House again in Committee.
235AB: Before Clause 184, insert the following new Clause—
“Conduct of local government members and employees
Part III of the Local Government Act 2000 (c. 22) (conduct of local government members and employees) is repealed.”
The noble Lord said: The amendment, which is put forward in the hope that it might lead to one or two interesting bits of debate, is intended to abolish the entire Standards Board for England, all its doings and the entire standards regime. On that basis I do not have a huge amount of optimism that the Government will accept the amendment this afternoon, but I believe that various points need to be made.
It is seven years since the new regime was agreed in the Local Government Act 2000, and five or six years since it came into operation. Has it made any real difference to the way councillors behave and to how local government acts? Has it increased the level of ethical standards within local government, or has it not really made much difference at all? In the very few serious cases which have arisen in that time, would it have been allowed to carry on without it? There is a general view within local government—if you get people talking honestly and, perhaps in some cases, off the record—that the answer to all these questions is that the regime is not worth the large amount of resource that goes into it.
Various problems have arisen in the standards regime, which the Government are responding to. They are particularly changing the emphasis from pretty well everything going through the Standards Board for England towards local resolution of complaints in the majority of cases. I will come on to that at the end of my remarks.
What is wrong with the system? First, the whole complaints system is in many ways operated at a trivial level. Cases which are taken to the Standards Board and often referred back to the local monitoring officer or, indeed, to the local standards committee, should really be sorted out there and then, without any great to-do and certainly without the great bureaucratic procedure that takes place. The system is very expensive to operate and the outcome does not seem to be worth the candle that is put into it.
I was fascinated when listening to the previous debate on whether people with a pension from the European Union should declare it as an interest. The word used by the Chairman of Committees was that in many cases people would find this “distasteful”. The difference in culture between what is declared in this Chamber and the restrictions on people taking part in debates here, and the very restrictive, sometimes penal, regime which takes place within local government, was fascinating.
Secondly, in many places the complaints procedure has been used as a means of political campaigning. It has been used as a weapon in “partisan dialogue”—I think was the phrase used by my honourable friend Andrew Stunell when this issue was discussed in the House of Commons. I regret to say that there have been places and times where and when it has been used as a weapon, not just politically but by some officers, against what I might call the persistently awkward squad among councillors, or perhaps just people who were saying things they did not want to hear.
It is an open question as to how far you can go in having a robust discussion with a council officer without being accused of bullying. There have certainly been instances when council officers have made complaints of bullying when all that has been happening is that a councillor has been persistent in trying to put forward his or her view of what should happen, perhaps in their ward or the authority. There is a feeling that the rules laid down mean that robust debate is more difficult to have in some councils than it ought to be.
Accusations can come from anyone and do not have to be backed up with anything. An accusation can appear in the local newspapers before it has been investigated and be used as a weapon in that way. When someone is put through the mill, it really is a traumatic experience, and sometimes good councillors go through hell when, in their view, they are doing no more than representing the people who elected them. I am aware of many instances of this, particularly of someone who was made quite ill by the whole process. In the end that person was found guilty on a technicality, but was clearly exonerated by the local standards committee.
We discussed yesterday why people stand for the council. Very often they have to be persuaded. People who would make good councillors have to have their arms twisted to stand. Most do not say, “I am just waiting for the local party to come round and ask me to stand”. They do not think like that. Instead, they find themselves on the council and then they may find themselves being put through a very vigorous complaints system if someone makes an accusation against them. That leads one to ask why on earth anyone does it any more.
The proposal being put forward by the Government is for everything to be dealt with locally, and there is a lot of sense in that, but there are some problems as well. One of the more serious problems is that in some areas the political culture is based on the presence of the long-term majority party. It permeates the culture not just of the local authority, but also that of local organisations, partnerships and so forth. Anyone who challenges that can be seen as a dissident, and there can be a real fear that they are not going to get a fair deal from the local standards committee. There is also the problem of the role of the monitoring officer on the council. The monitoring officer is there to advise councillors, but councillors have the right not to take that advice. Once they have checked the code of conduct and read the advice of the standards board, they may think that the monitoring officer is wrong. But if a complaint is then filed and goes to the local standards committee, it is the monitoring officer who advises it. Even if a different solicitor within the authority is technically present to do it, the monitoring officer is looming in the background all the time, so this is a difficult situation.
I have not talked about some of the serious cases such as Islington because that would take a long time. Those cases alone may be responsible for the changes the Government are now making. But there is a serious difficulty in some places about representing your local ward. In some councils, the fact of representing a particular ward is in itself perceived to be an interest. I have referred previously to Birmingham where I am told that if you are a ward councillor, you cannot deal with a planning application anywhere within your ward. That is total nonsense, and yet this kind of thing is going on. On the one hand, candidates stand for election on the basis that they live in the ward—“Vote for me, I am local”—but nowadays if a town is divided into several wards, I ask that people are put into different ones otherwise they will be considered to be too local. There is a serious problem here and at the heart of the standards regime.
Those are just a few of the problems. I hope that the Government’s changes will bring improvements, but I believe that we will be back here debating the problems with the new regime before very long. Indeed, there is a body of opinion in local government that would say, “Let’s scrap the whole thing”. At the last general election the Conservatives went to the polls saying, “Let’s close down the Standards Board for England”. I hope that that is still their policy. If it is, then on that at least I shall join forces with them. I beg to move.
The noble Lord, Lord Greaves, has raised an interesting and important aspect of local government. The question to ask is whether, having scrapped these provisions, we have anything to put in their place. If matters are not dealt with locally, they have to be considered in some other way. All the examples that the noble Lord has given resonate with me, not because I was involved in or had knowledge of such things, but because I understand how these things can happen. The person who is clueless about the possibility that they might be maligned, misunderstood or stood up before they get on to the council is really naive. We all know what human nature is and we all know about politics: it is about power. If the manner in which one achieves power attracts people who indulge in what you and I would call distasteful practices, that is the way it is. You are not going to change human nature. However, the noble Lord, Lord Greaves, is right to ensure that we hear from the Minister about experiences that may guide us on the relevance of all this.
I have declared almost redundant interests in local government over the years, although I am still in touch. I have been to events at which things are said, alleged or pursued that I can honestly say from my point of view ought not to have been, because one has to be robust in local government. I am not talking about matters in the Chamber. One might get very heated and use illustrations, but one should have the grace to withdraw if one is challenged and if, on reflection, what one has said proves to be untrue. But here we are talking about very sensitive matters over which some people can become much more distressed than perhaps I or the noble Lord, Lord Greaves, might. The question therefore is: is it right that they should be so protected that those who wish to pursue a matter, maybe a vendetta, are warned off for being unchivalrous or ungenerous? Quite frankly, I do not think that that protection needs to be provided.
My final point on this issue is that when you stand for election at any level, you should expect some nastiness in one form or another to come your way. That is not to say that you deserve it but, human nature being what it is, it will happen. One therefore needs to have a method of resolving this kind of problem. To that end, we are constantly looking for solutions to problems before they get to court or progress to a higher level in the form of libel, stories in the newspapers and so on. In my view, the papers are far harsher today, so I will be interested in what the Minister says about practice.
The noble Lord, Lord Greaves, has regaled us with evidence, and I can understand how such things could happen. It is regrettable that they do. But we still need a means of resolution. The noble Lord talked about allegations made against chief officers or senior officers of bullying members and people feeling that they are being hectored. But of course that can also happen the other way around. Some officers have a reputation for trying to run a committee, and that is either resented or people just bow down to the pressure. We are talking about character traits and a certain manner of doing things. But in the end it is the councillors who call the shots, and the councillors whom I know both in London and elsewhere are robust enough to know their rights. As far as I am concerned, if this amendment is passed and the provision is repealed, I wonder how we are to provide a forum in which these matters can be resolved.
I find it difficult to support this amendment. I understand what the noble Lord, Lord Greaves, means, but I have always interpreted this part as being the end of a long road. Most people will put up with quite a lot, but eventually somebody breaks and says, “I can’t go on”. There must be a system whereby they can appeal to somebody else. The fact that the Standards Board is now being repatriated and brought back into a more local focus on the council means that these questions can be dealt with by the local standards board—the council and the independent member of that standards board—in an immediate and far less public way. It has always seemed to me that going to the Standards Board for England is a step too far. It is far too important and far too over the top. However, local standards boards or committees can handle something like this. Where there is evidence, or even just a feeling, that somebody is being treated badly and that there is a history of that, a mechanism such as this is necessary, so I do not support the amendment.
My noble friend did not say that this is party policy. The noble Lord, Lord Graham, asked how we would deal with things if we did not have a Standards Board for England, but it is only seven years old. The world kept on turning, although there were problems of conduct that led the Government to believe, possibly in response to difficulties in Labour-run authorities as well as in others, that some sort of standards regime, such as the one they put in place, was required.
There are three powerful influences on how a councillor conducts himself. There are the influence of his colleagues and the issue of reputation, which are much better dealt with within the authority by his colleagues, and there are elections. The Standards Board for England has developed a culture that will be hard to change. It is pity that as we move towards local determination, which I strongly support, it still has some involvement. It will be hard to change that culture. As the noble Lord, Lord Graham, said, the board deals with sensitive matters, but it has not always dealt with them sensitively. With sanctions up to and including disqualification from office—being barred from standing for office—this is serious stuff.
One of my colleagues on the London Assembly said, “Hasn’t everybody been referred to the Standards Board at some point?”, which shows how it is regarded. I have not been referred, but I have frequently thought, “There but for the grace of God go I”, because that has been overdone. My noble friend asked whether it has made a difference and went on to say that he would not talk about the London Borough of Islington case because we could be here all day. I declare an interest because I was a witness in that case. It made a difference in the toll that it took on those who were involved—the councillors who were referred and an individual who was a third party—and it took a huge toll financially, which was eventually largely paid by the council tax payer. The Mayor of London case is the other big case, although a number of small cases have gone into folklore. The Mayor of London case was separate. The adjudication panel that took the final decision was largely responsible for moving the whole thing on because it was so absurd. It was seen to be absurd by the London Assembly, which had unanimously called on the Mayor to apologise over the comments in question, but felt that to suspend him was an absurd reaction and completely over the top. That was not the adjudication panel or the Standards Board, but it was part and parcel of the same cultural approach.
As we have heard, we have monitoring officers, some of whom are overzealous about ward issues. They may possibly be overanxious and their zealotry may come from anxiety about what they should be doing. My noble friend mentioned planning. The standards code will reduce that problem a little, but it does not deal with balancing conflicts of interests with proper ward representation. An awful lot is wrong with the system, and a lot of it stems from the way in which the Standards Board set itself up and went about this. It would be better if it went, which is not to say that councillors should misbehave; that is not what we are saying at all.
My understanding is that situations such as this, where there may be a complaint against a councillor by an officer or the other way round, would never go near the Standards Board for England. It would go to the local standards council. It is on that basis that I do not support the amendment. There has been a lot wrong with the Standards Board for England and if it vanished without trace nobody would miss it, but I want to be clear that this would be a locally determined matter that would be taken against the background of doing precisely what the noble Baroness suggested, which is local councillors looking over their colleagues.
This was an interesting debate that was full of real common sense. In moving his amendment, the noble Lord, Lord Greaves, spoke about the situation as it is has pertained to date, not about the new regime, which is exactly as the noble Baroness, Lady Hanham, described it. Everything will start off at the local level and there will not be a circular process of things being referred up, coming back down and so on. The monitoring officer and the local standards committee will deal with the first challenge and only in very specific circumstances will a case be referred to the Standards Board. That is the context.
The noble Baroness, Lady Hamwee, was right when she said that the most effectual methods of disciplining behaviour and raising standards are the culture of the council, constituency pressure and elections. However, there has to be a discipline for instances where those all fail and things go wrong. My noble friend Lord Graham and the noble Lord, Lord Greaves, were right that there are instances where people behave badly, and there have to be arrangements for that. The reason why we have those arrangements was set out in the Graham report, which looked at the operation of the national standards board and came to other conclusions. It made the point that this was better done at a local level. We have followed those recommendations.
This amendment would sweep away any ethical regime. The noble Lord said that he does not expect us to accept it and, once again, he is right. However, he has raised interesting questions about the sociopathology of local politics and what one can do to achieve integrity and good behaviour while at the same time having a discipline regime that takes care of vulnerable people and people who misbehave.
The noble Lord asked whether this has made a difference. One could argue that there is evidence that, if it had not made a difference, there would have been more reference to the Standards Board itself. Recent research indicates that 93 per cent of councillors support the code of conduct—what it is there to do and how it does it. Eighty per cent said that maintaining high standards is one of the most important issues in which they are involved. One can see why when one considers the fact that many people feel that the conduct of members is one of the most important issues for authorities. Trust is low, and we return again and again in our discussions on the Bill and in the House to how to restore and nourish trust in politics as a whole, and to the connection between the elector and the councillor or politician. Indeed, the health of our democratic institutions depends on trust, and poor behaviour by a small number of people can have a disproportionate and damaging effect. It is also interesting that 44 per cent of councillors also said that they thought that standards had increased in recent years. That is a significant percentage. It seems that more people would prefer to have this than not to have it.
That is absolutely right. I take that point. The amendment does not envisage substituting the ethical regime that we have now with any other arrangements. In that case, it would remove local government from many other parts of the public sector that have ethical codes that we expect people to abide by. There is no reason why local government should be exempt, but that is the nature of the amendment. We take the point that the current regime has been attacked for being overly bureaucratic and centralised and lacking in local ownership. Our proposals are designed to tackle that. On the trivial nature of complaints, to which noble Lords have drawn attention, the Standards Board rejects straightaway 75 per cent of the complaints that it receives and there is no investigation, so there is clearly a mechanism for filtering out trivial challenges. Again, we take the point that one cannot control human nature and that there are always unpredictable situations, but our proposals are very much based on the conviction that high standards of conduct are more likely to be maintained if local authorities take most of the decisions about conduct.
Noble Lords also talked about the culture at the Standards Board. I believe that such a culture is much more likely in a local situation in which people know the people involved and where it may be possible to take a more proportionate, more sensitive and more commonsensical approach. This will be helped a lot by the fact that we have introduced independent chairmen on standards committees for local areas. That is an important development. Moreover, if people feel that they are not going to get a fair deal from the standards committees, they can always refer their complaint to the Standards Board, which, under the new regulatory rule, will look carefully at any complaints that are made about the behaviour of standards committees. Indeed, part of the Standards Board’s function will be to offer guidance and support to generate better and more consistent practice in the operation of standards committees. That is one reason why we want the Standards Board to remain.
The system will be less bureaucratic and will promote greater ownership. It will make the role of the Standards Board at local level more transparent and more likely to promote and maintain a culture of high standards of behaviour. For that reason, I cannot accept the amendment. We believe in the need to maintain consistent standards across the country, retaining the Standards Board very much as a light-touch regulator to oversee the consistent operation of the new committees.
The noble Lord asked a couple of other questions. We are aware of the issue of conflicts of interest when a councillor represents his electors. He will know that the code of conduct was recently revised to make it clearer and more proportionate, which has certainly been welcomed. The regime is more relaxed about personal and prejudicial interests, to allow councillors to speak up. That was overdue. I ask him to bear in mind the principles that we are trying to follow in this revised regime—namely, local ownership, local control, being more sensitive, learning the lessons of the Standards Board and being careful about trivial complaints and litigious elements—while maintaining the Standards Board but as a lighter-touch body, as I said. I think that the balance is right. It has certainly been welcomed and I hope that the noble Lord will be able to live with this as it develops.
I thought that the Minister was going to invite me to withdraw the amendment, but she invites me to live with this. I have absolutely no choice but to live with it as a local authority councillor. This will be very interesting, because it will develop differently in different places. I repeat my usual mantra that all councils are different and all have different cultures, and that the culture of standards committees will evolve within the framework that has been laid down. I am a passionate advocate of local councils and local government, but there are still some pretty awful local councils, so there will be some pretty awful standards committees. It is up to everyone who is active in those areas to be very vigilant about those and to replace them.
