the new young voters proved themselves to be better informed, more conscientious, even more mature than many of their elders. They blew to smithereens all those misgivings and dire warnings of the doomsayers. As a result, in the debates on the Wales Bill in your Lordships’ House last autumn, I successfully argued that a similar referendum in the Principality could not, rationally and in justice, exclude this age group. We should all be grateful to the then Minister and her then colleagues in government for accepting the logic of that case, and authorising the

Assembly so to provide. My understanding is that all parties in the Assembly have decided that they should do so.

Since the referendum in Scotland, the Parliament in Holyrood has moved on to ensure consistency in this extension of the franchise north of the border, again, with the assent of the UK Government. I understand that the Prime Minister here has accepted that there will have to be a vote in the Commons to the same effect in respect of the EU referendum. Given the support already indicated by some Conservative MPs, I hope that this will eventually happen on a free vote.

Meanwhile, in your Lordships’ House, any noble Lord who remains resistant to this logical change must ask themselves two simple questions. First, what evidence have they that the young people in this specific age group in England and Wales are less mature, less responsible and less well informed than their compatriots in Scotland? Secondly, if this is truly a United Kingdom, how can they justify discrimination in such an absolutely crucial matter as the electoral franchise, which will exclude young people south of the border? Having answered those questions, I challenge them to put on record their remaining objections to this reform. I beg to move.

Lord Kennedy of Southwark (Labour)

My Lords, this proposed new clause to be inserted after Clause 10 gives effect to the policy of my own party and that of the Liberal Democrats to allow citizens upon reaching the age of 16 to vote in elections. In this case, the entitlement is for local government elections only. I suspect that this amendment is not going to receive a favourable response from the Government, which is most unfortunate.

The amendment proposed by the noble Lord, Lord Tyler, and supported by the noble Lord, Lord Shipley, my noble friend Lord McKenzie and me is one that the Government really should have a more open view of rather than the all too familiar no that we have been getting when this issue has been raised in recent times. I am well aware that the noble Lord, Lord Cormack, who is not in his place at this late hour, is not a supporter of this policy. However, when we spoke in your Lordships’ House recently, he made some excellent points that I agreed with very much. They regarded the need for much more citizenship education, which I think is very important. I see a programme of that sort of education leading to actually being able to register and to vote at 16. We do not have that at the moment, which is very much to be regretted. The arguments for allowing people to vote at 16 have been rehearsed many times before. It has been a policy in the manifesto of the Labour Party and, of course, the Liberal Democrats. It is also a policy of the Scottish National Party, the Greens and, of course, the Scottish Conservative Party, whose leader, Ruth Davidson MSP, said that she was a fully paid-up member of the vote-at-16 club. I am not sure what the position of Plaid Cymru is, but I am sure that it would support the policy as well.

As the noble Lord, Lord Tyler, said, the game changer was the decision taken to allow people at 16 and 17 to allow people to vote in the Scottish referendum last year. As he said, the young people embraced their civic duty with pride and a real sense of responsibility, and they were part of the decision on

the future path that their country decided to take. It was the right thing to do and it is generally accepted across civil society that it was a good thing. After the referendum, the Scottish Parliament voted unanimously to allow votes at 16 for all elections to Holyrood, and next year 16 year-olds will vote for the new Assembly in Scotland. I am sure that the Welsh Assembly will take a similar view. We are in a position whereby, in different parts of the United Kingdom, there are different ages at which people can vote, which is not a good place to be. It is a mess, and one that this House should address.

What is also interesting is that in the three Crown dependencies close to Great Britain, you can vote at 16: in the Isle of Man and the Bailiwicks of Jersey and Guernsey. You can also vote at 16 at certain elections in Germany and Norway. I have no doubt that this change will happen, and sooner than most people think, and for me it cannot come soon enough.

Has the Minister seen the report from the Election Commission on the progress of moving to IER? Here we are talking about votes of 16 and 17 year-olds when, due to the action of the previous Government—who of course included the Liberal Democrats, so they cannot get away with this one—as of May 2015, the number of 16 and 17 year-olds actually registered to vote has dropped by 47%. There are now only 247,705 people registered to vote as of February 2014. That is a shocking figure and one that both parties in the coalition should be rightly ashamed of. Perhaps in responding the Minister would agree with me that EROs need to take the issue of engagement properly and work particularly to get these young people back on to the register, working with schools and colleges, as takes place in Northern Ireland. It was right when the Labour Party called for EROs to be given a duty to get everybody aged 16 and 17 on to the register.

