Oral evidence: The Government’s Cities and Local Government Devolution Bill, HC 369Monday 23 November 2015

Oral evidence, 23 November 2015.

Witnesses

Sir Edward Lister, Deputy Mayor of London, Policy and Planning, Darren Johnson, Chair, Devolution Working Group, London Assembly, and John O’Brien, Chief Executive, London Councils, gave evidence.

Chair

Good afternoon and thank you all for coming to give evidence this afternoon. For the sake of our records, could you say who you are and the organisation you are representing this afternoon?

Darren Johnson

I am Darren Johnson, Chair of the Devolution Working Group at the London Assembly.

Sir Edward Lister

I am Edward Lister. I am the Mayor’s Chief of Staff. I am also the Deputy Mayor for Planning.

John O'Brien

I am John O’Brien, the Chief Executive of London Councils. We are the representative body for the London boroughs.

Bob Blackman

The Secretary of State and the Bill have both made clear that it does not refer to London. How concerned are you that London is being left behind?

Darren Johnson

We are not panicking about this, because generally the Bill is about giving other cities the opportunity to catch up with London. There are very few powers in any of this that London does not have already. Obviously, we want some more powers and we want conversations and negotiations with Government over those, but I do not think we are feeling left behind over this particular Bill. That is not to say that we do not want some serious negotiations with Government over things like fiscal devolution, rail devolution, the skills agenda and so on.

Bob Blackman

We will come on to that in a few minutes.

Sir Edward Lister

I am not really concerned at all. Rather like Darren, I think the Bill is about giving other authorities similar powers to London and that is to be welcomed. It has been a little lonely in this space and it is quite nice to see some of this going elsewhere, because London runs the risk of being seen as being treated in a special way, different to other parts of the country, and we are losing sight of the very real benefits we get from the current system. In answer to the point about whether we are after other powers, yes, we are, and we are in negotiation over those anyway with Government. We are in negotiation over skills, health and changes to the planning regime, which is within the housing Bill. We are constantly in negotiation with the Department for Transport over rail franchises and other things. These things are all ongoing at the moment and we do not see that as a problem.

John O'Brien

I broadly agree with what Darren and Ed have both said, but it has not stopped us, jointly with the Mayor, putting in a submission on 4 September along with 37 other areas. It has not stopped us having a series of discussions with Government officials about health, skills and employment support, as Ed has said. We are making progress on all of those. There is not going to be a big bang further London deal, but there is an important piece of public service reform there that we are making some progress on. The only thing I would say, which is perhaps a concern for the future, is that the London governance system clearly is different from the type of structure that is being introduced in some of those other deals you were talking about a few moments ago. We are going to need to find a route in London for devolution and delegations that work for groupings of authorities, which is part of the proposition we have jointly developed with the Mayor, and also to find some expression for how public service reform is governed across London between the Mayor and borough leaders.

Bob Blackman

We are going to come on to some more detailed questions, but do you think the powers you are looking for require a further Act of Parliament?

Sir Edward Lister

From a City Hall point of view, no.

Bob Blackman

Speaking as someone who has piloted through now five TfL Bills in the last Parliament, which give very limited powers to TfL, it appears that, every time TfL wants to do something, more legislation is required.

Sir Edward Lister

If you want to go that way, yes, there are always more things that we want, but I do not think they are going to be picked up by a general Bill. They are very specific items, which are always going to be specific and require their own legislation to see them through. For example, we are very keen on changes to the fire brigade structure in London. We are very hopeful that that is going to be in the policing Bill and some of the changes there, so there are bits and pieces of things that are in other Bills or they are very specific pieces of legislation, like the TfL legislation that you put through last Monday.

Bob Blackman

That is to revive it. It has only taken five years to get to this point.

Sir Edward Lister

I am equally certain that we will have dreamt up something else we want for TfL before the year is out, but there is nothing in the stocks at the moment.

Darren Johnson

Some of this depends on timescale. There is low‑hanging fruit, like getting the skills programmes devolved to London and so on, that does not require legislation. There is longer term stuff on things like fiscal devolution. We are already seeing the business rate devolution coming forward. We are still keen, across party, across City Hall, to see stamp duty and council tax setting come directly to City Hall, so there is more that we want. It just depends on what timeframe. In terms of low‑hanging fruit, for some of it there is no legislation at all required. It is just a matter of negotiating with Government.

