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Local Democracy, Economic Development and Construction Bill [HL]

Volume 706: debated on Wednesday 17 December 2008

Second Reading

Moved By

My Lords, I am delighted to introduce the Bill to the House. Noble Lords will know that this debate is taking place at a time of great economic upheaval, global in its origin but with a huge impact on local communities across Britain. The Government are committed to doing all we can to help people through these tough times and to prepare the way for better times. The Bill is part of that response. As the Government continue to lead nationally and internationally with partners to address global economic problems, we will, through the Bill, strengthen the capacity of local government and its partners to drive recovery where it really counts—at local level.

When tough choices have to be made, there is always the temptation to shy away from local discretion and flexibility. That would be the wrong response. Across our communities, people are facing uncertain circumstances, particularly in housing and jobs. In that situation, it becomes even more imperative that people feel they can influence what happens to them and know that opportunities will open up for better choices in the future. The Bill is about just that. It provides a new duty for local government to engage and inform the community about the work it does. That will help to raise its reputation as well as improving working relationships; it will help to build stronger, more resilient partnerships at local and regional level; and it will give local people, no matter where they live, a louder voice that must be listened to.

This is the next step in a journey that has been going on for some time to pass power down to local government and to increase the visibility and accountability of local councils as well as their scope to develop innovative local solutions. I do not apologise for the fact that this is work in progress because we have tested each step as we have taken it. The Bill will build on what already works. The Local Government and Public Involvement in Health Act 2007 established new rights of involvement for local people and arrangements for local authorities to work with partners on local area agreements, setting out priorities for each area.

I am delighted to say that the local area agreements, the LAAs, have proved to be one of the most successful innovations in local government for many years. They set out clearly how local government, with partners, will take the next steps in the improvement of public services through greater co-ordination at local level, whether that is well-being in old age, the environment or reducing teenage pregnancies. We have enshrined the principle of devolution in the Central-Local Concordat agreed with local government.

We needed to go further, however, so in June this year we published the White Paper, Communities in Control: Real People, Real Power. It set out a range of measures, based on research, extensive consultation and above all listening hard to people, that aimed to transfer greater power from government to citizens and communities, providing a stronger role for local authorities.

What do we know? For a start, we know from Jane Roberts’s work as head of the Councillors Commission that people are confused about the role of councillors and local government and its partners as a whole, and that this lack of information and public awareness is a major barrier to participation and engagement in all forms of public service. On the economic side, we have responded to the desire of many of our cities and towns to expand their powers to act collectively to bring in the skills, jobs and investment that they need. Over the past year, we have consulted extensively on what sort of framework and powers are needed at different levels in order to help drive economic development. We have listened to what local government has told us and produced a final package that I am pleased to say has been welcomed by the local government community.

The Bill is based on a set of values underpinned by robust research, extensive consultation, sound evidence, good practice and the voices of people who know what it takes to improve and take advantage of the natural resources in the local community. It reflects fairness and balance—the two go together. It reflects fairness because we want every community to have the same access to information and influence to ensure that partners work together as well as possible and that scrutiny, for example, is as effective as possible. This includes fairness for the voices of those who are sometimes drowned out, such as tenants. It includes fairness for local government, too, in its dealings with regions as well as localities.

The Bill is also about balance, achieving the right balance between what is done at regional, sub-regional and local levels. It promotes the right balance between giving local government new responsibilities and providing it with new opportunities, powers and freedoms to influence local economies through multi-area agreements, for example, or the new economic prosperity boards. The Bill is also about providing more power for elected leaders and more accountability down to local citizens and communities.

Turning to the themes of the Bill, the first part addresses the key issue of ensuring that people are more aware of what their council and other main public bodies do and how they can get involved to influence decisions. The Bill will bring into law Jane Roberts’s main recommendation for a statutory duty on all principal authorities proactively to disseminate clear and accessible information on how local government works. This will include what councils and councillors do and how to become a councillor, with the aim of facilitating more civic participation.

To speak frankly, we want to end the current postcode lottery whereby while some people in some areas are well informed, many are not. Southwark is an outstanding example, and, seeing the noble Lord, Lord Hanningfield on the Front Bench, I am sure that Essex is; it is usually a leader in many aspects of local government. But many people are unclear about the basic facts of council functions and responsibilities, let alone how to get involved. We want to see uplift in all the ways in which people can take part in their communities, not just in the local authority but also as a school governor, a member of an NHS foundation trust or as a magistrate.

The key challenge is to make this more of a priority for local government itself. Significantly, an LGA survey of 300 council heads of communication indicated that only one in five thought that informing residents was a priority. As a corollary to that, the Bill aims to extend the ability of local people to hold local services to greater account. Building on the new councillor call for action, which will come into force in April 2009, the Bill will enable communities to call for action on their concerns and to have a say in how their area develops. Again, we are working on the basis of what we know. We know from the citizenship survey that petitions are the most popular civic activity; however, in 2007 the LGA found that fewer than a third of local authorities guaranteed a response to petitions. We have since found out that even fewer authorities make this information publicly available, and the Bill seeks to remedy this.

