Economic prosperity boards and combined authorities
Consultation on draft statutory guidance
www.communities.gov.uk
community, opportunity, prosperity
Economic prosperity boards and combined authorities
Consultation on draft statutory guidance
February 2010
Department for Communities and Local Government
Communities and Local Government
Eland House
Bressenden Place
London
SW1E 5DU
Telephone: 0303 444 0000
Website: www.communities.gov.uk
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February 2010
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Contents | 3
Contents
About this consultation
4
Section 1
Introduction
8
Section 2
Main features of EPBs and combined authorities
10
Section 3
The review
21
Section 4
The scheme
30
Section 5
The statutory order
46
Section 6
Changing an EPB or combined authority
49
Section 7
Glossary
53
4 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
About this consultation
Scope of the consultation
Topic of this
consultation:
Draft guidance on economic prosperity boards (EPBs) and
combined authorities, established through Part 6 of the Local
Democracy, Economic Development and Construction Act 2009.
Scope of this
consultation:
Purpose of consultation is to get stakeholders’ views on this draft
version of guidance on EPBs and combined authorities.
Geographical
scope:
England
Impact
Assessment:
Not applicable.
Basic Information
To:
Local authorities, public and private sector bodies involved in local
economic development and regeneration, businesses of all sizes
and the general public.
Body/bodies
Economic Development Division
responsible for
Local Economic Development and Renewal Directorate
the consultation: Communities and Local Government
Duration:
12 week public consultation (4 February to 29 April).
Enquiries:
Colin Lovegrove
Communities and Local Government
Economic Development Division
Zone 3/G10 Eland House
Bressenden Place
London SW1E 5DU
Telephone 0303 4443147
Or by email: [email protected]
How to respond: To either of the addresses above.
Additional
ways to become
involved:
Not applicable.
After the
consultation:
We shall take into account the responses to this consultation in
preparing final guidance on EPBs and combined authorities, which
we intend to publish in early 2010.
About this consultation | 5
Compliance
with the Code
of Practice on
Consultation:
The consultation complies with the Code.
Background
Getting to this
stage:
The Review of Sub-National Economic Development and
Regeneration, July 2007, stated that the Government would work
with interested sub-regions to explore the potential for allowing
groups of local authorities to establish statutory sub-regional
authorities which enable pooling of responsibilities on a permanent
basis for economic development policy areas beyond transport.
Part 6 of the Local Democracy, Economic Development and
Construction Act 2009 includes provisions for the establishment
of economic prosperity boards and combined authorities. These
provide a formal structure to lead collaboration between relevant
local authorities on sub-regional economic development and
regeneration (and transport in the case of combined authorities).
Previous
engagement:
Prosperous Places: Taking Forward the Review of Sub-National
Economic Development and Regeneration, March 2008, sought
views on statutory arrangements for sub-regional collaboration on
economic development and regeneration.
This consultation document and consultation process have been planned to adhere to the
Code of Practice on Consultation issued by the Department for Business Enterprise and
Regulatory Reform and is in line with the seven consultation criteria, which are:
1. Formal consultation should take place at a stage when there is scope to influence the
policy outcome.
2. Consultations should normally last for at least 12 weeks with consideration given to
longer timescales where feasible and sensible.
3. Consultation documents should be clear about the consultation process, what is being
proposed, the scope to influence and the expected costs and benefits of the proposals.
4. Consultation exercises should be designed to be accessible to, and clearly targeted at,
those people the exercise is intended to reach.
5. Keeping the burden of consultation to a minimum is essential if consultations are to be
effective and if consultees’ buy-in to the process is to be obtained.
6 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
6. Consultation responses should be analysed carefully and clear feedback should be
provided to participants following the consultation.
7. Officials running consultations should seek guidance in how to run an effective
consultation exercise and share what they have learned from the experience.
Representative groups are asked to give a summary of the people and organisations they
represent and, where relevant, who else they have consulted in reaching their conclusions
when they respond.
Information provided in response to this consultation, including personal information, may
be published or disclosed in accordance with the access to information regimes (these are
primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act 1998 (DPA)
and the Environmental Information Regulations 2004).
If you want the information that you provide to be treated as confidential, please be
aware that, under the FOIA, there is a statutory Code of Practice with which public
authorities must comply and which deals, amongst other things, with obligations of
confidence. In view of this it would be helpful if you could explain to us why you regard
the information you have provided as confidential. If we receive a request for disclosure
of the information we will take full account of your explanation, but we cannot give
an assurance that confidentiality can be maintained in all circumstances. An automatic
confidentiality disclaimer generated by your IT system will not, of itself, be regarded as
binding on the department.
The Department for Communities and Local Government will process your personal
data in accordance with the DPA and in the majority of circumstances this will mean that
your personal data will not be disclosed to third parties. Individual responses will not be
acknowledged unless specifically requested.
Your opinions are valuable to us. Thank you for taking the time to read this document
and respond.
Are you satisfied that this consultation has followed these criteria? If not or you have any
other observations about how we can improve the process please contact:
CLG Consultation Co-ordinator
Zone 6/H10
Eland House
London SW1E 5 DU
or by e-mail to: [email protected]
About this consultation | 7
Consultation process
Communities and Local Government invites comments on this draft guidance.
The consultation will run until 29 April 2010.
When responding please state whether you are responding as an individual or
representing the views of an organisation. Responses to this consultation must be received
by 29 April 2010.
You can email your response to: [email protected]
Or in writing to:
Colin Lovegrove
Communities and Local Government
Economic Development Division
Zone 3/G10 Eland House
Bressenden Place
London SW1E 5DU
8 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Section 1
Introduction
1.1 Part 6 of the Local Democracy, Economic Development and Construction Act
2009 (LDEDC Act) enables the creation of economic prosperity boards (EPBs) or
combined authorities. These are new sub-regional structures that are designed
to support the effective delivery of sustainable economic development and
regeneration, and, in the case of combined authorities, transport. EPBs and
combined authorities will operate within the wider framework of national
policies, regional strategies and sustainable community strategies.
EPBs and combined authorities:
• are corporate bodies
• are governance structures for sub-regional areas
• are voluntary for relevant authorities
• can be established in England, excluding Greater London
• can be given local authority functions (powers and duties) that relate to economic
development and regeneration
• combined authorities can, in addition, be given transport functions that are
available to integrated transport authorities (ITAs).
1.2 This draft guidance aims to explain the requirements of the Act and is designed
principally for groups of local authorities that are interested in exploring
whether an EPB or combined authority would be appropriate for their area.
The draft guidance will help relevant authorities to understand what these
arrangements are, and the process for creating, amending or abolishing one of
these bodies.
The LDEDC Act
1.3 The LDEDC Act establishes a framework for the creation of EPBs and combined
authorities. That is, it sets out a process for their creation and establishes
certain principles relating to their constitution and organisation. However,
the establishment of an EPB or combined authority is a local decision and any
particular one of these bodies should be tailored to the needs of the area for
Section 1 Introduction | 9
which it is established. The Act is therefore deliberately flexible and does not set
out any of the detail of how these bodies will function or the specific activities
they will carry out. This will be for the relevant authorities to determine as they
develop proposals for one of these bodies.
1.4 Part 6 of the LDEDC Act is modelled on part 5 of the Local Transport Act 2008,1
which provides for integrated transport authorities (ITAs). ITAs replaced the
former Passenger Transport Authorities and can also be set up in new areas.
They are designed to provide a more flexible option for the organisation of subregional transport. While there are differences, the processes for establishing
EPBs, combined authorities and ITAs are broadly similar, as are the membership
and constitutional requirements for these bodies as set out in the two Acts.
Authorities that are familiar with the provisions of the Local Transport Act 2008
on ITAs should therefore recognise many of the features and processes that
have been put in place for EPBs and combined authorities.
This draft guidance is divided into six sections:
• Section 2 gives an overview of the main features of EPBs and combined authorities
and provides an outline of the process for creating these bodies
• Section 3 gives guidance on how to undertake a governance review (the first step
towards creating an EPB or combined authority)
• Section 4 gives guidance on how to prepare a scheme (the second step towards
creating an EPB or combined authority)
• Section 5 describes the final stage of the process – from the publication of the
scheme to the creation of the EPB or combined authority by the Secretary of State
• Section 6 gives guidance on the process for amending or dissolving an existing EPB
or combined authority.
1
www.opsi.gov.uk/acts/acts2008/ukpga_20080026_en_11#pt5
10 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Section 2
Main features of EPBs and combined
authorities
2.1 EPBs and combined authorities are designed for groups of relevant authorities
that wish to work closely together to deliver improvements in economic
development, regeneration and, in relation to combined authorities, transport
across a sub-region. They are intended to support improved strategic decision
making on economic issues, and better coordination and delivery of economic
development interventions by local authorities. As the areas covered by
functional economic market areas (illustrated by, for example, travel to work
areas) are typically much larger than the areas of individual local authorities,
there is scope for improvements to be made to economic outcomes through
joint decision making and close coordination of delivery activity across these
economic areas.
2.2 By establishing an EPB or combined authority, a group of relevant authorities
will be able to create a sub-regional body with legal personality that can act
across their combined area. This body will be able to take on functions and
responsibilities for economic development, regeneration and (in the case of
combined authorities) transport. An EPB or combined authority will provide a
mechanism for governing and managing economic development, regeneration
and transport activity across the sub-region. These bodies will be controlled
by their members, a majority of whom must be elected members of the
constituent local authorities.
EPBs and combined authorities:
• provide a formal structure to lead collaboration between relevant authorities on
sub-regional economic development and regeneration (and transport in the case
of combined authorities)
• provide a stable mechanism for long-term, strategic decision making on economic
issues across the whole of a functional economic sub-region
• can take a strategic view of economic development and where investment should
be made to support long-term, sustainable economic growth across the whole of
a sub-region
• enable trade-offs to be made at a strategic level, taking into account what is best
for the area as a whole
Section 2 Main features of EPBs and combined authorities | 11
• provide a means of giving strategic direction to the development of a low carbon
economy
• provide a single body that can represent the needs and strengths of the sub-region
to partners and investors
• enable partnerships of authorities to demonstrate that they are committed to
long-term joint working
• provide a means of overseeing and steering significant programmes of work/
investment in the area; and
• facilitate transparency, accountability and visible leadership for sub-regional areas.