Bob Blackman

Let us move on. London has a population of 8.4 million, potentially rising to 11 million. Is it too big for such devolution? Is it a victim of its own success, given the huge demand there is for services?

John O'Brien

Size is an issue, quite clearly. We are much bigger than these other urban conurbations where deals are being done at the current time, so the proposition that London has advanced jointly between the Mayor and the boroughs talks about there needing to be different footprints. Clearly, there are further things that would be devolved and reformed at a pan‑London level. Skills commissioning is going to work formally at a pan‑London level, but informed by the intelligence that comes from groupings of boroughs and sub‑regional economies. Employment support—getting people furthest from the labour market back into work—probably is going to be for sub‑regional groupings of boroughs. The health propositions that we have been working on jointly operate at all of those different spatial levels. London has to recognise that complexity—there is no way out of it—and needs to adapt the way it manages that in that context. That is just the fact of the matter.

Sir Edward Lister

I was just going to add that 8.6 million is the current number.

Bob Blackman

It goes up every minute.

Sir Edward Lister

Yes, it will be north of that now. It is worth reflecting on the fact that London was 8.6 million back in 1939, under the LCC, and managed as an entity quite successfully in the 1930s, so we are almost back to where we started. Various things have denuded London of its population over the last 50 years, which has all come back again. We are where we are, but it is growing at that rate, just shy of 100,000 people a year, and that does mean that a lot is needed in London, in infrastructure and other things, if we are going to sustain that level of growth. This is where the mayoralty really comes into its own, because, without a very strong Mayor, you are never going to be able to get the kind of infrastructure improvements London needs to sustain this level of growth, let alone housing. It is in every sector. Not all of those are the responsibility of the Mayor; some of them are not even the responsibility of Government. They are things like the energy companies, electricity, gas, water. All of these are big issues and that is why London needs a strong central focus for somebody to talk about all this.

Darren Johnson

I do not dispute anything that John was saying about the need for sub‑regional working, borough partnerships and so on, but, in terms of whether London is too big or not, let us just look at the track record over the last 15 years. It has been a phenomenal success, whether you agree with everything that Ken Livingstone or Boris Johnson have done individually. I took issue with a range of what they have both done, but overall we could not possibly have successfully bid and run the Olympics in the way that London did, got Crossrail off the ground, got the London Overground network established, and got the tube upgrades after years and years of neglect, without London‑wide governance. It has been a phenomenal success in terms of delivery, so we should not ignore that in terms of London’s ask for more powers going forward.

John O'Brien

For absolute clarity, the proposition definitely talks about all three levels and there is a recognition of the importance of that pan‑London level. Picking up Ed’s point, clearly the level of growth in London does demand a sustainable model for investing to support that growth in terms of physical growth and hard infrastructure, but also soft infrastructure—things like school places which, as you know, is a huge issue in London. It also requires reforming public services in a way that will make them fit for the purpose of the challenge we face around health and care integration, so it is going to operate at all of those levels.

Mr Prisk

Is the issue here not really the boundaries of the boroughs but fostering a genuinely collaborative leadership? You have talked about layers and structures, but place‑making and the need for a holistic approach to the delivery of services is, frankly, what I suspect many of the public want. Would you say that that is where the emphasis should be, rather than trying to work out whose administrative boundary lies where?

John O'Brien

You are already seeing quite a degree of permeability working across London between boroughs. Within their own places, I think they take the view that, as you have said, this is about how we reform public services regardless of who is responsible for them. The big challenge is about preventing people going into hospital, leading more independent lives, getting people skilled and getting those furthest from the labour market into work. That requires working right across a range of public services. Some of those do not stop at borough boundaries, hence the point that we do see increasingly groupings of boroughs working together and collectively with City Hall to make sure those outcomes are secured. That is the focus of where modern local borough leadership is, both individually and in groupings.

Helen Hayes

Can I ask your views on fiscal devolution? Do you think it is necessary now to tackle the challenges that London faces?