I have three very quick points to make. There is a stage before reference on which current guidance seems to be lacking, and if the new system is to work well it really must stress it strongly. That stage is mediation. There may be a big row between a councillor and a council official at whatever level. A senior councillor might quite wrongly be trying to bully a low-level member of staff, a senior member of staff might be trying to bully a new councillor, or it might simply be a good old-fashioned row. Good old-fashioned rows often involve what might be called behaving badly. That never happens in your Lordships’ House, of course, but it happens everywhere else in the world. It certainly happens down the Corridor. There is nothing wrong intrinsically with good old-fashioned rows, so long as they do not take over and become the dominant factor in a situation. It is part of human life. One only has to read Alastair Campbell’s diaries to discover that people in high places are behaving badly all the time. It is life; it is politics.
If a council officer or a councillor is complaining about the behaviour of another councillor or council officer, there need to be probably informal processes locally for mediation. Sometimes, that is done within political groups. Group leaders will get together and say, “Look, there has been a bit of a problem here. Can we sort it out and just calm things down please?” Sometimes it will be done by senior staff of the council. It happens all the time. The problem is that the number of cases that could be referred in this kind of situation is a huge proportion of the tiny fraction of cases that do get referred, because most are dealt with sensibly.
If a senior councillor is trying to persuade a junior officer to do something that has not been agreed and is against council policy or whatever, the obvious thing for that junior officer to do is to go to his or her senior and, if necessary, go right to the top. You sort the problem out that way. You do not invoke legalistic processes that bring the whole thing into the local press and bring the authority into disrepute when it can be sorted out locally. That is my main point.
I am not sure that the new system has adequate rights of appeal against decisions of local standards committees. Obviously, we do not want everyone appealing, but there has to be a safeguard in the system for when local standards committees are not doing it right. As I understand it, the only right of appeal is to go to the courts and about 99 per cent of people would not have the ability, wish or finance to do that.
Like everyone else, we wish the new system a fair wind. We hope that it will be much better, but we will be watching it very carefully. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 184 [Conduct that may be covered by code]:
[Amendment No. 235AC not moved.]
235B: Clause 184, page 124, line 22, leave out “include” and insert “are”
The noble Baroness said: The previous amendment and the next group of amendments relate to big issues of high principle. This very small amendment concerns drafting. The Bill refers to,
“principles which may be specified … include principles which are to apply at all times to a person who is a member”.
What does that mean? The word “include” suggests that there might be other principles as well, but we do not know that or what they might be. Does it mean that there will be other principles which are applied only sometimes or to some people? Where is this term used and what does it mean? I beg to move.
Clause 184, which these amendments seek to amend, provides for the principles which govern the conduct of local councillors and the terms of the code of conduct which they should follow to include principles and provisions which apply at all times. Amendments Nos. 235B, 236A and 237A in this group are obviously related. They amend Clause 184 by providing that the principles governing the conduct of members and the provisions of the model code are limited to principles and provisions that apply at all times.
The intention behind the amendments is probing, as the noble Baroness said; that is, what is meant by the word “include” rather than for a specific limiting requirement to be imposed to indicate that specifically only these arrangements apply. We would be worried that the amendment imposes a barrier to what could be added or would reduce flexibility. The word “include” is deliberately used because we may want to have flexibility in future.
I am prepared to say to the noble Baroness—I will be saying it on the next amendment—that I will take away the issues that she raises because I can see what she is getting at. I think that they relate to the next group, which was originally grouped with these amendments because of the interface between public and private life. I shall be happy to consider the implications of what she is saying on this.
I am grateful to the noble Baroness. These important provisions carry a heavy sanction and operate within a quasi-legal framework. It is important to have a watertight and widely understood Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
236: Clause 184, page 124, line 22, leave out from “include” to end and insert “the principle that the conduct of a member or co-opted member in their private capacity is not covered by this Part of this Act except where it has resulted in a criminal conviction which is directly relevant to the performance of the official functions of the”
The noble Baroness said: This more substantive amendment is designed to give the Minister a chance to clarify the situation regarding the private behaviour of elected members in terms of the code of conduct. As we have already heard from my noble friend Lady Hamwee, the most high profile case of private behaviour being used as grounds for bringing the council into disrepute concerns Ken Livingstone, but there have been a number of others.
As we know, Mr Livingstone’s case resulted in no action being taken, but there have been cases where councillors have been suspended from office. I wish to place on record that it should be understood what a significant step this is. First, the individual concerned may have their reputation tarnished by such a finding, which will inevitably be used against them when they stand for election in the future; and, secondly, they may suffer a significant financial penalty through the loss of their allowances.
But, for me, the most important aspect is that when a councillor is suspended from office, the local area loses its democratically elected representative. In a single-member ward, this may mean that an area has no elected councillor. If we are going to have a system which results in this kind of interference in the democratic process, the principles and the processes which underlie it have to be absolutely watertight.
There are significant problems with the Government’s desire to see the private behaviour of a councillor used as grounds for suspension from office, and there is a significant question mark about whether it would infringe the provisions of the Human Rights Act in relation to the right to a private life. The Explanatory Notes to the Bill refer to the fact that there is a potential conflict with Articles 8 and 10 of the European Convention on Human Rights. I would appreciate the Minister’s comments on this aspect.
In professions which have sanctions, it is usual that the sanction applies only to its members’ professional conduct—for example, doctors being struck off and so on—and it is difficult to understand why councillors are treated as a separate category in which it would appear that what they do for 24 hours a day, seven days a week, is seen as being part of their job as a councillor.
My second area of concern is that a charge of bringing a council into disrepute comes with a certain amount of subjectivity. I do not believe that the processes of the Standards Board in enforcing the code of conduct have been conducive to getting to the bottom of whether something does bring a council into disrepute. To a certain extent, disrepute is in the eye of the beholder, and we have heard from my noble friend Lord Greaves how what is for one person a fairly robust discussion might be seen as something much worse than that by another. If—heaven forbid—we were ever to have a council run by the BNP and my noble friend Lord Greaves took a fairly robust stand against it, he could technically be said to be bringing that council into disrepute. So we have to be careful about this question.
The process is quasi-judicial, the penalties are significant and people may have to resort to expensive legal advice to help them through it. Our amendments therefore seek to remove the private behaviour of an individual from the scope of the code of conduct unless the activity in question—this is an important caveat—is a criminal one.
For me, there is a combination of doubt about whether or not private conduct should be included in the process because of the potential infringement of the Human Rights Act. There is a question about whether the disrepute can be judged sufficiently objectively and about the procedures being carried out in a kind of legal framework, but without many of its safeguards, combined with the severity of the penalty. I beg to move.
I have three amendments in the next group which are very similar to those spoken to by the noble Baroness, Lady Scott. Perhaps it would be convenient to have the debate on the two groups of amendments at the same time, rather than going through the whole procedure again. If the Minister is happy, I can speak to my amendments and we can conduct the debate around the same thing.
I shall speak to Amendments Nos. 236ZA, 237ZZA and to the amendment which, because of a misprint, appears on the Marshalled List as Amendment No. 238ZAA but which is actually Amendment No. 238ZZA.
As I understand it, the provisions in new Section 57A(1), (2) and (3) reverse the decision made in court in the Livingstone case, where the court decided that a private action was not a matter for the code of conduct. The ink is barely dry on the code of conduct that has just been signed off and put through my council—and, I dare say, through every council—and which took out the fact that private life could be taken into account. That code of conduct went in a month ago; we have just accepted it—the council meeting took it through last time—and, hey ho, here we are with the Bill reversing those provisions.
I have a lot of sympathy with what the noble Baroness, Lady Scott, has said. If you have criminal convictions, that is one aspect. However, where something is happening that is absolutely unassociated with your council life, to be subject to a standards board or committee or to the code of conduct is otiose and over the top. It is extraordinary, too, that the Government want to change so quickly the decision that was made by the court. The Minister may want to give us an explanation for that so that we can understand why the Government want to put it back in.
If you are accused and found guilty of dishonesty or of something that would have a real impact on the work you are doing, that is clearly a matter that needs to be taken into account. If you have already been punished by the court and the time is expended, that may not be a matter for anyone. The provisions need to be changed so that private life is not a matter for the code.
This is a serious matter, which we are all taking seriously. Having been a member of a political group on a council, I know we are sensitive to the feelings of our fellow councillors. The central issue of whether private—that is, non-council-related—events should figure in the characterisation of a member is important. I share the view that we need to examine closely whether that ought to figure at all in the standing and reputation of the councillor. Then there are the consequences and penalties that might flow.
One needs to take human nature into account, however. If the extent of the private action, which we are saying ought not to figure, is publicly known, that in itself will bring consequences. Even though there are no consequences legally or statutorily, the mere fact that a person has been charged is enough, although I am talking not about someone who has been exonerated. Your Lordships know the phrases: “Mud sticks”, and “There’s no smoke without fire”. I have been in situations where people have been uncomfortable, not wishing to act precipitously, and yet inevitably their career has been blighted or besmirched simply because they have been involved in accusations of that kind.
We all have experience in both Houses of Parliament, where Members of this and the other House have committed something that has led them to face the wrath of a court. As a consequence they become subject to scrutiny from other Members who consider whether they should have sanctions applied to them. Most people are reluctant to cast the first stone. I am not talking about, “There but for the grace of God go I”; I am talking about human nature. Unless the crime is heinous, something that just cannot be tolerated, one simply says, “That might have been me”—or indeed, “That was me, but I wasn’t found out, and I won’t do it again”. We try to be generous in our attitude to various people of that kind.
The noble Baroness has raised the bar. It is right that if a court arbitrates in a matter and the person is found guilty, that ought to be sufficient for action to be taken about his worthiness to serve on the council. She also raised the delicate question of interpretation. Some people are very generous and open-minded—I almost said “liberal”—in such situations and prefer to leave these matters be. What with the public, the local press, the local group and the local ward committee, there are sufficient ways to punish the person, and I do not think that his or her private life ought to figure in that way. I hope that my noble friend can say something helpful; the amendments are certainly along the right lines.
I am troubled by this clause. I support the amendment and what my noble friend Lady Hanham said about a person’s private life not being included.
I am not entirely clear what this clause is trying to achieve. What do we think is the problem? As I have gone around the country in the past three years visiting local authorities, I have been immensely impressed by their standards of integrity and probity. I was a little concerned by what the noble Lord, Lord Greaves, said about the differences across the country and some diversity between councils. I do not know whether there was an inference there, but I hope that the point was about the diversity of quality in authorities. I do not see a great diversity in issues of integrity and probity because I think the standards are universally high across the country.
I agree. I was not suggesting that there is a huge diversity in standards of probity but that there is great diversity in the culture of councils and the way in which they do things. Despite the attempts over the years to impose uniformity from above, that still exists. I have never been to Kent County Council, but I have no doubt that if I went there, I would find a unique organisation which does quite a lot in rather different ways from county councils that I know better in the north of England.
I was not talking about Kent County Council either; I was talking about my experience across the country. While I agree that there are differences in some cases in the quality of councillors and the effectiveness of service provision, the standards of integrity are universally high across England. I have been enormously impressed.
What are we trying to achieve here? Has the national Standards Board added to those important issues of probity and integrity and the conduct of councillors? Overall, I am not certain that it has. I think that in many cases it has actually done more damage through blighting people. As very often happens, the case of an individual councillor can be taken to the national Standards Board which can consider whether there is a case to be heard for up to a year without that councillor even knowing that a complaint has been lodged against him or her. The board has not added anything overall. We need to think hard about it.
On the other hand, the local standards committees add a great deal. They have the knowledge and the experience; they have attended council meetings and know what is going on. Those problems are much better dealt with at the local level.
Therefore, I entirely agree that this point on private life should not be included in the Bill, but I have major reservations about whether the national Standards Board has added anything to the issue.
That is an important contextual point for the amendments that we are discussing. We had the beginnings of a debate on it when were discussing an earlier group. I am sure that the noble Lord is right pay tribute to the integrity of local councillors. The fact that the national Standards Board dealt with only three serious cases, defined by exclusions of five years or more, reflects that. It is difficult to say whether those three cases would have been dealt with differently if it had not existed in that form. A very small number of cases were sufficiently serious to lead to exclusion, which reflects much of what the noble Lord said.
If I describe Clause 184, it might clarify a few issues. It is important for councillors to set an example of leadership to their communities and uphold high standards. Members should be expected to act within the law even when they are not acting in their role as members. The clause provides that the principles which govern the conduct of members of authorities, and the provisions of the code which they are required to follow, may include principles and provisions which apply at all times. Therefore, the intention underlying the clause is that a member’s behaviour at all times, including in their private and official capacity, should be included within the remit of the general principles and the model of conduct. As noble Lords have said, the clause is a response to the interpretation of the code’s remit by the High Court in 2006 in the case of the appeal of the Mayor of London, which cast doubt on the ability of the code to prescribe the conduct of members in their private capacity.
However, our current policy is that the code of conduct in respect of English local authorities should prescribe a member’s behaviour in their private capacity where that behaviour has resulted in a criminal conviction. That is its common-sense and proper application. That view was supported by those who responded to our recent consultation on the code, including the LGA.
I have real sympathy with the intention of the amendment, which is to ensure that the remit and principles of the code should extend to conduct in a private capacity only where that conduct has attracted a criminal conviction. I would like to consider an amendment which would reflect that intention in the Bill, so that nobody is in any doubt that that is how we mean to proceed. It would be helpful.
The goal is to provide in the Bill for the remit to include all behaviour and for secondary legislation to provide for the code to prescribe behaviour in a private capacity. The recently revised code already includes that provision.
We consider that the proposals are consistent with the ECHR since the rules relating to members’ behaviour in their private capacity do not interfere in any person’s human rights to any extent which is greater than that for which the criminal law already provides. The proposals are therefore lined up with the ECHR.
I think that what I have said takes care also of the amendments tabled by the noble Baroness, Lady Hanham, which would have provided that the principles and provisions of the model code of conduct that govern the member’s behaviour apply in respect only of a member’s official capacity and not their private capacity. I have explained why we cannot do that and why the code does not reflect that, but with the caveat that we will make an amendment to the Bill so that nobody is in any doubt about the seriousness and special nature of the matter. I hope that she will accept that and not press her amendment.
I am grateful for the indication that an amendment will be introduced, because it is clear that the clause does not reflect the legal position that pertains and it would change the legal position again.
I support the position on criminal convictions. If the Minister is kind enough to introduce an amendment, we just need to look at the level of criminal convictions, because those convictions can be trivial as well as serious. Citing criminal conviction in a widespread way may leave us in nearly the same difficulties as we are in at the moment. Perhaps the law officers who are considering this could look and see whether it needs to be refined a bit. Then we would probably all be on the same lines.
I am grateful to the Minister for thinking so carefully about the points that we have raised in this amendment and to those on the Conservative Benches for their support. The noble Lord, Lord Bruce-Lockhart, is entirely right in saying that upholding the highest standards of integrity and behaviour is not only in the interests of everyone in local government but that people in local government genuinely subscribe to it. Questions about the standards regime in no way lessen that, but it is absolutely key that principles of natural justice apply in this field as they would anywhere else. There is at least sufficient evidence to cast doubt on whether previous practices have resulted in that.
The noble Baroness, Lady Hanham, referred to trivial criminal convictions. The answer here is to allow criminal justice processes to take their course, so that a decision is made whether someone is guilty or not of a criminal offence. After that, the standards process makes a decision whether that criminal offence is one that impacts on someone’s role as a councillor. In other words, a minor speeding matter may very well be seen by a local standards board as one that would not cause a problem or interfere in someone’s ability to be a councillor. It may be that that person is the executive member for road safety—in which case the local board may take a different view. But if in that two-stage process the criminal issues are separated out from issues of standards of the council, we may be on safer ground. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 236A to 238ZA not moved.]
Clause 184 agreed to.
Clause 185 [Certain references to code of conduct to include default code]:
238ZAA: Clause 185, page 125, line 33, leave out subsection (1)
The noble Lord said: This is the one that the Minister and I thought was in the first group, but my noble friend said that it was in a group that came later. I think that we passed it, but it was not a terribly substantive point anyway, and I am afraid that it is lost in the miasma for ever.
[Amendment No. 238ZAA not moved.]
Clause 185 agreed to.