In addition, combined authorities:
• allow for the streamlining of sub-regional arrangements; and
• provide a means of fully aligning and coordinating transport planning and wider
economic development and regeneration across a sub-region.
2.3 EPBs and combined authorities are not primarily aimed at producing efficiency
gains or improvements in public service delivery beyond economic development
and regeneration (and transport in relation to combined authorities), although
they are likely to bring associated benefits in these areas.
2.4 EPBs and combined authorities are also not a mechanism for making changes
to the boundaries of existing local authorities. If there is a case for amending
existing administrative boundaries in an area, this should be looked at through
a separate process.2
Combined authorities
2.5 Given the important links that exist between transport provision and wider
economic development and regeneration – including access to economic
opportunities – the Act provides for sub-regional governance mechanisms
on transport (ITAs) to be combined with those aimed at supporting broader
economic development (EPBs), into a single, combined authority. In simple
terms, a combined authority is an amalgamation of an ITA and an EPB.
However, there is not a necessity for either of these bodies to already exist
before a combined authority is established. Neither does a combined authority
need to operate in precisely the same way as any ITA or EPB that it replaces.
For more information on boundary change processes see the Local Government and Public Involvement in Health Act 2007:
www.opsi.gov.uk/acts/acts2007/ukpga_20070028_en_1
2
12 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
2.6 ITAs and EPBs can coexist without forming a combined authority, but,
as there are obvious benefits to be gained from a coordinated approach
to economic development, regeneration and transport, and to avoid the
proliferation of different structures at the sub-regional level, it is likely that
a combined authority will be more appropriate than separate ITAs and EPBs
in the same area. This means that where there is already an ITA in an area,
relevant authorities that have concluded that similar arrangements would be
appropriate for economic development and regeneration functions (which
may include the ITA itself) should expect to establish a combined authority that
incorporates the ITA, rather than establishing an EPB in the same area. In this
case, the requirements of the Local Transport Act 2008 in relation to abolishing
the ITA would need to be followed before the new combined authority could
be established. In practice, the two processes could run concurrently, as long
as the requirements of both Acts were met. Where there is no existing ITA,
it is likely that if there is a case for dealing with economic development and
regeneration matters at a sub-regional level, there will also be a case for
including transport considerations and relevant authorities are advised to carry
out a review of both economic and transport matters.
Difference between EPBs and combined authorities
2.7 The primary difference between EPBs and combined authorities is the functions
that they are able to be given under the Act. In summary, an EPB will be able to
be given the power to exercise any function of its constituent local authorities
that relates to economic development and regeneration. A combined authority
will be able to be given economic development and regeneration functions
in the same way as an EPB and, in addition, will also be able to take on any
of the functions that are available to ITAs, including certain functions of the
Secretary of State. Further information on ITAs and their functions can be found
in DfT guidance.3
2.8 Apart from their functions, another important difference between EPBs and
combined authorities is in the way that they are funded. EPBs do not have the
power to levy constituent authorities. Like ITAs, combined authorities will have
this power, but only in relation to their transport functions. In addition, EPBs
do not have borrowing powers whereas combined authorities will be able to
borrow for transport purposes but not for broader economic development and
regeneration activity. For more information on funding see paragraph 2.31
and 4.35.
Guidance on Governance Reviews and the Publication of Governance Schemes –
www.dft.gov.uk/pgr/regional/localtransportbill/guidancegovernance.pdf
3
Section 2 Main features of EPBs and combined authorities | 13
Main features of EPBs and combined authorities
Purpose
2.9 Section 91(5) of the Act specifies that an EPB must perform its functions with
‘a view to promoting the economic development and regeneration of its area’.
The Act also states, in section 99(1), that the Secretary of State may only make
an order to establish an EPB if he considers that doing so is likely to improve:
• the exercise of statutory functions relating to economic development and
regeneration in the area; and
• economic conditions in the area.
2.10 The purpose of an EPB is therefore to promote the economic development and
regeneration of the area for which it is established. This includes improving
the exercise of statutory functions relating to economic development and
regeneration in the area and overall economic conditions. ‘Statutory functions’
in this context is intended to refer generally to things which local authorities
can or must do in relation to economic development and regeneration. It
therefore includes specific powers and duties on authorities that relate to
economic development and regeneration as well as activity carried out in these
areas under more general powers, for example under the well being power.
2.11 EPBs should operate within the principles of sustainable development and
ensure that their activities support the attainment of sustainable economic
growth.4 EPBs should therefore ensure that they pursue their economic
goals in a way that supports rather than compromises the achievement of
environmental and social goals, including climate change adaptation and the
development of a low carbon economy.
2.12 Partnerships for Growth: A National Framework for Regional and Local
Development 5 sets out the national priorities for economic development,
and how local authorities (including in sub-regional partnerships), Regional
Development Agencies and national agencies can work together with all those
involved in economic development to promote growth. It stresses the need
for support for economic growth to be co-ordinated both vertically between
national, regional and local levels, and horizontally across local and regional
boundaries. The new regional strategies should provide a long term strategic
framework for each region, setting out the region’s economic, social and
environmental priorities. They should also ensure consistency between national
and sub-regional and local objectives. An EPB should ensure that its policies
are consistent with the regional strategy and the implementation plan that
underpins it and that it is rural proofed.
Economic growth that can be sustained and is within environmental limits, but also enhances environmental and social welfare and
avoids greater extremes in future economic cycles.
4
Partnerships for Growth: A National Framework for Regional and Local Economic Development, HM Government, December 2009.
5
14 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
2.13 A combined authority must also carry out its functions with a view to
promoting the sustainable economic development and regeneration of the area
for which it is established, as is the case for EPBs. However, it also has statutory
duties as a local transport authority, including the development of policies for
the promotion and encouragement of safe, integrated, efficient and economic
transport to, from and within its area which should be rural proofed.
2.14 In section 110(1), the Act states that the Secretary of State may only make an
order to establish a combined authority if he considers that doing so is likely
to improve:
• the exercise of statutory functions relating to transport in the area
• the effectiveness and efficiency of transport in the area
• the exercise of statutory functions relating to economic development and
regeneration in the area; and
• economic conditions in the area.
2.15 The overall purpose of a combined authority is therefore to promote
economic development and regeneration, and to develop and implement
transport policies in its area in accordance with its statutory duties. This
includes improving the exercise of statutory functions relating to economic
development, regeneration and transport, improving the effectiveness and
efficiency of transport and improving overall economic conditions. A combined
authority offers opportunities for alignment between these goals.
Voluntary
2.16 The creation of EPBs and combined authorities is voluntary for relevant
authorities. The Secretary of State does not have the power to direct
authorities to consider or establish EPBs or combined authorities. Authorities
must give their consent before all or part of their area can be included in
a formal proposal (a published scheme) for an EPB or combined authority.
The Department intends to specify in the Local Authorities (Functions and
Responsibilities) (England) Regulations 2000 that the function of deciding
whether to participate in the establishment of an EPB or combined authority
covering their area should be the function of the full council and not the
executive of a local authority. This is in line with the Department’s policy on
the allocation of functions between the full council and executive of local
authorities, which states that determination of the local authority’s policy
framework, budget and other constitutional and quasi-legislative functions are
to be the responsibility of the full council.
Section 2 Main features of EPBs and combined authorities | 15
Legal status
2.17 The Act sets out that EPBs and combined authorities will be ‘bodies
corporate’. This means that they will have a separate legal identity from their
constituent local authorities and that they will be able to undertake their own
administrative processes, for example hold budgets, employ staff and enter into
contracts. They may also have statutory powers and duties conferred on them,
which they are able to exercise in their own right. As best value authorities,
EPBs and combined authorities will be subject to inspection by the Audit
Commission.
Geographical conditions
2.18 The Act sets out certain conditions that an area must meet in order for an
EPB or combined authority to be able to be established for that area. These
conditions are that:
• the area must consist of the whole of two or more local government areas in
England (not including Greater London). These could be the areas of county
councils, district councils or unitary authorities.
• the area must be contiguous, as the legislation requires that a local authority
cannot be surrounded by an EPB or combined authority that it is not part of
(i.e. the EPB or combined authority’s area cannot be ‘doughnut’ shaped), nor
can a local authority be part of an EPB or combined authority if it does not adjoin
the rest of the area.
• no part of the area can be part of the area of another EPB or combined authority,
i.e. EPBs and combined authorities may not overlap or coexist across the same
geographical area. It is also not possible for the area of a combined authority to
overlap with the area of an ITA.
2.19 These conditions are designed to ensure that there are no ‘gaps’ in the
area covered which could cause difficulties in ensuring effective economic
development. They also ensure that these arrangements do not overlap,
as this would undermine their ability to take decisions about the economic
development of their area and weaken their overall effectiveness. Combined
authorities may not overlap with ITAs as this would lead to there being two
local transport authorities in place for the same geographical area.
2.20 While the area of an EPB or combined authority must be made up of whole of
two or more local authority areas, in a two tier area it will be possible for an
EPB or combined authority to cover the area of one or more districts without
including the whole of the county’s area. It is also possible that different
districts within the same county could be part of different EPBs or combined
authorities. In such cases the county council would be a constituent authority
of the EPB (or in the second case, both EPBs).
16 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
2.21 EPBs and combined authorities do not have to fall within the regional
boundaries set out in the Regional Development Agency Act 1998, but are
required to be entirely within England. Given London’s unique status and
governance arrangements, the provisions in part 6 of the LDEDC Act do not
apply to London authorities and they will not be able to become part of an EPB
or combined authority. The provisions for these bodies also do not apply to the
Isles of Scilly.
Membership and voting arrangements
2.22 The activities of EPBs and combined authorities will be governed by their
members, a majority of whom must be elected members of the constituent
local authorities. In addition, each ‘representative authority’ must have at least
one of its elected members appointed to the EPB or combined authority (see
sections 90(1) and (3), and 104(2) of the Act).
2.23 Representative authorities are:
• unitary district councils that are within the EPB or combined authority
• county councils whose whole area falls within the EPB or combined authority
• either the county council or all the relevant district councils if only part of a
county’s area falls within the EPB or combined authority.
2.24 This does not mean that councils that are not representative authorities cannot
have members on the EPB or combined authority, only that there must be at
least one elected member for each of the representative authorities. This will
ensure that each geographical area within the EPB or combined authority’s
boundaries is represented by at least one councillor. There are no requirements
as to the number of members that the EPB or combined authority should have.