Sir Edward Lister

Absolutely. For us, it is very simple. We have land in London that we can bring forward for housing. Approximately 400,000 homes can be built on brownfield land in London. That brownfield land has sat there through each property boom and has never been developed. It has not been developed for one of three reasons: diverse land ownerships that have prevented it, which is obviously a solvable problem; contamination of one kind or another; or, the most likely one, connectivity—you just cannot get there in a sensible way. If we are going to continue to grow at the rate we are growing and if we are going to build the housing that we need in London—and it is about commercial property as well; we need another 500,000 jobs in London by 2025 and they need to homes to exist in—we cannot do any of that unless we put in the infrastructure. That is the bit that we desperately need money for and the bit that we need to be able to borrow and have certainty about. If we have certainty of funding, we can sort these things out, but when we are operating on penny packets of money from Government and in relatively short timelines, we can never assemble the kind of cash that we are going to need in order to grow the city. My argument is all about fiscal devolution for capital, not for revenue purposes. It would be totally wrong to borrow just to be able to keep services rolling. One has to reorganise the services to live with whatever the constraints are at the time, but, for capital works, that is where we are so desperate for the fiscal devolution and that is where the business rate is so very exciting as a prospect for that, as indeed are other potential tax revenue sources.

Darren Johnson

In welcoming groups of delegations from overseas cities, they are always absolutely amazed that the Mayor of London has to go to central Government to bid for funding for any individual transport project or other investment project. Even with the package of proposals that was put together by Professor Travers for the London Finance Commission, it would only change the amount that central Government controls down from 93% to 88% of the money collected in London, so we are still talking fairly modest measures. It will have a big impact on London, but we do not think it is going to massively upset the applecart in terms of Government finance. They are still going to control the huge bulk of taxes that are collected in London, but it will give us more of the freedom to invest in the way that Sir Edward was talking about.

John O'Brien

We did work very closely with City Hall on the Finance Commission. We were very supportive of those conclusions, so I agree that the answer is yes. It clearly raises issues about how you do that in detail and how you govern it in detail, which was part of the conversation we had at the back end of the Finance Commission and, indeed, was explored by the predecessor of this Committee in the last Parliament. There is detail to work through, particularly in the context of the Chancellor’s announcement about business rates, but, in broad terms, yes.

Helen Hayes

You have touched on the announcement on business rates. What difference do you think that is going to make?

John O'Brien

It is very significant. There is a very large amount of additional responsibility that would flow to London, when you think about what potentially the excess of business rate yield in London might be that would need to be soaked up by those responsibilities. The split between the boroughs and the Mayor that has existed since 2012 on business rates will clearly need to be revisited as part of what those additional responsibilities will be. In the context of the Finance Commission, we recognised each other’s interdependence around that and I think we would come back and have that conversation again. There are also some quite big issues about the relationship in terms of equalisation with the rest of the country, and how much that is a national system and how much it is based as a regional system. The last thing is that we are very supportive of it. However, our members are mindful of the fact that this will have to become a tax that is capable of fulfilling purposes as has not always been the case in the past. There are issues about predictability; appeals, which is clearly going to be important if we are thinking about adult and children social care and the degree it is funding that; buoyancy, given the population changes that we have already referred to; and, of particular importance for London, the growth in business activity and value—not just physical growth, which has been an issue for London and will be going forward.

Sir Edward Lister

In the mix we have at the moment, some of City Hall’s funding is done by business rates—about £800 million a year of TfL’s transport grant is done by business rates. We still have close to £1 billion that comes directly from the Department for Transport. Just switching that money from a Department for Transport grant to a business rate contribution, I know, does not sound as though it gives us a big gain, but it does, because it gives us certainty of the funding. Therefore, it helps us go forward in planning terms: every time we look at any big infrastructure project we are looking over very long time horizons. On Crossrail 2, we are not looking for completion until 2028. If we start doing things like extending the Bakerloo line, we would not even start it until 2030, but you have to start doing the work now to meet those kinds of timelines, so we are incurring massive amounts of cost preparing for the future. That is the right thing to do and I am not saying it is wrong for us to do that. I am just saying that if we knew that money was there, it would just make life easier.