Clause 186 [Assessment of allegations]:
238ZB: Clause 186, page 129, leave out lines 11 to 14
The noble Baroness said: My noble friend was referring to the kind of situation, which I call a “God and Robert Browning” moment, that occurred on a previous group of amendments a few days ago. There may be one or two more today on my part. Amendment No. 238ZB takes us to Clause 186 and new Section 57A, which will go into the 2000 Act. Like my noble friend, I question the clause.
My amendment would take out the provision which would allow the Standards Board for England to issue guidance in connection with the new section on suspending a standards committee’s functions or guidance on any regulations or any direction under this section. It was probably a knee-jerk reaction to seeing the words “Standards Board for England” that had me alighting on that. It allows me to question the extent to which the Standards Board for England should have the power to suspend a standards committee’s functions. New Section 57D starts with the words:
“In such circumstances as may be prescribed”.
Presumably that is the Secretary of State prescribing circumstances, and then the Standards Board for England can direct that the standards committee is disqualified.
It would be very helpful if the Minister could give us some clues as to the circumstances in which that would function. I use “function” when we are talking about functions. Shall I go on waffling for a moment? I could read the clause out. This brings a number of new provisions into the 2000 Act. I can see, in some senses, how it is trying to localise arrangements. I repeat my concern about the Standards Board for England having any role. It occurs to me that I could move the amendment because my noble friend has an interest in this group and he can go on talking. I beg to move.
My concern with this group of amendments is concentrated on the same issues as those raised by my noble friend. I do not want to say any more than she has said, other than to refer to new Section 57D(7), which is the power to suspend the standards committee’s functions. It states:
“The Standards Board for England may issue guidance in connection with—
(a) this section or any regulations under this section, or
(b) any direction under this section”.
To whom is the board to give guidance? This concerns actions by the Standards Board for England and it says that it may issue guidance in connection with those actions. It seems rather odd. If rules are to be laid down on how that is to work, I think it should be done through regulations because they would then apply to the Standards Board for England and to everyone else involved. The guidance seems to be made by the Standards Board for England for itself, unless I have read it wrongly.
I do not think the noble Lord has read it wrongly. I shall set out the main purpose of the clause and then we may be able to make sense of the amendment.
The clause provides the central provisions through which we want to deliver our policy of a more locally based conduct regime. Our intention is that the initial assessment of all misconduct allegations is now to be taken by a standards committee rather than by the Standards Board. If the standards committee decides that action needs to be taken on an allegation, it will refer the allegation either to the monitoring officer or to the Standards Board. Although we expect that most investigations of allegations will be undertaken by local authority monitoring officers rather than the Standards Board’s ethical standards officer—that is implicit in how we have organised it—we still have a reserve power to refer the more serious cases to the Standards Board for investigation. Because we recognise the importance of maintaining public confidence in this locally focused system of assessment, where the standards committee decides that no action should be taken on an allegation, the person who made the allegation may request a review of that decision. Following such a request, the provisions requiring a standards committee to make a decision on how to deal with the allegation will again apply. The committee has to make a decision within three months of receiving the request for a review. The noble Lord, Lord Greaves, asked about appeals, and that is a sort of low-level appeal mechanism.
The clause is extremely concerning. This is a double jeopardy situation where someone makes an allegation, a hearing is held, and the person making the allegation does not like the outcome and has a right to take it to a higher authority. That is very dodgy indeed. I cannot think of any situation in the law or in tribunals where an allegation can be made and the person making the allegation decides that they do not like the adjudication and can whip it off up to someone else. We do not have a right of appeal for someone who is accused of something and found against. It is the wrong way round here. We are beginning to run into the problem of people being guilty until proved innocent. Once the allegation is adjudicated on, that should be it.
This is a related point; perhaps the noble Baroness can write to us on this as well. If there is to be a system where big, important or problematic cases can be called in to a national level, surely that process should occur before the local process has been gone through and not afterwards. Should it not be like a planning application, for example, where the Secretary of State may say, “We’ll deal with this, so pass it over to us”? I am not saying that that is a good system.
I do not think that is logical. The point about having local committees is that they will do the sifting. They can decide the nature of the complaint on the basis of the evidence they have received and whether something is sufficiently serious at that stage to go to the Standards Board. If it were the other way round, we would be in the current position where everything is referred first to the Standards Board and there is no local input at all.
That may be the process by which it happens, but that sifting process will determine whether it is a major issue, after which it would be sent to a national level and the local committee would not hear or deal with it, so it would be sent after the sifting process but before it has been dealt with locally. Is that not the case?
The local committee, not the complainant, decides whether to refer the case upwards. The process of sifting through the local committee will determine the seriousness of the complaint and therefore whether it should be referred.
I have rather lost track of where I was on the original amendment. We were talking about the role of the Standards Board to issue guidance, particularly on the standards committees’ powers to make initial assessments in, for example, cases where appropriate levels of performance have not been achieved. In such cases any allegations or review requests will instead be dealt with by either the Standards Board or another local authority. The noble Baroness asked essentially—because her amendment seeks to delete that power—under what circumstances that guidance might be issued and what it might cover. This all comes within the general scope of trying to make the Standards Board a vehicle whereby we can promote good and systematic practice across the committees’ work. That will range from the way initial assessments are done, the nature of the evidence, the way it is reviewed and so on.
I do not have detailed notes on the work on suspending standards committees’ functions. It will obviously relate to a range of potential poor performance. It may concern the way that they are dealing with initial assessments or complaints or making judgments. The guidance is not yet written but it will have to be clear about the scope and the nature of that matter. I shall have to write to Members of the Committee about that because we do not have that detail in front of us at the moment. This clearly raises a lot of questions about how serious faults have to be, at what point people will see that a standards committee is not performing to the standards set down in guidance, and what must be done to bring it up to a higher level of performance. I am afraid that I cannot take the Committee any further on this as I simply do not have sufficient detailed information about that part of the operation. This is work in progress. However, I am happy to add that to the list of questions that I shall take away.
I think that the Minister questioned what I said about the allegation then being reheard. I draw her attention to page 127 and new Section 57B, which is headed, “Right to request review of decision not to act”. New Section 57B(2) states:
“The person who made the allegation may make a request to the standards committee … concerned for that decision to be reviewed”.
That means that it will be a second hearing.
We all understand the complexity of some of this, or at least we understand that it is complex; that may be as far as our understanding goes. I am very grateful to the Minister for agreeing to write. This throws into sharp relief the concerns that we have about how far this legislation has been thought through before it reaches us.
When I was gathering together my papers this morning for today’s proceedings, I thought that this was, to borrow the noble Baroness’s word, a rather dodgy amendment, but I am extremely glad that I decided to move it, even though I was not entirely convinced by it myself, because it has thrown up some very important issues. Quite apart from the, as it were, philosophical points raised, some of the practical issues of how these things may work lead me to suggest that whoever makes the relevant regulations—I got a bit lost in that—might like to include a flow chart to assist standards committees.
I end with a point of principle on new Section 57D, headed, “Power to suspend standards committee’s functions”, which is that it seems to have left the council out of this entirely. It is just the standards committee, which I know has a very specific status and a different status from that of a transport committee, for example, but I do not think that there is a way, as it is written here, that the matter is ever brought to the attention of the council, which is part parent of this.
I am very grateful to other noble Lords for the points that they have made, because they will help our debate in the long run. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 186 agreed to.
Clause 187 [Information to be provided to Standards Board by relevant authority]:
238ZC: Clause 187, page 130, line 20, leave out “different relevant authorities”
The noble Baroness said: The amendments in this group ought to be easier. Amendment No. 238ZC relates to what would be the new section about information to be provided to the Standards Board, which says:
“Different directions … may be given in relation to different relevant authorities or different descriptions of relevant authority”.
I can understand,
“different descriptions of relevant authority”,
which I take to be a shire, district, or London borough, but “different relevant authorities” seems to be potentially discriminatory against individual authorities. I do not understand why that is necessary and I hope that the Minister can set my mind at rest.
Amendment No. 238ZD would add to the part of the new section that says that a,
“direction … may be varied or revoked by a subsequent direction of the Standards Board”,
a suggestion that the Standards Board ought to comply with directions given by the Secretary of State. This is all part and parcel of my personal confusion, which I do not lay on anyone else, about the respective roles of the Secretary of State and of the Standards Board. We have talked about the track record of the Standards Board, and I have confessed that I have been prompted to table certain amendments by seeing its name. I hope that the noble Baroness may be able to help me. I beg to move.
I hope that this is easier, too. It is only when you get into the cut and thrust of Committee stage sometimes that you realise that there are complexities in articulating what you thought you understood in the first place.
The group of amendments relates to the arrangements by which information is to be provided by authorities to the Standards Board. Clause 187 enables the board to direct an authority to provide it with information in relation to the misconduct allegations that it has received and the requests received to review its decisions. That sort of information would be used to monitor the performance of standards committees and monitoring officers in carrying out their roles. This is necessary so that the board is able to make decisions on what further support and guidance committees need to improve their performance and on whether to remove a standards committee’s powers to make initial assessments of misconduct allegations.
Amendment No. 238ZC provides that, in giving directions to authorities on the information required, the board would not be able to give different directions to different authorities; it would be able to do so only to different types of authority. The noble Baroness asked about the relevant authority. The problem is that what she suggests would impede the effectiveness of the board’s monitoring role. We have specified relevant authorities so that different types of information can be given flexibly enough to meet different types of situation. The amendment would make it difficult to be able to request precisely the information required. Part of the problem is that that would be discriminatory to an extent; it would not allow for sufficient sensitivity to ask for the sort of information needed. That would be the effect of the amendment. The problem is that different authorities are likely to provide different sorts of challenges to the Standards Board in the management and monitoring of their performance. They will need to be able to provide different sorts of information to the board, depending on the different situations that they face. Therefore, I am simply saying that there needs to be as much flexibility as possible in the board’s capacity to request information.
The term “direction” is slightly blunt. It will mean any sort of exchange that the Standards Board has with the standards committee. It might take the form of a request by e-mail or letter to provide information, so “direction” is a slightly heavy-handed description. Most requests for information will be in the form of exchanges of letters with individual authorities, because there will have to be a tailor-made approach to each situation in order to get the right information on the right subject. Some requests will come from the other direction, with the standards committee seeking the advice of the board. Again, one wants to be able to build in as much flexibility as possible for those exchanges. There is no intention that any such directions will be imposed in a heavy-handed way, but we want to ensure that requests for information allow matters that are particular to each authority to be looked at more effectively and that they allow areas of concern to be identified.
Amendment No. 238ZD provides that any direction issued by the board about the information to be provided should comply with any direction given by the Secretary of State. The Secretary of State has no role in relation to the Standards Board and we do not want there to be such a role. We think that it would be very inappropriate for the Secretary of State to intervene in the board’s day-to-day operation of the regulatory regime and therefore we do not sympathise with the thrust of the amendment. The board is an independent regulator. It has to make its own decisions using its expertise and experience, and that is why we do not want to accept the amendment.
I think that all this will bear careful reading, but possibly not for a week or so. I hear what the noble Baroness says about the Secretary of State not having a role. That is an important point, but one needs to go back through some of our deliberations and be satisfied that that is the case. As to Amendment No. 238ZC, I think that I understood what the Minister was saying—that it is the different information rather than the different authorities that is relevant, although I should not use the word “relevant” here. She also talked about the Government’s intention that there will not be a heavy hand in this. Our role is to ensure that the words reflect the intention, and therefore I may want to return to that at a later stage. However, we will need to read the whole of these exchanges in order to flesh out the proposals in our own minds. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 238ZD not moved.]
Clause 187 agreed to.
Clauses 188 to 191 agreed to.
Clause 192 [Ethical standards officers: investigations and findings]:
238ZE: Clause 192, page 133, line 25, leave out paragraph (b)
The noble Baroness said: Amendments Nos. 238ZE and 238ZF are “Day 6 in Committee” amendments, in the sense that they reflect the fact that at this stage in Committee, and combining my brain with that of my noble friend Lady Hamwee, we are unable to make any sense of two provisions in the Bill. Therefore, I have tabled the amendments in the hope that the Minister can enlighten us.
Amendment No. 238ZE concerns the removal of a provision from the Local Government Act that allows members or co-opted members, or former members or co-opted members, to have access to documents. We do not entirely understand why that provision is to be removed. Amendment No. 238ZF refers to a provision in the Bill that we simply do not understand. Once we know what it means, we may have a bit more to say about it. In the mean time, I beg to move.
These confessions are coming thick and fast at this stage of the Bill. Amendments Nos. 238ZE and 238ZF relate to access to information arising from investigations by the ethical standards officer of the Standards Board. I will explain what Clause 192 does and how the amendments would bite on it. It extends the current access that an ethical standards officer has to documents, so that his access will not be limited, as now, to documents relating to a relevant authority or to an individual member. This is simply to allow an officer to be able to conduct an effective investigation by getting access to documents which may not necessarily relate directly to the local authority or the person, but which may relate to another interest that is relevant to the investigation, such as papers relating to the interests of family members, friends or associates.
Amendment No. 238ZE would allow access only to documents directly relating to the member and not to other relevant documents that might be relevant to a member’s personal interests. After experience of the way in which the Standards Board has been working, we feel that this would unnecessarily restrict the remit of the investigation and lead to relevant evidence in some cases not being made available. The advice that we have obtained from the Standards Board, based on the board’s experience of the operation of the current arrangements over the past five years, is that the current restriction in the rules allowing only access to documents relating to an individual member has resulted in a number of cases where it was not possible for the investigator effectively to gather all the relevant evidence pertaining to the case.
The sort of information in question would include, for example, a contract with the council entered into by a member of the councillor’s family, which could provide evidence of a conflict of interest but which would not be accessible under current rules since the contract would not relate directly to the member personally. It is that sort of situation. There is no intention to allow the ethical standards officer access to any or every piece of information at his whim. The access rule is limited to information that is strictly necessary to the officer’s investigation. So the safeguards are there.
Clause 192 also extends the number of persons and bodies to whom information obtained by an ethical standards officer during an investigation may be disclosed for the purpose of their functions. Amendment No. 238ZF would provide that the Secretary of State would not be able to add by order further people to the list of people and bodies to which disclosure of information can be made. We feel that this is unnecessarily restrictive because it would lessen the flexibility available to the Secretary of State to allow the sharing of information with other public sector bodies so as to facilitate the effective operation of the local government conduct regime.
I stress that this is very much intended as a reserve power. We would want to extend the list of bodies only in rare cases. The bodies added would have to be public bodies, such as the Standards Commission for Scotland or the parliamentary and health ombudsmen, which have overlapping responsibilities with the Standards Board. So in exceptional cases there would be a reserve power, but it is necessary.
Having received the report of the Delegated Powers and Regulatory Reform Committee, we will now provide for any addition to this list to be made by affirmative resolution, which will involve an appropriate level of scrutiny. So we have added a further parliamentary safeguard to the process.
I am grateful to the noble Baroness. It goes to show that, when we tabled these amendments, our brains were functioning. Having heard her response, I can now remember why we thought that these issues were significant. Certainly, extending access to documents should not be taken lightly. I can understand that in some cases it may be useful or even essential to have access to certain documents, but we should not underestimate how significant it is for the family of an elected member to know that their affairs can be looked at.
This is something to which we need to give further thought over the Recess. These issues go to the heart of the argument; we are talking not about criminal allegations, but about a set of circumstances that apply only to local councillors and for which there is no proper legal process. However, yet again we can see how the process is quasi-legal and therefore drags in other people, including family members and so on.
I can now remember why I made the query in relation to Amendment No. 238ZF. I did so because the issue was raised by the Delegated Powers and Regulatory Reform Committee. I am pleased that the noble Baroness has said that the affirmative resolution procedure will be used. Again, adding to this list by order is significant and ought as a matter of course to be brought to the attention of the House to enable any concerns to be raised. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 238ZF not moved.]
Clause 192 agreed to.
Clause 193 [Ethical standards officers: reports etc]:
238ZFA: Clause 193, page 134, line 15, at end insert “and shall do so if a reference under subsection (3)(b) is withdrawn”
The noble Baroness said: Clause 193 concerns reports made by ethical standards officers. The ethical standards officer can refer a matter to the adjudication panel and it appears that the Secretary of State can and therefore no doubt will make regulations for the withdrawal of the reference. This amendment probes the circumstances in which the ethical standards officer will be over ruled, because that is what this amounts to.
