The new Combined Authority O&S Order: a quick rundown      

Posted on 09/12/2016 by Ed Hammond. Tags: devolution, governance and scrutiny

After what seems like a very long wait, Government has now published a draft of the Order which sets out more detail for combined authorities on the form of their scrutiny arrangements. The Order will probably complete its passage through Parliament in January, but will not come into effect until 8th May 2017. 

While these sorts of bits of legislation always generate a flurry of interest, they tend to focus on the structures and processes that sit behind scrutiny, and on the composition of committees. It’s important not to fixate on the structures at the expense of the outcomes that scrutiny is here to achieve.

That said, it’s important to get the legal technicalities right. In the New Year we are producing some detailed guidance on overview and scrutiny, but in the meantime here is a quick rundown of the content of the new Order. You should note that an Explanatory Note, in which Government provides an explanation of the Order’s provisions, is forthcoming.

This should be read alongside the provisions in the 2009 and 2016 Acts which relate to scrutiny at combined authority level. We would in particular recommend that practitioners thinking about these issues look in depth at the provisions in Schedule 5A of the 2009 Act, which was introduced in the 2016 Act. Practitioners will also want to look at the specific Orders establishing the governance arrangements for their combined authority. Those Orders essentially mirror these more detailed provisions – for example, here is the part of the Order setting up a combined authority overview and scrutiny committee in the West Midlands, for comparison. 

A full rundown of all the legislation on this topic will be provided by CfGS in the New Year, but here are the main points. For clarity, we haven’t quite arranged all this in the order that it appears in the draft Order itself, but we’ve tried to keep to the same basic structure.

Membership

• The majority of members of the committee must be members of a constituent council; all of those members have one vote. Where a member is not from a constituent council they don’t have a vote automatically, but can be given one by resolution of the combined authority (this provides a mechanism for the OSC to appoint members from non-constituent councils and/or expert co-optees);
• The spread of the OSC members from the constituent councils must reflect the balance of political parties across those authorities (this is the balance of members overall, not just the leadership of the councils);
• Appointments must be accompanied by a public notice;
• Two-thirds of members must be present for a meeting to be quorate.

Chairing

• Where the Chair is an “independent” person (an option open to CAs to include in their governance scheme) it means that they must not be a member or officer now (or in the last 5 years) of a constituent council, or a parish council which forms part of an area covered by a constituent council, or a close friend or relative of someone with the above characteristics;
• Where the Chair is not an independent person, they must be an appropriate person. This means that they cannot be of the same political party as the Mayor. Where the Mayor is elected as an independent candidate, such an OSC Chair must not be of the same party that has the majority of members on the OSC – or where two or more parties have the same number of members, any of those parties;
• There has to be a public appointment process for the Chair if they are to be an independent person.

Member references and work programming

• Similar provisions exist here as apply to individual councils. Basically, the CA OSC must put in place arrangements to ensure that any of its members (and, importantly, any member of the combined authority) can refer an issue to the OSC for discussion. In practice, we have tended to take the view not that this gives any member the right to put any issue they want on an agenda for substantive discussion, but that its inclusion as a substantive item subsequently be discussed at a formal meeting. Basically this means that the committee might, as part of a broader discussion of the work programme during a formal meeting, consider such a reference and whether it is sensible to devote committee time to the issue in question;
• Where the committee decides not to accept such reference it has to provide reasons for its decision.

Relations with the Mayor and combined authority

• Again, provisions here are broadly similar to those that apply to individual authorities. CA OSCs have the power to make recommendations to the combined authority and Mayor; both the CA and Mayor are required to respond within two months;
• In relation to call-in (provided for under Schedule 5A of the 2009 Act) a meeting must be convened by the CA or Mayor to reconsider the decision no later than 10 days after the OSC’s recommendation is received.
• Where information of provided to a member of an OSC by the committee, the Mayor or the combined authority, the usual provisions around confidential and exempt information will apply. Members of OSCs do however have enhanced information rights, broadly similar to those conferred on councillors by virtue of Regulations laid in 2012. In the case of CA OSC members, such requests from OSC members must be complied with by the Mayor or CA no later than 10 days after they are received.

Mayoral and CA decision-making – key decisions

• The provisions around “key decisions” are essentially identical to those applying to individual authorities. A key decision is one involving significant (the term of not defined) expenditure or significant savings covering more than two electoral wards or divisions in the area. As usual, the requirement is that certain details of such decisions be published 28 days in advance, although there are certain urgency provisions that apply.
• We have noted that the special urgency provisions provide for the 28 days requirement, and normal urgency provisions, to be waived if the OSC chair agrees. Where the Chair is not available, the duty falls to the Chair of the CA. Where the CA Chair is also the Mayor, this could involve the Mayor making a judgment on the urgency of one of his/her own decisions. We are not sure that this is appropriate and are seeking a view on the matter from DCLG. [UPDATE: 15/12/16. DCLG have advised us that they do not envisage that the Mayor will be classed as a “decision-maker” under this part, so the Mayor cannot find themselves in the position of giving approval to their own request for special urgency. We await further clarification on the definition of “decision-maker” for the purpose of the Order]

Scrutiny officer

• As with individual councils, the CA must appoint a “scrutiny officer”, with a duty to promote the function. Such an officer must be the employee of the CA – not any of the constituent councils. [UPDATE: 15/12/16. DCLG have advised us that their reading of this part (Clause 9 of the Order) is that it does not, in fact, preclude a seconded officer from a constituent council from holding the position of combined authority scrutiny officer]

Audit committees

• We won’t be providing detailed guidance on the audit provisions of the Order, or the wider audit requirements for CAs. CIPFA are planning to produce material on this subject in the coming months.

Thoughts arising

In line with Government’s long-standing approach, provisions on CA OSCs are about creating a framework within which scrutiny has freedom to act – Government has therefore avoided putting in place substantive requirements for things that scrutiny “must” do.

However, the framework does give rise to certain opportunities.

• Co-option, and the power to draw members from somewhere other than the constituent councillor corps. The fact that such members will be non-voting makes it easier to co-opt people onto the body without having an effect on political proportionality. The opportunity might be taken (particularly as steps are taken towards wider public service reform in local areas) to invite non-executives from other agencies and bodies to sit on the OSC.
• On the relationship between the Mayor, CA and CA OSC, there is a three-way system of accountability here which is unlike the more straightforward decision-making systems applying at local level. Even where the Mayor and CA are led by the same party, there may well be divergences of views on certain points, and scrutiny could provide a means for mediating in disagrements. Thought should be given to the role that scrutiny can play in building positive working relationships;
• The Order makes no direct reference to overview and scrutiny in individual councils but, given the powers conferred both by the 2009 Act and by the Order, some overlap is inevitable. We are not suggesting that local areas attempt to establish “protocols”, memoranda of understanding or even worse formal joint structures, but some thought to joint working needs to be given. As we noted at the start, the Order is part of a permissive framework that permits such discussions to happen.