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Peers raise doubts about combined authorities and devolution under new government

The fate of combined mayoral authorities is uncertain as members of the House of Lords pointed out that there are a number of unsolved questions about their powers and how much support they will receive from the new government.

The House approved draft orders for the election of mayors in three combined authorities – Sheffield, Liverpool and the West Midlands – yesterday.

However, in the debate about the order for Sheffield, Labour peer Lord Beecham raised concerns about the fate of the devolution deals under the government led by Theresa May.

As part of May’s reshuffle, George Osborne, the chancellor who introduced the idea of the Northern Powerhouse, was replaced by Philip Hammond, whilst Greg Clark, one of devolution’s biggest supporters, was replaced by Sajid Javid as communities secretary.

Lord Beecham said: “The idea of devolution is welcome, but not every aspiring area is the same. Huge questions go unanswered about finance, accountability and structures to different degrees in different areas, and we do not know whether the new prime minister, her chancellor and the secretary ​of state share the apparent enthusiasm of their predecessors for this policy.

“Some areas—Greater Manchester, Merseyside and the Tees Valley—are well down the road and are well defined, but more work is surely required to ensure that for the kind of areas we are discussing today, and with some still to come, the serious questions raised by the National Audit Office, the Secondary Legislation Scrutiny Committee and others can properly be addressed. I make it clear that we on these benches—all of us—want to see this devolution work and be properly funded, but it is difficult to see how well it will work unless these critical questions are answered.”

A recent National Audit Office report said that devolution deals are becoming increasingly ambitious and will need oversight to ensure that they deliver value for money.

Lord Beecham warned that the devolution deals are “in danger of sliding into a back-door reorganisation of local government as the demand for a unitary model, based on an expanded South Yorkshire combined authority, inevitably grows”.

He said a recent report from the Secondary Legislation Scrutiny Committee, published last week, pointed out that the wishes of Bassetlaw district in Nottinghamshire and Chesterfield in Derbyshire are unclear.

The two districts will become part of the South Yorkshire authority but remain under their existing county councils for functions such as education, social care and libraries.

In the West Midlands authority, five authorities - Cannock Chase, Nuneaton and Bedworth, Redditch, Tamworth, and Telford and Wrekin - will be non-constituent members who are unable to vote for the mayor.

Lord Beecham also asked what discussions the DCLG has had with the Department of Health and NHS England about healthcare powers in the new combined authorities.

He said that authorities in both the West Midlands and Sheffield have rejected the concept of elected mayors but were being forced to adopt them under the changes.

He added that Osborne had “wildly overstated” the financial benefits of devolution, pointing out that Birmingham will suffer cuts of £817m a year by 2020 and Sheffield will lose at least £350m.

Liberal Democrat peer Lord Shipley, who is vice-president of the LGA, also questioned whether the chairs of the overview and scrutiny committees for the combined authorities would be independent.

He pointed out that the committees appointing them would be proportional to the leaders of the member authorities, who could all be from the same party.

Lord Shipley said: “I hope very much that when the minister comes back later this year, the guidance—if it is guidance, as opposed to being statutory—makes it clear that this appointment cannot simply be in the hands of a handful of people, all from one party, who may decide to support an independent person who, in practice, may well not be entirely independent. I draw that to the minister’s attention because it is important we ensure that public confidence in the powers of an elected mayor is protected.”

Lord Bourne of Aberystwyth, who was appointed parliamentary under-secretary to the DCLG as part of the government reshuffle, replied that elected mayors provided the “strong leadership” needed, and polls in the areas where they were introduced showed that they were more popular than other forms of authority.

He said that the process of appointing overview chairs would be “open, transparent and based on open advertisement”.

He also said that the government is currently looking at a devolution deal to Greater Lincolnshire and a “nascent” deal in East Anglia, although this was recently rejected by two local councils.

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