My notes say that Amendment No. 238ZFB relates to an interim ethical standards officer report. I cannot now make sense of the amendment because grammatically it does not seem to fit. I realise that the people who make sure that our amendments normally make sense when we put them down—the Clerks to the House—must have been as tired and rushed as I was. I apologise to the Committee for what may be a nonsensical amendment—I wish that my noble friend would stop giggling—but my point about the relationship between the ethical standards officer and all the other dramatis personae in all this still stands. I beg to move.
The first amendment refers to the power in Clause 193 about the withdrawal of a reference. Clause 193 provides a power for the Secretary of State to make regulations concerning the withdrawal of a reference by an ethical standards officer to the adjudication panel. The circumstances in which it would be right for a case to be withdrawn might include one where, for example, after the ethical standards officer had decided that the case should be referred to the adjudication panel for determination, further evidence emerged that indicated that there was no case to answer, or where the pursuit of the case would not be in the public interest, such as where somebody involved suddenly contracted a terminal illness. The clause allows for personal circumstances of that sort. We need to keep that flexibility.
Amendment No. 238ZFA would require the Secretary of State to make regulations allowing the withdrawal of a reference to the panel in cases where such a referral was likely to lead to the disqualification of a member. It is unnecessary because it is already our intention that the regulations should include the possibility of the withdrawal of a case where the member would otherwise be likely to be disqualified.
Clause 193 also provides for copies of reports by an ethical standards officer following his investigation to be put to the standards committee in order to assist it in carrying out its functions. That would apply where the ethical standards officer considered that making members aware of the circumstances and outcome of a case would help them to develop their knowledge and understanding of the operation of their regime. Amendment No. 238ZFB would require the ethical standards officer to pass a copy of the report on a case to the standards committee where a referral to the panel was withdrawn. That is unnecessary because there is no particular reason why there should be a requirement to copy a report to the committee in those circumstances, as we are already proposing that a report should be given to the committee on every occasion when the officer considers that the committee would benefit from it. That would be the effect of the noble Baroness’s amendment, but it is already covered by the wider provisions.
I am grateful for the Minister’s explanation. It reinforces comments made earlier about the importance of seeing draft regulations before we come to discuss this at the next stage. Some of the provisions are difficult to read because they amend earlier legislation in just a few small words and it is hard to follow quite what the cumulative effect is, but that is something that one has to grapple with. There are different ways of presenting legislation. So much of this depends on regulations that are in the mind of the Government and, however much we are mind readers, we cannot read everything. When the regulations are potentially very important and what the Government have in mind casts a completely different light on what is proposed in the legislation, that leads us to question the legislation itself. I do not mean to lecture the Minister, and I hope that she does not take it that way. I am expressing a degree of frustration, largely with myself for having such difficulty with this, and considerable concern about having to deal with legislation where we cannot understand its totality. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 238ZFB not moved.]
Clause 193 agreed to.
Clause 194 [Disclosure by monitoring officers of ethical standards officers’ reports]:
238ZFC: Clause 194, page 134, line 39, at end insert—
“( ) the standards committee of the relevant authority;”
The noble Baroness said: Amendment No. 238ZFC probes why new Section 65A is required. Is sending a report to the standards committee provided for somewhere else? If not, is it required, or is it covered by the reference to the monitoring officer in Section 66(2)?
Amendment No. 238ZFD deals with Section 66(6) of the current Act, which allows ethical standards officers referring matters to monitoring officers to give directions on the way in which those matters are to be dealt with. I realise what a significant power that might be. I had always understood that the role of the ethical standards officer was primarily investigative rather than about applying sanctions. Certainly under the new regime, if this means that the ESO can tell the monitoring officer how to deal with something, it does not reflect the reference to local determination and all that surrounds that. I beg to move.
Amendments Nos. 238ZFC and 238ZFD relate to the treatment of matters referred to the monitoring officer. Clause 194 provides that a monitoring officer may copy an ethical standards officer’s report to any member or officer of the authority. Amendment No. 238ZFC would provide that the standards committee should be added to the list of relevant persons to whom a monitoring officer may send a copy of the report. This is unnecessary because proposed new Clause 65A(4) already provides for the report to be sent to members of the standards committee—that is what “relevant” means in that proposed new subsection—as well as to other members and officers who would benefit from the information that the report may contain. We believe that the existing drafting is sufficient to ensure that those with an interest in the report, or those whose knowledge and experience of the system would be improved by seeing it, will be included in the circulation.
Clause 195 provides for the ethical standards officer or the standards committee to give directions on how a case should be dealt with when they refer it to the monitoring officer for action. Amendment No. 238ZFD would delete this power. That would seriously hamper the effective operation of the conduct regime by preventing the appropriate officers giving instructions on how particular matters should be handled; for example, in cases in which the ethical standards officer or the standards committee decide whether a particular case should be investigated, or whether other action, such as requiring the monitoring officer to circulate information referred to him for training purposes, would be appropriate.
The power already available to ethical standards officers to give directions to monitoring officers is being used proactively to seek mediation between parties to improve the content and availability of training and to ensure that members get access to better information. This is a very positive power with no heavy handed implication that they will be told what to do in all cases. It is there, in essence, to provide guidance on the availability of other options, and removing it would mean that matters could be dealt with only through formal investigation, which is not always the best way forward. It provides for those situations in which a middle way or a lower order of intervention would be appropriate.
This is something else that we will need to think about more. The Minister used the terms “instructions” and “guidance”, which are different. The legislation is about directions, so again one needs to understand the interrelationship and the hierarchy of all this. I am grateful for her answer, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 194 agreed to.
Clause 195 [Matters referred to monitoring officers]:
[Amendment No. 238ZFD not moved.]
Clause 195 agreed to.
Clause 196 [References to Adjudication Panel for action in respect of misconduct]:
238ZG: Clause 196, page 136, line 17, leave out “include” and insert “are”
The noble Baroness said: Clause 196 adds new Section 66A to the 2000 Act. It refers to the,
“kinds of action that may be authorised”,
by the new provision which enables panels of the standards committee,
“to decide what action, of a kind authorised by regulations”—
one would expect that—“should be taken”. Those “kinds of action” include ones authorised by further regulations. The amendment concerns the word “include” again. I apologise to the Minister if her explanation that “include” means “are” or something different was given to my noble friend during debate on a previous clause. I realise that I had stepped out of the Chamber when that was being debated. If “kinds of action” includes certain kinds of action, what else might they include? I beg to move.
This amendment relates to the sanctions available to the Adjudication Panel for England. Clause 196 provides that the Secretary of State may make regulations in respect of the referral of a case by a standards committee to the adjudication panel where the committee considers that the sanction available to it of a maximum three months’ suspension from office would be insufficient. In such circumstances, the committee will be able to refer the case to the adjudication panel, which can determine a sanction of up to five years’ disqualification from office.
Amendment No. 238ZG provides that the sanctions to be made available to adjudication panel members when a case is referred to it by the standards committee may include only the limited sanctions under Section 78A(4) to (6) of the Local Government Act 2000. That would unnecessarily reduce the range of sanctions to apply for cases referred by standards committees. The sort of things that would be excluded, for example, would be the option to take no action or the option to take action other than suspension or disqualification from office; or a requirement to undertake training or to seek mediation or to apologise. A whole range of things come into this area before one moves into the much heavier arena of disqualification. That would be the effect of the amendment. I hope that provides clarification.
Yes, it answers the question, but it makes me think that it is fairly difficult for legislation to talk about “kinds of action” that will be dealt with in regulations. It seems symptomatic of a culture where you cannot do anything unless an Act of Parliament permits it. I suppose that this reflects my feelings on giving discretion to local standards committees and so on. Perhaps it is just a pity that we are in a state of affairs where we have to have such complicated legislation. I am grateful for the explanation, which I think I followed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 196 agreed to.
Clauses 197 and 198 agreed to.
Clause 199 [Case tribunals: England]:
238ZH: Clause 199, page 138, line 5, leave out “may in particular” and insert “shall”
The noble Baroness said: The three small amendments in this group have nothing in common except that they all relate to the same clause. None of them is particularly important, but I should like some clarification. Amendment No. 238ZH refers to new Section 78A(5), which states:
“Regulations made under subsection (4) may in particular”,
and goes on with a list. I am querying the use of the words “in particular”, which suggests some kind of emphasis. I am not clear about whether paragraphs (a), (b) and (c) of new subsection (5) are in order of importance or are equal, but there are other regulations which may come forward emphasising different things. I return to the point I made before: given that we are talking about ethical standards, a quasi-legal process and possible suspension from office, we need to be clear about the parameters of the regulation.
My second amendment relates to the five-year exclusion period. Being barred from office for the remainder of your term and then barred from standing again for a period of up to five years is a fairly heavy penalty. I invite the Minister to explain why five years has been chosen and what kind of behaviour one could have in mind that would be so heinous as to deprive a person of the right to stand for office for five years but would not be criminal or fall foul of something more serious. I am racking my brains to think of an example.
The third amendment—I am getting tetchy—relates to subsection (5)(c), which states:
“enable it to disqualify the person …for being”.
I have always thought it should be “from being”, and yet “for being” is written throughout the Bill. I am not sure whether there is a grammatical construct which applies only to legislation or whether it is just bad grammar. I beg to move.
I dread the idea of the noble Baroness getting tetchy so I shall deal first with her third amendment. Mysterious are the ways of parliamentary draftsmen. Amendment No. 238ZK is a minor drafting amendment which was elegantly introduced by the noble Baroness. I shall take it away and consider whether it would be sensible to incorporate in the Bill an amendment on these lines. We can certainly deal with that.
As regards the other two important amendments, Clause 199 provides a new power for the Secretary of State to make regulations concerning the sanctions which a case tribunal, drawn from the adjudication panel, can impose. The intention is to allow the tribunal to impose a range of sanctions, including, for example, that the member should receive censure or undertake training or conciliation. This comes back to the debate we had on the previous group of amendments. Amendment No. 238ZH provides that the sanctions available to the tribunal should include specific measures listed in the Bill and not include any other measures. But we want to keep the flexibility to be able to support and develop a councillor rather than having to go for the punitive option. As to the notion of whether this indicates a hierarchy, no it does not. These three different options can be equally effective depending on which one is chosen to meet the situation. It is to make clear that this can be done legally under the power in Clause 119(5).
Amendment No. 238ZJ provides that the sanctions available to the tribunal would not include the current option of disqualifying a member from office for a period of up to five years. I asked these questions when I came to look at this part of the Bill and it is quite interesting how the use of these sanctions is attached to very serious qualifications. For five-year disqualifications, there have been only three determinations in this period, including breaches for sexual assault and child pornography which resulted in a sentence of less than three months’ imprisonment; they are serious offences. For four-year disqualifications there have been five determinations, including breaches for being convicted of a public order offence. For three-year disqualifications there have been nine determinations, including breaches for the bullying and intimidation of an officer of an authority. The noble Lord, Lord Greaves, said earlier that you must not exclude the possibility of people having a row and a constructive dialogue in the process, but we have enough experience now of bullying in the public sector to know what it looks like and feels like. I believe that to have such sanctions on that kind of behaviour is quite proper. There were 134 determinations resulting in disqualification for one year or less, including breaches for disclosing confidential information and failing to register an interest. So you can see how the regime has been applied.
The most serious cases of misconduct, such as sexual assault and child pornography, are dealt with by the courts by criminal conviction, but there are some serious cases of misconduct that may not come to court, including considerations like bullying and intimidation. They attract a three-year disqualification but do not end up in court. The ethical regime provides a necessary mechanism for disqualifying or suspending a member from office. Without it, an assault resulting in a criminal conviction and a prison sentence of less than three months would not of itself prevent someone from continuing as a councillor. We are looking for credibility and proportionality. It is interesting that there have been so few cases of five-year disqualifications.
We are back to what was underlying some of the discussion earlier: the arbitrary nature of some of these decisions. I am not talking about serious criminal behaviour here. Some events that take place, because someone picks them up, takes great personal offence at them and determines to pursue them, end up with a councillor being disqualified, but, to be frank, they are no different from circumstances that go on all the time in many places—probably most places. That is the difficulty.
I happen to know about two of the cases the Minister has referred to, and in both of them the decisions were disgraceful. They were overly penal convictions. I hesitate to use the word “conviction”, because these are not legal cases, but in effect that is what it is, whether being a councillor is part of your life or, nowadays, you do it full-time. You are being treated differently because someone decides they want to go for you. It is as simple, and as honest, as that.
I have two points. First, there is a clear rule that applies if you are convicted of an offence that carries a penalty of three months or more in prison, suspended or not. That is an objective criterion, in the sense that it is a penalty laid down by the court in relation to an offence, and it has been arrived at through due process with proper rules of evidence within a court. The problem is that the standards board’s rules of evidence and the way it reaches decisions on cases are not of that calibre. They are administrative punishments rather than punishments through the normal rule of law. It is unsatisfactory that that can happen.
Secondly, councillors under these circumstances are being treated quite differently from members of other legislative assemblies. They are being treated differently from MPs, Members of this House and, as I understand it, Members of the Scottish Parliament and the Welsh Assembly. Councillors are being treated more severely under these circumstances than anyone else, and that cannot be right. That is why some of us have great difficulty in accepting the fairness of the system so far as disqualification is concerned.
I am grateful to the Minister for agreeing to take a look at the grammar and for explaining the use of the word “particular”, but the amendment about the five-year period is more substantive. It provides an opportunity to underline some of the points I made earlier in a debate on other amendments, and I am grateful to my noble friend Lord Greaves for highlighting once again that it is the question of process here that is causing us a problem. Sanctions and penalties are available to people because of the office they hold that would not be applied to anyone else. That is one area where there is a potential conflict with human rights legislation.
I ask the Minister and her team to look at rulings in the European Court about the use of courts martial, for example. It ruled against the use of courts martial, on the basis that they provided a level of sanction against someone that would not be available if they were doing some other job and that the procedure used to arrive at the decision was rather less robust than normal legal process. I suggest that it is possible to interpret that ruling on the military as applicable to this situation.
No one on these Benches, the Benches opposite or in local government wants convicted criminals standing for councillors. Nevertheless, there is a question of balance, and it goes back to my earlier point about natural justice. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 238ZJ and 238ZK not moved.]
Clause 199 agreed to.
Clauses 200, 201 and 202 agreed to.
238ZL: Before Clause 203, insert the following new Clause—
“Code of conduct for local government employees
In section 82(1) of the Local Government Act 2000 (c. 22) (code of conduct for local government employees) for the word “expected” substitute the word “required”.”
The noble Baroness said: We discussed earlier the importance of the need to understand the difference between codes of conduct and the Standards Board regime. We on these Benches are in favour of codes of conduct—it is how to enforce them that has exercised us.
I want to use this opportunity to raise the question of codes of conduct for employees because so far the debate has concentrated on codes of conduct for elected councillors. But, as we have heard from my noble friend Lord Greaves, there is a question about the behaviour of council officers and employees. It struck me that there is a particular issue because of the changing styles of governance. I ask the Minister to consider these and commission some work, through her department, regarding the impact that changes of governance have had on relationships between council members and officers. Those of us with a background in local government probably all started in the days when the loyalty of council officers was unequivocally to the council as a whole. We all know that in the real world, that probably meant slightly preferential treatment for the group in administration. Nevertheless, it was clearly understood that the loyalty was to the council as a whole.
From discussions with colleagues, it appears to me that moving to executive arrangements, particularly those where the power is vested in one individual—a mayor or a so-called strong leader—changes the fundamental nature of the relationship. Officers become much more attuned to the needs and demands of the one person rather than the whole council. That is exacerbated by the fact that, as we do not have term limits for mayors or for leaders, some of them will be in place for a very long time. That may provide the strong government with continuity that central government wish for; nevertheless, there is a danger that, over the years, all the senior appointments will have been made by that individual and that a culture of independence and challenge that has been in local government runs the risk of being undermined. That could have serious knock-on effects for the way in which our councils are run. If the Government are serious about back-benchers having a proper scrutiny role, this is of profound importance. I beg to move.
