Local Democracy, Economic Development and Construction Bill [HL]

My Lords, I am pleased to have the opportunity to offer the reassurances being sought by the noble Lord. I am grateful to him and to the noble Baroness, Lady Hamwee, along with the noble Lord, Lord Tope, for the fact that we have been able to talk about these issues outside the Chamber in order to get to the heart of what we are trying to do. If we still disagree on either the necessity or the purpose, it would not be because we have not attempted to understand the position and we shall have to disagree on the principle. I am pleased that the noble Lord, Lord Hanningfield, said that we have got the message. Indeed, the amendments I am bringing forward in this group make it perfectly clear that we understand the voluntary nature of these organisations, which may not have been as clear as it should have been. I shall expand a little on that. In Committee we established that significant benefits could be gained and major opportunities exploited by tackling economic issues at the sub-regional level. Many examples of this were given from across the country. By working with real economic markets, one can have a real influence on the way in which services can be offered. We went on talk about maximising the benefits of how sub-regional is working already using the MAA model because in so many instances, it offers the greatest benefit. In many areas, that will be sufficient. However, our case is that where there is a strong economic case for even closer joint working, an EPB could make that possible. It could take the intention a step further by creating a legal body at the sub-regional level. I was pleased to hear the agreement of the noble Lord, Lord Hanningfield, to that in principle when he said that as long as EPBs are mostly composed of elected members, they could be a recipe for success. So the first reassurance I can give him is that they will indeed be composed largely of elected members and that any non-elected members will be there only at the behest of the local authorities involved. Unfortunately, that may not satisfy the noble Baroness, Lady Hamwee, but I shall address that point in more detail later in my remarks. I have also made it clear that we accept that EPBs will not be appropriate for all or even many areas, but in those places where partnership working has already made a mature contribution, there are some additional benefits to be had which we should not deny to local authorities. Those benefits are principally delivered by the creation of a legal personality, a legal body that can hold budgets, secure more direct management of economic programmes and serve the area as a whole. Furthermore, it could conduct a single conversation with government departments about what the area needs, which programmes are relevant, how they can be managed, what can be delegated and what can be achieved. The noble Baroness, Lady Hamwee, and the noble Lord, Lord Tope, have made it perfectly clear that they are sceptical about EPBs; the noble Baroness has rehearsed the argument again today. Before I turn to the argument, I should say that I think that theirs may be a minority voice because the LGA itself considers this to be a positive step. The principle of statutory bodies at the sub-regional level was certainly supported in the 2008 consultation, so long as they are voluntary. That is the stage we have reached in the debate, and I want to reiterate the point because it is where the democratic argument turns in the issues we are debating. I still hope to be able to persuade the noble Baroness that we are on the same side. I understand that there is a lack of conviction that EPBs are not truly voluntary, and not least is that the reason for bringing forward our amendments, which should make the voluntary nature of EPBs stronger, clearer and thus indisputable. Following our discussions in Committee, I have taken the opportunity to remove any possibility, however remote, that a non-unitary district could ever be included in a scheme for an EPB without the district council concerned having given its explicit consent. That is achieved through government Amendments 168R and 168S, and Amendments 168AH and 168AJ, which make the same change for combined authorities. Further, Amendment 168M will ensure that any authority, including a non-unitary district whose area as a result of any changes to an EPB would be added or removed from it, must also give its consent to the change. Thus, in two-tier areas, both the county and the district will have to give their consent for an area to be included in a scheme for an EPB, while Amendment 168AD makes the same change for combined authorities. At this very fundamental level, therefore, I hope that the noble Baroness is reassured that we are genuinely serious that EPBs are not only voluntary for authorities, but are also seen to be so. I turn now to the arguments advanced by the noble Baroness this evening, and put by the noble Lord, Lord Greaves in Committee, that EPBs will not be voluntary since by force of circumstances authorities will have no choice because of the way the funding flows. It is hard to argue counterfactual evidence, but we have taken significant steps to ensure that these bodies are voluntary. I have outlined that point. They represent choices for authorities based on a distinct local appreciation of the benefits that they would bring. We have also provided other safeguards. For example, there is a requirement that authorities must use a review to gather evidence that an EPB would be beneficial for the area. If that evidence cannot be produced, there can be no EPB, even if the Government would wish to have one for some other reason. Furthermore, the Secretary of State must consider that the creation of an EPB is likely to improve the exercise of statutory functions relating to economic development, regeneration and economic conditions in the area. Again, that has to be based on evidence. I would also argue, on the basis of commonsense, that there is no point in coercing local authorities into these types of arrangements because they are about partnerships and fundamentally working together for common aims and common good. You cannot generate a willingness among partners to work together if they do not want to work together, and partnership working must be in place before the EPB is created if it is to stand a chance of working properly.