Local devolution of powers

John Riddell, Weightmans, Leicester

We discussed this issue in the winter edition of ConsortEM. So much has happened since then that we are revisiting it. The Cities and Local Government Devolution Act 2016 received the royal assent on 28 January 2016. Members of EM LawShare have become involved in devolution with a deal being made in the West Midlands and proposals being tabled in the North Midlands.

The Cities and Local Government Devolution Act 2016 was substantially amended on its passage through Parliament. It provides for elected mayors for combined authorities, the creatures that will exercise devolved powers. The act was amended so that the Secretary of State can require a combined authority to adopt a mayor where at least two of the constituent councils and the combined authorities agree. This can happen even where more than one authority does not agree to the election of a mayor. A nonconsenting authority can be removed from the combined authority.

Other important provisions of the act include the removal of the statutory limitations on functions that can be given to a combined authority. The Secretary of State can also order that the combined authorities take on the functions of another public authority in the area. These two provisions mean that a combined authority can take on health functions. Transport, skills, planning and job support are other functions that are likely to be devolved.

The act allows the Secretary of State to change the constitution and membership of local authorities and make structural and boundary arrangements. Once again this power was handed to the Secretary of State during the bill’s passage through Parliament.

The act also allows mayors to take on the role and powers of Police and Crime Commissioners and sub-national transport bodies may be established to oversee transport strategy and investment priorities in a region.

Devolution deals and proposals show how the act may become reality through orders and regulations.

A West Midlands deal was made in November 2015. Full details appear on the gov.uk website but the most important powers devolved to the mayor and combined authority include responsibility for a devolved transport budget and franchised bus service. There will also be responsibility for a key route network of local authority roads.

Planning powers will be conferred on the mayor to drive housing delivery and improvements in the housing stock. The combined authority will have control of an investment fund of £36.5 million per year and 19+ adult skills funding from 2018/19. There will be joint responsibility with central government for employment support for those claimants who are hardest to help. There will be responsibility to work with the government to develop and implement a devolved approach to the delivery of business support programmes from 2017.

The draft North Midlands deal is being considered by central government. Nineteen councils in Nottinghamshire and Derbyshire have signed up to it. The plan is for the transfer of significant powers for employment and skills, transport, housing, planning, business support and investment from the government to combined authorities. An investment fund of £900 million over 30 years will be created. The benefits of devolution are stated to be 55,000 new private sector jobs and 77,000 new homes. There will be £137 million a year in consolidated transport funding and transport aims include Midland Mainline electrification and an HS2 station. It is proposed that there will be a devolved and consolidated local transport budget and single local transport plan. Finally, the mayor will be taking on the role of the Police and Crime Commissioners for Nottinghamshire and Derbyshire.

These two plans illustrate the nature of the proposed devolution but many questions remain unanswered. One is the perennial issue of the relationship between local and central government. One the one hand, devolution suggests the empowering of localities and decentralisation. On the other, the powers of the Secretary of State to impose mayors and change constitutions and structural and boundary arrangements suggests a greater degree of central control.

As ever, the key to local autonomy may be finance. The power to raise a precept remains unclear and mayors appear to have no power to borrow. It is perhaps significant that the Communities and Local Government Select Committee report on the Devolution Bill issued in February stated that there should be more fiscal devolution, including significant spending and tax-raising powers. That will be an interesting debate.

John Riddell
Partner, Weightmans
0116 242 8925