Agenda item

Report of the Chief Executive

Further to Minute 3/16 of the Cabinet, the City Council considered a report of the Chief Executive, which set out the proposals for implementing the Devolution Agreement and provisions for Mayoral West Midlands Combined Authority (WMCA).

 

The seven Metropolitan Councils of the West Midlands (Birmingham City Council, City of Wolverhampton Council, Coventry City Council, Dudley Metropolitan Borough Council, Sandwell Metropolitan Borough Council, Solihull Metropolitan Borough Council and Walsall Metropolitan Borough Council) conducted a Review of Strategic Governance in 2014 to assess whether the arrangements for economic development, regeneration and transport as they stood should continue or would benefit from improvements. This review highlighted the positive joint working to date that had been in place through informal arrangements, and considered options for the future.

 

The Review concluded that the establishment of a combined authority for the West Midlands was best placed to support business, to further growth, and to create jobs to secure an improvement in the region’s economic conditions. The Combined Authority would draw together strategic work across transport, economic development, employment and skills, improving outcomes and providing opportunity for the region. 

 

A Scheme was then drafted to form the legal basis for the creation of the new body, containing the membership, powers, functions and voting arrangements.  On the 13 October 2015, the Council endorsed these proposals and agreed that Coventry City Council should formally become a constituent member.  In addition, it resolved that the Devolution Deal should come back before Cabinet and Council for full consideration and debate.  Following this agreement, the Scheme was submitted to Government and a Draft Order (“The Establishment Order”) based on the Scheme was created by the Secretary of State.

 

On 23 February 2016 the Council consented to a Draft Order being laid before Parliament to allow for the creation of the West Midlands Combined Authority (WMCA).  The Cabinet noted that this “Establishment Order” was currently before parliament and was anticipated to come into force on 10 June 2016, on which date the WMCA would be established.

 

Negotiations with Government had continued to ensure that the WMCA created the right economic development incentives for the people of Coventry. In November 2015, a proposed “Devolution Deal” was signed by the Leaders of the seven Constituent Councils and the three Local Enterprise Partnership Chairs. The “Devolution Deal” was the basis of the agreement and underpinned the first stage of devolution. Assurance work around the Devolution Deal was also undertaken by PricewaterhouseCoopers (PWC) and Grant Thornton and were appended to the report submitted.

 

The Devolution Deal stipulated that the Chair of the WMCA would be a newly, directly elected Mayor, holding specific powers and functions. A draft order, the “Mayoral Election Order” was also appended to the report for consideration. Subject to consent by all of the constituent authorities, it was anticipated that the Order would be laid before Parliament in June 2016 providing for the Election of a Mayor for the WMCA on 4 May 2017.  The Cabinet noted however that the Order did not deal with the functions and powers of the Mayor and that this would be dealt with by a further Order.

 

In conjunction with the “Mayoral Election Order” a draft Scheme had been prepared, which dealt with the proposed functions and powers of the WMCA and the Mayor in line with the Devolution Deal. In particular the Scheme outlined those functions which would be a Mayoral Function, a Joint WMCA and Mayoral Function or a WMCA (non-Mayoral) Function.  The scheme operated on the principle that devolution was not about taking powers away from Constituent Councils, but was about drawing down powers from Central Government or government agencies.

 

The Cabinet were advised that additional governance arrangements in the Mayoral WMCA ‘functions’ Scheme would include additional members, in pursuit of the WMCA’s ambition to collaborate across the West Midlands geography.  A deadline of 10 June 2016 had been given for consideration by the WMCA Shadow/WMCA Board of additional membership.

 

Subject to the agreement of Council, the Scheme would be subject to public consultation and the report submitted set out the approach to this consultation.  Following consultation, the Secretary of State must consider the proposed scheme and the consultation responses.  The scheme would form the basis of a third order, the “Functions Order”. It was anticipated that this would be considered by Council in September 2016 before being laid before Parliament.

 

In line with the “Establishment Order” it was anticipated that the WMCA would come into being as a statutory body on the 10 June 2016.  It was noted that Councillor and Officer support from all member authorities was key, both to ensure the collaborative model for the benefit of the West Midlands continued, and also that the citizens of Coventry continued to benefit from the opportunities arising from the Devolution Deal. 

 

Coventry’s elected member representatives to the WMCA were considered and resolved at the Council’s Annual Meeting on 19 May 2016.  Alongside the democratically elected Leaders of each local authority, the Chief Executives from the constituent authorities made up the senior leadership team of the WMCA.  The constituent CEO’s would, aside from their day-to-day council responsibilities, also have strategic roles within the WMCA.

 

Strong public feedback during the engagement programme about the creation of the WMCA was that it should not mean extra layers of bureaucracy or new jobs created at an extra cost to the taxpayer and political leaders had been very clear to officers working on the development of the WMCA that wherever possible, resources should be absorbed by member Councils at no extra cost to the tax payer.  As a result, it was proposed that the Senior Management Team of the Combined Authority be made up by Senior Officers from the constituent Councils.  This arrangement would include the Head of Paid Service of Coventry City Council (Martin Reeves) taking on the additional responsibility of Head of Paid Service for WMCA on a temporary and part-time basis.  This provided a unique opportunity for Coventry to maintain a key strategic position in the new authority. Arrangements had therefore been put in place to delegate responsibility to the Executive Director of Place and members of the Senior Management Board for those areas of responsibility held by the City Council’s Chief Executive to exercise on his behalf on the rare occasions that he was not available.

 

The report indicated that a ‘Collective Investment Fund’ (CIF) had been an identified priority for the WMCA, with the aim of providing investment for commercial land and property developments, where these were viable but unable to secure all of the required investment to progress.  The CIF’s focus would be to secure economic return across the region at nil net cost to the WMCA at worst, operating as a revolving fund, for at least a 10-year period with the initial capital being repaid in full at the time the CIF was wound up. 