In conclusion, I support the amendment, and I am sure that the policy change will happen. However, we have a real problem with young people not being on the register, and we need to do something about that.

Lord Shipley (Liberal Democrat)

I add two facts for ministerial consideration. One fact that really struck me about the Scottish referendum was the very high turnout rate of 75% of 16 and 17 year-olds, when for the 18 to 24 year-old age group it was only 54%. That is very marked. What it demonstrates is a clear interest in current affairs and their futures. The question is whether an age group that can demonstrate such a commitment to thinking about their future should be denied a vote generally.

Secondly, decisions are made regularly by local councils which impact on the daily lives of 16 to 18 year-olds. A very good example is the cost of public transport for young people—the cost of bus services, urban rail systems and so on. I have come to the conclusion that the voice of those young people is not adequately heard. I am in favour of votes at 16 and have been for many years, but I am even clearer now that the time has come to implement the change that Scotland has trail-blazed.

Baroness Williams of Trafford (Conservative)

My Lords, there is no doubt that the Scottish referendum and debate was unique, certainly in my lifetime, in engaging the public

in the way it did. Participation in that election by people from all age groups, including 16 and 17 year-olds, was like nothing we have ever seen before. We can all look at it, wonder why we do not engage better with people from all age groups and reflect upon it. Amendment 48 would change the franchise for those entitled to vote in local elections in England and Wales to include 16 and 17 year-olds. As we have discussed, the Bill provides that the franchise for electing mayors for a mayoral combined authority is the same as that for all local elections in England, where the voting age is 18.

More broadly, of course, the voting age for parliamentary elections is set at 18, and beyond that the voting age in most democracies, including most member states in the EU, is also 18. Only Austria in the EU allows voting for 16 year-olds. We have heard the argument about the franchise in Scotland, but this was decided in Scotland, as is its devolved right, just as it is right that decisions about the franchise for elections that take place in England should be decided by this Parliament. I am sorry to be a party pooper at this time of night, but the Government have no plans to lower the minimum voting age and I am clear that the Bill is not the place to take steps to change the arrangements for local elections. I am sure that even proponents of lowering the voting age to 16 agree that, were it to happen, it should be only following detailed debate.

I have not read the report on IER but I wholeheartedly agree with the noble Lord, Lord Kennedy, about EROs engaging in getting people in general registered to vote, and certainly those younger age groups. On that basis I hope that the noble Lord, Lord Tyler, will feel happy to withdraw his amendment.

Lord Kennedy of Southwark (Labour)

My Lords, I am pleased about the Minister’s final remarks, because I think the drop is catastrophic: 47% have dropped out in just over a year and that collapse is a consequence of IER. We have to deal with that; it is catastrophic.

Lord Tyler (Liberal Democrat)

My Lords, this late at night I am grateful for any crumbs that fall from ministerial tables. I suppose I should be grateful for that last comment. I shall take up, for a second, the argument that this is not appropriate legislation into which this reform should be inserted. The Long Title of the Bill includes:

“to make provision about local authority governance; and for connected purposes”.

That is critical to the whole consideration of the Bill. We are trying to revive important parts of the local governance of this country, and if the franchise is not relevant to that I do not know what is. Of course, at this time of night it would not be appropriate, as the Minister said. We have not had a very full debate: I have no doubt that we will have a full debate on Report. Therefore, for the time being, I and my colleagues are happy to withdraw the amendment.

Amendment 48 withdrawn.

Amendment 48A

Moved by Lord McKenzie of Luton

48A: After Clause 10, insert the following new Clause—

“Devolution in London

(1) Within six months of the passing of this Act, the Secretary of State must publish a report on a greater devolution of powers in London, including on whether to make provision for the Secretary of State to—

(a) transfer a public authority function to a joint committee of London councils, and

(b) establish a joint board between London boroughs and the Mayor of London to support further devolution in London.”

Lord McKenzie of Luton (Labour)

My Lords, this issue was brought before us by London Councils—I am grateful for its briefing. This is by way of a holding amendment, because of the time involved. Subject to the debate this evening, we envisage a more specific amendment on Report.