Darren Johnson

The assembly, across parties, has been very supportive of the whole fiscal devolution agenda, including the retention of business rates. The only thing that I would add is to ensure that, with any new financial arrangements, there are sufficient checks and balances in place. Just as we have a potential assembly veto over the budget setting, strategies and so on for any new financial arrangements, we would expect that same check and balance to apply in terms of votes at City Hall.

Kevin Hollinrake

Sir Edward, you mentioned fiscal devolution for capital projects. One of our previous witnesses regretted that there was no devolution of borrowing power. Would that be something you would agree with?

Sir Edward Lister

We do have some borrowing powers ourselves at City Hall, and, indeed, through TfL we also have borrowing powers. About £3 billion I think is the limit on TfL. I am saying that from memory, so I stand to be corrected. We do have fairly substantial borrowing powers. From a city‑wide point of view, it is not a big issue to us, but, if we are to move forward on some of these big schemes, it would obviously make a lot of sense if we could go for and raise much bigger sums of money. Therefore, that would result in greater borrowing.

Darren Johnson

I accept the point earlier that you want to use these new powers not to just rack up extra debt in terms of revenue expenditure but for new capital projects, particularly for council house building in London. Around half the boroughs in London are now actively engaged in doing some form of building new social housing, often for the first time in decades, but we are talking very small numbers at the moment, because they are hampered massively by the borrowing cap on local authorities. Across most of the EU, Governments make a sensible distinction between local government borrowing for general expenditure and local government borrowing for housing investment, where you have a tangible asset, a guaranteed income that is realisable for many years to come and so on. We should be giving far more flexibility to local authorities to do that, particularly in London where the housing crisis is so severe.

Kevin Hollinrake

I want to talk for a second about sub‑regional devolution. The South London Partnership, for example, is looking at this. Is London just too large? Is it going to get too complex? Is there not a risk of that within those kinds of proposals?

John O'Brien

As I was saying earlier on, the overall proposition has hung together with leadership from the Mayor and borough leaders collectively. It is a London proposition. Within that, it envelops the fact that some pieces of reform and devolution need to happen at a smaller scale. Some of the proposals around health or getting people back into work clearly are going to operate at a lower geographical scale than the whole of pan‑London, and some of them will happen locally. The arrangements that are coming into place, with groupings of authorities coming together for those purposes, do cover a very significant swathe of London now, and at least four pretty well-developed partnerships are bringing forward propositions as part of that overall London proposition. Yes, it is messier and more complex than smaller, more compact urban areas, but that does reflect the reality of London and it is held together by joint work at the pan‑London level by the Mayor and borough leaders.

Sir Edward Lister

Health is an interesting one. I would suggest we are possibly even further ahead than Manchester on this at the moment, because we have had a number of years of working together. We have had the London Health Commission, which went through all of our thinking about it. We have a five‑year plan. We have annual reviews on this. We have the London Health Board, which is chaired by the Mayor and meets on a regular basis. What will evolve from that will be probably more sub‑regional by nature, because it is going to be around the clusters of hospitals, so it will inevitably be more of a sub‑regional structure. It is coming together pretty well at the moment and it is working. We are quite comfortable about that. We are quite comfortable about having regional, sub‑regional and local.

Darren Johnson

In terms of the health agenda, that very much reflects the evidence that we received when we conducted our own investigation through the assembly’s working group. There is a strong public health role for the Mayor. He already has statutory powers for public health, but does not have the budget to back those up, so we believe public health budgets being devolved down to London would definitely work at the London‑wide level far more effectively than at the borough or the sub‑regional level. However, in terms of acute and primary care, absolutely we think London is probably far too big to deliver that effectively and that would need to be done on a sub‑regional basis, unlike Manchester, which is smaller and could potentially do it on a regional basis.

Kevin Hollinrake

In terms of surrounding areas, South East England Councils has said that this “must not target cities at the expense of releasing potential in the highly profitable south‑east”. How would you respond to that?

