THE IMPACT OF THE GOVERNMENT'S DEVOLUTION
PROPOSALS ON ECONOMIC DEVELOPMENT AND LOCAL GOVERNMENT IN WALES
Local government
49. As we have suggested above, a crucial factor
in the operation of devolution to a National Assembly for Wales
is going to be the way in which the Assembly and the local authorities
relate to each other. The various actors will simply be physically
that much closer to one another than at present but, more important,
since the Assembly will have responsibility for allocating the
Welsh public expenditure block between the various services within
Wales it will find itself in control of much the greater part
of local government spending.
50. In oral evidence, witnesses from the WLGA (which
expressed a very low opinion of what it perceives as the tendency
for decisions affecting Wales to be made in Whitehall and, in
particular, of the operation of the doctrine of collective Cabinet
responsibility[86]) told
us that they had three major proposals: that the Assembly should
be put under a statutory duty to promote
local government, that the Assembly should be required
to form a Partnership Council with local government, and that
when the Assembly and its agencies (including the enhanced WDA)
intervene in local communities they should do so in response to
the strategies which have previously been agreed by the local
authorities.[87]
51. Clause 110 of the Bill satisfies the first two
objectives of the WLGA; it obliges the Assembly to make a scheme
"setting out how the Assembly proposes,
in the exercise of its functions, to sustain and promote local
government in Wales" [Clause 110(1)]
and to
"establish and maintain a body to be known
as the Partnership Council for Wales or Cyngor Partneriaeth Cymru"
[Clause 100(2)].
52. The WLGA regards the Assembly as a major
step forward in bringing transparency into the formulation of
policy generally and, in particular, to the process of secondary
legislation. The WLGA saw the Secretary of State as the potential
arbiter between local government and the Assembly should tensions
arise.[88] Mr Paul Griffiths,
the Association's Head of Corporate Affairs, suggested that it
was possible
"to be less than totally impressed with
the way in which secondary legislation is currently handled in
the United Kingdom.".[89]
He argued that, under the current procedures, there
was little real public debate or scrutiny of secondary legislation
inasmuch as the consultation process was carried out before the
legislation was published and the legislation itself could not
normally be amended.[90]
The process was conducted in a "dark and complex underworld,
dominated by professionals"[91]
and, in the view of his Association, would be much more open and
susceptible to reasoned argument from interested parties outside
Government under the proposed system of devolution than hitherto.
In short, the WLGA believes that, in spite of the fact that there
have traditionally been close working relations between the Welsh
Office and local government, the partnership should be placed
on a more equal footing.[92]
53. The Partnership Council is seen as an attempt
to bring central and local government together on the basis of
equality. The WLGA is anxious that, in accordance with the principle
of subsidiarity, local government should retain its existing powers
under the new arrangements; in essence, the Association wants
the Assembly to be responsible for strategy and policy-making,
while local authorities deliver services-though the WLGA also
sees local authorities as having strategic roles in their own
localities.[93] What
the WLGA does not want to see is "an enlarged, grandiose
county council".[94]
54. We raised with the Association the question of
the way in which the Council would work, given that the Assembly
will hold the purse-strings and the Welsh Office civil servants
will be answerable to the Assembly. The WLGA did not see this
as a problem, suggesting that, although the Assembly would be
led by its members,
"part of its processes will be delegated
to officials... [who] ought to declare their responsibilities
publicly and then, within their delegated responsibilities, be
accountable not just to the Assembly but to the public in general,
including the Association of Local Government. That is not to
take away from elected members any of their authority or responsibility
or accountability...".[95]
This is very much the local government model of administration,
where officials carry responsibilities in their own right,[96]
rather than the Parliamentary model under which (except in very
unusual circumstances) it is Ministers who are answerable for
the activities of their civil servants. The Association saw the
local government style of operation as much more open and transparent
than the Whitehall model.[97]
55. How the Partnership Council will work out in
practice is not at all clear. Schedule 7 of the Bill sets out
the framework, but not the detail-which the Secretary of State
has left to the Assembly itself. However, we doubt whether, in
practice, it is possible to have an entirely equal partnership
between the body which will be responsible for funding local government
in Wales, and the local authorities who will spend the money.
