Agenda item

Report of the Chief Executive

Further to Minute 38 of the Cabinet, the City Council considered a report of the Chief Executive which provided an overview of the background to the Deeper Devolution Deal (the Deal), the main elements, the proposed implementation and the next steps.

The Deal was agreed in principle by the West Midlands Combined Authority (WMCA) Mayor and Portfolio Leaders on 10 March 2023 and announced in the Chancellor’s Budget on 15 March 2023.

Following the announcement, a formal ratification of the deal was required by the WMCA and its constituent Local Authorities (LAs). The WMCA had taken the decision to approve the Deal at its Board Meeting on 13 October 2023. A two thirds majority of voting Constituent Members was required for the Deal to be ratified.

The devolution of the Bus Service Operators Grant (BSOG) to the WMCA was a public authority function, which could be dealt with under section 105B of the Local Democracy, Economic and Construction Act 2009. It would require a scheme, governance review and the consent of the LA’s before the laying of the Order by Government. An in-principle agreement of the devolution of the BSOG (the Order) was part of the document and was considered at the WMCA Board on 13 October 2023.

The Order would now be considered through the constituent authorities governance, before returning to the WMCA Board later in the year for final approval.

The report provided a summary of the funding opportunities available through the Deal and their potential benefit to Coventry. A copy of the latest WMCA Devolution Deal Thematic Summaries and WMCA Devolution Deal Implementation Plan were attached to the report as Appendix 1 and 2 respectively.

The report stated that if the City Council chose not to ratify the Deal, this could prevent Coventry and the region from accessing the additional funding and powers available. It would also undermine the relationship between the WMCA and the Government and make future cooperation on devolution or other policy topics far more difficult.  This option was therefore not recommended.

The recommended approach would be for the City Council to ratify the new Devolution Deal based on an examination of all the opportunities, and the associated risks of the proposals contained within the Deal. Officers had worked hard to understand the implications of each of the themes within the Deal and ways to maximise the opportunities for the city whilst monitoring and mitigating risks as far as possible. Consideration had also been given to how the Deal could help to deliver the aims of the Once Coventry Plan. The Council would ensure that it works to get the most out of the new deal by having the right involvement from members and officers in the various WMCA groups responsible for each of the devolution themes.

Each of the key themes in the Deal and the risks and opportunities associated with them were detailed in the report.

Regarding timescales, the WMCA had approved the Devolution Deal at its Board meeting on 13 October 2023. This would now be followed with the development of a Memorandum of Understanding (MoU) between themselves, Government and the 7 local authority members in November 2023 in respect of Business Rates Retention. The funding settlement itself would not begin until April 2025, but work to understand the implications of such a deal on the WMCA and its constituent authorities had already commenced. Other elements of the deal such as Commonwealth Games Legacy funding would commence immediately.

In addition, the Bus Services Operating Grant (BSOG) would require further negotiations with Government. The outcome of these negotiations would form an order, allocating the BSOG responsibilities to the Mayor. Once further negotiations with Government have taken place, all 7 constituent members of the WMCA would be asked to approve the new arrangements. These would be brought back to Cabinet at the appropriate time for debate and decision.

RESOLVED that the City Council:

1.  Approves the ratification of the West Midlands Devolution Deal as set out in the report and attached Appendices including the in-principle devolution of the management of Bus Services Operator’s Grant as a Mayoral function.

2.  Notes the performance to date of the West Midlands 100% Business Rates Retention pilot.

3.  Agrees to the development of the Memorandum of Understanding with Government, regarding the offer of 10-year, 100% Business Rate retention for the West Midlands, in accordance with the Devolution Deal.

4.  Delegates authority to officers, overseen by the Chief Executive, and following consultation with the appropriate Cabinet Members, to engage on the detailed implementation of the agreed elements of the Devolution Deal, which will include aspects that require further negotiation and future decision making.

5.  Requests that further reports are received by Cabinet (and Council if appropriate) on specific issues relating to the detail of the Devolution Deal such as approval of the making of the Statutory Instruments following the receipt of a draft order for Bus Service Operator’s Grant (BOSG).

6.  Requests that throughout the duration of the implementation of the Devolution Deal, half yearly updates be submitted to Cabinet and Scrutiny to outline progress.