English Devolution and Community Empowerment Bill (Third sitting)

The Committee consisted of the following Members:

Chairs: † Sir John Hayes, Dame Siobhain McDonagh, Graham Stuart, Valerie Vaz

† Berry, Siân (Brighton Pavilion) (Green)

† Blundell, Mrs Elsie (Heywood and Middleton North) (Lab)

† Carling, Sam (North West Cambridgeshire) (Lab)

† Cocking, Lewis (Broxbourne) (Con)

† Cooper, Andrew (Mid Cheshire) (Lab)

† Costigan, Deirdre (Ealing Southall) (Lab)

† Ellis, Maya (Ribble Valley) (Lab)

† Fahnbulleh, Miatta (Parliamentary Under-Secretary of State for Housing, Communities and Local Government)

† Holmes, Paul (Hamble Valley) (Con)

† McKenna, Kevin (Sittingbourne and Sheppey) (Lab)

† Moon, Perran (Camborne and Redruth) (Lab)

† Perteghella, Manuela (Stratford-on-Avon) (LD)

† Reader, Mike (Northampton South) (Lab)

† Simmonds, David (Ruislip, Northwood and Pinner) (Con)

† Slade, Vikki (Mid Dorset and North Poole) (LD)

† Uppal, Harpreet (Huddersfield) (Lab)

† Woodcock, Sean (Banbury) (Lab)

Sanjana Balakrishnan, Kevin Maddison, Dominic Stockbridge, Committee Clerks

† attended the Committee

Public Bill Committee

[Sir John Hayes in the Chair]

English Devolution and Community Empowerment Bill

As we begin consideration in Committee of the English Devolution and Community Empowerment Bill, I have a few housekeeping points to make.

Phones should be switched off. I have just switched mine off, as I do not want to set a bad example. I do not really like gentlemen to remove their jackets; I never remove mine, unless I am in my home or garden, or on holiday. I notice someone getting their tie on quickly.

We will power through this, but we will also give the Bill full consideration. I have made it clear to the Government Whip, as I now make it clear to others, that we are not going to delay unduly; equally, we will not hurry through without proper scrutiny. Getting that balance right will be my job.

Everyone is entitled to speak, and they should let me know that they wish to do so in the normal way. Anyone who wants to press an amendment to a vote needs to notify me, or make it clear in their speech that they will press for a vote—unless, of course, the Minister satisfies them, possibly by conceding the amendment, in which case a vote will not be needed. We will see about that as we go. Let us have a good Committee, with everyone enjoying it and participating, so that we have good scrutiny of legislation.

We are sitting in public and proceedings are being broadcast. I emphasise, no tea and coffee—it states that in my script, by the way, but I guess you knew it anyway—but you may refresh yourselves with water.

We now begin line-by-line consideration. The selection list for today’s sitting is available in the room and on the parliamentary website. It shows how the clauses, schedules and selected amendments have been grouped together for debate. There has been a bit of a change, because a Member withdrew their amendments late on, so we will be getting an up-to-date version of that.

The Member who has put their name to a lead amendment in a group is called to speak first. For debates on clause stand part, the Minister will be called first. Other Members are then free to indicate that they wish to speak by bobbing. If we have had a full debate on a clause through discussion of the amendments, I will probably not allow a separate stand part debate. If we have not had full consideration, we will have a stand part debate on that clause. I will gauge that as we go, mindful that we need to make progress, but have proper scrutiny, as I said.

At the end of a group of amendments and new clauses, I will call the Member who moved the lead amendment or new clause again. If any Member wishes to press to a vote any other amendment, which includes grouped new clauses, that is at the Chair’s discretion. The Member must inform the Chair in advance if they wish to press an amendment. My fellow Chairs and I will use our discretion to decide whether to allow separate stand part debates. I hope that is helpful.

With this it will be convenient to consider new clause 35—Standardisation of definitions—

“(1) Within six months beginning on the day on which this Act is passed, the Secretary of State must by regulations standardise the definition in legislation of—

(a) ‘national’,

(b) ‘strategic’,

(c) ‘local’ and

(d) ‘community’

for the purposes of ensuring each refers consistently to the appropriate level of local government across all legislation.

(2) Regulations under this section are subject to the affirmative resolution procedure.

(3) In exercising this power, the Secretary of State must have due regard to the need to ensure consistent use of the words listed in subsection (1), to facilitate public understanding of devolution.

(4) Within six months of a statutory instrument under subsection (2) being made, the Secretary of State must lay before Parliament a report setting out how the power under this section has been used this power, including any reasons for failure to exercise it where there is inconsistent usage of the words listed in subsection (1).”

It is a pleasure to serve with you in the Chair, Sir John. Before I speak to the first group of amendments, I put on the record my thanks to the witnesses who gave up their time in September to give evidence to the Committee. Their comments were insightful and will inform our scrutiny over the remainder of Committee stage.

The English devolution White Paper committed to introduce in law the concept of strategic authorities, which sits at the heart of our new devolution architecture for England. The clause makes good on that commitment and establishes a more consistent and simple model of devolution. The clause sets out the three levels of strategic authority: the single foundational strategic authority, the combined foundational strategic authority and the mayoral strategic authority. Each category will have access to a consistent set of devolved powers and functions.

Mayoral strategic authorities that meet specified eligibility criteria may be designated by secondary legislation as established mayoral strategic authorities, unlocking further devolution. We believe that that will deliver a permanent shift in power from Whitehall to all parts of the country, with consistent powers at the right level across all of England, so that empowered mayors can drive growth, unlock house building and infrastructure, and deliver the change that our communities want.

I echo the Minister’s welcome, Sir John. It is a pleasure to serve with you in the Chair.

We will refer to a good deal of evidence on all parts of the Bill, but it is important to set out briefly—in terms equivalent to those used by the Minister—the concerns that the Opposition continue to have about the significant democratic deficit that arises from the measures in the Bill; the risk of losing the efficiency and local insight that come from many of our local government structures; and, in the context of a country that already has fewer elected representatives per voter than any other developed democracy in the world, the impact of stripping out, by some estimates, up to 90% of elected representation. I therefore echo your comments, Sir John, on the importance of scrutiny of the Bill. Local authorities are the means by which our voters, our residents, exercise control over what happens in their neighbourhoods and communities. It is critical that the legislation gets that right.

We absolutely recognise the hon. Member’s point about democracy. Directly elected mayors can play a powerful strategic role. They are a key new part of the devolution architecture that we have seen work well across the country. I point to Greater Manchester, which has delivered the fastest growth of any local economy. They sit alongside strong democratic structures that we will have in local government. The Bill is complementary to that and does not cut across or undermine those structures.

It is a pleasure to serve under your chairmanship, Sir John. This is not my first Public Bill Committee, but I have had the whole summer to forget how these things work, so I look forward to being firmly guided by you if I stray from good practice.

I will speak to new clause 35. In that context, I emphasise how friendly, constructive and helpful the new clause is intended to be as a way of getting the Committee started on a good note. I ask Ministers to take the need for it on board, although I will not press it to a vote. I tabled the new clause to ensure that, more broadly, words such as “strategic” and “local”, where they relate to a level of government or a level of area of policy, have a consistent meaning for strategic authorities, constituent authorities and community-level groups.

I will give some examples of possible confusion growing in the areas cited in new clause 35. We have a strategic road network, which is in fact a national network managed by National Highways. We have new strategic authorities, which will have to manage a key route network, analogous to the Transport for London route network. We also have local roads managed by local authorities. In the Bill, however, we have strategic authorities being asked to make a local transport plan. That could be more helpfully named a strategic transport plan.

Another area of policy I am very familiar with is the community infrastructure levy. In later clauses, we will discuss new applications of the mayoral community infrastructure levies. I have experience of how, more locally, spending on what most local councils call strategic community infrastructure levies is done by local authorities. Decisions on local CIL spending, which is what councils normally call is, are made closer to the community, often by ward councillors or neighbourhood forums.

We are slightly better off in planning, where there is a national basis for decisions on nationally significant infrastructure, and where strategic planning applications may be called in by regional strategic level mayors under current or new structures. However I do think that we lack rigour, sometimes logic, and often clarity in all these terms now. More thought about making things more standardised and easier to understand would be very welcome. I am not proposing a vote on this new clause, but what I would like to hear from the Minister today is that she will take this away, ask for at least a report on the current range of terminology we have ended up with in different areas of policy, and consider potential further amendments and the fuller review the new clause calls for.