Sir Edward Lister

We work very closely with our neighbouring authorities. We do not have the same legislation as they do, in the sense that they have a duty to co‑operate; we have a duty to consult in the GLA Act. Sorry, I know we are splitting hairs here, but it is ever so slightly different. But we do meet on a regular basis and we are constantly having those meetings with our neighbouring authorities, because inevitably, at the moment, we are not seeing the outflows of people to the surrounding counties that used to be there. For various reasons, there is not the same movement today, but that could change tomorrow and they have their own pressures on housing numbers, infrastructure and everything else, so we do have this dialogue. We are steadily trying to turn it into a more formal structure, so we have a better structure to deal with it. It is getting sorted out one way and another, and we are fairly comfortable and I think our neighbours are fairly comfortable with that.

John O'Brien

We too have those dealings with areas around London, both as part of the structures that Ed has described and also bilaterally as well. In terms of some of these discussions about reform, they do take account of the surrounding area. Area‑based reviews of further education, which the Mayor will lead across London but borough leaders will lead in individual sub‑regions, will have to take account around the edges of London of the relationship with those who are outside of the London boundaries, because the movement of learners and the economy of local colleges will not follow exactly the boundaries of London. Indeed, in the health proposition we have been discussing, there is a clear recognition of the importance of London’s health service to people outside of the boundaries, but also of the health system nationally and the importance of London to that. There has to be some recognition of that as part of our work.

Darren Johnson

That is also true for the transport agenda and if more rail franchises come under the control of TfL. Generally, Transport for London is careful about bidding for those lines that are generally serving Greater London. We do not want to expand the empire across the whole of the south‑east of England. However, you cannot naturally stop all railways operating just at the boundary, so there will need to be some enhanced cross‑border issues around TfL. We have suggested on the assembly that formal partnerships be established for those areas that are going outside of the Greater London Authority area with the neighbouring authorities, so that there can be some form of transport partnership if we have more rail devolution.

Kevin Hollinrake

You have a very high profile Mayor, who always wants to represent the interests of London. Obviously, some areas’ interests are aligned to your economic development, but they will have their own economic development opportunities. Do they not feel sometimes that they are not fully explored because they do not have someone to represent them as much as you have in London?

Sir Edward Lister

It is true that having such a strong voice for London going out there and selling London, which is what we have with the Mayor and his ability to really get into places that—excuse me saying so—other local authority leaders cannot get into, because of the 8.6 million, because of the 23% GDP and all the other factors that come into play, does mean we can get in there. But we do not do things to the detriment of our neighbouring authorities. Yes, of course, for economic growth, if we can attract a firm to move their operations to London from overseas, we will do it, but, if that is not going to work, we are equally happy for it to turn up somewhere in the south‑east. Of course, what usually happens is that the head office could well end up in London but the rest of the operation will be somewhere else outside London. That is absolutely fine and we are very relaxed about that. The trick for us is to use the Mayor to push those doors open where only the mayor can do it and where having an ambassador like that works, and that has been true with both the current Mayor and his predecessor.

Bob Blackman

We have discussed the powers of the Mayor and the role the Mayor fulfils. Often it is not the powers that are given to him in the Bill or the legislation; it is the influence that is utilised. Is that what is really driving the achievements in London or is more devolution required?

John O'Brien

It is unquestionably the case that devolution and reform is not done in London. The challenges we have, whether they are about the challenge of growth and how we support it or the challenge of reform to make public services sustainable and affordable in a time of austerity, are going to require further reform. Some of that is about devolution, in the way that we have described. Having the Mayor, whoever he has been, has been an advantage and an asset in the way that Ed has described, with that convening power and the visibility of it. Indeed, we in London local government have felt the benefit of that in some of the causes that we have taken up and we have worked closely with both Mayors to bring that to benefit. That is going to require, going forward, an adaptation to some degree, as we make that reform go further, to make sure that the interdependence of both tiers of London government are reflected in that, because, as I say, it will not be quite the same system. Manchester, Sheffield and the west midlands will not have a system that is identical to the London system.

Bob Blackman

Is it a lesson for the Manchester model and for others that, if you have a big personality who can use his or her clout to the maximum possible, all this devolution stuff is fine, but that is what matters because they are going to drive it through?

John O'Brien

You need both. Mayors, by their nature, are going to need to be big personalities who convene and lead a place and provide shape to that place, but that will not be enough. There have to be the keys to further reform and further devolution if we are going to face the challenge that we have.