When I looked at the difference in meaning between “required” and “expected”, the words of Horatio Nelson came straight to my mind. He said:
“England expects that every man shall do his duty”.
There was no argument about what “expect” meant. If the aim of the amendment is to strengthen the intention that employees are expected to be impartial, loyal, trusting and trustworthy, there could be an argument for it, but, quite frankly, I cannot see the difference between the two words.
My experience, which is not as great as that of many people on the other side of the Chamber—mine and that of colleagues certainly does not add up to 87 years or a small share of it—was that there was never any question that the best service was given to the council. The noble Baroness clearly referred to senior employees with muscle and perhaps with their own agenda. People who were in power one year, then out of power again, of course carried the confidence of the chief officers. There would be a relationship or an ambience among the senior members on all sides, but there was never any question about the quality of the advice. The Minister may be able to advise us whether there is any need for, or value in, the proposal. If there is a value in it, I am prepared to listen, but I cannot see it.
I have already raised this issue with the Minister. The arrangements that we entered into—a Cabinet system and those for the rest of the council—have changed. Being leader of a large council, I know that, given the complications of the world these days, with CPAs, LAAs, MIAs et cetera, you need a sophisticated cadre of officers supporting you and working with you. Sometimes, the opposition parties, even one’s own back-benchers, are not interested in that side of things. They need a sophisticated group that supports a leader and the Cabinet members. They are growing increasingly distant from the challenges that one faces all the time, whether it is waste or adult social care, and from the bulk of the other members. The other members do scrutiny and need to be involved in policy development. Essex County Council has 75 members—so we have 10 in the Cabinet and 65 others. I increasingly feel that one needs a group of officers that gives more support to the others, helping them to do the scrutiny rather better and understand the policies, rather than a group which helps the Administration.
I have mentioned this matter to the Minister. She has mentioned it to the ex-leader of Camden council, whose name I have forgotten.
I have received a letter from her, no doubt prompted by the Minister, asking me to talk to her about this issue, so that her commission can examine it. The noble Baroness, Lady Scott, said that it is an issue that needs to be raised and examined. I support that, but I repeat that a leader needs a sophisticated, not a political, band of officers working just to help them through today’s minefield of complicated legislation and policy initiatives. I support the noble Baroness.
I understand that. I also understand that the opposition sometimes comes from the back benches of the controlling group, as we saw earlier today in the House. It happens on councils, too, and quite rightly so, because if scrutiny is to work, it has to happen. However, the noble Lord’s is a big-council view, because only big councils will be able to afford to employ those extra officers. For smaller councils that are desperately trying to cut back the number of staff and make 3 per cent cashable savings every year there is simply not the resource to do that. So we come back to the dilemma to which my noble friend referred: to what extent under the new arrangements are officers working for the controlling group or groups the people who have executive responsibility for the council and to what extent are they working for the whole council? It used to be very clear but it is not clear now. Even if it is a muddle, it should be set out so we all understand it and how it will work. But it ought not to be a muddle.
As an ordinary back-bench councillor you used to be able to get confidential help and advice from officers. If you had casework in your ward, on most councils you could do that confidentially through the appropriate officers. Nowadays, more often than not it will be passed on to the executive member or whoever has executive authority for that area. In many councils you have to deal with the executive member and not with a member of staff, who may be an opposition member in your own area. For political reasons and reasons to do with relationships, you do not want to deal with them—you want to deal with an impartial civil servant. In many cases, you cannot do that any more. That is a real problem. Political groups used always to be able to get confidential advice from officers. You cannot always do that now. If you want it, you often have to argue hard and negotiate for it. Again, these are more problems for big councils and big political urban councils than for smaller councils—but they are real problems.
There has to be an acceptance within councils that opposition and what oppositions do—as well as scrutiny from the back benches of the ruling party—is necessary and honourable. It is part of politics and makes the council better in the long run. That understanding is not there. There were councils in the past for which it was never there—but there are now problems.
This very interesting debate went broader than the clause or the amendment. To an extent, some of the things that I was going to say about how a potential code might work might not cover some of the issues. The changes in governance raise very interesting questions about dynamics, access to information and so on, in how people work. I hope that those wider issues are considered by Jane Roberts’s committee, because they have a knock-on effect on whether people want to be councillors and have the support that they need to do the job that they want to do. So it is by no means irrelevant.
We started consulting on a code for employers in 2004, and we think that it is time to look again at the issue as a whole. It will be important to see whether there are lessons to be learned from the code for councillors. So it is very much a live issue. If we were to come up with a code of conduct for employers, it could clarify some of the things raised today in the Chamber. So it would be worth pursuing it in a broad context, to see what could be picked up appropriately.
Amendment No. 238ZL would provide that employees would be required to follow the code. That in itself is unnecessary, because Section 82(1) of the Local Government Act 2000 is deemed to incorporate any such code that comes forward. Likewise, contracts held by employers are deemed to include observance of the code, too. The machinery is in place, so, should we come with a code, there would be no problem. The existing wording of Section 82(1) provides that the Secretary of State may issue a code of conduct that sets out the conduct expected of employers, which mirrors the drafting of the equivalent provision in the Act relating to the code of conduct for councillors and imposes in the same terms a statutory requirement on members to follow such a code. So it has been put in place and lined up.
After the examples and the experiences that Members of the Committee have brought to this debate, we shall look very carefully at what has been said and implied by those comments.
I am grateful to the noble Baroness for that constructive reply and for undertaking to see how this might best be moved forward. I am also grateful for the comments from those on this side of the Chamber. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 203 [Politically restricted posts: grant and supervision of exemptions]:
238ZM: Clause 203, page 142, line 8, leave out “general advice” and insert “guidance”
The noble Baroness said: This group of amendments takes us to the provisions on politically restricted posts. Four of the five amendments seek to change “general advice” to “guidance”, to ask where “general advice” comes in the hierarchy. How much does it have to be complied with? These provisions were inserted in Committee in another place and certainly the more devolved some of these things are, the better. The new provisions could mean that there are different regimes in, for example, neighbouring authorities or possibly even in a district within a county where there are differences. My basic question is: what is meant by “general advice”?
Amendment No. 238ZQ deals with guidance from the Secretary of State. I believe that in Committee in another place, the Minister indicated that the designation of politically restricted posts was still central, but exemption from designation would be a local matter. I was trying to understand whether this is the clause that implements that statement. I beg to move.
Yes, Clause 203 provides that the granting and supervision of exemptions of local authority posts from political restrictions will become the responsibility of the standards committee of each authority, rather than that of the independent adjudicator, who is an independent office holder appointed by the Secretary of State. The clause also provides for the Secretary of State, after consulting representatives of local government, to issue general advice to assist standards committees in making their decisions on political restrictions.
The term “general advice” is there because, since 1989, that term has been used by the independent adjudicator and it is commonly used. It has statutory force and is interchangeable with “guidance”. I agree with the noble Baroness that it is rather confusing, so I shall take this matter away and think about it.
I am extremely grateful. The Minister is being very accommodating this afternoon. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 238ZN and 238ZP not moved.]
Clause 203 agreed to.
Clause 204 [Politically restricted posts: consequential amendments]:
[Amendments Nos. 238ZQ and 238ZR not moved.]
Clause 204 agreed to.
Clause 205 agreed to.
Clause 206 [Proposals for joint waste authorities in England]:
238ZS: Clause 206, page 143, line 37, at end insert “and provided that the waste disposal authority for the area specified is consulted and may be invited to participate as one of the local authorities making such proposal”
The noble Lord said: I welcome the opportunity presented in the Bill to establish joint waste authorities; the disposal of waste is one of the biggest issues facing local government these days. The provision has been subject to detailed consultation with local authorities through the Innovation Forum, which has provided further clarity on this rather exciting opportunity. However, while Part 11 of the Bill sets out a framework under which a group of local waste authorities can submit to the Secretary of State for approval a proposal to form a joint waste authority, I am proposing that this part of the Bill be clarified to ensure that the waste disposal authority is consulted and may be asked to participate in the joint waste authority proposed by the waste collection authorities. As I hope is understood, in large counties the county council is the waste disposal authority and the district council is the waste collection authority. It is very important that they work together to form a joint waste authority.
One of the underlying principles in establishing a joint waste authority must be to bring additional opportunities—both added value and added benefit—that would not be deliverable through any other mechanism. My view is that the Bill falls short of what could otherwise be achieved. There is no doubt that establishing a joint waste authority, the joining up of waste collection authorities through horizontal integration and, where appropriate, the delivery of vertical integration between the waste disposal authority and the waste collection authority would bring economic, operational, environmental and social advantages to that administrative area. That is consistent with the Lyons review and the Government’s ambition of streamlining services and achieving efficiencies in local government. Various studies have been conducted, including one by my own authority, which clearly identify evidence of potential savings as a result of an integrated approach. I have therefore tabled these amendments to make it clear that the waste disposal authority should be consulted and may be invited to participate in the formation of the waste authority proposed for all parts of that area.
I hope that we are serious about the creation of joint waste authorities which can really deliver these benefits. That is why I am proposing a new clause setting out those powers in addition to the powers transferred by the constituent local waste authority. The new authority would need perhaps to contract on its own behalf and to raise additional private sector finance. Providing those powers to joint waste authorities free of the constraints of the borrowing limits and government procedures covering the constituent authorities would provide greater opportunities to find greater private sector involvement and other methods for financing some very expensive items.
I welcome the opportunity to create joint waste authorities and support it entirely, but I hope that the Government will be able to accept my amendments to make the authorities work even better. I beg to move.
I hope that I can reassure the noble Lord on his questions. I understand that he has considerable expertise in this area. I am delighted that his amendment has raised these matters and provided an opportunity to discuss the issue of joint waste authorities. As he said, the amendments seek to clarify the relationship between waste disposal authorities and their waste collection authorities in two-tier areas where a joint waste authority is proposed or established without the waste disposal function. The Government welcome the efforts to strengthen the ability of local authorities in two-tier areas to work together, but we cannot accept these amendments. Some of the issues raised in the amendments are already addressed in the Bill or will be clarified in secondary legislation. However, some of the elements in the amendments could—it may be a remote possibility—hinder local authorities’ ability to realise efficiencies.
Amendments Nos. 238ZS and 238ZT would oblige waste collection authorities to consult their respective waste disposal authorities about any proposal to establish a joint waste authority, and to invite them to participate in making such a proposal. We consider that the requirement to consult waste disposal authorities is already covered in Clause 207 by the inclusion of,
“any interested person in the authority's area”.
We think that inviting the waste disposal authority to join a joint waste authority goes a step too far. We agree that waste collection authorities need to consult their waste disposal authorities when considering the establishment of a joint waste authority, and the Government will place a strong emphasis on the need for collection authorities to engage with disposal authorities in the Secretary of State’s guidance. However, although in these circumstances waste collection authorities must consult waste disposal authorities, we do not think that it is appropriate to force them to join with waste disposal authorities or to miss the opportunity to gain economies of scale by entering into a joint waste authority of their own. I wish that I could appreciate the joke on the Benches opposite. I believe that it concerns a mobile phone. Perhaps a waste authority is ringing to give advice; that is brilliant.
Amendment No. 238ZV is unnecessary. The powers of waste disposal authorities to direct waste collection authorities, whether they are in a joint waste authority or not, will be unaffected by the Bill. I hope that—
I am confused. Clause 206(2) states:
“A proposal under this section may be made by (and only by) all the local authorities”.
Does that not imply that it has to be made by the district and the county authority—all the authorities within the area? That does not refer just to collection or disposal.
My interpretation is that it does not. I am getting a nod and a shake from the officials. It is an important point and I shall come back to it.
Amendment No. 238ZU seeks to set out the powers of joint waste authorities in a new clause. Once again we do not think that it is necessary. Joint waste authorities will have the same relevant powers and responsibilities as local authorities and other similar bodies. These powers are either in the Bill in the consequential amendments to Clause 207 or will be included in orders establishing individual joint waste authorities. The amendment seeks to ensure that a joint waste authority has the power to enter into contractual arrangements on its own behalf. That is the whole point of creating this new corporate body. As a separate legal entity it is able to do this, and the amendment is not necessary. I hope that I have reassured the noble Lord.
Further, it seeks to ensure that a joint waste authority has the power to raise private finance. Again, this is already the case by virtue of the consequential amendments which mean that a joint waste authority has the same powers as other local authorities in this request.
On the point made by the noble Lord, Lord Bruce-Lockhart, I am advised that the measure can mean any or all authorities. I am happy to write to Members of the Committee on this matter if that is helpful.
I apologise profusely for the fact that my mobile phone went off. The Committee will not believe it but I am opening a waste conference tomorrow morning and someone in another part of the building is writing my speech for that.
I do not like to keep referring to Essex, but it has 12 district councils and the county council. It is imperative that we get them all together to deliver an efficient waste system. It will cost something like £3.5 billion over the next 15 years or so. Raising that sum of money and getting everyone working together is one of the most important things that is happening at the moment as far as I am concerned as a leader of a council.
I realise that I contribute a great deal of waste, but I understood the Minister to say that the amendment is not necessary. The noble Lord, Lord Hanningfield, is trying to get together everyone who is involved, but there is nothing to stop everyone who is involved getting together under the present arrangement. In other words, if one wants to be so prescriptive as to write that into the Bill, the problems that might arise or the restrictions that that might be subject to may have been missed by the Minister. But as I heard her earlier on, she said that there was nothing to stop the relevant people—by invitation, as the noble Lord, Lord Hanningfield, said—being invited to discuss any of these arrangements.
If the noble Lord would like to help me try to get 12 district councils and one county council to agree the thing, he is welcome. It is very difficult to do that. We might have one or two districts that do not like parts of a proposal. In the end, we might get there. What we are trying to do in this very helpful legislation, which I totally support, is to have enough teeth not to force people into something but to make certain that the mechanism is there to try to make it happen. That is why I tabled the amendments. A lot of the reply by the noble Baroness was helpful, particularly on finance, but there should be more clarity in the Bill to encourage everyone to make certain that they participate in it, and that is what we are trying to do.
I stress that I will write with clarity on that matter. I have been advised many times that the important point is that we are talking about voluntary agreements, and local authorities are going to come together only through negotiation, discussion and voluntary commitment. I cannot imagine what a challenging but important job it is to bring together authorities in the way that the noble Lord has been describing. The proposals in the Bill have been welcomed, even on Monday by the Communities and Local Government Select Committee. We support the principles of the amendment, and I hope that I can give him clarity, but I am not sure that I will be able to do so by tomorrow.
I have trouble accepting that the noble Baroness is saying that “all” might mean “any” in this phrase:
“A proposal under this section may be made by (and only by) all”.
“All” cannot possibly mean “any”. “All” can only mean “all”. I am grateful that the noble Baroness might write on that.
One of the issues here is about the locality and ensuring that local authorities in any particular locality are making proposals that apply only to their locality. Now I am complicating things, which is not helping; I will move on.
We fully support the principles behind the amendment, and we welcome the opportunity to explain that we see the provisions as already being in the Bill or that they will come in the form of secondary legislation or guidance. I hope, with my undertaking to write and with Report still to come, that the noble Lord will consider withdrawing the amendment.
I thank the noble Baroness for that answer. We agree that it is a welcome step forward, and we want to make it work. She has answered some of the points very well. There are just one or two points that need to be clarified. She has said that she will write to us to clarify those points so that we know where we stand when we return after the summer. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 238ZT not moved.]
On Question, Whether Clause 206 shall stand part of the Bill?
I found that exchange extremely helpful. Last week, I asked the Local Government Association to give me any comments that it might have on these clauses—particularly regarding why they are necessary—because I had thought that under Section 10 of whatever Act local authorities could come together to undertake this sort of activity. Therefore, I did not understand why the clauses were required. The answer, which came via the LGA from Defra, was that there is a series of consequential amendments, but that did not take me a whole lot further. However, I understand from the point made by the noble Lord, Lord Bruce-Lockhart, that these clauses are a bit more restrictive in that they specify “all” authorities, and if all the authorities in a geographical area cannot agree, then none of them can. I understand the logic behind that to an extent but it needs to be clearer.