2.25 It will be possible, but not required, for persons other than elected councillors
to be members of the EPB or combined authority, although elected councillors
must always be the majority of members. The constituent local authorities will
decide whether they wish non-local authority members to be appointed and,
if so, by what process, when they develop proposals for an EPB or combined
authority to be created in their area. Membership could, for instance, include
advisers on environmental or rural matters who would be well placed to help
them deliver their ambitions in a sustainable way. Sub-section 90(5) of the
LDEC Act provides that an order establishing an EPB or combined authority
must provide for any non-local authority members of an EPB or combined
authority to be non-voting members. However, once the body has been
established, the local authority members may decide, if they wish to, to extend
voting rights to any non-local authority members.
Section 2 Main features of EPBs and combined authorities | 17
Executive arrangements
2.26 The Act allows executive arrangements to be established for an EPB or
combined authority, similar to the executive arrangements in place in most local
authorities. This means that an executive, which could be a single member or
a small group of members, can be created to make specific decisions on behalf
of the body as a whole. The constituent local authorities will decide when
developing proposals for an EPB or combined authority whether they wish it to
have an executive and, if so, what form it will take and what powers it will be
able to exercise.
Functions – EPBs
2.27 As the purpose of an EPB is to promote the sustainable economic development
and regeneration of its area, its functions should be those that allow it to
fulfil this role. However, economic development and regeneration depend on
a variety of interconnected policies and activities and the right approach to
these issues will vary from place to place. The Act therefore does not provide a
definition of ‘economic development and regeneration’ or of the functions that
relate to these activities. The Act allows for any function of the participating
local authorities to be granted to an EPB. It will be for local authorities to put
forward the functions they wish an EPB for their area to be able to exercise
when they develop their proposals, and to make a case for how these functions
will enable the EPB to fulfil its purposes.
2.28 Transforming Places; Changing Lives: Taking Forward the Regeneration
Framework sets out the Government’s three priority outcomes for regeneration:
• improving economic performance and tackling worklessness, particularly in
deprived areas
• creating the right conditions for business growth which could include
investment in infrastructure, land use, and a better public realm; and
• creating sustainable places where people want to live and can work and
businesses want to invest.
Local authorities should have regard to these outcomes in considering what
functions they would like to grant to an EPB.
2.29 The Act provides for an EPB’s functions to be made exercisable generally or
subject to conditions. It also enables functions to be made exercisable only by
the EPB (i.e. the function to be transferred to the EPB) or by both the EPB and
the local authorities (i.e. the function to be shared). There is no provision in the
Act for EPBs to be given tax raising powers.
18 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Functions – combined authorities
2.30 Combined authorities may be given functions of the constituent local
authorities in the same way as EPBs and it will again be for local authorities to
propose the functions the new body will need and to justify this decision. In
addition, combined authorities may be delegated functions of local authorities
and the Secretary of State and have powers and functions of ITAs transferred
to them under the provisions of chapter 2 of part 5 of the Local Transport Act
2008. They also have certain functions and powers in their own right, such as
the well-being power.
Funding and financial powers – EPBs
2.31 EPBs will be funded by their constituent councils. The basis by which the
contribution of each participating council will be determined is not specified
in the Act and should be agreed by the local authorities when drawing up
proposals for an EPB. The Secretary of State may give funding to EPBs under
section 31 of the Local Government Act 2003, although the Government does
not intend to provide any additional funds to EPBs over and above what would
already be provided to their area for the activities they will be carrying out.
2.32 EPBs do not have any tax raising powers and will not have the power to issue a
levy to constituent authorities. Nor will they have the power to borrow.
Funding and financial powers – combined authorities
2.33 As combined authorities are able to take on the functions and powers of ITAs,
the Act provides them with similar financial powers to those that are available
to ITAs, including the power to borrow and the power to levy constituent
authorities. However, these powers will only apply in relation to a combined
authority’s transport functions. Combined authorities will therefore be able
to levy constituent authorities to meet costs that are attributable to their
transport activities and to fund transport projects, and will be able to borrow
for transport purposes. A combined authority cannot fund any activity whose
overarching purpose is not to deliver transport objectives or functions by means
of the levy or through borrowing. These other costs will need to be met by
constituent councils according to an agreed formula, as is the case for EPBs.
The Secretary of State will have the power to give section 31 funding to a
combined authority, but does not expect to use this power to provide a level of
funding over and above the level previously awarded to the constituent local
authorities for the activities that the combined authority carries out.
Section 2 Main features of EPBs and combined authorities | 19
Overview of the process for creating an EPB or
combined authority
2.34 The process for establishing an EPB or combined authority falls into three
broad steps:
• A group of relevant authorities that are interested in strengthening governance
arrangements for sub-regional economic development carries out a review.
This review will assess existing governance arrangements for the delivery of
economic development, regeneration and transport in an area, and take a view
as to whether there is scope to improve outcomes by making changes to these
arrangements.
• If the review concludes that establishing an EPB or combined authority would be
beneficial for the area concerned, the authorities may then draw up a scheme
for the new body. This should set out the detail of its proposed constitutional
and operating arrangements.
• Once the scheme has been completed and published, the Secretary of State
will consider whether creating an EPB or combined authority will meet the
tests set out in the Act and will consult with the authorities concerned and any
other appropriate persons. If the Secretary of State considers that creating an
EPB or combined authority will be beneficial, a draft order will be laid before
Parliament. This must be approved by a resolution in each House of Parliament
before the order which brings the new body into being may be made.
20 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Process for creating an EPB or combined authority
A group of local authorities decide to review the
government arrangements for economic
development, regeneration and transport in
an area.
The authorities carry out the review,
which concludes that …
Existing arrangements
work well
Changes are needed
An EPB should
be established
A combined
authority should
be established
Existing arrangements
should be strengthened
or modified
The authorities prepare and publish a scheme for
either an EPB or combined authority as
appropriate
The Secretary of State considers
the scheme
The Secretary of
State decides
scheme is not
appropriate and
no order is made
The Secretary
of State lays a
statutory order
before
Parliament
Draft order
approved by
both Houses of
Parliament and
becomes law
Section 3 The review | 21
Section 3
The review
3.1 The first stage in the process of creating a new EPB or combined authority
is for relevant authorities to carry out a governance review. The purpose of
the review is to determine whether the existing governance arrangements
for economic development, regeneration and (it is recommended) transport
in the area are effective or whether the area would benefit from changes,
including establishing a new EPB or combined authority. In undertaking such
a review, local authorities will need to look at the economic development and
regeneration landscape in the round, including the activities of other agencies.
However, the review should focus on the governance arrangements for local
authority functions that might be addressed by the formation of a new subregional body, and not the functions and performance of those other bodies.
3.2 It is recommended that authorities that wish to undertake a review under the
LDEDC Act carry out a review under section 108 and look at arrangements for
economic development, regeneration and transport. Reviews should not be
carried out that exclude transport considerations unless there are very good
reasons for why this is appropriate. If authorities only wish to review transport
governance arrangements, they may carry out a review under the Local
Transport Act 2008.
3.3 Where an area has already reviewed or is reviewing its transport governance
arrangements under the Local Transport Act 2008 and authorities decide they
also wish to review the governance of economic development and regeneration
activity, the information obtained through the transport governance review
should provide a useful starting point for a wider review under the LDEDC Act.
Depending on the age and focus of the transport governance review, it may
be necessary to extend or refresh the information it contains, but there is no
need to duplicate existing work. If a transport governance review has been
completed and changes are being implemented as a result of it, authorities will
need to make a judgement as to whether it is preferable to first complete these
transport changes before commencing another wider review, or to postpone
changes to transport arrangements until the wider review has been carried out.
22 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Who can do a review?
3.4 If the review takes place under section 108 of the Act, as is recommended, it
may be carried out by any two or more counties, districts, ITAs or EPBs. That
is, if an EPB or ITA already exists in an area it may be one of the authorities
that takes forward a review for that area. A review that does not include
transport considerations may be carried out by any two or more county or
district councils in England.6 The expectation is that reviews will normally
be taken forward by groups of authorities that already have some history of
joint working and who wish to explore the possibility of establishing stronger
governance arrangements across their combined area. Where there is an ITA
(or EPB) already in place, there should be an expectation that this body will be
closely involved in the review process.
The decision to carry out a review
3.5 The decision to carry out a governance review is likely to be taken by a group of
local authorities that already have some record of joint working, but who feel
that stronger sub-regional governance arrangements are needed to deliver their
strategic ambitions for the area, particularly in relation to economic matters.
This in turn is likely be informed by evidence that the sub-regional economy is
not performing to its full potential and that there are particular weaknesses and
issues that can only be addressed by strong leadership and effective decision
making at the sub-regional level. The consideration of the evidence assembled
for the preparation of the regional strategy may, for instance, be the first
instance where it becomes apparent that existing governance arrangements are
inadequate.
3.6 In general, authorities that are considering reviewing governance arrangements
for economic development, regeneration and transport under the LDEDC
Act are advised to ensure that they have a thorough understanding of
economic conditions across their combined area. Good evidence will be
critical in establishing whether there is a case for strengthening governance
arrangements, including the benefits stronger arrangements could be expected
to deliver. The local economic assessment that all upper tier authorities will
be required to prepare under part 4 of the LDEDC Act from April 20107 will
be useful in ensuring that this evidence is in place. Groups of authorities that
are already working together on economic development issues and/or wish
to strengthen their collaboration are encouraged to carry out joint economic
London borough councils, the Common Council of the City of London and the Council of the Isles of Scilly are not included in the
councils that may undertake reviews under the Act.
6
Draft guidance for local authorities on carrying out the local economic assessment can be found at:
www.communities.gov.uk/publications/citiesandregions/localeconomicassessmentsconsult
7
Section 3 The review | 23
assessments for their combined area. The evidence gathered as part of the
preparation of relevant regional strategies for the area will also provide valuable
information as to the condition of the sub-regional economy and whether
existing arrangements could be improved.
3.7 In addition, the Audit Commission will report annually on upper tier local
authority areas through the Comprehensive Area Assessment (CAA). This will
include consideration of local outcomes which have a sub-regional perspective.
CAA reports may therefore help to identify issues which should be tackled at a
sub-regional level and are likely to be a useful source of evidence for authorities
who wish to strengthen their sub-regional working arrangements.