Darren Johnson

I could not help thinking, in the earlier session, that there was some wishful thinking about how a Mayor would behave and how they would interact with borough leaders and so on once they were elected. Once you have an individual who is elected, who comes in with their own agenda and the electorate vote in someone with a very powerful mandate, the dynamic changes altogether. Whatever is written down on the agreement in paper as part of the deal could really change once you have a real live person in office who has made some genuine pledges to the electorate and been voted in on those. It changes the dynamic enormously, which is why the scrutiny arrangements are crucial in this. That is having not just sufficient resources so that the scrutiny body—in London’s case, the assembly—can properly scrutinise the Mayor and do some real forward thinking in terms of agenda setting as well, but also some formal checks and balances. The assembly started off very weak in terms of formal checks and balances on the Mayor. It was mainly conceived as a scrutiny body. But, over time, as new powers have come to London—and the assembly’s power is a reserve power; it requires a two‑thirds majority—more and more mayoral decisions are now requiring the assembly’s support before they go ahead, so it is a check and balance.

Bob Blackman

Could you just talk us through that? The predecessor of this Committee gave a report and I am not sure how much of that was implemented, but obviously there were recommendations made. Has that changed the scrutiny model?

Darren Johnson

Not since the last time we spoke, but with the Localism Act 2011 in particular, more of the decisions that were in the gift of the Mayor that had been devolved from central Government now require an assembly vote, and could be either reversed or amended via a two‑thirds majority. Initially, that applied only to the budget, when the GLA Act first came into force in 2000, but over time there are more checks and balances with it, which I think is right, particularly if we are going down the route where more and more fiscal powers are coming from central Government. Having the checks and balances is absolutely crucial so that it is not just one person who has total control, as it were. Another key point is that the assembly has genuinely added value to the governance of London through robust scrutiny—and comparatively well‑resourced scrutiny, compared with the boroughs. I am reminded of a comment when Lord Coe came to the assembly after the Olympics. He said that, during the years running up to it, the assembly drove him absolutely mad with our robust scrutiny, difficult questions and so on, but it was always with the intention of getting the best possible Olympics. He thanked us for the hard time that collectively we gave him, because he said that that led to better decision making and a better outcome. It helped put the pressure on—having a very high profile body like the assembly, which can get on the evening news, asking these awkward questions.

Bob Blackman

Do you think, then, that this model should be replicated in other devolution deals in some shape or form?

Darren Johnson

I do not think there is one single blueprint for every part of the country, but I worry greatly that the scrutiny arrangements for the other parts of the country at the moment do not appear robust enough. They rely too much on borough leaders scrutinising the Mayor in the cabinet, which is not going to be the sort of open and transparent scrutiny that the assembly works in. The scrutiny pools seem particularly under‑resourced and not particularly thought through and focused, so there need to be much more robust scrutiny arrangements if devolution is to be a success in other parts of the country and other cities.

Bob Blackman

Eddie, you have been on the receiving end of the scrutiny. How has that improved your work and that of the Mayor?

Sir Edward Lister

For any of us who are on the end of scrutiny, it always sharpens one up and you do make sure you are not leaving any loose ends for somebody to unearth, so, yes, it is always important that one does this. I am totally supportive of it. It does work, as far as the mayoralty is concerned. It does make us think very carefully about the budgets as we put them through, because there we do need one third of the assembly to support the Mayor. Any strategic policies—they are named in the Act—also require one third of the assembly to support them. Yes, I suppose one can always not have a strategic policy or not renew it too often or whatever to avoid that, but it does not work that way, because it is still exposed and we still have to answer for it, so I think it works pretty well. Equally, though, I would say that we have close working relationships with the boroughs. We are meeting, on a very regular basis, all the leaders—the executive and the leaders of the London boroughs—so we have that dialogue going the other way. That is not so much scrutiny; that is more, I suppose, about negotiation, but the two bits work together.

Bob Blackman

John, before you make your comment on this, from London Councils’ perspective, how frustrated are you about not being able to scrutinise the Mayor in public in the way that the assembly does, for example?

