Local Democracy, Economic Development and Construction Bill [HL]

This is an important group of amendments to which I shall try to do justice. The amendments fall into two main groups. The first concerns the rationale for the creation of the leaders’ boards, their viability, composition and the different roles of different partners. The second concerns the role of the Secretary of State. I shall deal with the amendments in their two groups and in the context of the clause stand part debate raised by the noble Lord, Lord Greaves. The consultation on the SNR made it quite clear that leaders’ boards would be the key body representing the collective views of local government in a region, but the way in which they work and what they will look like will depend on each board. All that we have done is to set up some basic criteria which we expect to see met. They need to be streamlined and manageable to make strategic decisions, but to be representative of local government in the region and made up of leaders with the authority to act on behalf of the region. They are not leaders in the sense that we use for leaders of the council; they can be from the council, acting on behalf of the authority. It will be entirely up to the local authority to decide. That approach has been welcomed by the LGA. The fall-back power, which allows the Secretary of State to agree the scheme produced in the region, is just that: a fall-back power, reflecting the ultimate responsibility that she has to ensure that leaders’ boards are effective and meet the basic criteria. It is very satisfying that most regions are getting on with establishing leaders’ boards. The chances of the Secretary of State not approving a scheme that has wide support are remote. One leaders’ board is already in place, the famous 4NW. Our latest information is that leaders’ boards will be established in the next two or three months in at least four more regions, which is excellent news. Rather than take noble Lords through the detail, I shall write to them to update them on what progress has been made and in which regions. In probing this provision, the noble Lord, Lord Greaves, has to take into account the reality of the fact that leaders’ boards are already in place and in process, so he will not be surprised when I say that I cannot accept Amendment 168C, which would require that they should be optional. I will, however, answer his point about funding. We have already said that we will fund leaders’ boards to the order of £20 million a year to allow them to undertake their statutory responsibilities, just as we currently fund regional assemblies to carry out their functions on a regional planning body. They will not be allowed to levy a precept. Nor do we expect leaders’ boards to charge competent authorities for their work. I want to put on record the fact that, having established why we need leaders’ boards, we must accept that they need the resources to do the job. I turn now to Amendment 168D, which seeks to remove the phrase ““(whether or not incorporated)”” from Clause 66(1). In line with our flexible approach, we have left it to the participating local authorities to decide the legal status of their leaders’ board so that it can best meet their requirements. The phrase clarifies that intention. If incorporated, for example, a leaders’ board would have a legal personality and could enter into contracts on its own behalf as well as employ staff. They would otherwise draw on staff employed by the participating authorities in the region. Amendments 168E, 168G, 178A, 178B and 178D seek to replace ““participating”” authority with ““qualifying”” authority when referring to local authorities. Subsection (3) makes it clear that: "““For the purposes of this section, ‘participating authority’ means””," district and county councils, including unitaries, as well as national park authorities and the Broads Authority. I take the point he made, and I have an additional note from my officials saying that ““participating authorities”” would make the scheme to establish leaders’ boards, so this must anticipate any question of who qualifies, which will be determined by the scheme drawn up by the local authorities. Let me remind noble Lords of some of the criteria set out in the SNR document. One is that leaders’ boards should be streamlined, manageable, representative and composed of local authority leaders with sufficient authority to act on behalf of local areas. Amendment 168F could undermine those criteria by allowing leaders’ boards to include members from all local authorities and to allow non-leaders to be appointed as substitutes. The issue is how much detail about the composition of these boards should be included in primary legislation. The boards have to be effective and of a manageable size. In the north-east, it might be possible to include all the authorities, but there are 76 local authorities in the south-east. It is up to the boards how they manage functions. That does not rule out substitutes or even external stakeholders, but boards must be credible and have authority. I am afraid that if we were to accept the amendment, we might get bogged down in having to deal with detailed membership rules. We are aiming for flexibility. Amendment 172AA also risks burdening leaders with blanket rules to require board members to consult local authorities that are not directly represented. Of course they should be able to do so, but we look to their schemes to see how they will achieve that. Consultation may be the answer. However, there may be other ways to do this. I have spoken about the ability of boards to determine their own composition and how they work, which covers the provision suggested in Amendment 169ZA in relation to all political parties. The amendment would provide for all political parties to be represented on the boards, as well as a reasonable number of independent members. Many of my arguments about the amendments tabled by the noble Lord, Lord Greaves, apply here, but it is in essence for participating authorities to agree among themselves how they will allocate seats. What we expect to see and what is set out in the policy document is that leaders’ boards should reflect the political balance of leaders in the region. On the Secretary of State’s powers in Amendments 169 to 170 and 169B, noble Lords have argued that it is not necessary to have the Secretary of State’s approval here because local authorities can be relied on to take a responsible and inclusive approach, and I agree. Therefore, I revert to the arguments that I made previously. The powers here are to be used in the event of a worst-case scenario. They are there as a fallback position, and it would be irresponsible not to allow for such powers. They are particularly relevant in order for everyone to be satisfied that the leaders’ board will be representative of the whole region. Our final reason for believing that the leaders’ board needs to be formally signed off by the Secretary of State is that it will be a statutory body and a responsible regional authority. It will be in receipt of public funds, and it is only right and proper that it should be formally recognised as such by the Secretary of State. This is not a precedent. The power to approve the leaders’ board is the same as the current power of the Secretary of State to appoint a regional planning body under the Planning and Compulsory Purchase Act 2004. Amendment 171 would remove the ability of the Secretary of State, by direction, to withdraw approval for the leaders’ board scheme in a region where it was not operating effectively. We would expect that power to be used extremely exceptionally where the operation of the board was significantly at variance with its approved scheme. I have just made clear the value that the Government place on the scheme, and it would not be consistent for the Secretary of State to approve it and then not to be able to ensure that it was subsequently adhered to. Finally, I turn to Clauses 72 and 79. Clause 72 concerns what happens when the responsible regional authorities have prepared and published a draft revision of the regional strategy and submitted it to the Secretary of State. Amendment 180A to Clause 72 seeks to remove the requirement for the Secretary of State to publish any revisions and places this duty with the responsible regional authorities. I have just explained the importance of the Secretary of State’s approval role, and this applies equally to the publication of the document, which acts as the final sign-off. None of these powers is new. A power for direction for regional development agencies already exists in Section 7(2) of the Regional Development Agencies Act 1998. In addition, as I said, there is a power of direction in relation to the revision of strategy in the Planning and Compulsory Purchase Act 2004. I have gone through that at a fair place, for which I apologise. However, I am anxious to address the amendments and to make progress, and I hope that my response has been sufficiently clear for noble Lords to feel that their questions have been answered.