It is, after all, implicit in the system of devolution which
is proposed in the Bill that the Assembly will be free to order
its own spending priorities across the services for which it is
responsible-and its priorities may not coincide with those of
the local authorities. It is possible that the nature of the
relationship may depend, at least in part, on the model of Executive
/ Parliamentary relations which the Assembly adopts: whether it
is more like the local authority committee model or the Cabinet
model-and the precise nature of the relationship is not spelt
out in detail in the Bill.[98]
Moreover, it should not be forgotten that the principle of subsidiarity
espoused by the WLGA implies a hierarchy of authorities, even
if they have clearly-defined and autonomous roles.
56. The Bill provides for a Partnership Council
between the Assembly and local government. The precise nature
of the relationship between the two sides remains to be determined
as the details of how the Assembly is to work are filled in.
Moreover, it should not be supposed that the Partnership Council
will be a panacea for the problems which inevitably arise over
such issues as local government funding.
57. At the time of writing, neither Cardiff County
Council nor Rhondda Cynon Taff County Borough Council were members
of the WLGA; representatives of the Association told us that this
was because the two Councils felt that, at a time of financial
stringency, they could not justify spending money on subscriptions
to the WLGA and to the Local Government Association at the expense
of services.[99] In
the future, of course, this situation may change.
58. Clause 110(3) of the Bill provides that the Council
"shall consist of Assembly members and members of local authorities
in Wales", while Schedule 7 paragraph 3(1) requires the Assembly
to consult local authorities in Wales and associations of local
authorities in Wales about the membership of the Council. The
implication of this is clear: it is not proposed that local authority
membership of the Council should be restricted to members of the
WLGA-nor, so long as Cardiff and Rhondda Cynon Taff remain outside
the Association, could it be-and the Assembly will need to look
carefully at the way in which local authorities are to be consulted.
59. That said, however, we strongly support the
concept of a Association for local government in Wales as the
most efficient mechanism for consultation between local authorities,
the Assembly and the Secretary of State. Whether the present
format of the Welsh Local Government Association is the most appropriate
one for that purpose is not for us to judge; however, we suspect
that unless there be some form of consultation machinery
which brings together all the unitary authorities, the Partnership
Council may prove very unwieldy. We note that-at least by
implication-the Secretary of State shares our views on the matter.[100]
Local government and the enhanced
WDA
60. The WLGA was anxious that local authorities should
have a major role in economic development, principally on the
grounds that local authorities already produce economic development
plans and are best placed to identify the needs of their own communities.[101]
Against this, it was conceded that an overall strategic view
needed to be taken of the economic development requirements of
the Principality as a whole and that the enhanced WDA was best
placed to take that view.[102]
The Association also stressed that local authorities have statutory
responsibilities for the development of their areas.[103]
The overall thrust of the WLGA's argument was, again, towards
subsidiarity-that economic development should be delivered by
local authorities at the local level.
61. Mr Rowe-Beddoe told us that he was fully committed
to partnership with the local authorities and that the Regional
Economic Fora provided the mechanism for delivering that partnership:
"I cannot underestimate the importance of
the partnership. Really, this is not just words... without the
active partnership, trust, confidence, goodwill, tussles-whatever
else-with local authorities, the job could not be done. We are
clearly in this together.".[104]
62. We are sure that it makes sense to involve
local authorities in the process of economic development since
they, after all, are the planning authorities and will have to
provide many of the ancillary services which inward investment
requires. Equally, however, the enhanced Welsh Development Agency
must remain responsible for overall delivery under the supervision
of the Assembly.
63. The WLGA told us that it would like to see
fifty per cent of the Board of the new WDA to be chosen from among
elected local authority representative, in the same manner as
local authority members are currently appointed to the LAW.[105]
While we can see merit in a degree of local authority representation
on the Board of the enhanced WDA, we feel that the vast majority
of its members must have business and technical expertise. The
Board will be responsible for carrying out the policies laid down
by the Assembly; to import a large political element on to the
Board itself would run the risk of blurring the lines of political
accountability for policy execution.