John O'Brien

I do not detect a huge amount of frustration for this reason: borough leaders are part of the executive leadership of London government alongside the Mayor. They are very responsible for their places and also, to some degree, collectively for the work they do in London and with the Mayor. I do not think they are, in that sense, thirsting to do Darren’s job as the scrutineer.

Darren Johnson

We have very constructive dialogue with London Councils as well. On most of our committees, we will want to hear a local government angle. We are not formally scrutinising the councils or telling them what to do, but it is absolutely vital for our work that we hear the impact of housing policy on individual boroughs, and that we hear a London council’s point of view. That dialogue, which obviously happens on a day-to‑day basis with the Mayor, is also carried through with the assembly, because we want to hear from the London boroughs. We want to hear from both individual boroughs and London Councils about the effect of mayoral policies on their boroughs and about the impact of key problems coming up in London.

John O'Brien

There is just one thing I should add to the evidence you were hearing before about combined authorities and borough leaders working with new, directly elected mayors. There clearly is an issue there about how the Mayor of London and borough leaders work together on some of that executive leadership. As Ed says, we do that pretty constructively through various mechanisms that we have: the Congress of Leaders and the executive of the Mayor. There may come a point, as this evolves and there is further reform and further devolution, particularly in some of the areas we have been speaking about, where that is going to need some more formal expression. That is not to change the 2000 structure in a fundamental way, but it may need some evolution to be able to respect some of that joint decision making.

David Mackintosh

Do you think that the London Mayor has been a success because of the unique size and the profile of the city?

Darren Johnson

I think it is both. London has been big enough as a political entity to really make an impact. There are economies of scale on a strategic level. That is why, a few years ago, other cities that were being consulted through the referendum on the directly elected mayor model overwhelmingly, apart from Bristol and Liverpool, all said no, because it did not seem to be adding much to the picture just bolting on a directly elected mayor. Having one for Greater London as a whole means that there are the economies of scale to lever in investment, negotiate with Government and to co‑ordinate. Sometimes things are unpopular. Would we have had the congestion charge coming in without a Mayor who was prepared to take on opponents and deal with the tabloid hysteria and so on at the time? Would we have had the low emission zone and those sorts of things? Sometimes it does require quite a bit of bravery as well as the strategic co‑ordination and the economies of scale.

David Mackintosh

Do you think the governance is perhaps a bit too complex?

Darren Johnson

No, I do not think it is complex, certainly when you compare it with some of the arrangements that are now being discussed as part of the devolution Bill, where people do not have coterminous boundaries for their police and crime commissioners with their combined authorities and the confusing set of arrangements. London could possibly end up as one of the most simple and straightforward, because we have the 32 boroughs of the city and we have a strategic London‑wide government in the form of the Mayor and the assembly. Within that, there will be sub‑regional arrangements, but I do not think anyone is looking at formal combined authorities or anything like that, because two tiers seems sensible in spite of there being a need for sub‑regional working on some things.

Sir Edward Lister

I have watched this from two positions. I was a borough leader for many years when Ken Livingstone was Mayor and I have worked for Boris Johnson as his chief of staff for the past five years. When I was a borough leader, I must admit I always felt there must be a better way of doing things. I was not that keen on the mayoralty. Having now changed position, as I now work for the Mayor, rather like Darren said I just do not think you could have got some of the things through without having a London‑wide Mayor who is less susceptible to smaller pressure groups, who can make much tougher decisions, which you have to make, on a London‑wide basis and who can override people a little more than a borough can. To be blunt with you, I think it works. I have seen the way in which it has brought in resources to London. I have seen the way in which we have been able to operate things like the police and Transport for London, and some of the things we have done on pensions and other areas. All these things just would not have been possible without having a very strong—and I do stress very strong—central figure who is able to make tough decisions, and sometimes unpopular decisions, but with the scale of London, they are less of an issue. It does work.

David Mackintosh

We have talked a bit about scrutiny arrangements, but do you think that London’s scrutiny arrangements are sufficient to be able to cope with additional devolved powers?