Clauses 10 to 22 require local authorities to have a petition scheme, to publish details to guarantee responses and, in certain circumstances, to take action. Councils will no longer be able to ignore petitions calling for a community hall to be handed over for management by local people, more allotment space or empty buildings to be dealt with. Councils will have to explain their actions and, if enough people sign a petition, it could trigger a debate of the full council. For the first time, citizens in England and Wales will have the ability to set the agenda and influence the issues their elected representatives discuss. We have worked closely with the LGA in developing our proposals; we intend to continue this to ensure that any guidance on petitions is informed by the sector’s view. The next step is to build stronger partnerships and local connections, so we will also extend the duty to involve. In 2007, the Government introduced a duty to involve for local authorities. As part of the new local performance framework, we placed a duty on local authority partners to co-operate to agree local targets. It is right, therefore, that these partner authorities should have a duty to inform, consult and involve those interested and affected by their functions. Indeed, they welcome this. It will send a clear signal that all the partners must strive to give people across the community the opportunity to influence and challenge local policies and priorities.

We have also followed other advice. The creation of a national tenant voice was one of Martin Cave’s recommendations in his review of social housing regulation, Every Tenant Matters. He recognised that, while social landlords have well established organisations in place to represent them at national level, not least in discussions with government and the new social housing regulator, tenants lacked the resources and expertise to ensure that their interests were as effectively represented. Through this Bill we will ensure that we are able properly to fund the national tenant voice and that it has a statutory relationship with the regulator.

Following the logic of my argument of fairness and opportunity, the Bill also includes important measures to improve local governance and audit. Overview and scrutiny is an essential and growing part of the democratic process in holding to account those who exercise executive leadership. It is fast improving but, as the Centre for Policy and Scrutiny established, more can be done to help. Surveying local authorities extensively last year, the centre found that more must be done in tackling the capacity and perception of, and weight given to, the work of overview and scrutiny function in councils. We therefore want to ensure that joint scrutiny committees have a sufficiently broad remit to review and scrutinise issues of wider concern to the area, and that there is a designated officer in upper-tier authorities to help drive delivery of the LAA. This will help overview and scrutiny committees to use their powers effectively to drive improved outcomes; to help scrutiny members, primarily back benchers, to raise their profile and how they are perceived; and to ensure that the public can get engaged to raise issues of local concern.

This Bill will also deliver on a UK Government commitment to enhance the legislative competence of the National Assembly for Wales. In the field of local government, a suite of powers was transferred to the National Assembly in the Local Government and Public Involvement in Health Act 2007, which has enabled the Welsh Assembly Government to progress their public service reform agenda with the introduction of legislation that will reform the statutory basis for service improvement and strategic planning in Wales. The framework provision in this Bill will build on that, enabling the Assembly Government to consider proposals for the governance and scrutiny of Welsh local government.

I turn to two separate issues, which also increase transparency and local democracy. Clause 31 provides the framework for implementing recommendations in the report of the noble Lord, Lord Sharman, on audit and accountability to give the Audit Commission in England and the Auditor-General for Wales power to appoint an auditor to certain entities connected to local authorities. Such auditors will have the power to issue reports in the public interest when it is considered necessary to do so. The provisions will give confidence that there is a robust system in place for local government which reflects the special audit and accountability arrangements which are appropriate for public funds and already implemented in central government.

Moving on, the 11th report of the Committee on Standards in Public Life, Review of the Electoral Commission, published in January 2007, recommended that the Boundary Committee for England, which as noble Lords are aware is currently a statutory committee of the Electoral Commission, responsible for the upkeep of electoral arrangements for principal local authorities in England, should become an independent body separate from the Electoral Commission. We agree entirely with this. Clause 49 establishes the Boundary Committee as an independent body and Clause 55 removes responsibility for English local government boundary electoral arrangements from the Electoral Commission.

I turn to the second set of issues addressed by the Bill. The strength of our national economy depends upon the viability of our regional and local economies. Our regions have different strengths and weaknesses. They need organised intelligence, investment and support if they are to make the most of their strengths and protect against their vulnerabilities, particularly at this time. The party opposite appear to have a visceral prejudice against RDAs—and I see noble Lords actually nodding—but let me just outline their achievements in recent years. RDAs have driven through real improvement—230,000 more jobs, 35,000 new businesses, the transformation of 1,000 hectares of brownfield land into employment sites, and 180,000 people put into training

Over the past year, we have consulted widely with regions and local authorities about what new configurations at regional and local level might be helpful to align strategies on skills, transport, housing, planning and economic development; not more architecture, but a more effective bringing together of the things that people really need in order to thrive and flourish. Specifically, within the review of sub-national economic development and regeneration, we set out our plans for a more coherent sub-national framework for economic development as we are facing the demand not only of the new global economy but also of the unrelenting pace of technological change.