As a point of advice, if people want to contribute after I have called the Minister to sum up then just let me know in advance and I will call the Minister at the end, so she can respond to a variety of points that have been made. I do not want the Minister to have to keep getting up and responding to every speech. I know people are new to Committee, but it helps the Minister be able to sum up her consideration of all the points that have been made.

I am sympathetic to the intentions behind the new clause, and the hon. Member for Brighton Pavilion makes a good point regarding the tapestry of terms that we have in a very complicated local government structure; however, the Bill already includes defined terms relevant to interpreting local government structures. For example, clause 1 defines exactly what strategic authorities are. My concern is that taking a one-size-fits-all approach might have unintended consequences by altering existing definitions that have been deliberately tailored to work in specific legislative contexts. My view is that as we go through this process of standardising the new structure, with strategic authorities now established in legislation working alongside local government and community structures, the roles and the definitions of different structures of government will become much clearer. I hope the hon. Member will not press the new clause.

Clause 2

Functions of Strategic Authorities and Mayors

I beg to move amendment 261, in clause 2, page 2, line 21, after “economic development”, insert “, poverty and socio-economic inequality,”

With this it will be convenient to discuss clause stand part.

The amendment relates to the fact that the new strategic authorities simply must be tasked with reducing inequality as well as creating growth. We know that growth for growth’s sake does not trickle down or help everyone equally. The strategic authorities must be tasked with understanding, measuring and reducing socioeconomic inequality. The socioeconomic duty in the Equality Act 2010 is not yet commenced for England, but if it were the amendment would have to be made.

The amendment would make poverty and socioeconomic inequality an area of competence for devolved authorities, ensuring they can take action to address the root causes of disadvantage in their areas. As co-chair of the all-party parliamentary group on poverty and inequality, this is an issue close to my heart. In July, the officers and I sent a letter to the Secretary of State for Education and the Minister for Women and Equalities to ask about the urgency of commencing the socioeconomic duty. We said,

“The urgent need for the duty could not be clearer. Rising child destitution, increasing reliance on foodbanks and untimely excess deaths attributable to austerity policies all highlight the imperative for a legal tool to reduce socio-economic inequalities”.

We also said,

“Activation of the Socio-Economic Duty marks an important shift from piecemeal responses to rising poverty and widening inequalities, to a proactive systemic approach, embedded across all policy areas”.

The Bill is an opportunity to embed those principles.

I do not believe that these two actions—the commencement of the duty and the writing of this Bill—are mutually exclusive in achieving these goals. I cannot see why, given the Government’s promise to enact the duty, the new bodies should not be set up with it in place and in mind. I know that organisations including many local authorities are already preparing to comply with it in England. Towards the end of last year, one of my Green party colleagues on the London Assembly questioned the Mayor of London with some urgency about the work that he is doing with local authorities and agencies across London to prepare for this. We are now approaching the end of this year and it is still not in place. I believe that the Bill is the right place to start putting this into legislation.

The Opposition have some sympathy with the amendment, but we spent time reflecting on its implications and appropriateness for the Bill. I suspect that, to a degree, the Minister and I agree on this point. If we reflect on the legislative framework around our local authorities from their earliest origins, the relief of poverty and addressing inequalities—the duties that the amendment refers to—have been enshrined. It goes back as far as the Poor Laws, but in more recent years the National Assistance Act 1948 compelled all local authorities to support those destitute in their areas, and the Localism Act 2011 gives scope for local authorities to use their economic powers through activities such as procurement in ways that specifically benefit the local area.

The Levelling-up and Regeneration Act 2023, which was much debated and broadly had cross-party support, is reflected in a lot of this Bill. It was specifically about local authorities using their powers to support the economy of their local area. Just a short time ago, some of the members of the Committee were in this room debating the Planning and Infrastructure Bill, in which the Government set out a vision—contested to some extent—about how those measures affecting local authorities will address persistent issues of inequality. We recognise that sometimes that is about legislation, but sometimes it is about Government action.

Mention has been made of food banks, which were rolled out under the last Labour Government as a means of addressing persistent issues of poverty. I remember them being opened during my time as a local authority councillor, and Gordon Brown visiting and saying, “This is an example of how we expect local authorities to address some of these persistent issues.” Local authorities already have these duties at both the strategic and the micro level. I question whether it is necessary to add an amendment that, in essence, reflects existing duties throughout all the different tiers of local government in England.

I shall start by setting out the purpose of clause 2, then turn to amendment 261. The clause provides some broad thematic policy areas under which functions and powers of strategic authorities are arranged in the Bill. Defining those areas on the face of the Bill will bring clarity and purpose to the role of strategic authorities, which all parties agree we need to do. We want to empower mayors, who know who their areas best, to respond to local needs, so they can be the ones driving change and improvements in economic prospects and living standards and poverty. These thematic policy areas are deliberately broad, to allow for a wide range of activities.

I have a lot of sympathy with the intention behind amendment 261. Alleviation of poverty and tackling socioeconomic inequality should be a core part of what we do and a core metric of economic success. However, as the hon. Member for Ruislip, Northwood and Pinner set out, those duties are already baked into the very function and purpose of local authorities and, critically, they cut across all the thematic areas that we have set out.

The clause will enable strategic authorities to tackle poverty and socioeconomic equality in a cross-cutting manner. Whether it is a clear thematic area such as health and wellbeing, or housing, employment support and economic development, it runs across all of them. It is a core function that we hope the strategic authority will try to deliver if it wants to drive economic success in its area.

Mayors of established strategic authorities will also have the right to ask Government for additional devolved powers that they think will support them in tackling poverty and dealing with inequality. In our view, this important objective is embedded in the way in which we have designed the Bill. It is also embedded in what we are seeing across mayoral strategic authorities at the moment: alleviating poverty, tackling inequality and reducing homelessness are core objectives that they are all driving forward.

We believe that the intent and objective are right, and that we have set out the thematic areas in a way that allows mayors the discretion and ability to work across a range of policy areas to deliver that objective. I hope that the hon. Member for Brighton Pavilion is happy with that explanation.

I beg to ask leave to withdraw the amendment.

Clause 3

Single foundation strategic authorities

I beg to move amendment 4, in clause 3, page 2, line 27, leave out subsections (1) to (3) and insert—

“(1) A unitary district council or a county council may submit a proposal to the Secretary of State for designation as a single foundation strategic authority.

(2) A proposal under subsection (1) must be prepared in such form and contain such information as the Secretary of State may by regulations prescribe.

(3) The Secretary of State may by regulations designate a unitary district council as a single foundation strategic authority if—

(a) a proposal has been submitted in accordance with subsection (1), and

(b) the Secretary of State is satisfied that the designation is appropriate having regard to the need to secure effective and convenient local government in relation to the areas of competence.”

With this it will be convenient to discuss the following:

Amendment 28, in schedule 1, page 87, leave out lines 1 to 29.

Amendment 29, in schedule 1, page 95, leave out paragraph 33 and 34.

Amendments 4, 28 and 29 seek to ensure that this is a genuinely community-led devolution—I am sure that we will repeat that many times throughout the morning. Fundamentally, the Bill seeks to move decision making closer to home, which we welcome. However, closer to home needs to start at home, and we want it to be councils that take the initiative to establish a single foundation authority, not the Secretary of State. We also believe that the public should play a role, and therefore this process should involve consultation, which we believe these amendments will provide.

This is a really important issue for us; we think it is fundamental to the whole concept of devolution. As a result, my hon. Friend the Member for Stratford-on-Avon will speak to these amendments in more detail, and we will push amendment 4 to a vote.

We know there will be quite a degree of debate on this in due course. We sympathise with the objectives of the amendment, and we all share the concern that local people should be the ones who initiate change in the structures that govern their local areas, not the Secretary of State or the man in Whitehall who knows best. Therefore we have sympathy with the objective, and we shall return to that debate later on with some of the amendments around the structures.

It is a pleasure to serve under your chairmanship, Sir John. Amendments 4, 28 and 29 would make English devolution genuinely local by ensuring that local consent and public consultation come first. Amendment 4 would change clause 3 so that local authorities must apply to the Secretary of State themselves to become a single foundation strategic authority, rather than Whitehall imposing devolution on local councils. Amendments 28 and 29 would remove the parts of schedule 1 that would allow the Secretary of State to prepare a proposal for there to be a mayor in an existing combined authority area, and for the establishment of a combined county authority, without public consultation.