The area covered by the review
3.8 The Act provides that a review must cover the areas of those authorities that
are undertaking it. Where a county council is one of the authorities carrying out
the review, the review area does not have to include the whole of the county
but must include the area of one or more of its districts.
3.9 While it is not a requirement of the Act, a review should normally cover an
area that forms a functional economic market area (FEMA). This is to ensure
that economic development and regeneration issues are being considered at
the most appropriate spatial scale. It is recognised that FEMAs are an imprecise
concept, that there is no universal approach to defining FEMA boundaries
and that boundaries will vary depending on which local markets are being
considered. Given this, the onus will be on local authorities themselves to
identify the different economic footprints which are most relevant and to
determine the FEMA as they think appropriate. There are a widely used set of
indicators which local authorities should view as a suite from which to pick
a combination that best reflects the key drivers of the local economy (e.g.
labour markets measured by travel to work patterns8, or retail markets by retail
catchment areas). The findings of the local economic assessment carried out by
participating local authorities will be helpful in identifying the key markets that
should be considered when determining the boundaries of the FEMA.
3.10 As the boundaries of a FEMA will vary depending on the markets chosen there
must be strong evidence as to which sub-regional markets are most important
and so where the FEMA boundaries lie. If the FEMA is a different geography
to the proposed review area, authorities are advised to take steps to bring the
review area more closely in line with the economic geography.
DfT guidance on conducting governance reviews under the LT Act provides a list of data sources for reviewing boundaries (at Annex B)
which may be useful in determining the FEMA.
8
24 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
3.11 It is expected that all the authorities whose area is covered by the review should
be involved in the review process (including any existing ITA or EPB). However,
the Act does allow the area of a review to extend across the area of authorities
other than those that are undertaking the review. This may be appropriate
to ensure that links to wider governance arrangements and economic areas
are captured. If necessary, the area of the review can be altered as the work
proceeds.
What should the review cover?
3.12 Section 108 of the Act provides that relevant authorities may undertake a
review of the effectiveness and efficiency of transport within the area covered
by the review and of the effectiveness and efficiency of arrangements to
promote economic development and regeneration within the area covered by
the review.
3.13 Before a scheme for an EPB or combined authority can be prepared, the review
will need to have shown that the creation of one of these bodies would be
likely to improve:
• the exercise of statutory functions relating to economic development,
regeneration and transport in the area
• (for combined authorities) the effectiveness and efficiency of transport in the
area; and
• the economic conditions in the area.
3.14 The purpose of the review is therefore to determine whether the existing
governance arrangements for promoting economic development, regeneration
and transport (rather than transport services more generally) in the area,
including the exercise of relevant statutory functions, can be improved and
made both more effective and more efficient. It needs to consider the systems,
structures and procedures that are in place across the area to make decisions,
set strategy, manage delivery, assess performance and report on progress.
Once this has been established, conclusions can be drawn about whether the
area would benefit from changes in its governance arrangements, such as the
establishment of an EPB or combined authority.
3.15 The outcome of a review should be:
• an assessment of the effectiveness and efficiency of existing governance
arrangements for economic development, regeneration and transport across
the area
Section 3 The review | 25
• an analysis of the options available for making changes to these governance
arrangements – such as leaving existing governance unchanged, strengthening
or restructuring existing governance arrangements, establishing an EPB, and
establishing a combined authority
• a view as to which option is likely to be most beneficial.
3.16 Where an ITA already exists within the area being considered, relevant
authorities may wish to carry out a review which meets the requirements of
both Acts. This will enable the review to also examine the option of making
changes to the existing ITA. For instance if a review recommends that a new
combined authority should be established, a review under the Local Transport
Act showing that the ITA should be dissolved (so that it can be replaced by the
combined authority) would also be required.
3.17 As for ITAs, if there is an existing EPB in the area, a review will need to be
carried out under the LDEDC Act showing that it should be abolished before a
combined authority can be created. Again, the two reviews may be carried out
as part of the same exercise.
Stakeholders
3.18 Stakeholders are likely to be an important source of evidence for how well
existing governance arrangements in the area are functioning and where
there is scope for improvements to be made. Local authorities will need to
identify who their relevant stakeholders are in this respect. The Government’s
expectation would be that such a list would include representatives of the
business community, service providers and other delivery partners, relevant
regulatory bodies and relevant public bodies including Government advisors on
the natural and built environment and rural champions. It would therefore be
sensible for stakeholders to be informed that authorities are planning to take
forward a review, to be kept up to date about its progress and main findings,
and to have opportunities to input into the review as it progresses. The relevant
Government Office(s) will also wish to be informed if authorities are carrying
out a review under the LDEDC Act.
Review stages
3.19 The review should go through the following stages:
• Identify existing governance arrangements in place to support and manage
activity in relation to economic development, regeneration and transport.
26 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
• Gather evidence as to the effectiveness and efficiency of existing governance
arrangements. Evidence on effectiveness should cover both how well current
arrangements are able to manage the delivery of economic development and
transport in the area, and also their accountability and transparency to residents
and stakeholders.
• Assess the overall effectiveness and efficiency of existing arrangements and set
out areas of weakness. Identify available options for making changes to existing
governance structures and assess the pros and cons of each one, including their
value for money.
• Reach a conclusion as to whether changes to the governance of the area are
likely to deliver improvements and if so, what changes should be implemented.
Identify existing governance arrangements
3.20 Authorities should begin by confirming the area to be covered by the review
in terms of the local authority areas to be included. They should then identify
existing systems, structures and procedures that are in place across the area
to make decisions, set strategy, manage delivery, assess performance and
report on progress in relation to economic development, regeneration and
transport activities. This should include identifying the reporting lines and
interrelationships between different decision making bodies. The analysis
should also make reference to the links to relevant decision making bodies at
the local, regional and national level.
3.21 The review will need to have concluded that an EPB or combined authority
would be likely to improve the exercise of statutory functions relating to
economic development, regeneration and transport in the area before a
scheme can be prepared. The term ‘statutory functions’ is intended to refer
generally to things which local authorities can or must do in relation to
economic development, regeneration and transport. It therefore includes
specific powers and duties on authorities that relate to these issues as well as
activity carried out under more general powers, for example under the well
being power. It follows from this that when the review is identifying existing
governance arrangements it should look at any mechanism, structure or
process which local authorities in the area use to manage activity in relation to
these matters.
3.22 The Act does not provide a definition of economic development and so local
authorities should use their judgement as to the type of activity that should
be included in the review in relation to this issue. Unless there is some sound
reason for excluding the following areas the Government views that it should
include housing, spatial planning, employment, skills and enterprise.
Section 3 The review | 27
3.23 The review should also look at how interventions in deprived areas are
managed, including activity aimed at physical regeneration. In relation to
transport, authorities will need to look at the provision and administration
of transport as a whole, without ruling particular transport functions out of
scope.9
Gather evidence on the effectiveness and efficiency of existing
governance arrangements
3.24 This stage of the review should look for evidence as to how effective and
efficient the governance arrangements identified under the previous section are
at delivering economic development, regeneration and transport for the area as
a whole. It should look for evidence on questions such as:
• are there clear decision making processes in place and are the remits of different
bodies and structures in the area well understood?
• are there opportunities for strategic decisions to be taken for the benefit of the
area as a whole?
• are performance management and delivery of objectives monitored effectively?
• are there effective mechanisms for intervening when delivery is not progressing
as planned?
• are there effective processes in place for managing risk?
• is the area considered to be performing to its economic potential and, if not, are
there governance issues which may be hindering improved performance?
• do individual areas take account of the potential impacts of their policies on
neighbouring areas?
• can disputes and disagreements across the area of the review on relevant issues
be effectively resolved?
• what barriers and problems are there in relation to governance which may be
preventing outcomes from being achieved effectively?
• are stakeholders and residents aware of and able to be involved in decision
making processes?
• is there duplication in the activity of any bodies or structures?
• are decisions made and activities carried out within reasonable timeframes or are
delays caused by inefficiencies in processes?
• are all parties involved clear about their own role and the overall purpose of the
activities they are involved in?
More information on reviewing transport activity can be found in DfT guidance on ITA reviews:
http://webarchive.nationalarchives.gov.uk/+/http:/www.dft.gov.uk/pgr/regional/localtransportbill/guidancegovernance.pdf
9
28 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
3.25 Stakeholders will, in particular, be a useful source of evidence for this stage of
the review. Authorities should seek as wide a range of views and evidence as
possible to enable them to assess whether current arrangements are operating
successfully and how much scope there is for improvements to be made.
Assess current arrangements and identify and appraise options
3.26 The evidence gathered in the previous stage of the review should give
authorities a good idea as to whether current arrangements are able to deliver
effectively and efficiently for the area concerned. If problems and weaknesses
with the current arrangements have been identified, the review should look at
what scope there is to make improvements in current arrangements, and how
gaps or overlaps in delivery and accountability can be addressed.
3.27 The review should identify the possible options for change and set out the pros
and cons of each of the options identified. The options should include retaining
current governance arrangements unchanged and strengthening or modifying
existing arrangements, as well as establishing an EPB or combined authority.
3.28 The options should then be evaluated to determine which would be the most
beneficial. Points to consider include:
• the likelihood that the option will address weaknesses in the current
arrangements
• the extent to which the option is likely to help the achievement of improved
economic development, regeneration and transport in the area
• the likely cost of the option – distinguishing between start-up and ongoing
costs, and including any financial benefits or savings that it is likely to lead to
• overall value for money of the option, looking not just at financial benefits
but also other benefits that would be delivered (such as improvements in
accountability); and
• the risks associated with the option.
Reaching conclusions
3.29 The review should come to a conclusion as to which option is likely to deliver
most benefits in terms of more effective and efficient governance for the area,
better delivery of local authority interventions and therefore improved economic
conditions and transport services in the area more broadly. When calculating
the benefits of any option, local authorities will need to take into account the
likely costs of making changes to existing arrangements and whether these will
be outweighed by the anticipated benefits within a reasonable timescale.
Section 3 The review | 29
3.30 If the conclusion of the review is that an EPB or combined authority would be
beneficial, it should effectively produce a business case for the new body. That
is, the review’s final report should be clear about why an EPB or combined
authority is the best option for the area and what benefits the proposed new
body is expected to deliver, including why the EPB or combined authority is
likely to be more effective and efficient than current governance arrangements,
and what this is likely to lead to in terms of improved outcomes.
