Greater Manchester Combined Authority (Election of Mayor with Police and Crime Commissioner Functions) Order 2016 — House of Lords, 2016-03-23
Topic: Macroeconomics
Hilary Armstrong (Labour, Centre-left): My Lords, I, too, intervene mainly on the Tees Valley order. I have great sympathy with what the noble Viscount, Lord Eccles, said. I note that he talked about coming from the north-east. A real problem in all of this is that the previous Secretary of State did not want to hear the words "regions" and banned it for a while. Nobody was allowed to mention a region. In doing so, he broke up the north-east That leaves us with significant problems. One problem in the Tees Valley area is that there is one police authority and one fire authority for some of the Tees Valley, but Darlington comes within the Durham and Darlington fire authority and the Durham and Darlington police authority. This will present Tees Valley—and, I suggest, the Government—with a little bit of trouble, because there will be one mayor and one police commissioner not covering the whole of the area. There is a split there that I do not think the Government have worked through. They have brought it upon themselves by the daft things that were done in getting rid of the regional development agency in the north-east. But there you go—history often comes back to bite us The Tees Valley order is essentially about how to get a greater economic drive in that area. Of course, we and the local authorities in that area fully support that. There is huge ambition, but there are huge challenges. On its own the closure of the steelworks means that there will be at least £10 million less per year coming into the local authority from business rates, let alone all the other economic challenges from the closure of the steelworks. The financial settlement that goes with the combined authority deal simply does not address the enormous challenges. Another challenge that is not mentioned in the order, but certainly if Tees Valley goes the way of Greater Manchester it will become an issue, is that there is a large workforce in the Tees Valley area involved in social care. I confess that I have not yet been around all the authorities, but in either the north-east or the Tees Valley area I have not yet come across a local authority for which the amount it will be allowed to raise through the 2% additional levy on council tax will even cover the increase in the minimum/living wage. The amount that those authorities will be able to take in will be much less than in other authorities, such as Surrey, because they have more houses in the lowest council tax bands. They will be able to raise less, but the north-east and the Tees Valley also have the highest proportion of people needing social care who are entitled to public funding. When you put those two things together, there is a catastrophe waiting to happen. I have been asking the Department of Health what the way forward is on this, because the authorities will not be able to raise the money to meet the costs. As a very quick example, Surrey, which will be able to raise a lot through the 2%, has 1% of its elderly care population dependent on public funding. In Newcastle, more than 80% is dependent on public funding; as I said, it is unable to raise even what the rise in the minimum wage will cost this year These are incredible challenges. The Government have not addressed them and just keep saying, "It’s up to local authorities". Local authorities are not miracle workers. The people in the north-east deserve better. The Government need to put their attention to this—I think their collective attention, because when I have talked to different people in government they do not know that this is going on and that this is likely to be an effect. They have not thought about it. I plead with the Minister: we are all in favour of more devolution and of the combined authority concept, but that has to be done in a way that does not disadvantage the people of these areas even more. At the moment, government policy—I am quite prepared to accept by mistake—will make their task virtually impossible. That is not fair. When the Minister talks about fair funding, she needs to think of these other things, which will really have an impact on Tees Valley’s ability to get the economic drive that it is working so hard to see.