One of the greatest criticisms of the Bill is that it proposes a top-down, Whitehall-led devolution, which is not really devolution at all. In my county of Warwickshire, the choice of which strategic authority we create, form or join must come from local elected representatives who are closer to their communities and understand better the needs of our constituents. Such an important shaping of future governance must have grassroots support and should not end up being imposed by central Government, especially if we want to decentralise powers to tackle socioeconomic inequalities, address regional disparities and promote real autonomy.

Without the amendment, local people will lose the right to decide their own governance arrangements. Whitehall will be able to impose devolved powers, force mayoral models on to areas that have not asked for them, and redraw local governance boundaries behind closed doors. Community involvement and local consent are essential to ensure transparency and accountability in devolution decision making.

Amendment 4 reaches the heart of the issue at hand. It would ensure that devolution is locally led, not imposed. It would ensure that a council that wishes to become a single foundation strategic authority must initiate the process itself, rather than wait for the Secretary of State to decree it. If devolution is to have legitimacy, it must be built on local consent, local ambition and local accountability. Without that, we risk the Bill becoming an exercise in central control and a top-down approach dressed up as devolution. We would like to push amendment 4 to a vote.

Both the policy intent and the practice with places going through the devolution process are locally led. The impetus is coming from local leaders and local authorities that are working with their communities to drive the process.

On amendment 4, the Government have been clear that we will consider non-mayoral devolution arrangements for single local authorities on an exceptional basis where certain criteria are met. Designation is not intended as the end point; it is a stepping stone towards deeper devolution, which is what we hope will be the journey for all parts of the country. It is therefore most appropriate for the process to be initiated by the Secretary of State rather than the local authority. However, to be clear, the Secretary of State will not be able to designate a council as a foundation strategic authority unless the council itself consents to that designation. That is a robust safeguard that will protect the interests of the single local authority concerned. I agree with the sentiment behind the amendment to ensure that the Secretary of State has regard to the need to secure effective and convenient local government. I am pleased that those criteria are already embedded in the Bill when conferring functions on a single foundation strategic authority.

Amendment 28 seeks to remove the Secretary of State’s proposed power to direct for there to be a mayor for an existing combined authority without local consent. The Government have been clear about the benefits of mayoral devolution; we are seeing it across the country. For example, South Yorkshire mayoral combined authority brought the Supertram network back into public control after 27 years, and there are already drops in fare evasion, increases in usage, ticketing apps and improved clearing. Greater Manchester authority has taken control of its bus service, resulting in increased punctuality and ridership and cheaper fares. The North East combined authority has secured a £450 million development for one of the largest film studios in Europe, with the potential to create over 8,000 jobs.

There is, perhaps, a risk of the Committee being inadvertently misled, in that all these points are being described as locally led. The Committee needs to be clear: local authorities were told that they needed to submit the proposals or the Government would take powers to direct them to do it. It was a gun to their heads. It was not the case that local authorities came forward proactively. During the 14-year era under the previous Government, it was clear that proposals that did come forward for reorganisation would be entertained by Government, and a number of those were taken forward, but compulsion was not the case. It is only since the Government told local authorities that they either had to come forward or would be directed to do so that we have seen the proposals, so it is not the case that they are locally led. The Committee needs to be clear on that.

I completely disagree. I have been having conversations, for example, with our strategic combined authorities that are going through the process. The difference between this Government and the last is that we have created a clear sense of the powers and the economic opportunities that areas can take forward. Take, for example, our current devolution priority area. I am the new Minister, and I am having the first set of conversations with them. Every single one is excited and enthusiastic about the prospect. At the moment, the demand for devolution deals is outstripping our ability to respond, because we have attached to them clear powers, access to funding and the ability to drive the change that we want to see in those areas. So I completely reject the premise that places are being driven to do this.

There is a risk here that we are conflating what is actually happening on the ground. The Minister is absolutely right, and no one can argue that this Government have not been clear about the structures that they want to put forward. However, to say that there is a demand from local authorities requesting devolution is stretching it a bit, because it is quite clear out there—particularly in my area, in Hampshire and the Solent—that this Government have said to them, “You have to do this; otherwise we are going to force it on you.” That is not locally led, is it?

I spoke to the leaders of Hampshire and the Solent just last week, and they were unanimously enthusiastic about what was being proposed, because they could see the opportunity. I am pleased that it is being voted on, and ultimately it is for places to come forward. What we have said to them is, “If you go through this journey, there are powers that you can draw down that will allow you to drive change in your areas.” The strategic authorities, combined authorities and constituent authorities can see the economic prospect. They see what is happening in Greater Manchester, the Liverpool city region and the west midlands, and they want that for their residents. That is absolutely right, and what we are doing is enabling and supporting that.

Let me talk about the backstop power provided here. We do not expect to use it, which is why it does not come into force at Royal Assent; it is there if we need to draw on it. The only reason it is there—because we think the demand and the momentum created by devolution will do the job for us—is in the instance where there are blockages. That means when constituent authorities that want to move forward are being resisted by a particular authority, we give ourselves the ability to intervene. The reason we are doing that is because we do not want any residents to be left out. We do not want areas to be devolution deserts, not being able to benefit from the economic opportunities and prospects provided.

The reality is that the only reason they are queuing at the Minister’s door to access devolution is that they are being denied access to funding if they do not. Let me give the example of Wessex: Somerset, Dorset and Wiltshire have all been unitarised over the past 10 years. They should have been in the ideal position, but they were overlooked for the first wave of devolution. They were apparently not ready, and I accept that fact, but they have missed out this financial year on more than £300 million—£159.29 for every single household in that area—compared with other areas. They have no real choice but to devolve to a single authority, because why would their residents think it is acceptable for them to miss out on £300 million? So it is not fair, or it is disingenuous, to suggest that this is not compulsion. The other point I want to make—

Order. Interventions should be short.

It is absolutely right that we say that, in order to drive economic success in particular areas, there are powers that relate to economic drivers and levers that we want, and there is an investment fund that can be deployed at that functional level. I will not resile from that; it is absolutely the right thing to do. We are clear with places that we think a strategic authority operating at a functional geography is the way to unlock their economic potential, and we are building powers alongside that. Places that want to take it up absolutely can. At the moment they are queuing up to do so, and I am incredibly happy about that.

I am very disappointed in the hon. Member for Hamble Valley for not getting on in support of his area, which is enthusiastic for this and moving forward. Ultimately, there is momentum around devolution because the benefits of it are being seen already. It is not theoretical; it is not on paper. We are seeing it in our areas, and I want it for every part of the country, not just the ones that have gone through the journey.

The Minister should be very careful about attributing motives to myself that are not there. I am very supportive of the fact that Hampshire and the Solent and will have a mayor. Hopefully, it will be a Conservative mayor, as that will drive the economy going forward. I want to press the point that we can see how divisive this is in the fact that three different versions of local government reform are being proposed. Hampshire and the Isle of Wight were told, in this Government policy, that if they did not go ahead and embrace devolution, it would be forced on them in a way they may not like. That is not locally led; it is compulsion, is it not?

I will not press this point. All I can say is that I sat down with the leaders last week as a new Minister—the newbie—and I asked them how it was going. They told me, “we are enthusiastic and there is momentum around this because we can see the value that it will provide for our communities, so we are driving forward. What we need is for Government to get out of the way and for the Government to support and enable us.” I take that as a ringing endorsement of what we are trying to do. I can only go by the conversations I have had with local leaders. At the moment, I am seeing momentum and support for this, and rightly so because we are seeing the impacts of this on the ground and the Bill will extend that across the country.

Question put, That the amendment be made.

1|0|3|11|The Committee divided:|Question accordingly negatived.||0|0

I beg to move amendment 30, in clause 3, page 2, line 32, at end insert—

“(3A) Before making a designation under this section, the Secretary of State must consult town and parish councils within the area of the proposed single foundation strategic authority.”

With this it will be convenient to discuss the following:

Amendment 266, in schedule 1, page 79, line 15, leave out subparagraph (b).

Amendment 267, in schedule 1, page 79, line 33, leave out subparagraph (b).

Amendment 268, in schedule 1, page 80, line 18, leave out “subsections (3) to (5)” and insert “subsection (3)”.

Amendment 269, in schedule 1, page 80, line 20, leave out paragraph 6.

