My Lords, the hope for this Bill was that it would be a genuine step towards devolution—the kind of radical power shift that is needed to empower local communities to re-energise our economy, right across the UK, and reshape our public services so that they work equally effectively wherever you live because they are flexible enough to meet local needs. Instead, in too many aspects the Bill is centralising, with government having to give a sign-off to new structures, the introduction of centralised NDMPs and the mysterious office for place, and the imposition of an infrastructure levy, with its inherent risk that the Treasury may see it as a funding pot from which to fund national infrastructure.
The Bill also contains a presumption that areas and regions of the UK will get the funding they need to move forward only if they meet the Government’s model of what is needed. This may very well exacerbate the inequalities that the Bill attempts to address. Surely those operating at local level are more likely to know what is needed for their area. Instead of addressing the power imbalance between the nations and regions of the UK, the Bill attempts to face in too many directions at once. It includes a planning Bill, a local government structures Bill, an environment Bill and so many other projects and programmes, some with fairly tenuous links to levelling up and regeneration, as we have heard today. It has so much hanging from it that it has become a bit of a Christmas tree Bill.
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There was so much potential with this Bill to build on the very successful and radical work of community wealth building, in which the UK is taking a very leading role in using the power of public sector funding, combined with key collaboration and innovation from the private sector, to drive local economies. However, this locally driven regeneration of economies is set aside for a set of government missions that are not even on the face of the Bill but against which any funding bids or requests for governance changes are measured and which come direct from Westminster.
We were hopeful that something like a departmental style single grant to local authorities would allow flexibility in determining priorities and strategic goals. There is a strong case for going further and faster. I have commented before in your Lordships’ House on the fact that the UK is the most centralised country in Europe. Currently around 95p in every £1 paid in tax goes to central government, compared with 69p in
decentralised Germany. Granting greater revenue raising and borrowing powers to local government would be good for democracy and ensure accountability.
If the Government are nervous about that, they could pick up the idea of local public accounts committees. Comparative research by the OECD has found that decentralisation is positively linked to GDP growth and local investment. It is difficult to see how levelling up will ever reach its full potential without the fiscal firepower to match the political determination.
In the excellent Commission on the Future of Localism, carried out under the chairmanship of the noble Lord, Lord Kerslake—I should declare for transparency that I was one of the localism commissioners on that project—he identified what was needed:
“A fundamental rebalancing of power to people and communities requires more than tinkering around the edges. Localism needs to be approached as part of a complex system which requires radical action. Achieving change in a complex system requires a fundamental shift in attitudes and behaviours, as well as changes to underlying structures and mechanisms which drive how the system operates. Change is required in … resources, policies, power structures and values”.
It is hard to see how this Bill as it currently stands will drive forward the radical cross-departmental thinking to make these changes. I concede that it does definitely offer a little more than “tinkering around the edges”, but it does not offer radical reform either.
The problems to an extent start and end with funding. While government funding for levelling up is restricted to the budget of the Department for Levelling Up, Housing and Communities—not even that at the moment if it is correct that the Treasury has frozen capital spending for that department—they cannot hope to rebalance power to the people and communities and between our nations and regions.
We also need radical transformational change to financial institutions, such as the move to regional mutual banks outlined so powerfully by my noble friend Lady Hayman in an earlier group. It is interesting to see that the Welsh Government are already making good progress on this.
That is why we think further action will be necessary, so our Amendment 477 requires the Government to pass a dedicated devolution Bill. We must surely give CCAs, by right, powers which include but are not limited to, housing, energy, childcare, public transport, skills, training and development. Most of the provisions of the Bill have been introduced without sufficient consultation with the sector, which is why the second part of our amendment requires that a new devolution Bill introduce a framework of co-operation between CCAs and the Government based on mutual respect. I beg to move our amendment.