In the last exchange, we heard that under these provisions the arrangement is voluntary, but I would question that. The Secretary of State can impose financial provisions under Clause 206(6)(d), and I was left wondering what would happen if an authority had to have a financial provision imposed because it did not agree. Would it mean that it would back out and the whole thing would collapse? That might be intended because it might be a way of ensuring that authorities come to an agreement.
Under Clause 208(5) and part of subsection (4), the Secretary of State can exercise his powers, in effect, to modify a scheme that is submitted to him when all the authorities ask him to, which is fair enough, or when he considers it necessary to do so. That does not sound like voluntarism in its entirety. Under Clause 208(6), the Secretary of State may, by order, exclude any functions from those for which a joint waste authority was established.
Initially, I intended to ask what this was about but now I also make those points—let me put this in a positive way—to enable the Government to explain why these provisions are required in what we understand to be a voluntary arrangement.
Perhaps I may respond to that. My own view and, I believe, that of the Local Government Association, which is shared by my noble friend Lord Hanningfield, is that joint waste authorities would be extremely helpful. The first part of Clause 206 is entirely clear. I understood, and supported the fact, that this was not just about authorities coming together voluntarily to consider what they were trying to do but that it was about setting up a legal entity that had the right to go out to tender and fix contracts. This is about practical application, efficiency and value for money. In Essex or Kent, for example, there are 12 collection authorities and one disposal authority. If they come together in one authority, they have the right to take those practical steps, and that is where efficiency, value for money and better service will come in. Therefore, this is not just a question of voluntarism; it is about setting up statutory waste authorities. Some of the popular newspapers talked about “waste quangos”, but I do not think that that is the case at all. These bodies will have members of the councils on them and will be extremely helpful. I support the clause.
I do not want it to be thought that I oppose the clause for the sake of opposing the proposition. This is the only mechanism that we have to pursue this matter. Knowing about some of the joint waste arrangements in London, which have happened anyway, I was left with these queries about why the provisions were required.
I am delighted to have the opportunity to go through the clauses and to offer positively some explanation, following the introduction of this short debate by the noble Baroness, Lady Hamwee. Part 11 of the Bill introduces new powers, as the noble Lord, Lord Bruce-Lockhart, ably explained, to allow the creation of joint waste authorities in England. We have introduced these powers in response to requests by local authorities. Part 11 was introduced into the Bill in Committee in another place, where it was generally welcomed. In addition, the report into refuse collection published earlier this week by the Communities and Local Government Committee welcomed the Government’s proposals to allow the voluntary creation of these joint waste authorities.
Waste is one of the top pressures on council tax, and not all local authorities are necessarily the optimum size efficiently to deliver waste services. Partnerships with neighbouring authorities can offer local authorities, particularly smaller ones, a means of achieving economies of scale. While there are already many well established waste partnerships, there have been a number of calls for the Government to make legislative changes in order to allow the establishment of joint waste authorities.
A joint waste authority established under these powers would be a new legal entity with a statutory basis and would be responsible for discharging some, or all, of the waste functions of its constituent authorities. It is up to interested local authorities to develop proposals for a joint waste authority and submit them to the Secretary of State; no authority will be forced into joining a joint waste authority.
Clause 206 gives authorities the power to make proposals to the Secretary of State to form a joint waste authority. Proposals for a joint waste authority for a specified area in England should be made to the Secretary of State for the functions specified in the proposal. Under this clause, the Secretary of State may make regulations on the matters to be included in proposals and information that is required to accompany a proposal. For example, proposals would be required to include detail on the exact membership of a joint waste authority. Local authorities would also be expected to have regard to any guidance issued by the Secretary of State as to what a proposal should seek to achieve and matters that should be considered when making a proposal.
Clause 207 requires local authorities to consult relevant electors and any interested person in their area before submitting a proposal to the Secretary of State. Clause 208 sets out how joint waste authorities would be established and dissolved. The Secretary of State may implement a proposal for a joint waste authority by order, with or without modification. However, the Secretary of State’s powers are limited so that he may not establish a joint waste authority, either for an area that is different from the area specified in the proposal, or to discharge functions that are not specified in the proposal. That picks up on the point made by the noble Baroness, Lady Hamwee, that the Secretary of State’s powers are limited so that the Secretary of State cannot go outside the parameters of the proposal. That is very important when talking about this being a voluntary coming together of authorities.
The circumstances in which a joint waste authority may be dissolved are intentionally limited in order to ensure long-term stability. The Secretary of State may dissolve a joint waste authority where a request was received from—and this is important—all the constituent authorities, or where he considered it necessary to do so; for example, if it was significantly failing.
I do not really want to intervene again, but this goes back to the discussion we had before. Suppose that 11 authorities in Essex agree with the proposal and one does not. That waste has to be disposed of. These are mammoth contracts for multi-millions of pounds. What will happen? Will the waste just be left on the streets in that one authority? It is as bad as that. At times it is almost impossible to get agreement between the 12 authorities. The Government need to recognise that. Although it is very nice to say that the scheme is voluntary, there has to be some mechanism to make it work if we are ever going to dispose of all the waste, get the recycling going that we want and then have provision to get rid of the ultimate waste. The Government must realise that there might have to be some little bit of help for that one authority that would not agree to it.
I thank the noble Lord for that intervention. Perhaps I should remind noble Lords that joint waste authorities are only one of a whole range of waste collection and disposal possibilities for local authorities. It is a narrow and particular route that authorities might want to adopt. I can imagine that if one authority in a particular area will not join in with the others, even though there are obvious efficiencies and benefits in doing so, that would be incredibly frustrating. But this part of the Bill will not help in that situation because we are talking about a voluntary process here.
I am no expert on this but, if there is a real issue of failure in an area, there are other local authority performance management structures to examine or avenues to take in order to deal with the problem. Here we are talking about a positive proposal, but it is not one that would deal with the kind of circumstance described by the noble Lord. That is for a different discussion. This proposal for joint waste authorities has been welcomed. The details are being put in place through regulations and the making of orders to establish these new legal entities. The Secretary of State then has safeguarding powers—a point that the noble Baroness, Lady Hamwee, was concerned about— to ensure that, if a new entity were to fail, the Secretary of State could step in and wind it up. With those safeguards in place, it is a positive proposal, but it is not a panacea for all waste collection and disposal issues.
This is the same repertory company that gathered for the Bill for the Mayor of London, when we had a great canter over the course of all the difficulties. I certainly came to those debates with a general inclination towards a metropolitan or London-wide authority, but the more I looked at the situation and the more I heard, the more I came to appreciate the enormity of bringing together authorities that did not like the idea. In London there are 32 authorities and a number of arrangements had not been made. I came to the conclusion that you can take a horse to water, but you cannot make it drink.
I congratulate the noble Lord, Lord Hanningfield, on getting as far he has, and I hope that he gets a bit further with this in practice. He asked the very question that I was going to put to my noble friend: if you have an area with 12 authorities and 10 of them think a common solution is a good idea but two do not, what do you do? Of course, the two will carry on as they did before—uneconomically and not in accordance with best practice. Eventually their council tax payers and common sense will drive them into joining the new arrangement. The fact is that, when it comes to a question of independence, we have to consider people with great pride in their locality where they have given good service and have been well rewarded in terms of public esteem. They are therefore entitled to take their own view. The Bill sets out a mechanism that shows people with common sense and good will that 2007-08 will be different from previous arrangements. I understand what the amendment is trying to do, but leaving the Bill unamended is the right way forward.
I thank my noble friend for his intervention, which neatly brings me on to Clause 209. That clause requires that only members of local authorities and other specified bodies with waste functions can be members of a joint waste authority. The ability to establish joint waste authorities will provide authorities with another option for partnership working, one that they have requested. I support my noble friend’s point about democratic accountability. These authorities will be part of local democratic accountability. Where an area is lagging behind, I hope that it will look across the border and learn from the experience of others. I hope that the noble Baroness will withdraw her opposition to Clause 206 standing part of the Bill.
This discussion has been extremely helpful. I gave notice of my opposition to all the clauses in this part because I could not see what the amendments were and felt that the issues had to be aired. I am grateful to the noble Baroness, and we will read what she said.
Clause 206 agreed to.
Clauses 207 to 209 agreed to.
[Amendments Nos. 238ZU and 238ZV not moved.]
Clause 210 [Consequential amendments]:
238A: Clause 210, page 146, line 41, leave out subsections (1) to (6)
The noble Baroness said: The four consequential amendments in this group are designed to apply local government procedural and other rules that will bring joint waste authorities in England into line with similar bodies. Amendments Nos. 238A and 238B amend Clause 210 by removing the existing consequential amendments and cross-referencing to a newly created schedule. Amendment No. 247A deals with the territorial extent of the consequential amendments. Amendment No. 279A introduces a new schedule that contains amendments previously in Clause 210 and introduces new consequential amendments. I beg to move.
On Question, amendment agreed to.
238B: Clause 210, page 147, line 47, at end insert—
“( ) Schedule (Consequential amendments relating to joint waste authorities) (other consequential amendments) has effect.”
On Question, amendment agreed to.
Clause 210, as amended, agreed to.
Clause 211 [Joint waste authorities in Wales]:
On Question, Whether Clause 211 shall stand part of the Bill?
Clause 211 refers to joint waste authorities in Wales. It gives power to Welsh Ministers to make by order provision in relation to Wales and replaces references to the Secretary of State with references to Welsh Ministers. This is a welcome move to improve the devolutionary aspect of local government in Wales.
In Wales, geology, topography, rainfall and weather sometimes dictate that a waste authority’s facilities may not necessarily be in that local authority. There are 22 local authorities of differing sizes in Wales. Powys, where I live, is 132 miles long—the distance from the Severn Bridge to London. Others, such as Merthyr Tydfil, are very small. There have been problems in recent times in places such as the Rhondda where the waste facilities have not matched the capacity of the local authority to provide the kind of service that is necessary. I therefore very much welcome Clause 211, which will be very useful legislation for Welsh Ministers to deploy in Wales.
238BA: Clause 213, page 148, line 21, leave out “requires,”
The noble Baroness said: Amendments Nos. 238BA to 238BC would take out the terms “requires” in two places and “prohibits” in another place. I could have done more surgery, but the short point is to understand what there could be that is not covered by “regulates”. Debates on Report in the Commons dealt mainly with what entities were connected with or controlled by local authorities. The term “requires” is interesting in the context of entities controlled by local authorities and trusts connected with local authorities. Generally, a Secretary of State will make an order very often to stop a local authority doing something. When we talk about these semi-detached or detached entities, which should of course be completely detached, one can see that the regulations—I used the term “regulates” before—might be about stopping something happening because central government felt that it was inappropriate for such an entity or a trust to undertake the activity in question. It may be a rather different matter for the Secretary of State to require an entity controlled by a local authority or a trust to do something. Given that positive function, it is worth understanding what is in the Government’s mind. I beg to move.
My comments on Clause 213 mirror what I have just said about Clause 211 in that Welsh Ministers will be able to make orders in relation to entities controlled by Welsh local authorities. It is as simple as that. That, again, is an extension of devolutionary powers to Welsh Ministers in relation to local government in Wales. I agree with that, and I commend the clause to the Committee.
The Questions whether Clauses 213 and 214 should stand part of the Bill are in this group. I want to probe more widely than my noble friend Lady Hamwee about why we have this part of the Bill, what it means and one or two aspects of that. This part of the Bill was added on Report in the House of Commons, where it perhaps did not get quite the scrutiny that it might have done had it gone through Committee stage. I have read Hansard of the Report stage very carefully and have noted that the then Minister, Phil Woolas, referred to it being rather technical. He said that,
“you ain’t seen nothing yet”.—[Official Report, Commons, 22/5/07; col. 1150.]
He claimed that that came from the wild west, but I suspect that it came from Nelson when he was growing up in the town.
I have read this part carefully and I still am not completely clear what it is about, why it is there and what it means. Why is this in the Bill? Why did the Government feel that it was necessary to add it at Report stage in the Commons? It was obviously an afterthought. Some questions asked in the short debate in the Commons were not answered. Are things really going wrong now? To what extent are things going wrong now? Is this a response to concerns of auditors? Is it a response to concerns of government that local authorities are finding too many innovative ways to get involved in “entities” and they want to pull them back or what? It is fairly clear that one reason for having it is to include trusts as opposed to entities in the scope of the Bill. I shall ask a question about that in a minute.
From a layman’s point of view, what on Earth is an entity? Having read the Bill and Hansard of the House of Commons, I still am not sure what an entity is. It is not in common parlance in our part of the world. If people say, “Where are you going tonight?”, I say, “I am going to another meeting”. They may say, “Oh, what is it?” and I shall say, “Oh, it’s the entity” and everyone will know what I am talking about. However, I do not think that I am on any entities. The definition of an entity in the Bill states that,
“financial information … must be included in the local authority’s statement of accounts”.
It seems to be a body in which the local authority is involved, has invested or perhaps is represented. I am not quite sure what that means or what level of information is required. Can it simply be one line in the accounts or does it have to be full information? What does that mean in practice?
Linked to that, if trusts are being brought in, what is a trust in this context? What kind of trusts will be involved? Can the Minister give us some practical examples of the kind of companies, trusts and other bodies which might be involved? Slightly cheekily, perhaps I may ask whether local strategic partnerships can be entities. I think that the Minister’s shake of her head suggests that she does not want to answer that question.
My next question follows a comment made by my honourable friend Andrew Stunell, who made a brief intervention at Report stage. He said that the whole thing has about it,
“a sniff of control freakery”.—[Official Report, Commons, 22/5/07; col. 1155.]
I would have said that it looks rather more draconian than that. It appears to allow the Secretary of State to make decisions about anything and everything to do with this. It is very much a part that Henry VIII would have been proud of. It is clear that all the detailed rules and regulations will be in regulations, which perhaps is why it is difficult to understand what Part 12, which is fairly brief, means.
I shall put trusts, which have been brought into this, on one side, and stick to entities, whatever they may be. Does it change the existing provision or is it simply a re-enactment of existing provisions in a way which Phil Woolas described as less complex and outdated? Does it give more powers to the Secretary of State than previously? If it does, what is the purpose of them? In what ways does she intend to use them? Does it broaden the concept of entities, or are entities defined exactly as they were before the Bill was produced, or as they are now before the Bill is enacted?
Those basic questions lead to a concern that the welcome freer, more liberal regime under which local authority companies have been able to operate in recent years, which has led to a whole series of different and innovative projects in different areas, might be restricted and pulled back. It would be helpful to have guarantees from the Minister that that is not the case.
I commend what my noble friend has said; he has asked some very pertinent questions.
Clause 214(2)(c) states:
“the taking of specified actions by a member or officer of a local authority who is a trustee of a trust connected with that local authority”.
That provision opens up questions of possible conflicts of interest between the local authority and the trust, or the independence of the trust. There are, I know, circumstances in which that does occur. I can imagine, for example, that a regeneration trust for a community, which is registered as a charity, may be seeking funding and assistance from the local authority in constructing a bid, and there may be great merit in either an officer or a member on the local authority being involved in this.
Subsection (2) states,
“requires, prohibits or regulates”,
although the amendment refers only to “regulates”. I wonder whether this is going over the top in trying to control the activities within local authorities, as my noble friend has said. I am looking at the provision specifically from the point of view of trusts, which could be extremely useful in advancing the interests of the community in terms of employment and innovation.
I shall try to enlighten noble Lords, address the questions and put briefly on the record what the Bill does and what it is there to do. My first question to officials was, “How many legs does an entity have? It seems to be a very strange, insect-like creature”. That turned out to be not a million miles from the truth.
It ran into the several hundreds. The noble Lord did not ask four questions; he seemed to ask about 24 questions and I am not sure that I have recorded them all.
Why is this clause in the Bill at all? It was not an afterthought and during the making of the Bill there were many pressures on the Bill team and Ministers to put many different things into it. We always intended this to be in the Bill because it provides update and future-proof arrangements for entities. I shall come on to that later.
As to what inspired the provision, the questions were: “Are things going wrong? Are we limiting damage?”. Again, the answer is no; we are not aware of any evidence that entities are moving outside of the control of local authorities. In fact, Part 12 seeks to replace an old regime that applied only to companies. We want to ensure that controls apply to all entities, which are any bodies in respect of which financial information must be included in the local authority statement of accounts. I will come to a definition of that now. We want to ensure that controls apply through which local authorities can operate, and the clauses in the Bill achieve that.