30 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Section 4
The scheme
4.1 The second stage in the process of creating a new EPB or combined authority
is the preparation and publication of a ‘scheme’ for the new body (see
sections 98 and 109 of the Act). The scheme will be the basis for the creation
of the new body and should contain information on the area it will cover; its
membership, voting and any executive arrangements; its functions and the way
in which it will be funded. These details will be included in the statutory order
that is needed to create the new body. Authorities will also need to consider
the operational arrangements that they wish to put in place for the new body.
4.2 When preparing the scheme, authorities must keep in mind the outcomes and
recommendations of the governance review, to ensure that the new structure is
able to address the weaknesses identified in existing arrangements.
Before preparing the scheme
4.3 In order for a group of authorities to be able to proceed to the preparation of
a scheme for an EPB or combined authority in their area, they must first have
carried out a review as described in the previous chapter. The review must have
concluded that the establishment of either an EPB or a combined authority for
the area is likely to improve:
• the exercise of statutory functions relating to economic development and
regeneration in the area; and
• economic conditions in the area
and, for a combined authority, that it would also be likely to improve:
• the exercise of statutory functions relating to transport in the area; and
• the effectiveness and efficiency of transport in the area.
4.4 If the review recommends that an EPB or combined authority would be
beneficial for the area, then the authorities may choose to prepare a scheme.
There is no requirement to prepare a scheme, regardless of the outcome of
the review.
Section 4 The scheme | 31
4.5 uthorities should note that they are not expected, in preparing the scheme, to
make proposals as to how the statutory instrument needed to create the new
body should be drafted. It will be sufficient for authorities to prepare a scheme
setting out how they would wish an EPB or combined authority in their area
to operate, without identifying how this should be translated into a statutory
instrument.
Consultation
4.6 Relevant authorities will need to engage partners and stakeholders very closely
both to receive their input into the design of the new body and to determine
how the new EPB or combined authority will interact with these organisations.
Whilst there is no requirement to carry out a formal public consultation the
authorities may wish to consider doing so, and the Secretary of State will wish
to see evidence that the views of stakeholders have been sought and taken into
account when preparing the scheme. The scheme or accompanying documents
should therefore make clear what consultation has been carried out and
provide a summary of the views received.
The scheme content (1)
4.7 The scheme must include the following information in relation to the new body:
• the area that it will cover, i.e. which local authorities’ areas will be included
• the functions of the proposed EPB or combined authority
• the constitutional arrangements for the new body – i.e. the membership and
voting arrangements, whether the new body will have an executive and, if so,
how this will operate
• the basis by which the body will be funded by constituent authorities
• in relation to a combined authority, whether the combined authority will have
levying powers
• any property, rights and liabilities that will be transferred to the new body; and
• the name by which the EPB or combined authority will be known.
Area
4.8 The Act provides that the area covered by the scheme must consist of all or
part of the area covered by the review and must meet conditions A, B and C
in sections 88 or 103. These are: that the area consists of the whole of two or
more local government areas in England and that it is contiguous. In practice,
the scheme should normally cover the area of the group of local authorities
32 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
who carried out the review, which should form a functional economic market
area, although the review area may have changed during the course of
the work.
Functions
4.9 As mentioned in chapter 2, EPBs and combined authorities can be given power
to exercise any function of their constituent local authorities, i.e. any legal
power or duty that has been given to or placed on any of the authorities that
will be within the EPB or combined authority’s area. Combined authorities can
also be delegated functions under the provisions of the Local Transport Act
2008, including those of the Secretary of State (see paragraph 4.20 below).
Constituent authorities should reach a collective decision as to which functions
they wish their EPB or combined authority to be able to exercise and include
this information in the scheme.
4.10 The functions that can be given to EPBs and combined authorities are
constrained by the provision that the Secretary of State must consider that
the function can appropriately be exercised by that body (section 91(2)).
This means that the Secretary of State will need to be convinced that the
function will help the EPB or combined authority to fulfil its purposes (i.e. to
promote the economic development and regeneration of its area and, for
combined authorities, to develop and implement transport policies in its area
in accordance with its statutory duties), and effectively limits the functions that
can be given to EPBs and combined authorities to those that relate to their
purposes. However, as economic development and regeneration functions
are not defined in the Act, it will be up to local authorities to make the case
for why any particular function should be made exercisable by the EPB or
combined authority.
4.11 Authorities should also bear in mind the requirement that the Secretary of
State must consider that an EPB or combined authority is likely to deliver
improvements in the area before agreeing to create a new body. The authorities
should therefore focus on providing the EPB or combined authority with those
functions that will enable it to address the issues and weaknesses of current
arrangements, as identified in the review stage.
4.12 The Act allows for a function to be made exercisable by an EPB or combined
authority instead of by the constituent local authorities, or concurrently with
the local authorities. In the latter case, the authorities will need to be clear in
the scheme about the circumstances in which the function will be exercised by
the new body, in order to avoid duplication of activity. The “well being power”
is an example of a function that would most probably be made exercisable
concurrently by the new body and the local authorities, as the latter would be
Section 4 The scheme | 33
unlikely to wish to give up the ability to act under this power. Other powers
and duties could, however, be entirely given over to the EPB or combined
authority. The duty in section 69 of the LDEDC Act for county councils and
unitary district councils to assess local economic conditions is an example of
a duty that could be passed to an EPB or combined authority to carry out on
behalf of all the constituent local authorities.
4.13 The Act also allows for a function to be made exercisable by an EPB or
combined authority either generally or subject to conditions or limitations.
This may be particularly useful where a function is made exercisable by an
EPB or combined authority concurrently with the constituent local authorities.
For example, a function could be made exercisable by the new body only in
particular circumstances, or only after consulting certain organisations. It would
also be possible to use the power to place limitations on an EPB or combined
authority’s functions to limit the geographic area across which functions could
be exercised. Authorities should agree among themselves whether limitations
or conditions are necessary for particular functions but should avoid seeking
to apply these extensively. The new body is unlikely to be effective if there
are large numbers of conditions applied to the exercise of each function. Nor
should individual authorities seek to use the limitations to opt out of particular
functions that they do not agree should be passed to the EPB or combined
authority. There should be agreement between authorities as to the functions
that should be made available to the new body.
4.14 Authorities may agree to transfer wide powers to a EPB or combined authority,
which might then delegate responsibility for delivery for some of those
functions or elements of them back to the authorities transferring powers.10
The advantage of such an arrangement is that it would ensure wide strategic
power for the combined authority without necessarily disturbing delivery
arrangements.
‘Well being power’
4.15 Under section 2 of the Local Government Act 2000, local authorities have the
power to do anything which they consider is likely to achieve the promotion
or improvement of the economic, social or environmental well-being of their
area.11 Local authorities must, in determining whether to exercise this power,
have regard to their sustainable community strategies under section 4 of the
same Act. ITAs and combined authorities have a similar well-being power under
section 99 of the Local Transport Act 2008. EPBs will not automatically have a
‘well-being power’ but this power is a function that can be granted to the EPB.
EPBs and combined authorities are local authorities within the meaning of section 101 of the Local Government Act 1972. However,
if the EPB is to adopt executive arrangements, the order may have to provide expressly for delegation of executive functions.
10
Power to Promote Economic, Social or Environmental Well-being – Final guidance, DETR, May 2001.
11
34 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
4.16 The EPB or combined authority may only use the ‘well being power’ in pursuit
of its own purposes (to promote economic development and regeneration and
to develop and implement transport policies in its area) rather than for the
promotion or improvement of the well-being of the area in general. Even with
this limitation, the ‘well being power’ is wide ranging. Therefore, if authorities
wish the EPB to have this power, they should be clear about the areas in which
they wish the new body to act, and the process for resolving any disagreements
between the EPB and constituent local authorities. One option would be for a
group of authorities to propose granting the ‘well-being power’ to the EPB or
combined authority and then qualify in the scheme what they would want the
new body to be able to do under this power. This provides an opportunity for
the group of authorities to specify the core activities that the EPB or combined
authority will be expected to carry out.
4.17 Because of the link between the well-being power and the sustainable
community strategy, it may only be appropriate to grant the well-being power
to a EPB where the strategies of the constituent authorities are closely aligned.
4.18 Chapter 2 of part 2 of the LDEDC Act enables EPBs and combined authorities
to participate in mutual insurance arrangements without the need to transfer
the function from the constituent local authorities.
Transport functions
4.19 If a group of authorities is proposing the establishment of a combined authority
for their area they should consider the transport functions that they would
like to be given to the new body. There are various different possible scenarios
depending on whether an ITA already exists in the area or across part of the
area concerned. If an ITA already exists, authorities could choose to transfer its
functions to the combined authority without amendment. Alternatively, they
could take the opportunity to give further transport powers to the new body or
alter any conditions or limitations which were placed on the functions held by
the ITA. If there is no existing ITA for the any part of the area, authorities should
consider transport functions as set out in DfT guidance on ITAs.12
4.20 The Local Transport Act 2008 allows for the transfer of specific transport
functions to an ITA from the Secretary of State (excluding powers to make
regulations or other legal instruments, and powers to fix fees or charges)
and to an ITA from a metropolitan district council, county council or unitary
authority. The LDEDC Act provides that these functions can also be transferred
to combined authorities in the same way and that the functions may be made
subject to conditions. It should be noted that combined authorities will be local
transport authorities for their area and will therefore be required to prepare a
local transport plan (LTP) for that area.
http://webarchive.nationalarchives.gov.uk/+/http:/www.dft.gov.uk/pgr/regional/localtransportbill/guidancegovernance.pdf
12
Section 4 The scheme | 35
4.21 As with economic development and regeneration functions, any transport
function can only be granted to a combined authority if the Secretary of State
considers that it can be appropriately exercised by the combined authority.
Very broadly, this implies that functions to be transferred should either provide
for the delivery of transport services, or at least strongly relate to delivery. In
deciding whether to agree to transfers of functions, the Secretary of State will
consider both the potential impact on national users of transport infrastructure
or services, and whether the overall proposal for the combined authority will
deliver the strength of leadership required to provide continued effective
planning and delivery of services.
4.22 Local authorities may propose that the new body is given a power of
direction. This would allow the combined authority to direct one or more
of its constituent councils that they must or must not do certain things on a
specific road or class of roads. The activities which a direction could cover are
those which a particular local authority has the power to carry out as a traffic
authority (as defined under the Road Traffic Regulation Act 1984) or a highway
authority (as defined under the Highways Act 1980). This includes its powers
as a street authority. More details on the scope of this power to direct are
set out in sections 88 and 89 of the Local Transport Act 2008 and associated
DfT guidance.