Sir Edward Lister

I personally think they are. It is very important that whatever devolved powers the Mayor has, with them goes the scrutiny power to the assembly for that to be followed through. May I give an example? One of the devolutions we are very keen on at the moment is on the fire service. We have a statutory body in London that manages the fire service. It has representatives from the boroughs, representatives from the assembly and directly appointed representatives of the Mayor on it. It is quite bureaucratic and regularly takes a view that is different from that of the Mayor. The Mayor then spends quite a bit of time issuing mayoral directions to tell them to do what he wanted them to do in the first place, so we have a long legal process. Forget about the whys and wherefores; it just does not work very well. We think that you should get rid of those kinds of bodies, which do cost money, and leave that power with the Mayor. The assembly should then scrutinise the decisions, whatever those decisions are, and say whether they think they are right or wrong—or whatever their view may be. Those are the sorts of changes that we would like to see. In many ways, we want to see the assembly doing more scrutiny, but we also want to see them stepping back from some other areas of activity.

Darren Johnson

There is some tidying up that needs to be done. It was a recommendation from your Committee that the fire authority be scrapped and given to the Mayor with clearer scrutiny from the assembly. I am pleased to say we went away and reflected on what you recommended, and there was all‑party agreement in the end that, as long as there are robust scrutiny procedures in place, that will be a better model. There are other areas where it would be helpful to enhance the assembly’s role as the Mayor gets more powers devolved. We think it is an anomaly that local government has call‑in powers and a scrutiny function, but that we do not over mayoral decisions. I know that when this Committee looked at the governance of London, you recommended that that anomaly be corrected, which we very much welcomed. At the moment, all the mayoral strategies are subject to veto by the assembly apart from the police and crime strategy, which we do not think makes sense, so we think that the potential veto power, which is only a check and balance, but an important one, should be rolled out as well. As the Mayor takes on new functions, gets more and more powers, and will be delegating more and more decisions to people other than him or herself, we believe that mayoral appointments become ever more important. Although we have confirmation hearings for deputy mayors and key appointments, we believe that the assembly should have the power to reject those appointments as a check and balance on mayoral decision making, as more and more things are delegated. Again, you could only reject with a two‑thirds majority as a simple check and balance. I must say, in the 15 years of City Hall, we have only, so far, recommended that the Mayor does not proceed with one of his appointments and that appointee resigned from the job after two months, finding that he had taken too much on. We have not used it as a political bludgeon, and I think it would be a useful power to extend to the assembly. I have one other point. As a Select Committee, you have the power to summon witnesses not just from Government, but from a range of institutions that affect the area of business that your Committee covers. We think that the assembly should have its own formal powers to summon witnesses extended to other public agencies that affect the life and outcomes of policies and so on in London. At the moment, we can only invite guests out of the City Hall family. We cannot summon someone and we think that should change in terms of other public bodies in London.

John O'Brien

I just have one point. It is obviously important to bear in mind in this that, both in terms of the devolution proposition that London has advanced and thinking about the sort of powers that London sought through the London Finance Commission, that is going to be devolution to the Mayor and also, in some cases, to boroughs. The London Finance Commission spoke about devolution of taxes to London government. Clearly, we have scrutiny arrangements in the boroughs, which go alongside the way in which the Mayor is held to account by the assembly. I do not think, in any of the propositions that we have, there is anything that is going to fundamentally change the need for those two spheres to exist, but clearly, as that picture evolves and changes, I would accept the proposition that one needs to look creatively at scrutiny as well. In terms of what we have and what we have asked for, boroughs’ scrutiny arrangements for holding their own leaders to account for the way they play their part in public services in London, and Darren and his colleagues holding the Mayor to account, is probably the model that continues to obtain.

Bob Blackman

John, different London councils are talking about coming together and co‑operating. What scrutiny arrangements are being negotiated for those particular partnerships?

John O'Brien

It is still primarily, at the moment, through individual scrutiny arrangements in boroughs and scrutinising the outcomes. Clearly, they will be interested in the sort of things that they are combining on, whether that is health, job outcomes or skills and the like. There is some experimentation with joint arrangements and joint discussions about how that will happen, and I could imagine that will evolve further. London boroughs have been quite innovative in this space in the past, but I do not think it has gone beyond those conversations so far.

Chair

Thank you all very much for coming to give evidence to us this afternoon. Oral evidence: The Government’s Cities and Local Government Devolution Bill, HC 369 7