Over the past few years we have seen, along with the many changes in local government, changes in the relationships local government has with private organisations. They have taken very different forms. “Entities” include limited companies, public limited companies and limited liability partnerships, which were introduced in the Limited Liability Partnerships Act 2000. An example of that in connection with a local authority is the Kier Sheffield LLP, which was formed in 2003 between the Kier Group and Sheffield City Council to provide a repairs and maintenance service for the city’s social housing public and private buildings.
Another example would be foreign-registered companies and other foreign legal vehicles. For example, if an authority in Kent set up a joint venture company with an authority in France and it was registered in France, it could still be caught by our new Part 12 proprietary controls. Yet another example is future legal vehicles. I am told that the beauty of the provisions in Part 12 is that they provide for future-proofing against any new legal vehicle. As for trusts, the sort of trusts we have in mind here can range from the local leisure trust to the local allotment trust. That is a very broad definition. All those different forms are contained within the notion of “entity”. I think the noble Baroness is longing to ask a question.
It is. Trusts come within the definition of “entity”.
That explanation should give noble Lords a broad idea of the complex arrangements that local authorities have entered into in recent years. The third question the noble Lord asked me was whether this was a response to the concerns of government or of local authorities. Part of this was driven following the capital programmes working party technical sub-group in 2003 that looked at the prudential borrowing system. The Local Government Association expressed a desire for local authority companies to be defined according to accounting practices. That was also part of the motivation for trying to respond.
How did we respond? What does this part of the Bill do, and why? I refer noble Lords to a useful article on www.publicfinance.co.uk, which describes in good layman’s language what I am now going to put into impenetrable parliamentary prose. Part 12 is concerned with the proprietary controls on local authority entities. This is the background: financial controls on local authority entities are covered by the Local Government Act 2003, which sets out the regime for prudential borrowing. This part replaces the complex and outdated definitions for local authority companies that is contained in Part V of the Local Government and Housing Act 1989, “Companies in which Local Authorities have interests”, so the definitions are now aligned to modern accounting practices. That is something new, and I shall explain how that will work. Public Finance magazine carried an article that described the existing legislation as “dinosaur law”. It noted that the proposals make a lot of sense, should help to further modernisation and are to be welcomed. We have a body of credibility behind us.
We trailed this review of Part V of the 1989 Act in the 1998 White Paper, Modern Local Government: In Touch with the People, and Modernising Local Government Finance: a Green Paper in September 2000. The introduction of the prudential borrowing regime in Part 1 of the Local Government Act 2003 fulfilled a commitment to review in relation to financial aspects, but the commitment to review the application of proprietary controls has yet to be fulfilled.
The existing proprietary controls set out in Part 5 of the 1989 Act and in the Local Authorities (Companies) Order 1995 made under that provision, seek to ensure that companies through which local authorities may undertake their statutory functions and duties are required to act transparently and in accordance with the standards of the authorities themselves.
Subject to consultation, our intention is to attach these existing proprietary controls to the wider range of entities that local authorities in England and Wales now work through in relation to which local authorities have to keep group accounts—in other words, those bodies in respect of which authorities have access to benefits or exposure to loss. Local authorities now operate through a much wider range of organisations and entities than just local authority companies, as defined in the 1989 Act, such as, for example, limited liability partnerships.
The range of proprietary controls we are concerned with address the accountability, auditing and personnel requirements of a local authority company. Examples of existing proprietary controls cover such matters as remuneration to directors, access to information to members of the parent authority and public inspection of minutes. The existing proprietary controls apply to companies differentially on a “tiered” basis according to the degree of control that the authority has over the company.
The noble Lord questioned the need for the clause. I hope that he now understands that this is a measure to update and apply proprietary controls in a very responsible way to a wider range of bodies through which local authorities now work.
Clause 213(1) enables the Secretary of State, in relation to England, and the Welsh Ministers, in relation to Wales, to require, prohibit or regulate the taking of actions by entities connected with a local authority. This essentially replicates the existing provision in the 1989 Act. The power to regulate, forbid or require the taking of certain actions in relation to local authority companies, subject to the influence, or under the control of, local authorities, already exists in the 1989 Act.
Clause 213(2) provides that the Secretary of State may make an order under this section in relation to all English local authorities, English local authorities of particular description, or particular English local authorities. Subsection (3) provides a parallel power for Welsh Ministers.
Clause 213(4) provides that an order under this section may also require, prohibit or regulate the taking of specified actions by a local authority in relation to entities connected with it. Qualifying persons are those members or officers authorised to represent the local authority at meetings of an entity connected with a local authority or who are members, directors or holders of specified positions.
Clause 213(5) provides that orders may make provision in relation to all entities connected with a local authority or entities of a particular description.
In replacing Part 5, we are also bringing the proprietary controls into line with the capital finance rules which apply to local authorities including those made by CIPFA and provided in the Code of Practice on Local Authority Accounting in the UK: A Statement of Recommended Practice, known as the SORP. The SORP definitions capture a more appropriate relationship between an authority and its bodies than the current Part 5 definitions. The entities captured by the SORP are capable of delivering a service or carrying on a trade or business on behalf of the authority. We will be able to capture those entities that show up on the authority’s statement of accounts for that year.
Clause 213(6) currently provides that where an order makes provision in relation to entities of a particular description, as set out in Clause 213(5), it may provide for any expression used to describe the entity to have the meaning given by any document identified by the order or a reissue of the document. It means that accounting definitions already in use by local authorities will also be used for proprietary control purposes.
The intention is that descriptions are able to be based on the SORP without needing to amend the order when changes are made to such documents. However, when we reach later amendments, it will become clear that, in response to a DPRRC recommendation, we have refined our approach to bring the provision more into line with existing arrangements for defining proper accounting practices.
In short, the provisions will update, rationalise and simplify legislation. They are not, as the noble Lord suggested, an example of control freakery because we are enacting existing legislation. Now that the new prudential borrowing regime is in place, financial control of local authority entities no longer relies on Part 5 of the 1989 Act. We wanted to achieve the same alignment.
I am told that the beauty of the provisions in Part 12 is that they provide for future-proofing against any new legal vehicle. They will also enable an order to be made to define the references in other legislation which replace the definitions in the 1989 Act; that is “controlled” and “influenced”, which we are trying to move away from with the new provisions. We will consult on the content of the proposed orders.
The amendment—I am sorry that I have taken so long to come to it—would remove the terms “requires” and “prohibits” from Clause 213. Its effect would be that the Secretary of State would be able only to “regulate” the actions of entities connected with a local authority. That would stop the whole process in its tracks.
It might be helpful to explain why. Most of the proprietary controls in the companies order impose either requirements on companies, such as requiring a company to provide information to the authority’s auditor, or prohibitions, such as prohibiting a payment to a director who is a member of an authority that is in excess of that to which he is entitled as a member of an authority. The effect of the amendment would be that, in the examples I and others have given, we could not require a company to provide information to the authority’s auditor or prohibit excessive payments. That is what the terms of the order are designed to deliver and why “regulate” is insufficient for the purpose. The proprietary controls set out important safeguards in terms of openness and fairness, as well as checks and balances.
Clause 214 brings trusts connected with a local authority and trustees of relevant trusts within the provisions that can be made under Clause 213. The noble Lord, Lord Livsey, asked about the purpose of controls at Clause 214(2)(c). The power will be used in a very limited way. It exists simply to stop potential abuse—for example, officials or members being paid too much when working for a trust. We have made special provision for trusts and trustees because a trust is a purely equitable obligation and does not easily fall within the consideration of an entity. While it counts, we have had to make special provision for it. Under any obligation as a trustee, a local authority could be exposed to the risk of potential losses arising from it. Therefore, we wish to ensure that trusts can be brought within the scope of the provisions should we wish to do so.
Our intention is to use the powers at Clauses 213(1) and 214(2) to enable the existing proprietary controls in the Act to apply to trusts as part of the wider range of bodies. Amendment No. 238CA would remove the term “requires” in relation to trusts, thereby diluting the provision in the same way as the previous amendment by leaving just the term “regulate”.
I do not know whether I have addressed all the questions raised—it is a complex matter—but I hope that, having been given the narrative behind the clause, the noble Lord will understand it a little more and that the noble Baroness will feel able to withdraw her amendment.
I think that I am grateful for that. It certainly means that I can throw away one of the books that I had planned to take on holiday and look at this instead. I am grateful to the Minister for her long explanation. It was very helpful to have the position set out.
I am not clear about the scale of the organisations, entities and trusts which will be brought within the scope of the regulations and are not covered at the moment. Will there be any unintended consequences of doing this? Does she have any idea of the scale of increase in number of organisations and bodies that will be brought within the legislation?
We do not have any idea of the number of entities. It varies enormously according to the size of the authority, its financial arrangements and the way in which it chooses to deliver its services. I gave some details of the categories of entity which might come within the scope of the regulations, but their number will clearly be significant because it is growing all the time.
If the noble Lord will leave that matter with me, I may be able to come up with information quantifying the scale. This process has been in train for a long time—since the capital financing legislation in 2003—so the noble Lord can rest assured that its implications will have been thoroughly examined.
Okay. I am not sure that I ever rest assured about anything until I see it in black and white, but I am grateful for that. It would be very helpful if half a dozen sample authorities of different sorts could be provided as evidence and we could know whether they think that it is a problem or not. There may be no problem at all about this, and all these organisations and trusts may all be operating the impeccable financial and other arrangements that will be set out already in the regulations. If they are, I am not sure why we need the regulations—but they will not make any changes. But there must be a potential problem that in some cases really good projects, schemes or trusts will be halted in their tracks and have difficulties as a result of the need to comply. I have no idea, but I am asking the question.
The Minister said that the new regulations will enable the proprietary controls to operate on a tiered basis according to the degree of control that the local authority has. That sounds sensible, but I put it to her that it might be a good idea, instead of looking at the degree of control, to look at the degree of financial liability, which might be different. I speak from knowledge of a joint venture company, which I assume will come within these regulations, between a local authority and a private sector company. The degree of control is 50:50 but the financial liability is more like 30:70 to the local authority’s advantage. In other words, the local authority is putting in 30 per cent and the private sector 70 per cent—and that 70 per cent will probably grow over time. That is a specific technical question for the Minister to consider—whether financial liability is more relevant in some cases than control.
I was very grateful for everything that the Minister said. I look forward to reading Hansard and the article on the web when I finally get home from my holidays.
238C: Clause 213, page 149, line 1, leave out subsection (6)
The noble Baroness said: I am tabling these amendments in response to issues raised in the 12th report of the Delegated Powers and Regulatory Reform Committee.
As I explained under previous amendments, Part 12 currently enables proprietary controls to be applied to an entity connected with a local authority, with the description of entities to be based on any document. Our intention is to align proprietary control definitions with definitions used for accounting purposes, which are currently contained in the Code of Practice on Local Authority Accounting in the United Kingdom: A Statement of Recommended Practice, or SORP. It is worth repeating—and the Local Government Association was very keen for us to do this. Provision is also made to enable proprietary controls to be applied to trusts.
The DPRRC report recommended that if the,
“purpose of subsection (6) is to allow ambulatory references”—
I understand those to be references that delegate powers to another body so that the body defines the terms that are referred to in statute—
“to a particular document (the Code of Practice on Local Authority Accounting) then we recommend that the provision should be so limited and should not allow ambulatory references to any document whatsoever”.
Our Amendments Nos. 238C to 238K address this recommendation by narrowing the definition of “document” and make necessary technical amendments. Previously, the clause was very broad and enabled reference to be made to any document identified by order. In response to the DPRRC recommendation we now propose to restrict this to certain documents, as I will now explain.
As noted, our intention is to align definitions for entities with those already in use for accounting purposes, known as “proper practices”. Currently, the SORP is one of the documents identified as proper practices by regulations made under Section 21 of the Local Government Act 2003. There is a caveat to this. It is possible that the SORP may not always be a document identified as proper practices, or its name might change following a reissue, which may happen annually. Should the clause be limited to refer to the SORP as the DPRRC recommended, the Government could not continue to align proprietary controls with definitions used for proper practices without needing to amend primary legislation. Therefore, Amendments Nos. 238C and 238D respectively remove the subsections that include reference to “any document” from Clauses 213 and 214, the first in relation to entities and the second in relation to trusts.
Amendment No. 238E allows that an order made under Clause 213 may provide that a description of entity or trust may be made by reference to an expression used in a document, but that the reference to a document is now limited to a document which has been identified as proper practices by regulations made under Section 21 of the Local Government Act 2003. Amending the legislation in this way will allow the Government to continue to align propriety controls with proper practices without needing to amend primary legislation should the SORP no longer be used for proper practices.
Amendments Nos. 238F and 238G make technical amendments to ensure that definitions in Clause 215 have the correct meanings.
Amendment No. 238H ensures that consequential amendments made to secondary legislation following the repeal of Part 5 of the Local Government and Housing Act 1989 may make reference to a document that is identified as proper practices similar to that in Amendment No. 238E.
Amendments Nos. 238J and 238K similarly ensure that when the Secretary of State or Welsh Ministers define terms for descriptions of entities used in primary legislation, the descriptions may make reference to a document identified as proper practices. I beg to move.
The Minister may have answered my question: once one uses “identified” one has to find a way of defining it—a document so identified by virtue of Section 21(5) of the Local Government Act 2003, which relates to documents not yet existing. With not much excitement, I went to Section 21 of that Act to find that the power under subsection (2)(b) is not to be read as limited to the identification of an existing document. There must be an easier route to a migraine.
238D: Clause 214, page 149, line 45, leave out subsection (4)
On Question, amendment agreed to.
Clause 214, as amended, agreed to.
Clause 215 [Further provision about orders]:
[Amendment No. 238DA not moved.]
238E: Clause 215, page 150, line 45, at end insert—
“(5A) Where an order under section 213—
(a) makes provision in relation to entities of a particular description, or(b) makes provision in relation to the trustees of trusts of a particular description,it may provide for any expression used in identifying that description of entity or trust to have the meaning for the time being given by a relevant document identified by the order.(5B) In subsection (5A) “relevant document”—
(a) means a document that (at the time the power under subsection (5A) is exercised) is a document identified for the purposes of section 21(2)(b) of the Local Government Act 2003 by regulations made under that provision; and(b) includes a document so identified by virtue of section 21(5) of that Act (documents not yet existing).”
238F: Clause 215, page 151, leave out line 6
238G: Clause 215, page 151, line 8, at end insert—
“and references to a trust connected with a local authority have the same meaning as in section 214.”
On Question, amendments agreed to.
Clause 215, as amended, agreed to.
Clause 216 [Exemptions from orders]:
238GA: Clause 216, page 151, line 13, leave out “a particular entity, or”
The noble Baroness said: The answer to my questions may lie in the Minister’s earlier explanation of what an entity is and why these provisions are needed; I apologise if she has already covered the point. Clause 216 provides that the Secretary of State or Welsh Ministers can,
“give a direction exempting … a particular entity, or entities of a particular description, or … the trustees of a particular trust, or of trusts of a particular description”.
My amendments question the particularity of the particular entity or the particular trust. As with a rather similar amendment discussed earlier today, I can see that there might be a need to deal with entities which fall within the same broad group of trusts, but can the Minister tell me in what circumstances the Secretary of State or Welsh Ministers would exempt one entity—one trust? I beg to move.
I have not already addressed the point; it is a new one. It may be helpful if I provide an example of how an exemption for an individual company has been needed in the past.
Article 4 of the Local Authorities (Companies) Order 1995 requires regulated companies to mention on their documents the fact that they are controlled or, as the case may be, influenced by a local authority, and to list the relevant authorities. In 2006, the Secretary of State was approached by Local Authority Building Control for an exemption from this requirement. With membership open to over 300 authorities, it was considered impractical for the company to name every authority on all relevant documents. The Secretary of State agreed that such a requirement was impractical and a direction was issued to exempt the company from that requirement. There may be other circumstances in which it would be appropriate to consider exempting an individual entity or trust from the scope of regulation established under any new order.
The point is as simple as that. One can only imagine a letterhead listing 300 companies. The provision addresses practical issues, and if we accepted the amendment, we could not prevent those issues being brought into play.