64. An alternative approach which might be worthy
of further consideration is for the regional committees of
the Assembly itself to be given powers of cooption under which
representatives of local authorities, business and the trades
unions could be brought into the process of consultation over
regional strategies and economic planning.
65. In the course of their evidence to us on
the more general question of economic development, witnesses from
Cardiff University Devolution Group expressed a degree of disquiet
on the possible impact of devolution on higher education in Wales.
66. At present, the Secretary of State is responsible
for funding further and higher education in Wales, and the Welsh
Office is the sponsoring department for the Further and Higher
Education Funding Councils for Wales. Under the proposal currently
before the House those responsibilities will be devolved to the
Assembly, though the Assembly will not be able to restructure
the Higher Education Funding Council.[106]
67. The Vice-Chancellor of the University of Wales,
Cardiff, Professor Brian Smith, pointed out to us that higher
education in Wales could not be considered merely from a domestic
Welsh perspective, because the Welsh institutions of higher education
competed with their English counterparts for the same pool of
applicants. Moreover, it is only because they are able to attract
students from the rest of the United Kingdom that the Welsh universities
and colleges are able to sustain their student numbers:
"roughly... half the students who we educate
in Wales are from Wales and half our own students go to England,
and this student mobility is more vital for Wales than it is for
England.".[107]
Professor Smith and his colleagues expressed concern
that, because the institutions of higher education operate in
a UK-wide market, under a devolved administration there could
be a tendency for the problems of the tertiary sector to be seen
as less immediate than purely local ones:
"A leaking roof in a secondary school is
more urgent to Assemblymen than the problems of higher education.".[108]
68. We asked whether the preferred solution would
be to hand back responsibility for higher education funding in
Wales to the Department for Education and Employment. Professor
Gareth Rees, Professor of Education Policy, was reluctant to go
down that route, but stressed that the matter was one which needed
further thought:
"precisely because higher education is different
from other forms of educational provision in Wales, therefore
the machinery of governance which will be required to deliver
[it] most effectively will need to be different from the machinery
of governance with respect to either schools education or further
education.".[109]
69. Higher education is important not only to
the culture and self-image of Wales as a modern, progressive society,
but also to the Welsh economy. Cardiff University Devolution Group
estimated that the sector generates about 23,000 jobs and an annual
turnover of some £1 billion;[110]
in short, it is a major business producing a high-value-added
product. It is therefore important that devolution does not cause
disturbance to the sector-especially as regards research funding,
where the Welsh institutions of higher education will need to
be able to compete on equal terms with their English and Scottish
counterparts if they are to continue to be successful. It is essential
that a smooth transition be made from the present system to the
devolved one; and how that is to be achieved will have to be a
matter of negotiation between the Assembly, the Higher Education
Funding Council for Wales, and the sector itself. It is, however,
vital that the importance of the sector be recognised within the
new arrangements. This is a complex matter and, in the absence
of a body of firm evidence, we make no specific recommendations
at the present juncture-but we intend to return to the issue at
a later date.
70. One of the powers which is likely to be
transferred from the Secretary of State to the Assembly is the
power of determination of planning appeals and call-in of applications.
Several witnesses expressed misgivings on this point;[111]
and it would appear to us that there are three potential areas
of difficulty inherent in transferring this power to the Assembly.