Amendment 270, in schedule 1, page 80, line 21, leave out paragraph 7.

Amendment 271, in schedule 1, page 82, line 11, leave out paragraph 14.

Amendment 31, in schedule 1, page 83, line 3, at end insert—

“(6A) The Secretary of State must consult town and parish councils within the proposed new combined authority area.”

Amendment 272, in schedule 1, page 85, line 31, leave out paragraph 17

Amendment 27, in schedule 1, page 85, line 37, at end insert—

“(2A) The Secretary of State has obtained consent for the proposal from any affected local government area.”

Amendment 32, in schedule 1, page 86, line 20, after “to” insert “and thereafter consult with”.

We rehearsed the conversation about the level of consultation, but this is really about the role of town and parish councils. We have seen, since the devolution announcements were made, areas around the country rush to form town and parish councils where they do not already exist, and to protect services through town and parish councils where they already do.

However, we have heard that town and parish councillors have been completely ignored throughout the entire process. There has been no formal consultation with them and they have barely been mentioned. In fact, in the whole of the Bill, the title “parish councillor” is mentioned just four times, and in relation only to community assets. They are the true local councils; they are the people who know what is going on in their communities. The suggestion that there is no formal role for them to play in something as important as the creation of a huge council that will move things further away from them is hugely problematic.

We had local reorganisation in the Dorset area back in 2019. I have visited a number of the parish councils, and they have said to me that, since they lost their district council, the unitary council that they now have to work with is distant; things do not get done. In some of the areas being proposed, the new unitary authorities might be 50 or 60 miles away—they are going to be dealing with half a million people. Their main role is going to be in those really statutory, strategic functions. Yet our town and parish councils will be the ones that have to pick up the pieces, so their voices have to be heard. Of course, they will not be the ones making the decision—we know that—but they are simply invisible. We feel strongly that they should be part of that conversation; they should be consultees in this. Things should not be able to happen without their voices being heard.

I have great sympathy with the point that the hon. Lady is making. Would she agree that town and parish councils are already being asked to take on more services? We are seeing potential districts being abolished, handing down—or essentially getting rid of—assets to town and parish councils. Meanwhile, the town and parish councils are not being consulted on the wider reorganisation going forward. I wholeheartedly endorse the hon. Lady’s view that parish and town councils need to be consulted. Could she elaborate on why she thinks the Government are so reluctant to do so?

I thank the hon. Member for his intervention. I am not in the mind of the Government; I cannot understand why they would not want to embrace the incredible hard work of these volunteers in our communities who are already doing so much. But we are seeing, in every community, services handed down or at risk of closure, which are then only saved by the incredible work of the parish councils. It just strikes me as odd that we would not embrace the role of those parish councils.

I would just point out—I will say this multiple times in this Bill Committee—that, as someone in an area that has become unitary, no one is ever saying, “We want more district, borough and county councils, rather than fewer.” We have to be careful not to suggest that there will be less engagement with the council because we are going to unitaries.

Could the hon. Lady set out what legal change to parish councils she is concerned about? What powers are they losing? I cannot see any change in a parish councils’ powers under the Bill.

No power is being lost, because parish councils have few powers in the first place. What we are suggesting—what we feel should be at the heart of devolution—is about consent: actually consulting those local organisations that have a role. They are tax-raising and grant-giving organisations. They are, in reality, taking on a lot of those services yet their voice is silent. We are not asking for their powers to be changed; we are asking for their voices to be heard. That is all that the amendment requires.

I was a town councillor for a good decade and a half before I became an MP. We went through unitarisation in Cheshire in 2008, so I recognise a lot of what the hon. Lady is saying about town and parish councils being asked to take on more services—I saw it under the last Conservative Government as funding was taken away from Cheshire West and Chester council.

The reason why I am mystified is that my experience of town and parish councils is that they are not shy about expressing themselves. I am not sure what the hon. Lady is looking to achieve with the amendment, because town and parish councils are perfectly free to express their view in the consultations that already happen when these authorities are set up. Is she suggesting that town and parish councils should have a veto? From the way her amendment is worded, that seems like an entirely different proposition. Could she clarify that?

Nobody is suggesting a veto; we are suggesting a voice. There is a big difference. We have already heard that district councils felt that they were pushed around by the county councils, and the experiences of town and parish councils are simply an acceleration of that; when these proposals were being put forward by the Minister earlier this year, there was absolutely no role for those councils. We are simply saying that there are layers of local accountability that we believe should be on the list of people who are consulted.

This is a simple amendment that says, “You are already consulting other organisations in the chain of command. You should also include the town parish councils in that chain.” That is why we believe that amendment 33 is critical, as it

“would require the Secretary of State to consult local councils prior to proposing the area in which they are situated is added to an existing combined authority”,

and why we will push it to a vote.

I shall speak to the amendments standing in my name. There is a degree of overlap between the points made so far and the subject matter of my amendments: all of them revolve around the issue of localism and consent. As has been clearly expressed, I have a degree of sympathy for the points that have just been made, particularly those about the role of parish and district councils in agreeing to and steering this devolution process.

When we had our witness session just a few weeks ago, we heard from Councillor Sam Chapman-Allen of the District Councils’ Network and from Justin Griggs, the head of policy and communications at the National Association of Local Councils, which represents the parish councils and parish meetings of England. Both of them emphasised in their evidence the need for and the importance of that local voice. I reflect on legislation passed recently—particularly the Police, Crime, Sentencing and Courts Act 2022, which strengthened the powers that our communities sought for local authorities to deal with unauthorised encampments. One of the things we missed was the opportunity to enable parish councils and parish meetings to use those powers. That is a really concrete example of where our constituents would have benefited.

We know there are both sins of omission and sins of commission. I suspect it is a sin of omission that the Government have failed to use the opportunity of this legislation to complete the devolution work that they talk about, and to ask, “What role will those elected bodies at the town and parish level be able to play in the context of this new devolved world?” It speaks to something that I know the Opposition have real concern about: a form of institutionalised disrespect for local leaders that is built into this process. There is wholesale abolition of the local voice at scale, and proposals that the Secretary of State will direct, rather than consent.

Sir John, you will perhaps call to mind Lord Porter, formerly Gary Porter of South Holland, as one of those many local leaders whose approach and insight really shaped the nature of that local community. Reflecting on my time in local government, I had the opportunity to serve with people with very senior public and private sector leadership experience who steered the strategy of the local authority to deliver for local residents. To be told that the Government’s view is that they are to be mere community convenors, and they are not to have a role in that strategic leadership, is frankly insulting to the work that so many of our local leaders do.

The hon. Member is talking about localism and the importance of things being done with communities, not to them. I was a Cherwell district councillor when we were involved in joint working with South Northamptonshire. I remember clearly that the leaders of South Northants district council were distinctly unimpressed by the level of consent that they were given when the Conservative Government told them that Northamptonshire county council, which the Conservatives bankrupted, was being disbanded and that joint unitary authorities were to be created in Northamptonshire. Was he so exercised about local consent at that point?

The short answer to the hon. Gentleman’s question is yes. I have spent a good deal of my time in local government. One of the key issues that we learned from the process, and one of the reasons why former Secretary of State Eric Pickles said that he had a pearl-handled revolver in his desk—for anyone who came to him to suggest forcing local government reorganisation on England—was the need to get things right with local consent.

There are times, which I think we can all see in the local government landscape at the moment, when, because of geography or failure of leadership, we know it is necessary for Government to intervene, and Governments of all parties have done so. Northamptonshire was an example of such a place. Individual local authorities within it had not failed, but there had been a collective failure of the public service in that area. The Government therefore felt compelled to intervene to remedy that, as opposed to imposing an alternative vision for how they thought the local area should be governed.

New clause 23 stands in my name. It seeks to enshrine in the legislation the principle of consent. We have the very opposite of what we have been told as a Committee, that this is all locally led. Clearly, the Government are already using the levers in their power to compel local authorities down a certain route. Under the force of such compulsion, local authorities feel that that is what they have to do, because it is the only way to address some of their reasonable and justifiable concerns. The timetable, the process and all those things come at the same time as a wholesale reorganisation of planning and infrastructure, which is stripping away the local powers and voices that are so critical to ensuring that the infrastructure and new housing that we all want are delivered.