Constitutional arrangements
4.23 ‘Constitutional arrangements’ refers to the arrangements for exercising the
functions and making the decisions which are the responsibility of the EPB or
combined authority. These arrangements include:
• the rules determining membership of the new body
• the voting powers of members
• executive arrangements
and, in the case of a combined authority:
• functions of any executive body.
Membership
4.24 Authorities will need to agree a process for appointing members to the EPB or
combined authority. These members will run the new body and have overall
responsibility for delivery of its functions, although certain matters may be the
responsibility of a smaller executive or delegated to staff or other bodies (such
as an executive body). The Act requires that a majority of the members of the
new body are appointed by the constituent local authorities from among their
own elected members, and also that each representative council appoints at
36 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
least one of its elected members to the new body (see section 90(1) of the
Act). The authorities should clearly set out in the scheme the process that will
be used to appoint local authority members to the body, both initially and to
deal with vacancies and other future changes, the length of their term and any
restrictions on the number of terms that can be served.
4.25 When deciding on the process for appointing local authority members,
consideration should be given to how an appropriate political balance between
members can be achieved, including the extent to which minority parties and
independents should be represented.13 Authorities will also need to consider
the effect of local council elections in the area on the membership of the EPB or
combined authority, as any local authority member who is not re-elected to the
council will have to resign their seat on the EPB or combined authority. If any of
the constituent authorities have directly elected mayors, consideration should
be given to whether these elected mayors should be able to be members of the
new body.
4.26 If authorities wish to do so, they may allow for non-local authority members
to be appointed to the EPB or combined authority, as long as these members
remain in a minority. The scheme should include information on the process
by which any such members would be appointed. These members might,
for example, include representatives of local business, environmental groups,
rural interest groups or other bodies that could properly advise EPBs, residents
groups and local authorities that border the EPB or combined authority. The
decision to include particular non-local authority members should be based on
an assessment of the expertise necessary to deal with particular issues faced by
that sub-regional area. For example, in ex-industrial areas, contaminated land
issues may be important, and expertise in this field would be of value.
4.27 There are no limitations in the Act on the number of members that may be
appointed to an EPB or combined authority, but authorities should be mindful
of the need to keep the body to a manageable size. The appropriate number of
members will partly depend on whether or not executive arrangements will be
put in place (see 4.30 below).
4.28 Authorities should decide and set out in the scheme the basis by which any
remuneration, including expenses and pension contributions, will be made to
members. If they wish to, authorities may agree that no remuneration will be
made to members, or that different allowances will be made to different types
of member (e.g. local authority and non-local authority members).
Rules on political balance contained in Part 1of the Local Government and Housing Act 1989 will apply if local authorities are
appointing three or more members to an EPB or combined authority.
13
Section 4 The scheme | 37
Voting
4.29 The scheme should provide information on how voting in the EPB or combined
authority will be carried out. The Act allows for different weight to be given
to the votes of different types of member. Authorities should therefore decide
whether they wish to establish a ‘one member, one vote’ arrangement, or
weight votes according to some criteria. The vote of the chair of the body
should also be considered. Authorities should specify in the scheme whether
a simple majority is required for the EPB or combined authority to agree
resolutions, or whether some other threshold should apply, either to all votes
or those on particular topics. It may be decided, for example, that the EPB or
combined authority’s budget must be passed by a two thirds majority.
4.30 Sub-section 90(5) of the LDEDC Act provides that an order establishing an EPB
or combined authority must provide for any non-local authority members of
an EPB or combined authority to be non-voting members. However, the Act
also provides that the local authority members may choose to allow non-local
authority members to have voting rights, once the body has been established.
These could be full or only partial voting rights, i.e. non-local authority
members could be permitted to vote only on particular issues or in specific
circumstances. The scheme should set out the process which local authority
members would need to go through if they wished to alter the voting rights of
non-local authority members.
Executive arrangements, including scrutiny
4.31 The Act allows local authorities, if they wish to, to establish executive
arrangements for their EPB or combined authority i.e. to allow for certain
matters or decisions to be the responsibility of an executive comprised of either
a single member or a small group of members.
4.32 The scheme should set out whether the new body will have an executive and,
if so:
• the form the executive will take, for example, a single executive member or a
small cabinet of executive members
• how the member(s) of the executive will be appointed, including whether or
not section 15 of the Local Government and Housing Act 1989 (duty to allocate
seats to political groups) should apply
• which functions of the EPB or combined authority will be the responsibility of the
executive
• what powers the executive should have to delegate its functions to a committee
of the EPB or combined authority or to another body
• what the access to information requirements should be in relation to the
proceeding of the executive; and
38 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
• how the discharge of functions by the executive will be reviewed and scrutinised
by the non-executive members of the EPB or combined authority.
4.33 The Act sets out that it will not be possible for anyone other than the EPB or
combined authority itself to agree its budget, i.e. this responsibility cannot be
given to an executive.
Passenger Transport Executives
4.34 Where a group of authorities is looking to establish a combined authority in an
area where there is an existing ITA, the role of any existing passenger transport
executive will need to be considered. Options include:
• retaining the PTE as a separate entity, as an executive body of the combined
authority; or
• merging the functions of both the ITA and the PTE into the new combined
authority.
Funding
4.35 EPBs: The Act does not set out funding arrangements for EPBs. The authorities
must therefore agree among themselves how the costs of the EPB will be met.
For example, the costs could be divided equally between all the authorities,
some weighting could be applied depending on the population or budgets of
authorities, or different percentages could be made payable by different types
of authority.
4.36 Authorities will need to consider making provision for the set up and running
costs of the new body. They will also need to decide whether they wish to
transfer capital and/or programme funding to the EPB and, if so, whether this
funding will be part of the share contributed by each authority or whether
it will managed through a separate process. EPBs will not have the ability to
borrow, but individual authorities may borrow in their own right and then
transfer these funds to the EPB, although the individual authorities will retain
accountability for such borrowing.
4.37 The formula for calculating the contributions of different authorities must be
included in the scheme and may form part of the statutory order that creates
the EPB. This will mean that the arrangement will be legally binding and the
EPB or the other authorities may have recourse to the courts in the event of
non-payment by any one of the constituent authorities. Authorities may also
wish to include in the scheme the timetable in which payment should be
made to the EPB. The annual corporate/business plan prepared by the EPB
should provide individual authorities with a good indication of their liabilities in
advance of any budgeting year.
Section 4 The scheme | 39
4.38 Combined authorities: The funding arrangements for combined authorities
allow them to levy constituent local authorities for transport purposes. For non
transport purposes, the body will be funded in the same way as for EPBs, and
the authorities must propose a suitable arrangement. Again, start up as well as
running costs will need to be considered.
4.39 The scheme will need to confirm whether the combined authority will levy for
transport costs. The scheme will then need to set out, as for EPBs, how the
costs of the combined authority that will not be met by a levy will be covered,
including any formula for dividing the costs between authorities.
4.40 For transport purposes only, a combined authority will be able to use prudential
borrowing powers. Combined authorities will not be able to borrow for nontransport purposes, except through constituent authorities pooling individually
borrowed funds, for which they will remain individually accountable.
Name
4.41 The authorities should agree between them what the new EPB or combined
authority will be called and set this out in the scheme. The name does not need
to include the words ‘Economic Prosperity Board’ or ‘Combined Authority’
The scheme content (2)
4.42 The information covered above must be contained in the scheme to allow the
Secretary of State to make a statutory order that both creates the new body
and sets out its functions, funding and constitutional arrangements. This will
provide a clear basis for the operation of the new body.
4.43 In addition to this information, there are a number of other issues that local
authorities will need to consider before the new EPB or combined authority can
be established. Authorities will, for example, need to think about the practical
requirements of the new body (e.g. staffing and accommodation), its objectives
and arrangements for monitoring their delivery, its internal structure including
any committees and sub-committees, how it will interact with other partner
organisations and how its activities will be made as open and transparent as
possible. Information on these issues may not be included in the statutory order
and may change once the body is established, but as much detail as possible
should be provided either within or alongside the scheme to enable the
Secretary of State to make an informed decision as to whether establishing the
new body is likely to deliver benefits.
40 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Practical arrangements
4.44 Local authorities should consider:
• staffing arrangements, including whether the EPB or combined authority will
directly employ its own staff and/or whether staff from the constituent local
authorities will be seconded to the new body
• if the new body is to employ its own staff, what levels of pay, pensions and what
general terms and conditions will be given to them
• how the chief executive (if applicable) of the new body will be appointed and the
powers and responsibilities will be attached to this post
• the skills requirements of the new body
• accommodation arrangements
• how the required support services will be provided, including HR and IT services
• how the necessary financial systems will be provided, including payroll,
accounting and banking arrangements; and
• which, if any, properties, rights and liabilities will be transferred to the new body
or will be acquired by it.
Structure of the new body and relationships with other organisations
4.45 Authorities should include a diagram in the scheme showing the proposed
structure of the new body, including any executive arrangements, committees,
sub-committees, advisory groups and executive bodies.
4.46 Local authorities should also be clear about how the proposed new body
will interact with other structures in the area, including any governance
arrangements identified in the review that will not be incorporated into the
new body.
4.47 Local authorities should be clear about how the work of the EPB or combined
authority would relate to the constituent local authorities. In particular
authorities should be clear about how the objectives of the EPB or combined
authority will fit with the wider goals of the constituent local authorities’
sustainable community strategies. Constituent authorities should seek to align
the relevant parts of their strategies and ensure that they are consistent with
the EPB’s strategic priorities.
4.48 As EPBs and combined authorities are partner authorities for the purpose
of Local Area Agreements (LAAs), responsible authorities will be required to
consult them when drawing up their sustainable community strategies and
LAAs, and they will be required to co-operate with the responsible authorities.
Section 4 The scheme | 41
4.49 Where there are other existing or planned sub-regional structures or bodies
in place, for example an employment and skills board (ESB) or economic
development company (EDC), consideration will need to be given to how the
relationship between these and the new EPB or combined authority will work.