Over the past year it is reported that London government—London boroughs and the Mayor of London—have worked to develop a proposition for devolution in London. From this joint work it has emerged that further devolution will ideally require strengthened governance arrangements at the pan-London and sub-regional levels, without creating a layer of unnecessary bureaucracy. The Bill represents a welcome step towards greater devolution across the country but as yet does not provide a direct route to secure the statutory underpinning for the strengthened arrangements that are believed to be necessary for London. Therefore, London Councils firmly supports the proposed new clause, as it believes that it not only speaks directly to its concerns but provides a framework for developing robust governance arrangements in the capital that support further devolution to London at a pan-London and sub-regional level.

London’s existing governance arrangements work well, it is suggested, with London boroughs and the mayor possessing distinct executive power but maintaining a successful strategic partnership. However, governing devolution in London will require new decision-making arrangements. In particular, over the last year it has become clear that there is a need to develop a way of harnessing the best of both tiers of governance in London to manage reformed service provision without adding unnecessary bureaucracy. As such, London Councils wants arrangements that reflect both the mayor’s and the boroughs’ needs and allow effective agreement and decision-making. In addition, any new mechanism would have oversight and authority only over areas of newly devolved responsibility. In practice, many of the responsibilities that might be devolved to London at a pan-London level would be further devolved to individual members or groups of members.

It is expected that borough partnerships will often be the preferred operational arrangement for the newly devolved responsibilities. In order to meet the Government’s tests for devolution, these partnerships would also need some form of statutory underpinning. The Bill fails to provide a direct enabling route towards the strengthened governance arrangements required to deliver further devolution to London. Specifically, it creates no provision for devolution to London government as a joint partnership between London boroughs and the mayor, and it leaves groups of boroughs unable to develop governance arrangements

robust enough to meet the Government’s tests for the delegation of public functions. Instead, London Councils wishes to explore amendments to the Bill that address two specific issues: strengthening pan-London governance and sub-regional arrangements.

In respect of the need to establish an underpinned partnership between London boroughs and the mayor, it is suggested that it would be necessary to explore a new clause that provides the Secretary of State with the power to establish a joint board between London boroughs and the Mayor of London to support further devolution to the capital. The board’s stated purpose would be to improve statutory functions relating to economic development and public functions generally within the Greater London area, and it is proposed that the board could be established only if all the boroughs, the City of London and the Mayor of London agreed. In order to support devolution, the board should be able to take on the exercise of public functions in relation to the Greater London area. However, in order to respect the existing partnership between London boroughs and the mayor, the power would be limited so that the board could not take on any function that was currently a function of the mayor, London boroughs or the City of London.

With respect to the need to provide a sufficient mechanism for devolution to groups of boroughs, it is suggested that it would be necessary to explore a second new clause that creates provision for the Secretary of State to delegate a function of a Minister of the Crown or a government department to a joint committee of London councils, subject to consultation with and agreement by the relevant councils. The new clause would largely mirror powers in the Localism Act that permit a Minister of the Crown to delegate a function to the Mayor of London but create provision for groups of boroughs to use their existing joint committees for the discharge of delegated public functions. This probing amendment provides an opportunity to test the Government’s thinking on these issues and creates a hook for further amendments potentially along the lines set out above.

The areas where it is believed that there is further scope for devolution to London are skills, employment, housing, health, crime, community safety and criminal justice, and of course business support. It is suggested that, as in Greater Manchester, a London package should include devolution to London of identified budgets to provide a genuine “common front door” via the LEP’s London business growth hub. I beg to move.

Lord Tope (Liberal Democrat)

My Lords, I added my name to this amendment but, sadly, too late to get it printed on the Marshalled List. As a long-time London councillor, I am more than pleased to support the purpose of the amendment which, as the noble Lord, Lord McKenzie, said, has come from London Councils. I am very grateful to the noble Lord for describing the briefing so fully. At this time of night I am certainly not going to repeat all that, but I would like to emphasise some of it.

At Second Reading, I made particular reference to the position in London. As currently drafted, the Bill clearly does not fit with the unique structure of

London government. However, that is not, in itself, a reason why we should not enable further devolution to London and within it and the Bill does not quite meet that. In response to me at Second Reading, the Minister said:

“London boroughs are absolutely not precluded from coming forward with their ideas for devolution”.—[Official Report, 8/6/15; col. 717.]

