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Combined authorities and economic prosperity boards: the way forward?

Project iStock 000000224397XSmall 146x219Are Combined Local Authorities and Economic Prosperity Boards (‘EPBs’) the missing link for local authority regeneration initiatives? Rob Hann reports.

In its response to Lord Heseltine’s review of how to more effectively promote growth and create wealth in the UK (see ‘No Stone Unturned’), the Coalition Government said it wanted local authorities to put economic development at the centre of their activities, and to collaborate, including with private sector partners, across a functional economic area. Establishing a combined authority or an economic prosperity board under new powers, could become an effective way in which local authorities across an economic area can collaborate for economic growth.

The Local Democracy, Economic Development and Construction Act 2009 now provides powers to create new statutory joint authorities (known as combined authorities) who may exercise any function of its constituent councils that relates to economic development and regeneration, and any of the functions that are available to integrated transport authorities. For transport purposes combined authorities are able to borrow money and can levy constituent authorities.

The Greater Manchester Combined Authority was the first to become established in 2011. The combined authority builds on the ten boroughs’ long experience of working together since the abolition of the Greater Manchester Metropolitan County in 1986. Other authorities are now following their lead (see West Yorkshire Combined Authority case study below).

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These new entities have a separate legal existence in law (unlike a joint committee) but remain wholly within the public sector environment (unlike a joint local authority owned company) and provide a much needed ‘missing link’ to the list of options available to local authorities seeking to join up policy and strategy on certain major functions across geographical boundaries.

Combined authorities may also take on the functions of Economic Prosperity Boards. These are an alternative structure in the 2009 Act which allows the combined authority to take on the economic development role of their constituent local authorities.

Functions and powers

Combined authorities can be passed functions by the Secretary of State under the general powers in the Localism Act 2011. Combined authorities also have a version of the general power of competence, again introduced via the Localism Act 2011. The power is similar to that available to local authorities, though it does not allow combined authorities to provide statutory services on a commercial basis (see S113A):

The Localism Act 2011, sections 15-20, allows the transfer of any public function from other bodies, or from ministers, to ‘permitted bodies’ – a designation which includes combined authorities (section 20). It would therefore be possible for further powers to be devolved to combined authorities by statutory instrument.

Process, applicability and limitations

Where local authorities come forward with locally-led proposals for a combined authority, the Secretary of State for Communities and Local Government may, if certain statutory conditions are met and if Parliament approves, make an Order enabling those local authorities to establish their proposed combined authority.

A combined authority can be set up when two or more contiguous English local authorities, covering an area’s economic footprint, want to collaborate more closely together to improve economic outcomes. There are some limitations to the new powers currently. For example, a local authority can only be part of one combined authority and currently one part of a combined authority’s area cannot be geographically separate from the rest of the combined authority.

The local authority of any district of England outside Greater London can join a combined authority and a county council can become part of a combined authority even if only some of the non-metropolitan districts that make up the county are within the combined authority area.

A statutory review of current governance arrangements and options must be undertaken, and a scheme outlining their proposals submitted.

The Secretary of State must then consult, including with the authorities that would be covered by the combined authority, and must be satisfied that the establlishment of a combined authority would bring about the following benefits:

  • Improve the effectiveness and efficiency of transport in the area
  • Improve the exercise of statutory functions relating to economic
  • development, regeneration and transport in the area
  • Improve the economic conditions in the area.

Case study

The West Yorkshire Combined Authority will be made up of ten members in total.

Eight of these members will be elected members from the five constituent West Yorkshire councils of Bradford, Calderdale, Kirklees, Leeds and Wakefield. The five constituent councils would each appoint one of its elected members to the combined authority, with the remaining three members appointed by the constituent councils to reflect the political balance among the authorities.

The City of York Council will appoint one of its members to be a non-constituent council member of the combined authority.

The Leeds City Region Local Enterprise Partnership (LEP) will also nominate one of its members to be a non-constituent member of the combined authority.

It is proposed that each constituent and non-constituent council will appoint its Leader to the combined authority.

In the case of the Local Enterprise Partnership, the Chair will be appointed. This provides for decision-making at the highest level to set the strategic direction of the authority. The LEP has been invited to become a non-constituent (partner) member of the combined authority to ensure that decisions made fully reflect the views of business.

Joint committees and joint boards

Other local authorities, whilst also exploring new models to join up, have decided to establish economic prosperity joint committees covering similar functions (economic development, transport and regeneration) across boundaries. Several Nottingham authorities announced their joint committee approach in 2014. This approach might be a way of testing out working relationships before investing time and energy in setting up new legal vehicles via the statutory process described above. Either way these new approaches to strategic partnerships between local authorities are a helpful new addition to the options previously available.

Conclusions

These new bodies provide an exciting new opportunity for the joining up of economic regeneration efforts across regions through a legal entity wholly within the public sector administrative environment. Through such bodies, their constituent councils potentially have greater flexibility and influence than each council working independently would have. The process to establish a combined authority or an economic prosperity board is relatively straightforward albeit public consultation and the statutory processes necessary before they can be set up may be a disincentive to some.

Economic prosperity boards may also start to become an important option open to groups of authorities who are exploring land pooling programmes to generate surpluses for re-investment purposes. Some authorities (sensibly) are testing the waters by working through the more tried and tested method of joint committees but these arrangements have their drawbacks. Establishing a specific legal entity that engages the leading members of the community in crucial economic development, regeneration, job creation and growth initiatives impacting across a wide geographical area must be an attractive option to many councils to combat deprivation and re-invigorate local economies.

Local Partnerships LLP is working with a number of local authorities and LEPS and others involved in regeneration (such as the British Property Federation and their members) to remove obstacles to growth and provide support for developing new ways of working.

Rob Hann is Director, Legal Services at Local Partnerships LLP. He can be contacted on 07768906391 or This email address is being protected from spambots. You need JavaScript enabled to view it..

See www.hannbooks.com

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