The view of the Opposition, therefore, is that we need to enshrine in this legislation not powers for Whitehall but powers for people—powers for people to shape through their local leaders the community structures of service that deliver for them and the taxes that they pay. People are represented to exercise such powers. Enshrining the consent of local authorities is a small step in that direction.

I will respond to amendments 30, 31 and 33 first, and then amendments to 266 to 280. I appreciate the intention of the Liberal Democrat amendments, and I reiterate that I think we are completely aligned in this Committee in our desire not just to push power down, but do so in a locally driven way. On the specifics of the lead amendment, the principal body affected by the designation that we are seeking will be the unitary council or the county council. The Bill already provides that no designation can be made without the consent of the relevant councils.

On amendment 31, the Secretary of State must already notify the proposed constituent councils, and any other persons that the Secretary of State considers appropriate, about a proposal to direct the establishment of a combined authority. The Secretary of State must consider the representations of that body. As my hon. Friend the Member for Mid Cheshire said, there is no shortage of representation and voice from individual town and parish councils. We think that the process of engagement is already there and that to impose additional requirements to consult every town and parish council in the proposed areas would be disproportionate and also risks conflating the distinct roles of town and parish councils, which, as I said at the evidence stage, we absolutely see having a role to play in the new architecture of strategic authorities.

Strategic authorities have been created to tackle regional issues and to capitalise on the opportunities that exist over a significant economic geography, such as pursuing, for example, integrated transport. Town and parish councils, meanwhile, will continue to represent their local communities, managing neighbourhood services and supporting initiatives that improve the day-to-day lives of their residents. Each tier of local government will be accountable to their local communities and should continue to represent their interests and to work in alignment.

When areas go through this process—and they are being made to go through it—will the Minister consider making it easier for areas that are unparished to create town and parish councils? Otherwise she will create large unitary authorities and some areas will have town and parish councils and others will not. Will she make it easier to set up town and parish councils where there are not any?

We will discuss neighbourhood governance and neighbourhood boards later in the Bill. When it comes to areas that do not have town and parish councils, we recognise there is an opportunity for us to create structures so that there is stronger community representation and a stronger community voice. There is an opportunity for us to design something that works in areas where town and parish councils do not exist or may not be appropriate. We want to create flexibility so that local areas can find the right structures for them, so that neighbourhoods and communities have the voice and representation that we want to see across the country.

I turn to amendments 266 to 280. As I have said before, we have been accused of compulsion, and all I can do as a new Minister is point to the feedback that I get from the local areas that we speak to. Our engagement to date suggests there is genuine enthusiasm and momentum, because areas can see the economic opportunity and what a strong Mayor can do for their area. The Government have been clear in our aims: we want to get universal coverage of strategic authorities across England, because we can see the benefits that places like Greater Manchester and Liverpool are experiencing. We want that for every single resident across the area.

During the evidence sessions, we heard senior local government leaders describe “inconsistent and…unhelpful messaging” on the building blocks of the new authorities—I quote what I wrote down. When we heard from those who are intended to be part of the investment agenda, they described no “meaningful consultation” from the Government on the proposals. How does the Minister square that with the idea that this is strategic and locally led?

That is not the feedback that I heard in that evidence session. At the moment the places in our devolution priority areas are going through a process of consultation. They are talking to their constituent councils, voting it through the council chamber and taking it to their residents to make the case.

What we are seeing is positivity and momentum. Our job as a Government is to build on that and support and enable that. I come back to the point that there is a backstop power that we do not expect to use. But in the instances where we have got a blockage, we want to be able to help create a strategic authority so that we do not have devolution deserts and parts of the country left behind. We are very clear that the powers will commence only at the point that they are needed, rather than on Royal Assent.

Finally, new clause 23 would impose disproportionate consent requirements for these processes, requiring strategic authorities to seek the consent of all district, parish and town councils in their area. As I have said, there are already provisions in place to ensure a level of consultation. A primary aim for us in this Bill is to make the process simpler, more streamlined, more effective and less expensive. That is the feedback that we have had from places that have gone through the process and the feedback that we are getting from places going through the process.

My worry is that the proposed amendments would undermine the principle of having a process of devolution that is far more streamlined and far easier for places. Again, the feedback we are getting from conversations is that there is enthusiasm, appetite and commitment to do this. We want to make it as easy as possible for places, which is why I hope that hon. Members will not press the amendments.

Question put, That the amendment be made.

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I beg to move amendment 38, in clause 3, page 2, line 32, at end insert—

“(3A) The Secretary of State must make provision to ensure councils designated as a single foundation strategic authority receives adequate funding to facilitate their transition.”

With this it will be convenient to discuss the following:

Amendment 39, in schedule 1, page 84, line 13, at end insert—

“(9A) The Secretary of State must make provision to ensure the combined authority receives adequate funding to facilitate its establishment.”

Amendment 361, in clause 19, page 22, line 32, at end insert—

“(f) funding which has been allocated to support the establishment of new strategic authorities.”

Our councils are struggling to make ends meet. With so many on the edge of a precipice, I can see why they would be queuing up to create a strategic authority, which come with millions of pounds. There is, however, huge concern in councils that the cost to set up and run these organisations is oblique, and that there is a risk that the cost of running them will be passed to local people through additional precepting. I can tell the Committee from experience that the tens of millions of pounds that it is said will be saved by creating strategic authorities generally are not saved, and that if they are saved, they are replaced with other costs and take 10 years to materialise. Many councils do not have 10 years before they will go bust.

I am acutely aware that some funding was put aside for those organisations in the devolution priority phase, but when I asked the previous Minister what was happening with funding for future phases, I was met by stony silence. He explained to me that in order to progress there would need to be money in the settlement, but at the same time he talked about having already made a three-year settlement. That suggested to me that those organisations that are not already funded perhaps will not be funded within a three-year period, because there is no money. Given that those organisations are already telling us that they are £300 million short this year because they are not in the programme, but the Minister has no money set aside for next year to continue the programme, where is the money coming from?

Our amendments 38, 39 and 361 would require the Secretary of State to ensure that authorities receive adequate funding at least to facilitate their establishment, if not their continuation. It is crucial that local leaders—and local people, when they vote to make this progress—do not tie themselves down to additional costs that they cannot afford. That is why we feel it is important to press amendment 39 to a vote. My hon. Friend the Member for Stratford-on-Avon will elaborate further.

I had the privilege of spending 24 years in local government, divided equally across the previous Labour, Conservative and coalition Governments. I do not think that local government felt at any point in those 24 years that it was well funded and there was plenty of money to go around. In every single one of those years, irrespective of who was in government, our starting point when setting council tax was, “How are we going to meet a very substantial savings target?”

In the history of devolution and local government reorganisation, even going back to Redcliffe-Maud—those proposals were partially implemented and then halted—no Government of any party have ever got beyond phase 1 of their devolution proposals. It is therefore understandable that local leaders have seen that the Government have their chequebook open to provide some additional money and said—I am sure we will all reflect on the conversations we had at our recent party conferences, and I heard a number of local leaders say this—“We’re in a financial hole. Local government in England is £1.5 billion worse off, net, as a result of the rise in national insurance introduced by the Chancellor of the Exchequer last year. People are desperate. Even if the money that is on the table is only enough to cover some redundancy costs or to meet the costs of some good and worthy local projects, it is money that is worth accepting.”

We understand why people have embraced that process. However, it does nothing to address the underlying structural question. We heard in evidence that unless a local authority reaches the Treasury’s original proposal of around half a million residents, it is unlikely that there will be any net saving from the reorganisation process that sits beneath the creation of the new strategic authorities. Local government finance will need to be resolved through a different process. The Bill does nothing of substance to address it.

I have some sympathy with the Government on this point. I do not wish to be seen to be helping the Minister out, but one of the points that was made to us is that the Government have been clear that some money is available up front for those submitting bids. Anybody who has been through the reorganisation process will know that the way to do it in a financially efficient manner is to exit high-cost staff and replace them with lower-cost staff, or to reorganise in a way that makes the delivery of the service or business more efficient. Local leaders have a great deal of experience in doing that.

The Opposition do not feel able to support these proposals. We recognise that the Government have made some funding available, but we need to acknowledge that the way that is playing out at a local level is very much, “Here’s some one-off cash from Government. There won’t be anything coming in the future to help our ongoing financial situation, so let’s use it now while we can grab it.” We all sympathise with our local leaders for embracing that because it is the only game in town and there is the backstop of power of compulsion. Nevertheless, we acknowledge that some funding has been provided, and will therefore abstain on the amendments.

