Agenda item

To receive an update report on devolution in West Yorkshire to focus on the progress that has been delivered since the first mayoral elections in May 2021. The report provides information on the new structures that are in place as they relate to Leeds, details of key achievements delivered through the devolved structures, focuses on ongoing challenges and examples of partnership activity with the Council, which will benefit people living and working in Leeds.

The report of the Director of Resources provided a devolution update for the Scrutiny Board since the delivery of the Devolution Deal and the first mayoral elections in May 2021. It highlighted the key achievements delivered through devolved structures and partnership activities and their impact on Leeds, as well as key challenges and how the Devolution Deal may evolve going forward.

In attendance for this item were:

• Cllr James Lewis – Deputy Mayor /Leader of Council
• Tom Riordan – Chief Executive
• Neil Evans – Director of Resources
• Martin Farrington – Director of City Development
• Ben Still – WYCA Managing Director
• Cllr P Truswell – Chair of Infrastructure, Investment and Inclusive Growth Scrutiny Board
• Cllr B Anderson – Chair of Environment, Housing and Communities Scrutiny Board
• Cllr A Marshall-Katung – Chair of Adults, Health and Active Lifestyles Scrutiny Board

The Chair said that the Chairs of other Scrutiny Boards were in attendance for this item because devolution crossed many areas of the Council and therefore potentially the remits of the different scrutiny boards.

The Director of City Development opened the item providing the Board with the following points:

• The report gave an overview of the West Yorkshire Devolution Deal which was announced in the Budget in March 2020 with the final consenting order in January 2021 and mayoral election in May 2021.
• As a devolution deal there was more than £1.8 billion in funding over the next 30 years, including £38 million per year in not inflation linked gainshare funding divided into25% capital and 75% revenue.
• The West Yorkshire Combined Authority (WYCA) also took a decision to take on borrowing for non-transport powers through separate legislation. In December 2021 the Government informed WYCA of its intention to lay a draft order in Parliament on this matter in January 2022.
• The report covered the funding position, partnership working the proposals for a single investment fund recognising that some of the funding is ring-fenced, West Yorkshire Investment Strategy and highlighted the key benefits following the devolution deal which included the work of the inward investment authority who work closely with the Council and other authorities. It also provided information on the gainshare funding and how this has been divided up.

Responding to questions from the Chairs of the Scrutiny Boards and the Board Members of Strategy and Resources Scrutiny Board the following information was provided:

Funding and Inflation

It was noted that there are variable amounts of autonomy in relation to funding, depending on the nature of the funding coming in on transport. The most autonomy of funding WYCA has is on gainshare, which is still subject to two processes which are the five yearly gateway review with Government that ensures the money is spent according to the good value for money principles and secondly that there is a requirement for the funding to be spent through the Combined Authorities Assurance Framework, which was referenced in the submitted report.

The limits of the funding are around the devolution deal, which are in promoting economic growth and alignment with the economic priorities of the Combined Authority.  It is also dependent on whether the funding is capital or revenue. Other funds such as the City Regional Sustainable Transport Fund which is mainly a capital funding programme, is subject to a detailed business case which had been submitted over the last eighteen months. It is constrained as it is intended to be spent on projects which were named and set out in the business case.  This is where the funding for mass transit is set out.

The Combined Authority would like more flexibility on funding such as CRSTS, but the benefit is that it is multi-year which provides a degree of freedom with projects and enables better resource planning as compared to previous arrangements.

The funding for Bus Sustainability Improvement Programme is predominantly from revenue, this is subject to a business case and has a specific purpose.

It was the view that the Combined Authority was fairly constrained even though these are devolved funds and there is a case for greater devolution to use the funds more flexibly in their deployment.

In response to questions about the impact of inflation on gain share funding, it was noted that the Combined Authority had estimated that the gainshare over the time period would equate to £1.1 billion but taking account of current inflation projections it would become less than £700 million which would be a major loss. No gainshare amounts have been index linked.

