---

English Devolution and Community Empowerment Bill

My Lords, in moving Motion A, I will also speak to Motions B, C, C1, H and H1. It is a pleasure to bring the English

Devolution and Community Empowerment Bill back to the House of Lords to consider the amendments and reasons from the other place. I thank all noble Lords who engaged extensively in the brief period we had between Report and ping-pong. I also thank my colleague in the other place, the Minister for Devolution, Faith and Communities, for setting out the Government’s position on the amendments agreed by your Lordships during earlier stages of the Bill. As she outlined, the Government’s central aim with this Bill is to devolve power and money from central government to those with skin in the game, building a different type of state where communities with local knowledge are given the power to shape their areas.

I thank the noble Baronesses, Lady Bakewell, Lady Scott and Lady Pidgeon, for the first group of amendments today. Lords Amendment 2, tabled by the noble Baroness, Lady Bakewell, seeks to add rural affairs as a distinct area of competence to Clause 2. While I very much appreciate the good intention behind it, I do not believe this change would address the underlying concerns that noble Lords have raised. I have reflected on the points made on Report, and the central issue is not whether rural affairs appear as a separate area of competence, since rural affairs are already within the scope of the other competences. Rather, it is about how strategic authorities and their mayors exercise their functions, taking proper account of the needs of rural communities.

To address that, the Government propose to issue non-statutory guidance to strategic authorities to ensure that they consider the needs of those who live and work in rural areas when exercising their powers and functions. Separately, we are providing mayors with the ability to appoint up to 10 commissioners, which will give the flexibility to assign multiple commissioners to a particular area of competence. This approach enables commissioners to focus on specific aspects within those areas, such as rural affairs, should they wish to do so. With these points in mind, I ask the noble Baroness not to insist on her amendment.

Lords Amendment 4 in the name of the noble Baroness, Lady Scott, seeks to ensure that appointments of commissioners by mayors are made through a fair and open selection process and that the criteria and process for appointments are published, as well as commissioners’ remuneration. Through the passage of this Bill I have been emphatic about the Government’s focus on accountability in local government, and commissioners are no exception to that. I trust that the statutory guidance published by the Government on 16 April, which covers important issues raised in this House, provides confidence to noble Lords in that regard. Members in the other place raised concerns about appointments being based on merit. I am pleased to confirm that the guidance explicitly states that appointments should be based on merit and fair and open competition, and that details of a commissioner’s role, once they are appointed, must also be published on the website of the combined authority or the combined county authority.

The noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, queried directly with me how adherence to the guidance is monitored and enforced.

As the guidance is statutory, relevant authorities must have regard to it unless they have a good reason to depart from it and can explain that reason. If the guidance is not properly considered, decisions may be unlawful and therefore open to challenge through a judicial review. Failure properly to consider the guidance will also be a relevant consideration for government in assessing whether an authority is meeting its statutory responsibilities, including compliance with the best value duty, and would form part of MHCLG’s assessment of governance and improvement.

Lords Amendments 13 and 87 in the name of the noble Baroness, Lady Pidgeon, would enable the London Assembly to amend the Mayor of London’s budget with a simple majority. The Government will simplify and ensure consistency in the voting arrangements across mayoral strategic authorities, including London. A general principle in that simplification is that the voting arrangements for exercising functions should match those for agreeing the budget that funds those functions. In mayoral combined authorities and combined county authorities, most functions will now be decided by the default arrangement of a simple majority of authority members, which must include the mayor, but some functions—strategic planning, bus franchising, mayoral development corporations and fire—are exercised solely by the mayor. For that reason, these authorities have two budgets, one for functions exercised by the authority as a whole and one for functions exercised solely by the mayor.

The Bill streamlines the process for setting and agreeing the budget for functions exercised by the authority as a whole. They will now be subject to a simple majority, including the mayor. However, mayoral budgets will continue to require a two-thirds majority to amend, as set out in existing secondary legislation. It is right that we empower democratically elected mayors to set the budget for functions exercised solely by the mayor, with the appropriate checks and balances that the two-thirds majority provides. The GLA’s budget and governance are fundamentally different from those of combined authorities. All functions are exercised by the mayor, so there is a single consolidated mayoral budget for the GLA. The assembly’s role is to scrutinise the mayor’s budget and exercise the functions, not make decisions on them. It is therefore appropriate that the threshold for amending the final draft of the Mayor of London’s consolidated budget remains a two-thirds majority, as is the case for mayoral budgets in other mayoral strategic authorities.

That is why it is the Government’s view that this House should not insist on these amendments, as they would put the scrutiny of the mayoral budget in London out of step with those in combined authorities and combined county authorities. I thank noble Lords for their engagement on this matter and in particular the noble Baroness, Lady Pidgeon, for raising it and for providing a helpful opportunity for the Government to clarify the position. I am happy to confirm that the Government will update the guidance and explainers setting out voting arrangements across mayoral strategic authorities to ensure that this principle can be easily understood.

The noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, mentioned that there are a very few exceptions to that, and I will detail why that is the case. Those differences exist for technical reasons—for example, in the east Midlands, given the Nottingham tram contract, or where the number of constituent authorities within a CCA does not allow for a neat two-thirds split. The Tees Valley has five constituent authorities, and therefore a three-fifths voting threshold is the closest equivalent to two-thirds that is possible with that number of constituents. As I said, the Government will publish guidance setting out voting arrangements.

On Amendments 87B and 87C in lieu, the explanation that I have given clearly sets out that a review of voting arrangements for the London Assembly’s ability to determine the Mayor of London’s budget is unnecessary. I hope that this is sufficient to address the concerns of noble Lords, and that they will agree to the Motion from the other place not to insist. I ask the noble Baroness, Lady Scott, not to press her amendments in lieu.

Finally, Lords Amendments 85, 86, 97 to 116, 120, 121 and 123 in the name of the noble Baroness, Lady Scott, collectively seek to remove the powers for the Secretary of State to direct the establishment or expansion of a combined authority or a combined county authority, or to provide for a mayor in certain circumstances. The Government do not support these amendments. We remain firmly of the view that devolution can play a central role in boosting regional growth, attracting investment and improving outcomes for communities, with decisions taken closer to the people they affect.

The powers in the Bill are intended to ensure that progress towards those aims is not stalled indefinitely where there is a clear potential for devolution but, importantly, where no workable proposal has come forward locally—because that is what we all want to happen, ideally. They provide a backstop power to be used only where necessary and appropriate, and with clear statutory safeguards. In practice, our approach continues to be one of collaboration with local partners.

That commitment to partnership has been reinforced by the assurances given by the Minister for Devolution, Faith and Communities in the other place, where, as your Lordships will know, the Government made clear that for a period of two years following Royal Assent they will not commence the powers enabling the Secretary of State to direct the establishment of non-mayoral strategic authorities or the expansion of existing strategic authorities without local consent. They have further committed that for a period of four years following Royal Assent they will not use these powers to provide for a mayor without local consent. These commitments provide a clear and proportionate backstop power while preserving the legislation’s ability to support devolution over the long term. On that basis, I ask noble Lords not to insist on their amendments to Schedule 1.

Motion A1 (as an amendment to Motion A)