It is pointless to establish a strategic authority without appropriate financial support. Without support to build structurally, hire staff, co-ordinate partners and begin delivering on their devolved powers, new combined and strategic authorities risk becoming bodies with responsibilities but no real capacity to act. As the Minister will know, local authorities have been starved of funding by consecutive Governments. We need to ensure that these new unitaries—these new beginnings—have the best start in life, and that begins with fair funding so that devolution can be effective.

Amendment 39 is complemented by amendment 361, which would require the Government’s annual devolution report to include details of funding given to support new strategic authorities. Each year, when the Government report to Parliament on devolution, they would be required to explain how and why money has been spent to help to establish new devolved authorities.

As it stands, the Bill risks becoming a Trojan horse for centralisation, concentrating power in Whitehall rather than genuinely devolving it to local communities as promised. Amendment 361 would support true, locally led devolution by ensuring financial transparency and holding Ministers accountable for supporting local government reform. That is why we intend to divide the Committee on amendment 39, which is essential to ensure that new combined authorities and new strategic unitaries can operate effectively from the outset and deliver the powers and services they are intended to provide. Without adequate funding, the whole exercise of devolving powers and establishing new authorities will be meaningless.

For too long, my constituents, like so many across the country, have faced the consequences of under-resourced local authorities, with promises to their families and communities left unfulfilled. Our amendments would provide the vital financial support that this new era of local government requires, enabling us to deliver on the ambitions of devolution and achieve real, tangible results.

I thank the hon. Member for Ruislip, Northwood and Pinner for highlighting the deep cuts that were imposed on local authorities during a decade and a half of Conservative government, which fundamentally weakened our civic infrastructure. We should never forget that. We absolutely appreciate that, as a result, local government is operating in a difficult context. I welcome the intent behind the amendments: it will be important for strategic authorities to ensure that they have the capacity funding so that they are established.

Amendment 38 concerns single foundation authorities. We do not anticipate that there will be transition costs for such authorities. When a unitary or county council is designated as a single foundation strategic authority, it will retain its existing voting and governance arrangements. The designation will sit alongside its status as a local authority. In other words, there will be no transition involved, so transitional funding is unnecessary.

We recognise that the mayoral strategic authorities that we are creating will need funding to support the transition and build capacity. All Members across the House want to see strong, capable authorities in their area, with the tools and capacity to deliver for their local communities. That is why in the English devolution White Paper we committed to provide new strategic authorities with capacity funding to kick-start their organisation. I am pleased to confirm that all areas on our devolution priority programme will receive £1 million in mayoral capacity funding this year to help establish new institutions, once the legislation has been laid before Parliament. They will also receive capacity funding in future years, so that they are ready and prepared to deliver the benefits that we believe devolution will unlock. As the Government are committed to providing funding for establishment expenses through the mechanism of mayoral capacity funding, we do not believe that amendment 39 is necessary, but we recognise the intent behind it, which is why are we are taking action.

Amendment 361 would require the Government to report on funding allocated to support the establishment of new strategic authorities. I am pleased to say that that is already established practice. Clause 19 amends the Cities and Local Government Devolution Act 2016 to ensure that all funding devolved to strategic authorities is reported. That will include any funds to support their establishment. Again, therefore, we agree with the intent behind the amendment but we do not believe that it is required.

Will funding be made available for areas that are not yet in a programme on the same footing as the areas that are already in one? It would be completely inappropriate if that funding was not committed to. I want to get that on record.

We have established a principle that there should be mayoral capacity funding. We have established a principle that for places that are going through the transition, to ensure that any mayor that is created is able to hit the ground running, capacity building needs to be a core part of that. That applies to the places that are going through the devolution priority programme at the moment, but the same principle invariably will apply across the piece.

Vikki Slade, do you wish to divide the Committee on amendments 38 and 39?

We were seeking to divide only on amendment 39, but given that we have had that assurance, I am happy not to do so. I beg to ask to leave to withdraw the amendment.

Clause 4

Combined authorities and CCAs: establishment, expansion and functions

Question proposed, That the clause stand part of the Bill.

Clause 4 introduces schedule 1, which will streamline and simplify existing processes for establishing new combined authorities and combined county authorities, and for changing the arrangements of existing authorities. The Government have been clear that their goal is to achieve universal coverage of strategic authorities. We are therefore confident that clear and tangible benefits of devolution will be experienced across the country. We have also been clear that we want to create mechanisms that will ensure that the process is streamlined—that it is fast, and effective and efficient locally—and allows representation, but fundamentally allow us to move through the process that we see appetite and demand for across the country.

The powers introduced by the clause will be used as a backstop. They will be deployed only where we have devolution deserts and we want to work with areas to remove blockages, to the benefit of residents.

We return to the theme that areas can have devolution provided it is in the form that Whitehall dictates. It remains a significant concern to the Opposition that we are proceeding in this manner, but that point is made and I suggest that we move on.

Schedule 1

Establishment, expansion and functions of combined authorities and CCAs

Amendment proposed: 266, in schedule 1, page 79, line 15, leave out subparagraph (b).—(David Simmonds.)

Question put, That the amendment be made.

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Amendment proposed: 267, in schedule 1, page 79, line 33, leave out subparagraph (b). —(David Simmonds.)

Question put, That the amendment be made.

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Amendment proposed: 268, in schedule 1, page 80, line 18, leave out “subsections (3) to (5)” and insert “subsection (3)”.—(David Simmonds.)

Question put, That the amendment be made.

5|0|6|11|The Committee divided:|Question accordingly negatived.||0|0

I beg to move amendment 62, in schedule 1, page 80, line 19, at end insert—

“5A After section 105B insert—

(1) A non-mayoral combined authority may only exercise the following functions with the consent of each constituent council—

(a) adopt or amend the authority’s budget;

(b) where it is not part of the budget, approve the total sum of the transport levy.

(2) In this section a reference to the “transport levy” is a reference to any levy issued by the combined authority relating to the exercise of its functions relating to transport in accordance with any regulations made from time to time under section 74(2) of the Local Government Finance Act 1988.”’

With this it will be convenient to discuss Government amendments 63 to 67.

I will begin by talking to Government amendments 63 and 65. The Government recognise that the creation of a combined authority or combined county authority can cause some concern in prospective constituent councils. One of the main worries is that the new institution could create new financial burdens on existing councils.

Many existing combined authorities and combined county authorities already include provisions in their constitutions that enable constituent councils to veto decisions that could create a financial liability on them. We recognise that those provisions have helped to soothe concerns about establishing new combined authorities and combined county authorities. That is why the amendments will create a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of affected constituent councils before exercising their functions in a way that could create a financial liability on these councils. That will ensure that any future non-mayoral combined authorities or non-mayoral combined county authorities will need to comply with this requirement without the constituent councils needing to secure agreement to its inclusion in the individual authority’s constitution.

I turn to Government amendments 62 and 64. In the English devolution White Paper, the Government set out that in combined authorities and combined county authorities without a mayor, most decisions would require a simple majority vote. That is provided for in clause 6. However, in the White Paper, we also said that key strategic decisions would require unanimity in non-mayoral authorities. The budget for the authority is one of those decisions.

Similarly to amendments 63 and 65, amendments 62 and 64 introduce a standardised requirement for non-mayoral combined authorities and non-mayoral combined county authorities to obtain the consent of all their constituent councils when adopting or amending their budget. That includes the direct contribution of those councils to transport expenditure.

I have a couple of questions for the Minister. It feels as though these amendments are intended to bring some welcome consistency and clarity.

The Committee will know that local government finance is largely regulated by the Local Government Finance Act 1992, but that older legislation on council tax fixing and budget setting all essentially states that a local authority’s budget must balance in-year. A local authority is not the same as central Government—it cannot borrow to fund its day-to-day expenditure.

However, one implication of the Secretary of State’s allocation of all these new powers to mayors or combined authorities is that they may choose to incur expenditure that imposes a liability on an individual local authority without seeking that authority’s consent. For example, there would be a legislative conflict if the mayoral combined authority decided to increase spending, or to increase rights to services for social care, which a local authority has to pay for, without giving the local authority the opportunity to include that in its budget.