Affordable Housing

Paragraph 39 was highlighted as providing detail in relation to the £89 million funding the Combined Authority had committed to the Brownfield Housing Fund. It was noted that Leeds was in the process of securing approximately £42 million of that fund. Last year Leeds delivered 595 affordable houses which was above the in year need but not the total need of about 1,200 new houses. Using this funding alongside the strategic grant from Homes England and monies from Section 106 would provide a pathway to 750 affordable homes per annum over the next three years. It was recognised that this funding was assisting with more affordable housing but there was a higher need than can be supplied.

The devolution deal secured a housing revenue fund which allowed housing teams from the Local Authorities to look at development sites and bring forward the case where they were in a deliverable position. It was also noted that there were now more sites ready to go which would not have happened without the devolution deal. The Brownfield Housing Fund comes with a degree of constraint in that the projects need to demonstrate a positive value for money BCR. It was acknowledged that these sites were challenging, and this was preventing developers coming forward with more affordable homes.

National Health Service

Greater Manchester had picked up the health service as part of their devolution deal six or seven years ago. Since then, the reforms that have taken place in the health service through the Integrated Care System (ICS) has meant there was a reluctance to go further with devolution of health services.

The Chief Executive said that he had led a peer review on Greater Manchester, and he was of the view that the new arrangements on the ICS do change the dynamics and he endorsed the views of the Leader. It was recognised that it was important to focus on the economy transport skills. He was also of the view there was a need to simplify the funding streams and the more autonomy and flexibility we can get, would lead to better results.

Combined Authority Scrutiny Committees

The three Combined Authority Scrutiny Committees all publish full plans, and the Chairs of the Scrutiny Committees would be willing to talk to Local Authority Scrutiny Chairs. This could be facilitated by the Combined Authority.

Page 48 Paragraph 10 of the submitted report listed the Combined Authority Scrutiny Committees as:

• Governance and Audit Committee
• Corporate Scrutiny Committee
• Economy Scrutiny Committee
• Transport/ Infrastructure Scrutiny Committee

Page 48 also listed the other decision-making committees at paragraph 9 of the submitted report.

It was noted that the Council was represented on all the Combined Authority committees and there was a link there for the Scrutiny Board Chairs to use if they so wished.

Police and Crime Panel

It was noted that the Managing Director would take the question about how best to work with the Police and Crime Panel away and come back with the information.

Assurance Framework

The major projects and one of the benefits of devolution are that they are considered with the West Yorkshire Assurance Framework which allows WYCA to target the timing of the business case, which is measured in weeks, which provides greater certainty of the time it will take for a project and the resources required. The Assurance Framework is design to answer questions such as what is going to be produced from the project and will it be value for money. The processes are made as efficient and effective as possible. The Assurance Framework is now used by all the partners and provides accountability to Central Government of the money that is spent through the Combined Authority. It was acknowledged that the framework had scored well and was trusted by Government.

Adult Education Budget

The main changes in the first year were about rationalisation, looking at the quality of contracts. This resulted in a reduction of contracts from 100 to approximately 38 with most of these West Yorkshire based, so more about supporting the local economy. The challenge that the AEB face currently is the upward inflationary pressure on intervention rates, how to maintain the number of learners coming out of the system and finding additional funding to increase the number of learners. It was noted that one of the benefits from AEB was that they were able to use some of the flexibilities that come with devolution arrangements.

It was recognised that the Combined Authority do not have links into the communities and communication was best through the local authorities. It was noted that information about how the Combined Authority cascade information would be brought back. It was suggested that Councillors could assist with communicating information into their communities. Members were advised that Leeds City Council had signed an AEB agreement, and the Director of City Development offered to liaise with the Combined Authority on looking at how to communicate information on AEB to the communities.

It was noted that the Leader offered to invite Tracy Brabin the West Yorkshire Mayor to a meeting of Council, where Elected Members could meet her and ask questions in 2023. 

RESOLVED – To:

A)  Note the updates contained in the report and agree any appropriate Scrutiny Board actions that may arise from these.

B)  Note that additional information linked to the Police and Crime Panel will be provided to members following the meeting.