I am sure that she intended to include the Greater London Authority as well as the London boroughs. It is all very well to say they will come forward with their proposals for devolution. As the noble Lord, Lord McKenzie, said, they have been working on this jointly for some time now and will come forward with proposals. However, the proposals may well reach agreement, not just between the boroughs and the GLA but with the Government as well, but if the legislative structure is not there to enable them to be put into place, it is going to be a very frustrating exercise. The Bill is the obvious opportunity to ensure that the legislative framework is there to enable that further devolution to happen in London.

The noble Lord, Lord McKenzie, made a couple of specific references to what the GLA and London boroughs have in mind. I will repeat it specifically, because I want the Minister to assure us tonight, either that the legislative provision is already there under existing legislation or, if it is not, that they will seriously consider ensuring that there is provision in this Bill. This is an opportunity we have to take. Specifically, as the noble Lord, Lord McKenzie, said, they want provision to enable a joint partnership between London boroughs and the mayor. This is not just permission to co-operate. They can do that without permission. It is to have the governance arrangements necessary to implement that.

Secondly, we are already familiar with a lot of joint working between a number of London boroughs, but we are talking about the creation of joint partnerships between them. Again, we are not simply saying, “It is a good thing; get on with it”. That is happening already and has been for some years. We are talking now about the creation of the necessary statutory governance arrangements to make it happen.

This is the legislative opportunity to do this, if that provision is not already there. London Councils and the GLA, on whose advice I act, do not believe it is. If we do not do it in this Bill, it is a missed opportunity. It is quite likely that there will not be another opportunity in this Parliament and there is no reason at all why London should be left out of the move to devolution simply because it has a different structure to the rest of the country.

Baroness Williams of Trafford (Conservative)

My Lords, I am very happy to use this probing amendment to set out how I see the position in relation to London. I did indeed say at Second Reading that there was nothing to preclude London boroughs or the GLA from coming forward. Perhaps I will expand on that slightly this evening. It is for the London mayor and the boroughs to continue to work together and to agree proposals, which the noble Lord tells me are ready, for greater devolution of powers to London. These could include provision to

transfer public authority functions to a joint committee of councils or the establishment of a joint board between the boroughs and the mayor. We will consider whatever the mayor and London boroughs wish to propose, and no doubt they will be making a strong case as to how any proposal they make would provide better outcomes for Londoners. As with any other area, we are ready to have conversations with them, and look forward to those proposals coming forward.

The amendment, however, would turn the process on its head, because it would be the Secretary of State who kicked things off with his report. This is not the approach that we want to follow, as I am sure noble Lords will have established by now, because we believe that such an approach is far less likely to deliver genuine and effective devolution that will improve to the greatest extent the outcomes places face and the economic performance of particular areas.

I hope that on that note the noble Lord will feel able to withdraw the amendment.

Lord McKenzie of Luton (Labour)

My Lords, I am grateful to the noble Lord, Lord Tope, for his support for this amendment and to the Minister for her reply. If I understood it, I think she was saying that under what is proposed it will be perfectly feasible that the boroughs and the GLA et cetera simply need to come forward and make their case. However, is she saying that what is sought under the new arrangements does not require any change to primary legislation? That is the issue here. Perhaps she could just answer that specifically.

Baroness Williams of Trafford (Conservative)

My Lords, as far as I am aware, it does not. I draw noble Lords’ attention to the manifesto commitments on further devolution to the London mayor as well. I hope that that reassures noble Lords.

Lord McKenzie of Luton (Labour)

I am grateful for that and think that I am reassured by it. I think that it needs a quieter reading than at this hour—perhaps in the morning on the train. If, effectively, it does not need primary legislative change, that is fine. I think that we still have scope to bring something more specific back at Report if that proves not to be the case. I know that the Minister is stacking up lots of meetings at the moment, but it would be very helpful to have a specific meeting with London Councils, to make sure that the case it is making is fully heard and that it understands the technical position that she has outlined.

Baroness Williams of Trafford (Conservative)

My Lords, before amendments are withdrawn et cetera, I can confirm that, and have actually already started to have a conversation with one London authority.

Lord McKenzie of Luton (Labour)

On that basis, I beg leave to withdraw the amendment.

Amendment 48A withdrawn.

Amendment 48B not moved.

Clause 11 agreed.

Schedule 4: Minor and consequential amendments

Amendments 49 and 50 not moved.

Schedule 4 agreed.

Clauses 12 to 14 agreed.

House resumed.

Bill reported without amendment.