Will the Minister give us clarity, first, on accounting standards? The legislation mentions that local authorities should refer to guidance from the Chartered Institute of Public Finance and Accountancy. CIPFA is not the only accepted accounting standard in the public sector, although it is generally a reliable one. Given our previous discussions and the evidence we have heard about access to local audit and financial advice, can the Minister confirm that accounting standards other than CIPFA will be accepted, if a local authority relies on them? Or will they have to be reframed within CIPFA? That will let the Committee and member authorities know exactly where they stand.

Secondly, while this is a fairly catch-all provision, there will be areas—we have seen this in Greater Manchester most recently—where central Government fund the investment and set-up of a new transport network but the ongoing running costs must be met by trading that service to local residents, and a large deficit emerges; essentially, the service runs at a significant loss. Especially if the underlying authority is a transport authority that issues freedom passes, that can have a significant financial impact. Essentially, council tax payers of one authority subsidise the costs of service delivery by a mayor.

I thank the hon. Member for his detailed, complicated questions. We will write in response, particularly on the public accounting standards.

We have set what we think is a good baseline. There will obviously be some flexibility for constituent authorities. The hon. Member will remember from the evidence session that the accountability and financial framework across local government is a current challenge, so we are looking to drive improved standards across the piece. That will apply to strategic authorities as much as to local authorities, but we will write fully in response.

On the wider question about the balance and the trade-off, our judgment is that for non-mayoral combined authorities, where constituent authorities operate together, we should put in those safeguards. In essence, constituent authorities act in concert, collectively, to make decisions. Whether it is a question of financial liabilities or transport budgets, it is right that all the constituent authorities provide consent. In the case of the mayor, however, our view is that because the mayor has his or her own democratic mandate and the ability to direct, that is separate from what we see in non-mayoral combined authorities.

Inevitably, there will be safeguards. In the evidence session, we heard really powerful evidence that the mayoral model works well when the mayor works in lockstep with constituent authorities and the two are aligned, with a strategy that they work around. We have seen examples of where the model does not work well, and we have had to go in and support and remediate the process when the mayor works without their individual local authorities. The model drives that. However, we think that there is something specific in the mayor’s democratic mandate; we have a model where there is a majority vote, with the mayor on the side of the majority, in order to drive through big strategic decisions.

I am grateful to the Minister for undertaking to provide that clarity in writing. She said that there are differences between a mayoral authority and a combined authority without a mayor. We have seen a good case study in the Mayor of London’s decision that he wished to be seen to fund free school meals in primary schools, but the budget that is provided is less than the cost. School budgets, which are determined by the Department for Education, are subsidising the shortfall in the money provided by the mayor. We see posters on the tube saying that the mayor is funding this, but in fact the amount he provides is less than the cost. Probably all London MPs have had representations from schools that have said, “We are having to make staff redundant because of this shortfall. It’s a significant burden. It is causing a real cost.”

That is an example of where accounting and legal decision making sit across several different authorities. Although it is not the only ringfenced local authority grant, it would be helpful to have clarity about how the dedicated schools grant will be managed in a mayoral combined authority, so that we do not see a repeat of what happened in London with school budgets being raided to cover up a shortfall in a mayoral policy proposal.

I am happy to provide that clarity in writing.

The Minister has courteously and helpfully said that she will write regarding those specific questions. May I ask that that is done within the period in which we are considering the Bill, and made available to all Committee members?

Yes.

Amendment made: 63, in schedule 1, page 80, line 19, at end insert—

“5A After section 105B insert—

(1) This section applies where a non-mayoral combined authority considers that the exercise of a function by the authority may result in a financial liability being incurred by one or more constituent council (each such council being a “relevant constituent council”).

(2) The function may only be exercised with the consent of each relevant constituent council.

(3) When deciding whether subsection (1) applies, the authority must have regard to the “Code of Practice on Local Authority Accounting in the United Kingdom” published by the Chartered Institute of Public Finance and Accountancy, as amended or reissued from time to time.’”—(Miatta Fahnbulleh.)

Amendment proposed: 269, in schedule 1, page 80, line 20, leave out paragraph 6.—(David Simmonds.)

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Amendment proposed: 270, in schedule 1, page 80, line 21, leave out paragraph 7.—(David Simmonds.)

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Amendment proposed: 271, in schedule 1, page 82, line 11, leave out paragraph 14.—(David Simmonds.)

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I beg to move amendment 25, in schedule 1, page 83, line 3, at end insert—

“(6A) After preparing a proposal the Secretary of State must publish a statement demonstrating how the physical geography, community identity, and the boundaries of other public services in the area would be affected by the proposal.”

With this it will be convenient to discuss the following:

Amendment 305, in schedule 1, page 83, line 32, at end insert—

“(5A) The Secretary of State may not make an order under this section that has the effect of placing Cornwall in a combined authority with any other authority.”

Amendment 43, in schedule 1, page 84, line 13, at end insert—

“(9A) If the order establishes a combined authority which contains the Isle of Wight, the authority’s name must include ‘the Isle of Wight.’”

Amendment 306, in schedule 1, page 86, line 18, at end insert—

“(5A) Neither the added local government area nor the existing area of a combined authority in the order includes Cornwall.”

Amendment 44, in schedule 1, page 86, line 32, at end insert—

“(7A) If the proposal establishes a combined authority which contains the Isle of Wight, the authority’s name must include ‘the Isle of Wight.’”

This Government’s plans for devolution involve folding existing local government structures into larger combined authorities. From a central Government perspective, the benefits are clear. Each region has a single point of contact, accountability and new structures through which to work. However, devolution should deliver benefits in both directions and be truly community-led.

If proposals are prepared by the Secretary of State and the Department rather than being locally-led, we believe that a basic requirement should be that each new authority is appropriately sized, and that physical geography and cultural identities within the authority—especially community identities—are looked at. We need to look at the boundaries of other public service structures in the area that could be affected by the new combined authority, such as fire and rescue services, police forces and integrated care boards. In my area, we have local government reorganisation and the ICBs are being reorganised as part of NHS England reform or abolition, so both are changing at the same time. In geographical local areas, we have not just NHS commissioners but other NHS services, such as local NHS trusts.

Looking beyond size—I hope that the Government are flexible about size, because of all the other important considerations with any new authority—authorities should be shaped carefully to reflect economic zones, as well as physical geography. Crucially, there must be careful thought about how the proposals will align with public services. I have already talked about the organisation of ICBs, but there are also, for example, existing transport hubs and established boundaries for fire and rescue services.

A less tangible but no less important requirement is respect for distinct community identities. For example, my area is in the county of Warwickshire. South Warwickshire is very rural, with hundreds of parish and town councils, while north Warwickshire has different economic areas and is more populous and urban. Proximal areas may not be well-suited partners in new combined authorities, so what kind of flexibility will there be to think about services and the shared history of local communities so that such areas do not have a false cohesion?

The Opposition have listened attentively to the points made by the hon. Member for Camborne and Redruth and by my hon. Friend the Member for Isle of Wight East (Joe Robertson). My hon. Friend the Member for Hamble Valley may speak later to the amendments in the name of my hon. Friend the Member for Isle of Wight East, but they both relate to the need to recognise in local government structures the heritage of the parts of England that are affected.

From all the evidence that we have heard, and from many Members’ contributions, we know just how important it is that people feel that the name of their local authority area—that most basic of things—has a connection to them. On top of that are layers of geographical and economic considerations, as well as the trouble of learning it, all of which have an impact. That is why we and others are so keen to support measures to ensure that historical names are not lost in any of the Government’s proposed devolution measures, and that that heritage is fully recognised in any structures that follow.

I will briefly elaborate on what my hon. Friend the shadow Minister has said about amendments 43 and 44. I do so on behalf of my hon. Friend the Member for Isle of Wight East, who has been a tireless and fierce campaigner for his constituents, and not only at Prime Minister’s questions.

I represent a Hampshire constituency whose southern parishes look out on the Isle of Wight. If I take a walk down Hill Head beach or somewhere in Hamble, I always see it. In Hampshire, the Isle of Wight is a constant. It is a constant presence on the coast of southern England, but it is also a vital part of our county. It has a proud set of people who have a booming economy that contributes so much to the county of Hampshire, and which is a major part of the county’s identity.

The Minister has talked about wanting local views and localism to be at the heart of the devolution agenda. I believe her. We had a brief interaction earlier, and although we can disagree about whether that devolution has been forced or voluntary, I absolutely believe that the Minister intends to make sure that if devolution happens, the regions involved have an identity and the right to an economic injection that delivers for people locally.

