Agenda item

(Leader of Council) To consider the attached report (C-027-2015/16).

(1)        That the latest position in the ongoing discussions with the Department of Communities & Local Government concerning the proposal to develop a Greater Essex Devolution deal be noted;

(2)        That the continued participation of Epping Forest District Council in the discussions be agreed, with regular updates submitted to the Cabinet; and

(3)        That, once the nature of the emerging Devolution proposals had been finalised, a detailed report be submitted to the Council to debate the merits of the Council’s participation.

The Leader of Council presented a report on the proposals to develop a Greater Essex devolution deal with the Department of Communities & Local Government.

The Leader reported that the fifteen local councils of Greater Essex (Essex County Council, Essex district, borough and city councils, plus Southend-on-Sea and Thurrock Unitary Councils) had been working together to explore devolution ideas and draft proposals which could see the transfer of powers and funding from central Government to a Greater Essex Authority. The proposals were not yet fully developed and any final deal would need to be considered by Full Council before a final decision was reached. It was suggested by those supportive of devolution that it could bring benefits like greater local control over issues such as:

·         growing the local economy in a sustainable way

·         application of skills funding to ensure training matched current and future business need

·         increasing inward investment and job creation, and

·         tackling some of the transport and infrastructure challenges of the area.

In order to agree to devolving power, the Government would require a set of proposals that showed ambition in terms of outcomes, a strong governance model and a realistic prospect of delivery.

The Cabinet was reminded that work had commenced on the devolution programme in December 2014 and the Leader had regularly updated members about the initiative in his reports to the Council. In April 2015, he advised that he had not signed a letter from Essex Councils to the Secretary of State expressing interest in negotiating a devolution deal for Greater Essex because he felt this Council needed to be provided with more information on the proposals before it could reach an informed decision. Since then work had progressed and some more detail about the proposals had emerged, though the proposals were still not complete and some key issues were not yet resolved. Perhaps most notably the Governance issue was yet to be addressed.

The Cabinet was advised that a high-level submission was made to the Government on 4 September 2015 to confirm the Greater Essex Partnership’s continued interest in a devolution deal. The letter was substantially amended to reflect specific concerns about housing growth and the importance of the metropolitan Green Belt raised by this Council. The submission deadline was set by the Government to filter the number of devolution deals being considered and so it was necessary for the Greater Essex Partnership to show strong interest in securing a devolution deal. Without Epping Forest’s continued participation the submission would have been considerably weakened and would possibly have been rejected at that point. One of the main concerns of those bidding for devolution was that those securing early deals would fare better than those who were unsuccessful at this stage and would find themselves bidding for a diminishing amount of funding.

The Leader opined that there was still not enough information to make an informed decision about a final deal and that the case for devolution to a Greater Essex Authority was yet to be made. However, he had reluctantly signed the letter to enable the Partnership to continue to develop proposals. The letter did not commit any of the signatories to devolution at this point but had enabled the Greater Essex proposal to remain under consideration by the Department of Communities & Local Government. In December 2015, a more detailed submission would be made to the Government setting out the offer and requests as the basis of a devolution deal and the approach to a new governance arrangement. This would commence the detailed negotiation phase with the Government.

The Cabinet was being asked to consider whether they wished the Council to continue to participate in the discussions around the devolution programme, and the emerging shape of the devolution deal. In the meantime, Leaders and Officers from all of the Greater Essex partners would commence negotiations with the Government to co-produce a detailed submission. A copy would be shared with Members and debated at Council. If the Cabinet agreed to remain involved in the discussions around devolution, further reports would be submitted to the Cabinet during this process to update Members on the latest position.  The detail of any final devolution deal reached with the Government, including any new governance model (such as a combined authority), would need to be approved by the Cabinet and then recommended to the Council for ratification. It was anticipated that this would not be until the first quarter of 2016 at the earliest.

The Leader concluded that the issue for the Council was the housing growth implicit with the proposals for economic growth within the Greater Essex area as 90% of the land within the Epping Forest District was Metropolitan Green Belt. There was also a lack of detail within the proposals concerning the governance model and the financial model, including the costs of the Combined Authority. It was unclear at the current time exactly what the benefits would be for the Epping Forest District from being a part of the devolution deal, and the Leader invited the Cabinet to share their thoughts.

Members of the Cabinet expressed a degree of scepticism with the proposals and highlighted the issues listed in the report that needed to be addressed before a deal on devolution could be agreed. There was a considerable level of concern regarding the costs of the process and it was felt that the Council needed to be certain of the costs and benefits of being involved before a firm decision could be made. It was also felt that the governance arrangements needed to be determined, which should include both a veto for the Council and a mechanism to withdraw from the arrangement without penalty, legal or financial, if necessary.

The Leader highlighted that the devolution proposals were primarily concerned with economic growth, which would also require housing growth. The Portfolio Holder for Governance & Development Management emphasised that it was illegal for any authority outside of the Council’s Strategic Housing Market Assessment area to take any of Epping Forest’s projected housing. The Portfolio Holder for Planning Policy added that the Local Plan process was concerned with local people making decisions about their local area.

The Deputy Leader commented that the Council needed more clarity about the proposed governance arrangements, and pointed out that the timescale was unrealistic. The Council had also been asked to contribute financially to the costs involved in developing the devolution proposals, with a request for £15,000. The Council definitely needed to have a veto for proposals that was not in the interests of residents of the District, as well as an exit mechanism which would not penalise the Council. The Deputy Leader felt that the idea was good in principle, but it was hard to see any benefits for the Epping Forest District from devolution; the example of the Council’s participation in the North Essex Parking Partnership was quoted as a precedent.

Other Members of the Cabinet felt that there were no substance to the current proposals, and that it would be difficult to reach agreement with all 15 authorities before the need to submit more detailed proposals in December 2015. It was also felt that the whole process was proceeding with undue haste, with very little or no detail forthcoming about the elements of the devolution deal. The possibility of having an elected Mayor for Essex was also raised, and the issues that would cause – not least an additional layer of bureaucracy. However, it was felt that the Council should remain involved in the discussions for the time being.

The Leader welcomed the comments from the Cabinet and requested further clarification as to what limits should be set for the conduct of future discussions by the Council. The Cabinet felt that the following limits would be appropriate:

            (i)         The Council would not sign up to further proposals until there was a           financial model showing the full costs of devolution, and that the time of the   Chief Executive in leading one of the devolution work streams would the         Council’s contribution to the costs incurred until now;

            (ii)        The Council would not sign up to further proposals until there was a           fully worked up Governance model, which included an exit mechanism        without legal or financial penalty for the Council; and

            (iii)       The Council would not sign up to any further proposals in relation to            devolution without the support of the full Council.

Decision:

(1)        That the latest position in the ongoing discussions with the Department of Communities & Local Government concerning the proposal to develop a Greater Essex Devolution deal be noted;

(2)        That the continued participation of Epping Forest District Council in the discussions be agreed, with regular updates submitted to the Cabinet; and

(3)        That, once the nature of the emerging Devolution proposals had been finalised, a detailed report be submitted to the Council to debate the merits of the Council’s participation.

Reasons for Decision:

To continue to explore the opportunity to receive devolved powers and funding streams from the Government.

Other Options Considered and Rejected:

To opt out of the Greater Essex bid at this point. However, this could weaken the Greater Essex bid significantly and risked damaging relationships with our partners in Essex. At this point, there was not enough information on the details of the bid to make a fully informed decision.