In the case of ESBs, there will need to be clear links between the ESB and the
EPB or combined authority to ensure the development of a coherent economic
vision for the sub-region, with common objectives. One way to achieve this
could be for the chair of the Employment and Skills Board to be a member of
the Economic Prosperity Board or combined authority, and vice versa. If there
is an existing sub-regional EDC, consideration should be given to the role of
the EDC within the new framework. More generally, the creation of an EPB or
combined authority provides an opportunity for the existing delivery landscape
in relation to economic development and regeneration to be streamlined
and rationalised. The role of other existing delivery vehicles, such as urban
development corporations (UDCs) or housing market renewal pathfinders,
should therefore be examined and consideration given to how delivery can be
most effectively organised within the new arrangements.
4.50 Consideration should also be given to how the EPB or combined authority will
relate to neighbouring authorities, particularly in relation to how economic and
transport flows that extend beyond the area of the new body will be managed.
Any EPBs and combined authorities that neighbour London will need to work
with relevant London boroughs as there are likely to be significant commuting
flows into London.
4.51 Authorities should be clear about how the new EPB or combined authority will
interact with other public sector organisations in the area and at regional level
and national level and how its delivery plan relates to the regional strategy
and implementation plan. This should include bodies such as the regional
development agency (or agencies), the Homes and Communities Agency, the
Environment Agency, Natural England, the Highways Agency, national park
authorities, the Learning and Skills Council and the Skills Funding Agency14
and, where applicable, the Forestry Commission. Once it is established, it may
be sensible for the EPB or combined authority to agree a protocol with key
partner organisations setting out how their relationship will work.
4.52 Finally, authorities should be clear about how the new body will relate to
private and voluntary sector organisations in the area. These businesses and
organisations will be critical to the economic growth and development of the
area and the new body will need strong relationships with them in order to
deliver its objectives. The EPB or combined authority should have mechanisms
The Learning and Skills Council will cease to exist from April 2010. The Skills Funding Agency will take over adult skills funding and
local authorities will take over commissioning for young people.
14
42 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
in place for understanding the needs of employers, investors and developers
in the area and coordinate their activities with other local interventions. The
new body should also have means for effectively engaging with voluntary and
community organisations in the area.
Objectives and strategy
4.53 An EPB or combined authority should have a statement of its planned forward
activity in the form of a corporate or business plan, which should be revised
annually once the body is established. As well as setting out what the EPB or
combined authority is expected to deliver in that year, the plan should also
be clear about how the objectives of the body fit with the wider goals and
priorities of its constituent local authorities, as set out in relevant sustainable
communities strategies, regional strategies, Local Area Agreements (LAAs) and
Multi Area Agreements (MAAs). An EPB should operate within the principles
of sustainable development and ensure that its activities support sustainable
economic growth.
4.54 While authorities will not be in a position to draw up a plan for an EPB or
combined authority before it has been created, they may wish to set out in the
scheme or accompanying documents the broad tasks that they would expect
the new body to take forward within its first few years. For example, as bodies
which operate at a strategic level across the area of a number of authorities,
an EPB or combined authority would be expected to draw up and take forward
a strategy for the long term sustainable economic development of the subregion, including the development of a low-carbon economy.
4.55 Where there is already an MAA in place across the area (including an MAA
with statutory duties established under part 7 of the Act), it is likely to
be appropriate for the EPB or combined authority to take on the overall
management of the MAA. This may include responsibility for delivering
particular MAA targets.
4.56 Once it is established, the members of an EPB or combined authority will need
to ensure that there are effective performance management processes in place
to monitor delivery and value for money.
Financial management
4.57 The Act requires that an EPB keeps a general fund, to which receipts must be
carried and from which liabilities must be discharged, and that accounts must
be kept of all transactions to or from this account.
4.58 The financial accounting and reporting practices for combined authorities will
have to ensure that the distinction can be made between transport funding
(raised by a levy or borrowing) and other funding.
Section 4 The scheme | 43
Scrutiny and transparency
4.59 EPBs and combined authorities should be as open and transparent as possible
in their operations and should have clear arrangements in place to allow for
scrutiny of their activity. The means by which any executive of the new body
will be scrutinised by non-executive members should be set out in the main
body of the scheme (see 4.31 above). However, local authorities should also
consider how wider scrutiny of the EPB or combined authority’s activities by
constituent local authorities, partner organisations and residents can take place.
4.60 A local authority overview and scrutiny committee may scrutinise EPBs and
combined authorities under section 21 of the Local Government Act 2000
where the EPB or combined authority is undertaking activities that impact on
the area of the local authority or inhabitants of that area. Local authorities may
wish to consider the establishment of joint overview and scrutiny committees
to undertake this activity.15 Under existing legislation, the EPB or combined
authority is required to provide scrutiny committees with information and
to have regard to their reports or recommendations where the reports or
recommendations relate to the achievement of a LAA target that the EPB or
combined authority is party to. Authorities may want to consider putting in
place voluntary co-operation arrangements that go further than these statutory
requirements.16
4.61 In addition, EPBs and combined authorities will be subject to various rules and
duties to ensure that their activities are as transparent as possible, including:
• the Local Government (Records) Act 1962
• the access to information provisions in part 5A of the Local Government Act
1972
• investigation by the Commissioner for Local Administration (‘the Local
Government Ombudsman’) under section 25 of the Local Government Act 1974
• the requirement to have their accounts audited by the Audit Commission,
which can issue reports in the public interest under sections 2 and 8 of the Audit
Commission Act 1998. Under section 16 of that Act any elector can object to
any item in their accounts and under section 47A the Audit Commission can
issue reports on their performance
• the duty to secure continuous improvement in the provision of services (‘Best
Value’) and a duty to consult representatives of council tax payers and business
rate-payers for the purpose of deciding how to fulfil that duty (section 3 of the
Local Government Act 1999)
Section 123 of the Local Government and Public Involvement in Health Act 2007, as amended by the LDEDC Act, allows regulations
to be made providing for formal joint overview and scrutiny committees. No such regulations have yet been made.
15
It is the Government’s intention to legislate at the earliest opportunity to strength the powers of local authority overview and scrutiny
committees: Strengthening Local Democracy Consultation, CLG, July 2009.
16
44 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
• the duty to involve under section 3A of the Local Government Act 1999; and
• the Freedom of Information Act 2000.17
4.62 Local authorities should consider how they will ensure that the proposed EPB or
combined authority complies with these requirements and, more broadly, how
its activities will be made as transparent and open as possible.
Timetable
4.63 Authorities will need to agree a timetable and project plan for setting up the
new body, including a target date on which they propose launching the new
body and important interim milestones. As a general rule, authorities are
advised to leave at least nine months from publishing the scheme for the new
body to be established.
Revised business case
4.64 Once the scheme has been completed, the authorities should revise the
business case for the new body produced by the review. This should result in
an updated estimate of the costs associated with the new body as well as the
benefits it is likely to deliver and the overall value for money of the proposal.
This information should be submitted to the Secretary of State either within or
alongside the completed scheme.
Completing and submitting the scheme – consent
4.65 The Act provides that all of the authorities whose area is to be included in
the area of the final scheme, must either participate in the preparation of the
scheme or give their consent to the scheme before it can be published (see
section 98(4) and (5), and section 109(4) and (5)).
4.66 Ideally, the authorities that are working to establish the EPB or combined
authority should oversee the production of the scheme as a group, and will
therefore all participate in the preparation of the scheme. However, to ensure
that the final scheme is one that all authorities are happy with, the published
scheme should be accompanied by a statement showing that each of the
participating authorities is content to establish an EPB or combined authority
on the basis of the scheme. The Department intends to specify in the Local
Authorities (Functions and Responsibilities) (England) Regulations 2000 that
the function of deciding whether to support the establishment of an EPB or
combined authority covering their area is the function of the full council and
not the executive of a local authority.
This list is not exhaustive. For a full list of local government and other law which applies to EPBs and combined authorities see
schedule 6 of the LDEDC Act. Other provisions can be applied by the order establishing the EPB or combined authority.
17
Section 4 The scheme | 45
Summary of what should be submitted
4.67 In summary, the following information should be submitted to the Secretary of
State as part of the published scheme:
• the findings and conclusions of the governance review
• the main scheme document, setting out the area, functions, constitutional
arrangements, funding arrangements, name of the new body and, where
applicable, a summary of how equitable delivery of benefits across both rural
and urban areas will be ensured
• additional information (where available) on the proposed arrangements for
staffing, accommodation, objectives, scrutiny and relationships with other
organisations
• a summary of the consultation that has taken place during the preparation of
the scheme and views received
• a revised business case setting out anticipated costs and benefits of the
proposals; and
• a statement signed by each of the participating authorities showing that they are
content for an EPB or combined authority to be established on the basis of the
scheme.
Publishing a scheme
4.68 It will be for authorities to decide in what form the scheme should be
published, although in doing so they should ensure as a matter of good
practice that it is available in different formats, on request, in order to make
it accessible to local residents and other persons with an interest. A copy of a
scheme (accompanied by the documents mentioned above) for an EPB should
be forwarded to the Secretary of State for Communities and Local Government,
a copy of a scheme for a combined authority should be forwarded to both the
Secretary of State for Communities and Local Government and the Secretary of
State for Transport.
46 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Section 5
The statutory order
5.1 Once a scheme for an EPB has been published it will be considered by the
Secretary of State for Communities and Local Government. A scheme for a
combined authority will be considered jointly by the Secretary of State for
Communities and Local Government and the Secretary of State for Transport.
If the Secretary of State considers that the scheme fulfils the requirements set
down by the Act, a draft of the order required to create the EPB or combined
authority will be prepared. The Secretary of State is required to formally consult
all relevant authorities, and any other persons considered appropriate, before
the order can be laid before Parliament and, subject to the approval of both
Houses, become law.
The Secretary of State’s consideration of the scheme
5.2 The Act sets out various requirements that must be met before a statutory
order creating an EPB or combined authority on the basis of a published
scheme can be made. These are that the Secretary of State must consider that
the EPB or combined authority is likely to improve:
• the exercise of statutory functions relating to economic development and
regeneration in the area; and
• the economic conditions in the area.
and for a combined authority that it is also likely to improve:
• the exercise of statutory functions relating to transport in the area; and
• the effectiveness and efficiency of transport in the area.
5.3 The Secretary of State must also have regard to the following before making an
order to establish the new body:
• the need to reflect the identities and interests of local communities; and
• the need to secure effective and convenient local government.