238H: Clause 217, page 151, line 38, leave out from “by” to end of line 40 and insert “a relevant document identified by such provision.
(5) In subsection (4) “relevant document”—
(a) means a document that (at the time the power under subsection (4) is exercised) is a document identified for the purposes of section 21(2)(b) of the Local Government Act 2003 by regulations made under that provision; and(b) includes a document so identified by virtue of section 21(5) of that Act (documents not yet existing).”
On Question, amendment agreed to.
Clause 217, as amended, agreed to.
Schedule 14 agreed to.
Clause 218 [Definition of certain terms in amended enactments: England]:
238J: Clause 218, page 152, line 37, leave out from “by” to end of line 39 and insert “a relevant document identified by the order.
(4) In subsection (3) “relevant document”—
(a) means a document that (at the time the power under subsection (3) is exercised) is a document identified for the purposes of section 21(2)(b) of the Local Government Act 2003 by regulations made under that provision; and(b) includes a document so identified by virtue of section 21(5) of that Act (documents not yet existing).”
On Question, amendment agreed to.
Clause 218, as amended, agreed to.
Clause 219 [Definition of certain terms in amended enactments: Wales]:
238K: Clause 219, page 153, line 25, leave out from “by” to end of line 27 and insert “a relevant document identified by the order.
(4) In subsection (3) “relevant document”—
(a) means a document that (at the time the power under subsection (3) is exercised) is a document identified for the purposes of section 21(2)(b) of the Local Government Act 2003 by regulations made under that provision; and (b) includes a document so identified by virtue of section 21(5) of that Act (documents not yet existing).”
On Question, amendment agreed to.
Clause 219, as amended, agreed to.
Clause 220 agreed to.
Schedule 15 [The Valuation Tribunal for England]:
238KA: Schedule 15, page 217, line 17, leave out “are” and insert “include”
The noble Baroness said: This group of amendments deals with points raised by the Council of Valuation Tribunal Members for England and Schedule 15 deals with the Valuation Tribunal for England. The schedule was the subject of some debate in the other place.
Amendment No. 238KA seeks to leave out “are” and replace it with “include”. This is the opposite of what we have previously sought. I am a little nervous that I may be told that “are” and “include” are synonymous. However, the council made the point that “business arrangements” dealt with in this part of the schedule are more extensive than just selecting members to hear an appeal.
Amendment No. 238KB seeks to insert at line 7 on page 218 the words,
“with the consent of the President”.
This concerns tribunals’ functions which, as the council points out, are by their nature judicial. The executive should not have the functions of the tribunal at its disposal without having to overcome that little hurdle.
Amendment No. 279B seeks to amend Schedule 16, which refers to existing legislation. The relevant paragraph gives to the Valuation Tribunal Service the function of providing general advice about procedure in relation to proceedings before the tribunal. This might have been appropriate when trying to establish conformity between 56 different valuation tribunals, but for the future when there is a single tribunal with a judicially appointed president, it will not be appropriate. Advice on judicial procedure should normally come from a judicial, not an executive, source.
As regards Amendment No. 279C, sub-paragraph (3)(a) provides for a majority of the members of the Valuation Tribunal Service board to be serving Valuation Tribunal presidents or chairmen. In the opinion of the majority of presidents of the present 56 tribunals, this provision blurs the separation of powers between judiciary and executive and has encouraged the Valuation Tribunal Service to involve itself in judicial matters. I am told that the service should follow the same form as HM Courts Service with one judicial member on the board to demonstrate clearly the division between judicial and administrative responsibilities.
As regards Amendment No. 279D, as no tribunal member other than the president of a board is in issue, the relevant sub-paragraph is not required. I beg to move.
I have a rather long speaking note because it is important to take seriously the considerations that the noble Baroness mentioned. I shall address Amendments Nos. 238KA, 238KB, 279B, 279C and 279D. Although the noble Baroness did not speak to the two last amendments, I shall put my response to them on the record. They all relate to the single Valuation Tribunal for England. Members of the Committee are looking rather perplexed. I beg the Committee’s pardon. The noble Baroness spoke to all those amendments.
The Government wish to establish a single Valuation Tribunal for England. Part 13 and its associated schedules—Clauses 220, 221 and Schedules 15 and 16—provide for the establishment of a single Valuation Tribunal. The Bill provides that appointments of the president, the vice-president, the chairman and the members of the VTE should be made by the Lord Chancellor following selection by the Judicial Appointments Commission in line with the requirements of the Constitutional Reform Act 2005.
Why have we made this decision? There are at present 56 separately constituted tribunals in England, which hear appeals in relation to council tax and national non-domestic rates. Members of the tribunals are unpaid volunteers—this is an opportunity for me to say “thank you” to them for the wonderful service that they offer. The Government believe, however, that continuing with 56 separately constituted valuation tribunals in England is not sustainable and that variations from modern tribunal practice currently in place in the valuation tribunals must be addressed. That view was supported in a recent public consultation.
The Government’s aim in bringing forward the amendments is to modernise and reorganise the valuation tribunals to address variations from modern tribunal practice currently found in the structure and operation of the tribunals; to promote good tribunal practice; and to encourage the efficient and effective running of the valuation tribunals for the user and all stakeholders while continuing to sustain the tribunals’ judicial independence. It is about providing a modern and responsive unified Valuation Tribunal for England, with a full customer focus that reflects modern thinking about tribunals. By establishing a single tribunal for England with a national president, the Government want to establish a tribunal that reflects best practice in the tribunal world and offers the best possible service. We strongly believe that a national president would strengthen judicial independence and would provide the benefit of an authoritative voice on judicial issues affecting the tribunal. The Government believe that those changes will be better for the consumer in the end.
The consultation received widespread public support in summer 2006. All the key stakeholders, including valuation tribunal members, local authorities and the Council on Tribunals supported the establishment of the VTE. Some responses to the recent consultation underlined the importance of preserving the local culture of the valuation tribunals. I emphasise that it is not the intention of these legislative changes to lose this local connection. On the contrary, it is extremely important to keep it. We anticipate that the VTE, while having a national jurisdiction, will maintain a presence in regional centres, together with a locally based membership, and will sit in a range of accessible locations across the country. We also anticipate that members will continue to be nominally allocated to a region or division within the VTE and continue to sit in that area.
I will turn to the amendments. Schedule 15 seeks among other things to insert new provisions in relation to the VTE into Schedule 11 to the Local Government Act 1988 that provide for the establishment of and the arrangements for the VTE. Amendment No. 238KA would change the wording of new paragraph A17(2)—which is in paragraph 2 of Schedule 15 to the Bill—so that the definition of tribunal business arrangements is not restricted to the selection of members to deal with an appeal. We are aware that some tribunal members have concerns about this—for example, in relation to the listing of appeals for hearing—but I hope that I can provide reassurance on that point.
In practice, the VTE will have both express and implied powers. Some powers—for example, the power in new paragraph A5 for the president to assign functions to a vice-president are express and are set out in the Bill. In particular, in relation to tribunal business arrangements, it is important for the VTE president to have an express duty to make provision for the selection of VTE members who are to deal with any appeal. However, other powers are implied. For example, the VTE must determine those appeals which are within its jurisdiction as set out in new paragraph A2. Consequently, it has a power to do anything that is necessary to fulfil that duty, including the listing of appeals. There is no need to make express provision for each and every facet of this power in the Bill, and there is no need to refer to this in the definition of tribunal business arrangements.
It is important to make express provision in the Bill that tribunal business arrangements provide for the president to select the members of a tribunal who are to hear an appeal. Under the arrangements that exist at present for the 56 separate valuation tribunals in England, a tribunal hearing an individual appeal must have a chairman, unless the parties to the appeal agree otherwise. The Bill seeks to mirror that arrangement for the VTE, by requiring that at least one senior member of the VTE—the president, a vice- president or a tribunal chairman—be required to deal with an appeal. It is important to have that in the Bill, and it is set out in new paragraph A17(3). In order to provide for that, the Bill must also provide for the president to make tribunal business arrangements, under new paragraph A17(1), and for those tribunal business arrangements to address the selection of VTE members, under new paragraph A17(2).
I should also mention that other procedural requirements may be set out in regulations made under new paragraph A19. The Government will consult widely on those, including consulting the VTE president, before making use of that power.
However, against that background, there is nothing to prevent the president making further procedural arrangements, which may take the form of guidance, provided that those arrangements are consistent with any regulations made under new paragraph A19. We have not included that in the Bill but we think that it is important for the president to decide whether and how best to do that.
Amendment No. 238KB seeks to amend the regulation-making power in new paragraph A19(2)(e) so that the consent of the president is required before the clerk or any other member of the VTE’s staff can discharge functions relating to an appeal. Regulations made under this power may set out functions of the VTE relating to an appeal which can be discharged by the clerk or by other VTE staff. I understand that the concern here may be that some of the VTE’s functions may, through regulations, be delegated to the clerk or other staff without the president’s agreement or against his will.
I reassure the Committee that there is nothing new in this approach. A similar power already exists in relation to the current valuation tribunals in paragraph 8(1)(b) of Schedule 11 to the Local Government Finance Act 1988. In short, its purpose is to facilitate good administration and not to usurp or interfere with the appellate functions of the valuation tribunals. The purpose of the power in new paragraph A19(2)(e) is precisely the same, albeit in relation to the VTE.
It should also be noted that requiring the consent of the president before any functions can be discharged by the clerk or another VTE staff member is likely to be unnecessarily bureaucratic, and one can see how that might happen. We are simply after the facilitation of good administration.
Before exercising the regulation-making power in paragraph A19, the Government would certainly consult the president of the VTE about any proposal to enable a function to be discharged by VTE staff. We would not seek to act against the president’s wishes and indeed, in most cases, the Government expect the power in new paragraph A19(2)(e) to be used at the express wish of the president of the VTE. In practice, it is likely that those functions will be discharged by the clerk or by other VTE staff only in circumstances where the president or the members selected to deal with an appeal are content for the functions to be discharged in that way.
The amendments that have been tabled to Schedule 16 to the Bill seek to alter some of the arrangements concerning the Valuation Tribunal Service, as set out in the Local Government Act 2003. That is something that the noble Baroness brought to my attention. I believe that the amendments are rooted in concerns among certain tribunal members about the judicial independence of the current tribunals.
Perhaps I may briefly remind the Committee about the purpose and remit of the VTS. It is a non-departmental government body sponsored by the Department for Communities and Local Government. Its purpose is to secure the efficient and independent operation of valuation tribunals in England and to improve customer service. It has statutory functions—they are contained in the 2003 Act—to provide staff, accommodation and other support to valuation tribunals in England. It also has the function of giving general advice about procedure in relation to proceedings before tribunals. That includes giving general advice to tribunal members and, significantly, to members of the public who might wish to submit an appeal—for example, in the form of leaflets setting out how to make an appeal.
The VTS has a board of seven members, including a chairman and deputy chairman, who are all appointed under Office of the Commissioner for Public Appointments rules. It has a staff of 132, led by a chief executive. Again, the VTS can be found in a number of locations across England.
There are four amendments to Schedule 16. Amendment No. 279B seeks to remove one of the key functions of the VTS—that of giving general advice about procedures in relation to proceedings before the current tribunals and, in due course, following the establishment of the Valuation Tribunal for England, in relation to proceedings before that tribunal. It has been suggested by some members of valuation tribunals that such a function will no longer be valid with a single tribunal and a judicially appointed president. We think that their concerns may be prompted by a misunderstanding about what the function actually means in practice.
The Government’s view at the time of the passing of the 2003 Act and now is that this function is not about giving advice about specific appeals. That is why the function refers to “general advice”. Any general advice given by the VTS would be likely to be offered to two main groups of stakeholders—members of the VTE and members of the public.
General advice to tribunal members would be aimed at better helping them to understand the general procedures applying to appeals that may come before the VTE. General advice to members of the public—for example, in the form of leaflets—describes the circumstances in which an appeal can be made, and so on.
In giving general advice the VTS has not and would not be usurping the Valuation Tribunal for England’s inherent power to decide, in accordance with the applicable legislation and the VTE president’s tribunal business arrangements, how best to handle a particular appeal. I hope the noble Baroness is satisfied on that point. The provision in the 2003 Act ensures that the giving of such general advice is a function of a particular body. Since it is the VTS that provides the administrative staff for the current 56 tribunals and will provide the administrative staff for the VTE, it is the Government’s view that the VTS is best placed to take on the role of offering general procedural advice. It also seems unwise to burden the VTE with this general function. Indeed, we believe this would be the practical effect of the amendment. The VTE has no specific resources to carry out the function, and it is better employed in determining appeals. I am hoping that there is no reason why the VTS and the VTE should not liaise about the VTS’s exercise of that function and come to an accommodation about what the limits of the function should be.
Amendments Nos. 279C, 279CA and 279D are linked. Amendment No. 279C seeks to remove the requirement for the majority of members of the VTS board to be senior members of the VTE, and Amendment No. 279D is consequential to that amendment. Amendment No. 279CA would prevent any member of the VTE from being appointed as a board member of the VTS, other than the president of the VTE, who is appointed to the VTS board by virtue of his office.
I shall explain briefly why there is currently a provision that the majority of the members of the VTS board are drawn from the membership of the valuation tribunals. Then I will set out why the Government believe it is important this provision is retained when the VTE is established. It is worth mentioning that at present four of the seven VTE board members are either presidents or chairmen of valuation tribunals.
Proposals for the establishment of the VTS were addressed in a 2000 Green Paper and a 2001 White Paper, which were supported. In consultations with the valuation tribunals one of the key points was the imperative for the membership of the VTS board to be drawn mostly or exclusively from the body of tribunal members. A provision was built into the constitution of the VTS to reflect those wishes. It ensures that the board has a good understanding of how tribunals work.
Representations have recently been made to Ministers that this aspect of the constitution of the VTS should be amended. The Government take the issue of the judicial independence of valuation tribunals very seriously indeed, just as we did when we first consulted on the constitution of the VTS and when we passed the legislative provisions of the 2003 Act. I have to say that no specific evidence has been forthcoming that the constitution of the VTS is of itself prejudicing judicial independence in such a way that the only possible solution is for that constitution to be amended by means of changes to the 2003 Act. Neither have we seen any specific examples where the way in which the VTS board is operating, with a majority of tribunal presidents and chairmen, is in fact prejudicing judicial independence. I am sure that the VTS board has no wish to prejudice or to be perceived as prejudicing judicial independence; indeed, I am quite confident that the reverse is true. The current constitutional arrangements for the VTS are supported by the Council on Tribunals, which takes the view that the statutory requirement for the tribunal member majority on the board is sufficient to maintain that judicial independence.
The consultation undertaken in the summer of 2006 about the proposals to establish the VTE raised no significant concerns over the requirement for the majority of the VTS board to be drawn from senior members of the VTE. We continue to take the view, moreover, that the proposals in this Bill for a new unified valuation tribunal under a single national president will go further still to support that independence.
Amendments Nos. 279C, 279CA and 279D would leave the president of the VTE as a member of the VTS board by virtue of office. To remove the requirement that a majority of the VTS board must be senior members of the VTE would, I believe, deny the VTS board crucial input from those who are involved in the day-to-day working of the VTE and would go against the views of the members of the valuation tribunals expressed when the founding legislation for the VTS was approved.
The Committee has been patient as I have set out the background and explained the implications of the amendments—although I suspect that it has probably been more painful for me. But, on that basis, I hope that the noble Baroness will feel that her concerns have been addressed and questions answered.
I am grateful for that response and I am sure that the council will be grateful as well. Obviously, I will wait to hear what it has to say. I also thank the noble Baroness for dealing with Amendment No. 279CA, which is on the supplemental list and not in my name but that of the noble Lord, Lord Hanningfield. It is useful to have had it included.
I want to make one brief comment. I can understand why the first of the amendments would have caused concern because instead of saying in paragraph A17(1),
“The President must make tribunal business arrangements”,
and then going on to define them, it could simply have said, “There shall be arrangements for the selection of members”, and so on. Because of the concern about definitions, the whole thing has become more complicated rather than any easier. However, I am again grateful to the noble Baroness and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 238KB not moved.]
Schedule 15 agreed to.
Clause 221 agreed to.