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Guide to Setting up a Combined Authority

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Guide to Setting up a Combined Authority COMBINED AUTHORITIES A PLAIN ENGLISH GUIDE The LGA would like to thank Shared Intelligence for compiling this guide: www.sharedintelligence.net Although every effort has been made to ensure the accuracy of its contents, this document does not constitute legal advice on the setting up of a combined authority. CONTENTS SETTING UP A COMBINED AUTHORITY 4 WHAT IS A COMBINED AUTHORITY? 4 WHY ESTABLISH A COMBINED AUTHORITY? 5 ARE THERE ANY CRITERIA THAT A PROPOSAL FOR A COMBINED AUTHORITY MUST MEET? 5 WHAT ARE THE FUNCTIONS OF A COMBINED AUTHORITY? 6 WHAT ARE THE FINANCIAL POWERS OF A COMBINED AUTHORITY? 6 WHAT AREA SHOULD A COMBINED AUTHORITY COMPRISE? 7 WHAT ARE THE GOVERNANCE ARRANGEMENTS FOR A COMBINED AUTHORITY? 8 WHAT IS THE PROCESS FOR ESTABLISHING A COMBINED AUTHORITY? 9 WHAT IS THE PROCESS FOR ABOLISHING A COMBINED AUTHORITY? 12 COMBINED AUTHORITIES IN PRACTICE 13 Combined authorities: a plain English guide 3 SETTING UP A COMBINED AUTHORITY What is a combined In more detail authority? A combined authority (CA) is a statutory A combined authority (CA) is a form of collective decision-making between at least two councils in order to improve the legal body set up using national delivery of public services and other public legislation that enables a group of functions across the area concerned. two or more councils to collaborate The core legislation relating to CAs is the and take collective decisions across Local Democracy, Economic Development council boundaries. and Construction Act 2009 amended by the Cities and Local Government Devolution It is far more robust than an informal Act 2016. The Transport Act 2008 is also partnership or even a joint committee. relevant in relation to the governance The creation of a CA means that member arrangements for CAs because they are councils can be more ambitious in their joint based on those originally introduced for working and can take advantage of powers Integrated Transport Authorities. and resources devolved to them from national CAs are formally established by the government. Secretary of State for Communities and While established by Parliament, CAs are Local Government through a Parliamentary locally owned and have to be initiated and Order following the request or consent of supported by the councils involved. the councils concerned. There are two types of combined authority: those with a mayor for the area covered by the CA Top tip: Building effective relationships and those which do not have a mayor. To be effective a CA must be built on a firm The legislation does not allow the creation foundation of collaborative working of combined authorities in London. and trust between constituent councils, other partners and local stakeholders. Establishing the political common ground is crucial. It is important to address any political differences, concerns and fears early on in the process. The work on the CA must be underpinned by a shared narrative for the future of an area and the part that more formal collaboration and, where appropriate, devolved powers could play in delivering that vision. Creating a CA is not a quick fix. The most important and potentially challenging task is maintaining relationships and good collaborative behaviours at leader and chief executive level. 4 Combined authorities: a plain English guide Why establish a In more detail combined authority? The legislation defines two tests any The core purpose of a CA is to deliver better proposal for a combined authority outcomes for local communities as a result must meet. of closer joint working and collaboration at a The first test is to establish whether the local level. They enable a group of councils creation of the CA is ‘likely to improve the and partners which are working together to exercise of [those] statutory functions in put their collaboration on a more ambitious the area or areas concerned’. This test and permanent footing. The current focus is (or variations on the theme) is repeated on the role of CAs in the context of devolution a number of times at key points in the agreements between central and local legislation. government. As such, CAs also provide a way of meeting the governance requirements The second test is captured in the duty on national government has set for the devolution the Secretary of State to have regard to the of powers and resources to a local level identities and interests of local communities through negotiated devolution agreements. and the need to ‘secure effective and It is important to remember, however, that convenient local government.’ there is no legislative link between CAs and devolution. A group of councils could propose a CA to enable them to, for example, pursue a Top tip: A step by step process set of shared public sector reform objectives without any reference to devolution. It is important to see the establishment of a CA and the transfer and devolution of Are there any criteria that functions as a journey. It is not necessary to agree everything at the start of the a proposal for a combined process. It is important, however, to be authority must meet? clear from the start about the decisions that will need to be taken at an appropriate time. There are three key criteria that any proposal Once underway the process will gather for a CA must meet. Expressed in the form of momentum and all participants need to be questions they are: comfortable with that. • Will the CA improve the delivery of its It may make sense to include references to functions in the area it covers? additional functions in the initial proposals • Will the CA help to secure effective and for a CA to prevent the need for a further convenient local government? Parliamentary Order at a later date. • Does the proposed CA reflect local identity and the interests of local communities? Combined authorities: a plain English guide 5 What are the functions of It is important to see the creation of CAs and the transfer of powers to them as a a combined authority? process rather than a one-off event. The early CAs all built on longstanding When the first CAs were established the partnership arrangements between the legislation gave them responsibility for councils concerned. The legislation enables transport, economic development and both councils and the Government to regeneration. The current position is far transfer additional functions to a CA once more open, leaving the functions of a it has been established. combined authority to be determined by a combination of local choice and the outcome of negotiations with government. They can What are the financial include both local authority functions, where it makes sense for them to be delivered at a powers of a combined larger scale across administrative boundaries, authority? and the powers of other public bodies, where this is agreed through a devolution This is an area in which there are some agreement. significant differences between those CAs which have a mayor and those which do not. In practice most of the CAs created so far have economic development, regeneration All CAs can be funded by their constituent and transport as their core functions. Some councils through a levy. This is a shift in proposed CAs, such as Gloucestershire’s, funding from the councils that make up the envisage a wider range of functions including CA to the authority. It is not a means of raising health and social care and community safety. additional resources. Elected mayors can Many places envisage their CA will contribute raise additional resources through a precept to the delivery of public service reform. (or additional charge) on local council tax The Greater Manchester CA has the widest bills, but only where the order establishing range of functions, including health and social them allows them to do so. Where the mayor care, children’s services and public health. is also the police and crime commissioner and raises a precept in that role, the funds When thinking about the functions a must be kept separate. combined authority might have it is important to take account of: All CAs will have the power to borrow money under the local government prudential • the need to meet the ‘improve the exercise borrowing regime, but the order establishing of test’ referred to above the authority must specify the purposes for • the Government’s ability to devolve some which the money may be borrowed. Many functions specifically to the mayor, rather devolution deals include the retention of than the CA, such as responsibility for a local business rate growth above an agreed devolved transport budget in the West threshold and the Government is committed Midlands. to passing 100 per cent of business rates to local government by 2020. In addition, CAs also have a general power of elected mayors will be able to increase competence. This mirrors councils' general business rates by 2p in the pound if the power of competence, which means councils relevant Local Enterprise Partnership (LEP) can do anything an individual may do unless agrees. it is specifically prohibited from doing so.1 Many devolution deals also include other devolved resources including an investment fund. 1 ‘The General Power of Competence: Empowering councils to make a difference’, 2013, LGA: www.local.gov.uk/c/ document_library/get_file?uuid=83fe251c-d96e-44e0-ab41- 224bb0cdcf0e 6 Combined authorities: a plain English guide In more detail What area should a combined authority The legislation covering the functions of CAs is very much enabling. For example comprise? it leaves open the scope of powers a CA The
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