Section 5 The statutory order | 47
5.4 The Secretary of State will want to ensure that an EPB or combined authority
does not create artificial divides in an area which has a strong community
identity, that the differing needs and interests of local communities are taken
into account, and that the division of responsibilities between authorities is
workable and sensible.
5.5 The LDEDC Act does not require the Secretary of State to formally ‘approve’ or
‘reject’ a scheme for an EPB or combined authority, but authorities that have
published a scheme can expect a response that makes clear whether or not the
Secretary of State is minded to make an order based on their proposals. There is
no legal power in the Act for the Secretary of State to require that changes are
made to a published scheme. However, if the Secretary of State has insufficient
information to make a decision or has specific concerns, the authorities may be
asked to provide further information or clarification. In practice, it is likely that
discussion will take place between the local authorities and central government
to ensure that a workable scheme has been produced.
Preparing the statutory order
5.6 Once the Secretary of State has reached a view on the scheme, a statutory
order creating the new EPB or combined authority will be drafted.
5.7 Sections 102 and 113 of the LDEDC Act state that the Secretary of State must
‘have regard’ to a scheme before making a statutory order. This language has
been used to allow modifications that are necessary to secure the effective
functioning of the EPB or combined authority. Whilst the Secretary of State is
not tied to implementing exactly what is proposed in the scheme, he will not
make an order which achieves something different without referring the matter
back to the local authorities for further consideration and, if necessary, for
them to produce a revised scheme.
5.8 As the order will be scrutinised in Parliament, it will be necessary for an impact
assessment to be drawn up to accompany the order. This will be done by CLG
(with DfT where relevant).
Consultation on the order
5.9 Before the order can be made the Secretary of State must formally consult
all the authorities whose respective areas will partly (as may be the case for
counties) or completely fall within the new body’s area. The Secretary of
State must also consult any existing EPBs or ITAs whose respective areas fall
entirely or partly within the area of the proposed new body, and any other
persons the Secretary of State considers appropriate. These are likely to include
representatives of the business community, regulatory bodies, service providers
and other delivery partners and relevant public bodies.
48 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
Parliamentary consideration
5.10 Once the order and consultation process have been completed the draft order
will be laid in both Houses of Parliament. Each House must approve the draft
order, by affirmative resolution, before the final order can be made and become
law.
Timetable
5.11 The process from the publication of the scheme to the statutory order
becoming law will depend upon several factors, most obviously the complexity
of what is proposed. Overall, following publication of a scheme, authorities
should allow a minimum of nine months before proposals can come into force,
although this is a guide only and more time may be required. If they wish to,
authorities may establish ‘shadow’ running arrangements before the order
creating the EPB or combined authority comes into force.
Section 6 Changing an EPB or combined authority | 49
Section 6
Changing an EPB or combined authority
6.1 EPBs and combined authorities are designed to provide long-term, stable
governance mechanisms for groups of local authorities that are committed to
joint working on economic development. Local authorities should therefore
not expect to make major changes to an EPB or combined authority once it
has been established. However, once an EPB or a combined authority has been
operating successfully for a period, the individual local authorities may consider
the need for further changes to the constitution and functions of the body.
6.2 If changes need to be made to aspects of an EPB or combined authority that
are not contained in the statutory order which created it, for example its
staffing arrangements, these can be done by the EPB or combined authority
according to its own procedures. Where there is any doubt as to whether
a suggested change will require legislation, authorities should consult their
lawyers and, if necessary, with CLG and/or DfT.
6.3 Some changes require amendment of the order that established an EPB
or combined authority. These include making changes to the body’s area
(i.e. by adding or removing local authority areas), functions, constitutional
arrangements (i.e. membership, voting and executive arrangements), and
funding. In order to ensure that such changes will result in benefits to the
area, the Act requires a new review to take place and a revised scheme to be
published before any amendments to the order are made.
Review of an existing EPB or combined authority
6.4 The Act allows an EPB or combined authority, or any one of its constituent
councils to carry out a review of any aspect of the body which is contained in
the statutory order, at any time. This review should broadly follow the process
set out in Section 3 above. However, if only a fairly small change is to be made
to the body, the review may focus on that aspect and need not deal with
all the points that would need to be covered in a full review. For example,
if the constituent authorities wish to pass an additional function to an EPB,
the review should focus on how that function is carried out under existing
arrangements and assess what scope there is for improving the exercise of that
specific function.
50 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
6.5 If the review concludes that making an amendment to the statutory order
would be likely to lead to improvements, the authority or authorities may
prepare a scheme proposing that a change is made. Again, the scheme only
needs to focus on the particular change that is being proposed and how the
body’s operation would be altered if it were made. For example, if a new
function was proposed to be passed to the EPB or combined authority, the
scheme should address how that function would be exercised, including
any limitations or conditions that should apply to it. This scheme should be
published and would then be considered by the Secretary of State in the same
way as a scheme for a new EPB or combined authority.
6.6 Authorities may fulfil the requirement to carry out a review and prepare a
scheme for an amendment to an existing EPB or combined authority by revising
the review and scheme which were prepared when the body was created.
Changing the boundaries of an EPB or combined authority
Changes to the boundaries of constituent authorities
6.7 The statutory order that creates an EPB or combined authority will define its
area on the basis of the areas of its constituent authorities. Changes to the
boundaries of the constituent local authorities will therefore automatically result
in the EPB or combined authority’s area being amended. For small changes, this
is unlikely to be problematic.
6.8 If significant changes are proposed to constituent local authorities or their
boundaries, such as the creation of new unitary councils, then the rationale for
the EPB or combined authority continuing to exist will need to be examined.
In any area with an existing EPB or combined authority where substantial
structural or boundary changes are proposed, careful consideration will need
to be given to whether the EPB or combined authority should be abolished,
reconstituted or remain largely unchanged.
6.9 Any changes to an existing EPB or combined authority will require a new
(or amended) review and scheme to be prepared and a new (or amended)
statutory order to be made. The process of preparing the new review and
scheme and laying the new statutory order may be carried out in parallel with
the processes required to implement local government structural or boundary
changes in the area.
Section 6 Changing an EPB or combined authority | 51
Adding a local authority’s area
6.10 Adding the area of a local authority (or local authorities) to an existing EPB or
combined authority may be appropriate where there is evidence that this new,
larger area provides a better approximation to the functional economic market
area (FEMA) of the sub-region than the original area of the body. This may be
because the original FEMA has changed over time. If this is the case, a new
governance review can be carried out to see if extending the EPB or combined
authority would be likely to deliver benefits in terms of improved economic
development, regeneration and transport in the area as a whole.
6.11 If the review concludes that extending the area of the body would be
beneficial, a new (or revised) scheme may be prepared setting out how the
enlarged body would operate, including necessary changes to membership,
voting, executive and funding arrangements. Both the review and scheme
preparation should be carried out in partnership by the existing EPB or
combined authority and the authority that is looking to join the body. Where
the area to be added is a two tier area, both the county and the relevant district
council(s) should be in agreement that the enlargement of the EPB or combined
authority should be explored, and both should be involved in the new review
and scheme. As a safeguard, the Act provides that an area cannot be added to
an EPB or combined authority unless all the authorities for that area have given
their consent to this taking place. The agreement of the authorities for the area
joining the body will need to be formally confirmed before the new statutory
order is laid.
Removing a local authority’s area
6.12 If there is evidence to show that the economic situation in the area has
changed such that it would be appropriate for the area of one or more of
the authorities in an EPB or combined authority to be removed from the
arrangement, the EPB or combined authority, or one or more of the constituent
authorities, may carry out a new review to determine whether this would be
likely to result in benefits. If the review shows that making the change would
be likely to improve the exercise of statutory functions relating to economic
development, regeneration and transport and the other tests required by
the Act, the authority or authorities may prepare a new (or revised) scheme
proposing this change.
6.13 There may be circumstances in which an authority wishes to be removed
from an EPB or combined authority so that it may be added to the area of
an adjoining EPB or combined authority. This is possible under the Act, but a
new review would need to show a clear economic rationale for this move and
evidence that the new configuration was likely to lead to improved outcomes.
52 | Economic prosperity boards and combined authorities: Consultation on draft statutory guidance
6.14 If there are reasons other than evidenced economic reasons which lead to an
authority wishing to remove itself from the EPB or combined authority, every
effort should be made to resolve these before seeking to remove authorities
from the arrangement.
Abolishing an EPB or combined authority
6.15 The abolition of an EPB or combined authority should only be necessary in one
of the following circumstances:
• if a combined authority is to be set up in an area, an existing EPB covering all or
part of the same area must be abolished in order for the combined authority to
be created
• if such significant changes are made to local government boundaries in the area
that the EPB or combined authority no longer makes sense (for example new
unitary authorities are created, as mentioned above)
• if the economic situation in the area has changed to the extent that the EPB or
combined authority is no longer appropriate; or
• if the body is failing to deliver its objectives and sustained efforts to improve
performance have failed.
6.16 In all cases, a new review and scheme would need to be prepared either by
the EPB or combined authority itself, or by one or more of its constituent local
authorities. The review and scheme will be subject to similar requirements as
for new EPBs and combined authorities. For example, the review will need
to show that abolishing the body would be likely to improve the exercise
of statutory functions relating to economic development, regeneration and
transport in the area. A scheme that follows on from such a review should set
out how the functions of the EPB or combined authority would be exercised in
its absence. In the case of the abolition of a combined authority, the scheme
will need to state which bodies will be designated as local transport authorities
for the area once the combined authority has been removed. In most cases this
will be the relevant local authority.
6.17 If the body is failing to deliver benefits, reforms should be made to its operating
arrangements to improve its performance, and only if these also fail should
abolition of the body be considered. The Act states that the Secretary of State
may not make an order to abolish an EPB or combined authority unless a
majority of the constituent county and unitary authorities give their consent.
Section 7 Glossary | 53
Section 7
Glossary
EPBs – Economic prosperity boards
LDEDC Act – Local Democracy, Economic Development and Construction Act 2009
ITAs
– Integrated Transport Authorities
FEMAs
– Functional economic market areas
LTP – Local transport plan
PTE
– Passenger Transport Executive
ESB
– Employment and Skills Board
EDC
– Economic Development Company
UDC
– Urban Development Corporation
LAAs
– Local Area Agreements
MAAs
– Multi-Area Agreements
ISBN 978-1-4098-2196-0
ISBN: 978-1-4098-2196-0
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