71. The first is the possibility that it may be more
difficult for a Committee of the Assembly to take an objective
view of an individual case than can the Secretary of State, since
Members of the Assembly are likely to be subjected to local political
pressures in a way which the Secretary of State is not to anything
like the same extent. The calling-in of planning applications
and the determination of appeals are quasi-judicial proceedings
in which the Secretary of State is required to take an objective
and dispassionate view on the facts of the situation as they are
presented to him and to the Planning Inspectorate. As the Royal
Society for the Protection of Birds [RSPB] pointed out, this is
a technical exercise which depends on a detailed assessment of
the Inspector's report and technical advice from civil servants.[112]
Mr Griffiths of the WLGA conceded that there was no clear proposal
as to how the Assembly was going to fulfil a quasi-judicial appellate
role.[113]
72. The second is the need for consistency in the
application of planning policy. Because at the moment responsibility
for enforcement rests ultimately with the Secretary of State,
he is in a position to make sure that, in the case of major planning
applications, the Planning Policy Guidance is enforced in a consistent
manner throughout Wales. Because of the unique nature of their
planning powers and the potential impact of their activities upon
economically-fragile rural communities, this is particularly important
in the case of the National Parks Planning Boards. We have misgivings
as to whether a Committee of the Assembly could achieve a similar
degree of consistency.
73. The third is the potential for a hiatus in the
operation of the system while the new Assembly settles into its
normal routine. Because of the quasi-judicial nature of planning
call-ins and appeals, there would presumably need to be special
procedures created for the Committee of the Assembly which would
oversee the system should those powers be transferred.
74. On the other hand, we are aware that, were the
powers of call-in and determination of appeals to remain with
the Secretary of State, the Planning Inspectorate would have to
remain under his direction-which goes against the principle of
transferring the staff of the Welsh Office to the control of the
Assembly. The Secretary of State himself described the possibility
that the power of call-in and determination of appeals might not
be transferred to the Assembly as "an odd proposition".[114]
Moreover, Councillor Harry Jones of the WLGA argued that the
exercise of those powers by a Committee of the Assembly would
be more transparent and democratically accountable that the present
system.[115]
75. While we are conscious of the potential difficulties
of such a course, we nevertheless recommend that further consideration
should be given to the operation of the system for calling-in
planning applications and determining appeals. There are a number
of options which might be considered: for example, to retain the
present system under the control of the Secretary of State or,
alternatively, to make a single person[116]
or a small panel within the Assembly structure, rather than a
full Committee, responsible under the Assembly's Standing Orders
for the exercise of those particular powers. We prefer the panel
option.
76. It is our opinion that, at the very least,
serious thought should be given to making proper medium-term transitional
arrangements for call-in of planning applications and determination
of appeals in the event of the transfer foreshadowed in the draft
Transfer of Functions (National Assembly for Wales) Order 1998.
In our view, this would be best achieved by the Secretary of
State retaining a reserve power for a twelve-month interim period.
77. In addition, when those powers are transferred
the Assembly's Standing Orders should provide clear criteria to
govern appeals and the types of planning applications which should
be called in; and we would hope that, in developing those criteria,
the Assembly would have regard to the need to promote sustainable
development wherever possible. The RSPB suggests that in
the absence of clear guidance there could be a tendency for the
Assembly not to intervene in local planning decisions and, in
effect, for the power of call-in to go by default[117]-a
view with which we have some sympathy.
86 QQ
120-1. Back
87 Q
119. Back
88 Q
182. Back
89 Q
170. Back
90 ibid. Back
91 Q
171. Back
92 Q
190. Back
93 Q
123. Back
94 Q
124. Back
95 Q
190. Back
96 QQ
192-3. Back
97 Q
192. Back
98 HC
Deb (1997-98) 302 c892. Back
99 QQ
133-4. Back
100 Q
715. Back
101 Q
197. Back
102 Q
198. Back
103 Q
195. Back
104 Q
41. Back
105 QQ
206-10. Back
106 Cm
3718 p 32 and paragraph 3.25. Back
107 Q
262. Back
108 ibid. Back
109 Q
267. Back
110 Q
262. Back
111 eg
the RSPB, Appendix 24 p 263. Back
112 ibid. Back
113 Q
176. Back
114 Q
724. Back
115 Q
177. Back
116 a
suggestion which commends itself to CBI Wales in terms of the
speed and clarity which it would bring to the decision-making
process: QQ 358-9. Back
117 Appendix
24 p 263. Back
| 