 

The CIF would be a fund of investments made by the WMCA itself, funded from WMCA prudential borrowing capped at £70 million, as soon as the WMCA had the necessary borrowing powers.  Until such time as the WMCA had the power to borrow, Birmingham City Council had agreed to act as Accountable Body for the CIF, and would therefore undertake any borrowing relating to the CIF in the short to medium term.

 

It was anticipated that the WMCA Board would approve that Finance Birmingham be appointed as the Fund Manager for the CIF.  Ownership of the CIF funds would however remain with the WMCA, or Accountable Body, and would only be released when loans are fully approved and all necessary paperwork had been completed.  The investment strategy and parameters for the CIF would be set by the WMCA. Finance Birmingham will work closely with WMCA member Councils and Local Enterprise Partnerships on the pipeline of investment opportunities.

 

It was therefore proposed that the Council enter into a legal agreement with Birmingham City Council to confirm that they would share the risks associated with the CIF and therefore any losses, in equal proportions with the other West Midlands councils.  This would only be triggered in the event that the WMCA was unable to fund any losses from its own financial resources.

 

In moving the Recommendations, the Leader, Councillor Duggins paid tribute to former Leader of the Council, Councillor Mrs Lucas for her valuable contribution thus far in respect of the implementation of the Devolution agreement.

 

The following five amendments (in italics) were moved by Councillor Blundell, seconded by Councillor Crookes and lost:

 

Amendment 1:

Item No 3.1a

Delete recommendation No. 9 in the report and replace with:

 

“This Council is happy to consider the Devolution Deal and due diligence work surrounding it, but regrets that, on such an important subject, the Labour Group has consistently refused to allow Coventrians to express their views through a referendum.

 

This contrasts sharply with the referendum which the Conservative Government has arranged so that the British people can decide on membership of the European Union”.

 

Amendment 2:

Item No 3.1a

Recommendation No. 10 in the report

After the word “consent” add the words ”with regret”. At the end of the sentence after the word “WMCA” add the words “, due to the lack of a meaningful consultation with Coventrians”.

 

The whole recommendation No 10 now to read:

 

Consent with regret, to the draft Order (“The Mayoral Election Order”), providing for the election of a directly elected Mayor for the WMCA, due to the lack of a meaningful consultation with Coventrians.

 

Amendment 3

Item No 3.1a

Recommendation No. 11 in the report

At the end of the first sentence, after “Council”, add the words “and to include the Leader of the Opposition or their nominee.”

 

The whole recommendation No 11 now to read:

 

Delegate approval of any minor drafting amendments of the Order (“The Mayoral Election Order”) to the Chief Executive following consultation with the Leader of the Council and to include the Leader of the Opposition or their nominee. This delegation is to include approval of the term of the elected Mayor, as this is still under ministerial discussion.

 

Amendment 4

Item No 3.1a

Recommendation No. 13 in the report

At the end of the first sentence, after “Council”, add the words “and to include the Leader of the Opposition or their nominee.”

 

The whole recommendation No 13 now to read:

 

Delegate approval of any minor drafting amendments to the draft Mayoral WMCA “functions” Scheme to the Chief Executive following consultation with the Leader of the Council and to include the Leader of the Opposition or their nominee. This delegation is to include the approval of additional members of the Combined Authority as per paragraph 2.3.9 of this report.

 

Amendment 5

New Recommendation to add in to the report

Recommendation No 15

“That this Council understands that only functions previously carried out by Central Government will be devolved to WMCA and that where possible these functions will be devolved further to the appropriate local authorities’ (ie ‘subsidiarity’ where possible)”

RESOLVED that the City Council:

 

1.  Agree the Devolution Deal, having considered the due diligence work surrounding it.

 

2.  Consent to the Draft Order (“The Mayoral Election Order”) providing for the election of a directly elected Mayoral for the West Midlands Combined Authority.

 

3.  Delegate approval of any minor drafting amendments of the Order (“The Mayoral Election Order”) to the Chief Executive, following consultation with the Leader of the Council, this delegation is to include approval of the term of the elected Mayor as this is still under ministerial discussion; and request the confirmation of the City Council.

 

4.  Approve the draft Mayoral West Midlands Combined Authority “functions” Scheme for public consultation.

 

5.  Delegate approval of any minor drafting amendments to the draft Mayoral WMCA “functions” Scheme to the Chief Executive, following consultation with the Leader of the Council, this delegation is to include the approval of additional members of the Combined Authority, as per paragraph 2.3.9 of the report submitted.

 

6.  Approve the arrangements for the Head of Paid Service of the Council taking on additional responsibility as Head of Paid Service for the West Midlands Combined Authority.

 

 

Note: in accordance with paragraph 18.2 of the Constitution, it was moved by Councillor Blundell and seconded that a recorded vote be required.

For	Against	Abstain
Councillors:	Councillors:
Abbott	Birdi
N. Akhtar	Blundell
P. Akhtar	Crookes
Ali	Hammon
Dr R Auluck	Lapsa
Bains	Lepoidevin
Bigham	Male
Brown	Mayer
Caan	Ridley
Duggins	Sawdon
Gannon	Skinner
Kaur	Williams
Kelly
Kershaw
A Khan
T Khan
Lakha
Lucas
McNicholas
Maton
Mulhall
O’Boyle
Ruane
Seaman
B. Singh
R. Singh
Skipper
Sweet
Thay
Thomas
Walsh
Welsh
Lord Mayor

 

Result: Carried

 

For: 33

Against: 13

Abstentions: 0