My Lords, this draft order was laid before this House on 8 June 2016. If approved, it will create the position of mayor for the Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority—also known as the Liverpool City Region Combined Authority—with the first election to be held in May 2017, and set the first mayoral term for a duration of three years, with the next election in May 2020, with subsequent four-year terms.
The Conservative Party committed in its manifesto to,
“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors”.
To give effect to this commitment, the Government passed the Cities and Local Government Devolution Act earlier this year. As I set out to the House during the passage of that enabling legislation, the Government have introduced clauses to allow directly elected mayors for combined authorities because devolution of the ambition and scale set out in the manifesto requires strong and clear accountability and leadership. It is therefore considered necessary that where major powers and budgets are being devolved, local people know who is responsible for decisions. Mayoral governance offers a proven model for effective local leadership, which has worked around the world.
Turning to the Liverpool city region, this order is a milestone in the implementation of the two devolution deals agreed between the Government and local leaders. It follows the establishment of the combined authority on 1 April 2014, from which time it has been serving the Liverpool city region, bringing together across the area the closely interconnected issues of transport, economic development and regeneration.
On 17 November 2015 the Government and the combined authority announced a devolution agreement which provided an offer of powers and budgets from the Government on the basis that the area will deliver certain reforms and measures, including adopting a directly elected mayor covering the whole combined authority area. This agreement included that the mayor for the Liverpool city region would individually exercise some functions in relation to transport and strategic planning.
The combined authority has taken on responsibility for: devolved funding—£30 million a year over 30 years for the Liverpool city region; control of the devolved 19-plus adult skills funding by 2018-19; joint responsibility with the Government to co-design employment support for harder-to-help claimants; and a devolved approach to business support from 2017, to be developed in partnership with the Government. On 16 March this year, the combined authority and the Government additionally agreed: early adoption of the government pilot for 100% business rate retention in the combined authority’s area, starting in 2017-18; additional new powers over transport; and further commitments for the area and the Government to work together on children’s services, health, housing and justice.
In delivering the full range of commitments in the devolution deal, the Secretary of State intends, subject to statutory requirements and parliamentary approval,
to make further orders to implement the deal. Subsequent orders will include the transfer of budgets and powers in planning, transport, education and skills.
On 24 June 2016, the Liverpool City Region Combined Authority published a governance review and scheme, which sets out the constitutional changes to the combined authority and the functions of the mayor as the area assumes control of additional budgets and powers from the Government. The combined authority is currently consulting local citizens and stakeholders on the contents of these documents and will issue a report on its findings to the Secretary of State later this year.
The draft order establishes a mayor for the Liverpool city region and sets the dates of elections and the first and subsequent term lengths. It is laid before Parliament following the statutory process specified in the 2009 Act, as amended by the Cities and Local Government Devolution Act. As required, all the constituent councils have consented to this order being made and the Government have laid the draft order, having had consideration of the statutory requirements. As required, we are now seeking Parliament’s approval before making the order.
The order is about delivering devolution and empowering local authorities to set their own policy agendas. The order provides enhanced local leadership in the form of a directly elected mayor with a strong democratic mandate and independence from the combined authority. The mayor will work closely with local leaders, who will sit on the combined authority board, and together they will drive forward the economic opportunities presented by devolution, with the mayor acting as chairman of the combined authority and providing a single voice for the area that can be both prominent nationally and help drive the devolution agenda.
As noble Lords may recall, during the passage of the enabling legislation there was debate on the necessity of mayors in devolving powers to local areas. The Government have made clear their stance on the necessity of mayors. However, they are not alone in this belief. Research commissioned by the Centre for Cities in May 2016 found that members of the public across five devolution deal areas supported the notion that directly elected mayors should have greater powers than council leaders.
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With that said, it is important to note that no one area has been required to adopt the mayoral model. The Government’s position is that if an area is to have a mayor, it will be because that area, through its democratically elected representatives, has chosen to have one. However, the Government view devolution as two-way, and it is our clear intention that the accountability offered by a mayor is desirable and therefore forms part of the devolution deal that has been agreed between government and local leaders.
The Government have made excellent progress in implementing their devolution agenda. An order establishing the position of mayor in Greater Manchester was made on 28 March 2016. Orders have now been laid to establish the position of mayor for the Tees
Valley, North East, Sheffield City Region and West Midlands combined authorities. All of these are scheduled to hold their first mayoral elections on 4 May 2017.
The Tees Valley mayoral order was laid before the House on 13 June. If approved, it will create the position of mayor for the Tees Valley Combined Authority, with the first election to be held in May 2017, and it sets the first mayoral term for three years, with the next election in May 2020 and with subsequent four-year terms.
As I have just set out, the Government are committed to devolving powers to places that have chosen to have directly elected mayors. I reaffirm the Government’s view over the necessity of mayors where powers and budgets are being devolved, as they provide this clear accountability and leadership.
As with the Liverpool city region, this order is a milestone in the implementation of the Tees Valley devolution deal that was agreed between the Government and local leaders on 23 October 2015. The first step in implementing the deal was made on 1 April 2016, when the combined authority was established, with functions over transport, economic development and regeneration. The deal provided an offer of powers and budgets from the Government on the basis that the Tees Valley would deliver certain measures and reforms, which included a directly elected mayor covering the whole of the combined authority area. The deal included that the mayor would hold responsibility for a consolidated transport budget and a multi-year settlement from government, as well as being able to exercise the function of creating mayoral development corporations.
The combined authority would take on responsibility for: creating a Tees Valley investment fund, bringing together funding for devolved powers and delivering a 30-year programme of transformational investment in the region; it would take control of a new £15 million-a-year funding allocation over 30 years, to be included in the Tees Valley investment fund and invested to boost growth; it would also take on the leadership of a comprehensive review and redesign of the education, skills and employment support system in Tees Valley; and it would take responsibility for a devolved approach to business support from 2017, to be developed in partnership with government.
The draft order uses the same enabling legislation as the previous draft order concerning the Liverpool city region. It establishes a mayor for the Tees Valley and sets the dates of elections and the first and subsequent term lengths. It has received the consents of all constituent councils; we are now seeking Parliament’s approval before making the order.
My previous introduction to the situation in Liverpool set out the role of the mayor and the opportunities that can be driven forward through a partnership of the mayor and local leaders. I repeat that the Government view devolution as a two-way process and that the Tees Valley leaders have chosen to adopt this model in order to agree a substantial devolution deal with government. As with Liverpool, the mayor will be the chairman of the Tees Valley Combined Authority, and as such will provide an important voice for the Tees Valley at a national level.
As I stated previously, further draft orders will follow to establish the position of mayor for other combined authorities and I look forward to bringing them before the House. It will be a major milestone for the Tees Valley and for the devolution process there. I commend both draft orders to the Committee.