Agenda item

This item will include a presentation by David Trethewey, Divisional Director Strategy and Performance. The following link to the West of England Devolution Agreement is provided as background information on this item

https://www.gov.uk/government/publications/west-of-england-devolution-deal

Councillor Warren, David Trethewey and Andrew Pate gave a joint presentation on the West of England devolution proposals. A copy of the PowerPoint slides used in the presentation is attached as Appendix 1.

Councillor Warren said that he thought that a detailed presentation on the proposals would be helpful in clearing away misconceptions that had arisen.

David Trethewey said that in essence the proposals were about the transfer of powers from central government to local areas. Eight areas of the country have  agreed devolution deals with the government. There were different issues and priorities in each of these eight areas and each area had to consider how to get the best deal for itself. The Councils in the West of England had been working successfully together for a number of years. What was proposed was not the merger of the Councils; it was about working together on the issues specified in the deal. The West of England is a net contributor to the national economy, Manchester is not. Challenges in the West of England include static productivity, skills shortages, housing, areas of deprivation, traffic congestion and an infrastructure deficit. The deal for the West of England included new money, unlike the deal for Cornwall. The deal proposes an elected Mayor for the region.

Councillor Warren underlined that the West of England deal was the best in the country in terms of funding per capita. There were aspects of the deal that he was not happy with, but he thought it was a good deal that would bring significant benefits to the region.

Andrew Pate said that the deal would mean an extra £900m over 30 years. This would in fact probably be spent over 10-15 years. There could be additional money if the West of England showed that it had done a decent job with the devolved powers and money. There was a City Deal for the West of England already in place, which had produced £500m of economic development in the region. The City Deal allowed the West of England to retain 100% of the growth in business rate revenue. Changes were proposed to local government finance that would allow all local authorities to retain 100% of business rate growth from 2020, giving rise to a risk that the City Deal could be undermined. Only the devolution deal could give full protection against this risk. There were also proposals to devolve existing funding, such as the Local Growth Fund, which could raise the value of devolution deal to over £1bn. The West of England would also get a seat at the table in the negotiations about the proposals to reform local government funding. The deal involves a 50/50 split between capital and revenue. The revenue would enable more flexibility and the ability to finance borrowing without having to increase Council Tax.

David Trethewey spoke about the powers and responsibilities that would delegated to the West of England (slides 10-13).

Councillor Warren drew attention to the constraints on the power of the regional Mayor. The Mayor’s budget would be rejected if two thirds of the constituent Councils voted against it. The Joint Spatial Plan had to be approved unanimously. He said that no powers would be taken from the Councils and new powers would be devolved to the joint authority, which would be set up by the Councils.

David Trethewey summarised the future timetable for the proposals. B&NES Council would debate and vote on the deal in June this year, followed by a public consultation on the governance arrangements for the combined authority. The summary consultation would be submitted to the Secretary of State in August. A draft order creating the combined authority would be laid before Parliament in October. The shadow combined authority would be up and running by February 2017 and the regional Mayoral election would take place in May 2017.

Rosemary Naish (Chair, Clutton PC and ALCA representative) asked how the Metro Mayor and his office would be funded. Andrew Pate explained that there is already a West of England Partnership office with about 30 strategic-level staff, which also supports the Local Enterprise Partnership. (For details see http://www.westofengland.org/ and http://www.westofenglandlep.co.uk/). This office was funded by voluntary contributions from the four authorities and by direct government grant. The skills budget was directly funded by government. He thought that the scale of the administration would not be radically changed by the devolution proposal. It is likely that the main addition would be the cost of the regional Mayor him or herself, and perhaps be one or two other related things. There would be a need for better legal and technical underpinning of the funding for the Mayor’s office. B&NES currently runs the West of England office on behalf of the four Councils. Greater clarity about its legal structure and funding would be welcome.

Bruce Shearn (Radstock TC) said he that he was concerned about the possibility of one council dominating the combined authority. He noted that the spatial plan provided for 80,000 houses in the former Avon area and asked what was to stop a lot of them being located in B&NES. Councillor Warren replied that the Joint Spatial Plan had to have unanimous agreement from all the Councils. He was aware that the new Bristol Mayor wants to build more homes in Bristol. David Trethewey pointed out that the process for the new Joint Spatial Plan had begun before the devolution arrangements were in place. Councillor Warren said that the four Councils would continue to do their day-to-day work; he saw the combined authority as an enabling layer above them. There were projects in other Council areas that could be funded by the combined authority, such as the South Bristol Link Road, that would benefit the whole region.

Chris Warren (Chair, Saltford PC) said that the proposal for an elected Mayor for Bath and North East Somerset had been overwhelmingly rejected in the recent referendum, but there was to be no referendum on the Metro Mayor. There was concern that the combined authority was another layer of bureaucracy. The area around Keynsham and Saltford is a magnet for development and he hoped that it would not become joined to Bristol in twenty years’ time. Councillor Warren noted that a Mayor for B&NES had been rejected by 80% of voters in the referendum. However, he saw the devolution deal as a means of enabling investment in infrastructure. He had spoken recently to Sir Peter Hendy, who had said that if a deal were made the area would be much better placed to access transport funding.  He had asked the government to drop the requirement for a Mayor and would continue to do so, but he was sure that the benefits of the deal outweighed this requirement.

Mike Hedges (Farrington Gurney PC) said that everything in the regional strategy was linked to everything else. More houses meant that there had to be more infrastructure and more schools. Improved productivity required more people to possess appropriate skills. This was going to take a lot of co-ordination between the four councils. Councillor Warren said he thought that infrastructure was the basis of everything else. Andrew Pate said that the councils were co-ordinating already and that devolution would provide the resources to be able to do it well.

Bob Simons (Chair of ALCA) asked how the Metro Mayor would successfully allocate funding if he was perpetually challenged by the councils. Andrew Pate reminded the meeting that Joint Spatial Plan required unanimity among the councils, but the budget had to be approved by two thirds of them. He hoped that situation never arose where the final budget was rejected. There was a track record of collaborative working in the West of England. The government would expect the combined authority to have a framework within which decision making was well managed and transparent.

Bob Simons asked whether Town and Parish Councils would be able to negotiate devolution deals with B&NES. Andrew Pate replied that the Treasury had been excited about devolving powers and funding to certain regions because it saw the potential for supporting the economy. Devolution was limited to certain things such as infrastructure. The outlook for Council funding in general was not at all rosy; money for day-to-day services was getting tighter all the time. If, as the economy grew, the Council had money to devolve to the parishes, it would be delighted to do so. Bob Simons said that if the Council did not speak to the parishes, it would never know how the parishes could help them. He suggested a forum should be established to facilitate this. Councillor Warren pointed out that there were already area forums. He said that there would be a designated member to whom the parishes could speak.

Judith Chubb-Whittle wondered how the outcome of the EU referendum might impact on the devolution proposals. Andrew Pate said that he did not think there was a direct link. More generally what happened in Europe would impact on the economy.

Chris Gittins (Clerk, Timsbury PC) asked whether devolution would lead to the franchising of buses. David Trethewey replied that devolution was about acquiring new powers, rather than a list of commitments to do specific things. Franchising of buses was something that the new combined authority could decide to do. Councillor Warren said that there plans for rural bus services in the Neighbourhood Plans. These were at a very early stage, but the process had started.