It would be very easy for the Government to accept amendments 43 and 44, because they would do nothing to change the mechanics or principles of the Bill. They would merely ensure that a region of very proud people is included within the description of the mayoralty that is proposed for Hampshire.

I used to live on the Isle of Wight. I got married there and my parents met there, so I have a fond connection to it. Does the hon. Member agree that if “Isle of Wight” is not included within the authority name of “Hampshire and the Isle of Wight”, it might disappear from all the other organisations in which it features, such as fire authorities or health authorities? Suddenly, the Isle of Wight’s unique identity would be completely subsumed into an amorphous Hampshire.

As the hon. Lady knows from when we were on the BBC’s “Politics South” programme some weeks ago, I rarely agree with Liberal Democrats, but I suspect that she and I agree on this point. I know that she stands for her area and, as a former council leader, for the wider area, and that she knows a lot about the Isle of Wight. I did not know that she got married there, but I am sure it was a lovely wedding, because the Isle of Wight is a beautiful place steeped in history. She is absolutely right that while Hampshire and the Isle of Wight have been together geographically, they have also been together in the way organisations have worked, over hundreds of years. I see the Solent as the water motorway connecting the mainland to the Isle of Wight. We could not interact without having it there. “Hampshire and the Solent” is the wrong name for the proposed mayoralty, because it leaves out the distinct identity of a proud people on the Isle of Wight.

I want to express my sympathy with the amendments related to the Isle of Wight. It is not miles away from the area that I represent, Brighton Pavilion. I know many people there who are similarly proud of their distinct identity. I note that the name for the new combined authority that will envelop Brighton is “Sussex and Brighton”. If it is good enough for us, it is good enough for the Isle of Wight.

I agree. I have had many a night out in Brighton, and I know that it is a very vibrant city. If it is good enough for Brighton to be named within that county, I do not see why the population of an island in this United Kingdom should not be named as part of its mayoral authority.

I say to the Minister, in the same spirit of co-operation in which I know she will respond, that if there is no movement in the decision on the name, that risks wider implications for the Bill. Many other areas will then start to think about why we went through the parliamentary boundary commissions’ changes to the names of our seats. That was a very difficult thing; people were not recognised.

The Isle of Wight has a precedent for being treated differently. It has always received special dispensation in the boundary discussions that we have had before. It would therefore be perfectly sensible for the proud and great people of the Isle of Wight to be recognised and have their name in a proud county name, if this devolution goes forward.

I call Perran Moon.

Meur ras—thank you, Sir John. The Bill places me in an invidious situation. For thousands of years, the people of Cornwall have been considered different from the rest of the country. Indeed, the word Cornwall means “land of foreigners”. We call it Kernow—the people of the promontory.

This is not a question of names, or even of identity. It is a question of legally binding national minority status under the framework convention for the protection of national minorities. In Cornwall, we currently have quite deep levels of devolution, but the issue is that as the Bill is drafted, it compromises article 16 of the framework convention. We are concerned that in the next few weeks and months, Cornish national minority status must be protected, because at the moment Cornwall is the only part of the United Kingdom with national minority status that is prevented from accessing the highest level of devolution, as doing so would compromise that status.

I have had several conversations with Ministers and am satisfied with the Government’s assurances at this stage that Cornwall will receive a devolution arrangement that allows us to access the highest level of devolution without the requirement to join a mayoral combined authority, and that the recognition that we live on a multinational island will be protected. It is very important to understand that—

I know that the hon. Gentleman is not the only person with an interest, and that there are other amendments on the same topic. He mentions that he is satisfied with the Government’s assurances. We have not directly sought those assurances; would he be willing to set out for the Committee the nature of them, so that we can all understand what has been committed to and can be well informed when we come to make voting decisions later on?

I have had no commitments; I have had discussions with Ministers. We have had discussions about the difficulties with the proposals made here, with the potential for the Bill to become a hybrid Bill and the complications that that would bring. I am happy to keep talking to the Government in a spirit of openness, reflecting the views of every political party in Cornwall bar one. On that basis, I am content to keep talking. I cannot support the amendments because of the negative change that I think they would make to the nature of the Bill, so I will be voting against them.

I put on record my thanks to hon. Members who are championing specific areas that have a unique identity, which the Government completely recognise. On amendments 43 and 44, I pay tribute to the hon. Members who have been championing the Isle of Wight and its proud history. The Government understand and support the intent behind the amendments, but we will not be taking them forward. Let me explain why.

Earlier this year, Isle of Wight council, Hampshire county council, Portsmouth city council and Southampton city council submitted a joint expression of interest in the Government’s devolution priority programme. They went through a consultation process, based on the proposed name of Hampshire and the Solent. This was not imposed by the Government; it came as a proposal from the local area, and on that basis a public consultation was conducted.

It is worth saying that of the 6,000 responses we received, only a small minority commented specifically on the name of the proposed combined authority area. The Government’s response to that consultation is online, if hon. Members want to look at it. It is important to say that once it is established, it is completely open to any combined authority or combined county authority to change its name by resolution, with the consent of its members and using existing powers. That is already in the Bill. The Liverpool city region combined authority and the South Yorkshire mayoral combined authority have both changed their names in the same way. There was no constraint from Government; the powers are there. It is within the gift of local areas to go ahead and do that.

The Minister mentions that 6,000 people replied to the consultation on Hampshire and the Isle of Wight, but that only a small number of respondents actually mentioned the name. How many people from the Isle of Wight responded to that consultation, and how many of them mentioned the name?

I do not have those figures, but we can write to the hon. Member with them. However, the principle remains that the power is there. It is within the gift of constituent authorities; it is not being imposed by Government. If there is a name change that the combined authority wants to take forward, it can take it forward. We have seen that in Liverpool and South Yorkshire. There is no constraint from us. It is a determination for, and with the consent of, the constituent authorities. It is within the gift of Hampshire and the Solent to make that change.

The Minister says that it is not the Government who are making sure that it happens. I accept that. However, having been in her position for only a short time—that is not her fault, as the fickle finger of fate has rested it on her shoulders—she may not know that the negotiation process that has taken place among the local authorities in Hampshire has not been smooth. There has been an overarching view that the county council, which has rushed towards accepting this devolution notwithstanding the impacts of the Government’s decision to push it forward, has not worked collaboratively. There is a wish for devolution, but in the minutiae it has been a very county council-dominated process.

As my hon. Friend the Member for Broxbourne says, the reason that there has not been a huge uptake in response to the consultation is the flawed nature of the decision-making process. I ask the Minister not to rest on the consultation responses, because as my hon. Friend says, a number of people on the Isle of Wight simply did not bother to respond. It is not about the make-up of a geographical devolution settlement; it is about a name. I ask her to listen to the elected representatives on the Isle of Wight who serve in this House, who have asked for it, and to consider it again.

Order. I respectfully remind Members that interventions should be brief.

I declare that I am Hampshire born and bred, being from Romsey. I just ask: why are we so disrespectful of a place like Brownsea island? If it is called “Hampshire and the Isle of Wight”, what about the great Brownsea island, the home of our native red squirrels? Surely “Solent” is more inclusive for all the other islanders who live in the area beyond the Isle of Wight.

I say gently to hon. Members that we absolutely recognise the desire. I have had multiple conversations with the leader of Isle of Wight council, who was enthusiastic about this devolution deal. It is within the gift of constituent authorities to change their name; it is not for Government to impose. I hope that there is now a constructive conversation and relationship among the leaders of all the different parties. The leader is an independent politician, and I hope that in that spirit they will move forward.

I recognise the uniqueness of the name, but what really matters is what devolution will deliver for residents and constituent authorities. I hope that as much energy and time will be put into the nuts and bolts, the bread and butter, and the impact of what we are trying to do through devolution as will be put into the name. However, I recognise the particular sensitivities in relation to the Isle of Wight.

My hon. Friend the Member for Camborne and Redruth spoke about the issue of Cornwall. He has been a long-standing champion of Cornwall and its distinct identity. He has prosecuted the case incredibly effectively, not just in the context of this debate but across the piece. He is a proud Cornishman and I know that he wants the best for his constituents. I have put it on record in Committee, and I do so again, that we recognise the uniqueness of Cornwall. We are keen to continue engaging not just with my hon. Friend, but with other Cornish MPs, to ensure that we recognise that uniqueness and status and, critically, that we are doing a set of things that can enable local leaders to respond to the challenges—

Order.