A strategic role for a regional development agency and a single regional strategy is a crucial part of this. The purpose of RDAs is to bring together partners and information, to prioritise economic activity, to respond to the challenges faced by significant markets, to take long-term decisions, to co-ordinate activity, and to ensure that no area is left behind. However, they are not operating at full strength. In particular, the separation of spatial planning—including housing supply, land for employment and infrastructure provision—from economic planning is absurd. It means, for example, that too often the bus will stop before the employment site or it does not go to the most vulnerable community, new housing is built miles from the workplace or the town centre without the required infrastructure, or towns and cities attempt to pursue contradictory economic, social and environmental ambitions.

The Bill will therefore bring together economic and spatial planning into a single regional strategy. It will bring real focus to the long-term analysis, diagnosis and solution of problems over 15 to 20 years. It will bring together the priorities and the economic possibilities, set out a long-term vision to enable all partners to pursue genuine agreed sustainability for the region, and draw on the five drivers of productivity and combine economic development with housing, infrastructure, skills and the natural assets of the region. That is the way to get a more effective balance between the needs of the environment, the economy and our communities.

We mean all partners to be involved. To complement regional strategic planning, we need a greater capacity at local level to inform and influence the regional strategy. Local authorities—including district councils—operate at the level where the most direct impacts are felt, where economic exclusion and deprivation are most clearly recognised and where opportunities can be exploited.

We listened closely to the concerns expressed during the consultation about the need for elected local authorities to be part of the process of taking decisions on such major issues as the provision of much needed new housing at the regional level. Clause 66 therefore requires local authorities to form a new body—a leaders’ board—at the regional level to work with RDAs in developing the strategy, bringing stronger democratic accountability to the process. The LGA has described this measure as a victory for local government.

Leader’s boards, along with new regional select committees, will play a major part in addressing what many have regarded as a democratic deficit at the regional level in the absence of elected assemblies. The twin “poles” of national and local democratic oversight will combine to deliver stronger and more responsive regional working. The involvement of council leaders will ensure that vital debates about the future of our regions involve elected representatives with stature and authority.

The effectiveness of the dialogue between local and regional tiers will also depend on the unique knowledge and creativity councils bring. Therefore, the Bill also strengthens the role of local authorities in promoting and delivering economic development by introducing a new statutory duty on local authorities to assess local economic conditions. No doubt I will be told that some councils do this, but not all, and not systematically. We have evidence to show that. This will ensure that councils have the necessary evidence to take decisions to strengthen their local economy and to channel resources into those activities that will produce the greatest benefits for local residents and businesses. The economic assessments will also provide valuable underpinning evidence for the regional strategy and the overall needs of the broader economy.

In recent years, it has been evident, not least from the steps taken by regions themselves to make the most of their partnerships, that economic markets—this is so self-evident it hardly needs to be said—often cut across the boundaries of local authorities, and that issues such as housing, transport, and skills are often best addressed by groups of authorities working together. That is what they want to do but that link has been missing in recent years. The Bill therefore opens up new opportunities for councils to set up joint working arrangements. We are working with what works and with what local authorities want. Multi-area agreements have proved phenomenally popular with local authorities. There are now seven finalised MAAs, involving 59 local authorities, with three more being negotiated. When local authorities told us that they want MAAs to operate on the same statutory basis as LAAs, we listened. Through this legislation we will therefore allow for the voluntary creation of multi-area agreements with statutory duties.

We will also legislate to enable councils, where they wish, to set up formal legal arrangements for joint working. These will be known as economic prosperity boards and will be designed to drive forward economic development across a city or sub-region. We will also allow areas that choose to do so to combine an EPB with the functions of an integrated transport authority. All those legislative changes being introduced on sub-national economic development are the result of well ventilated arguments that have taken place over the past two years, and are rooted in what local government has said that it needs.

Finally, there are important provisions in the Bill to improve the operation of construction contracts. Lack of clarity about payment and any ensuing disputes can seriously impact on the successful delivery of construction projects. The 1996 construction Act, which regulates construction contracts, has generally worked well. But it has become clear, following extensive consultation with the industry over a number of years, that it is defective in certain regards. Our amendments address these weaknesses and will create greater certainty and clarity of cash flow for all in the construction supply chain. Of course, well managed and successfully delivered construction can act as a catalyst for wider economic regeneration and improve public services. Therefore, this is a very timely and salient improvement in legislation.

Noble Lords will see that this is a wide-ranging Bill for good reason. The economic problems we face are unprecedented and its impact will be felt in many different ways. It gives every neighbourhood, city and region more opportunity to reach its potential and unlock the talent of its people. It helps to build strong, resilient and more powerful communities, which is more important than ever in these times where local services have to adapt to meet local circumstances and difficult local choices have to be made in the face of financial constraints. But we continue to put our trust in local government and in the intelligence and good will of communities to find their own solutions that best respond to local needs, and to shape their local destinies. I have every confidence that local authorities and individuals will continue to rise to the challenge. I beg to move.

My Lords, I thank the Minister for her full and detailed description of the Bill. I am sure she will agree that the Short Title is a mouthful. Indeed, when I first heard the Title of the Bill—it is the first Bill that I have dealt with—I thought that it was a Bill of unrivalled importance and complexity because it sounds as if all those ingredients are there, not just local democracy but economic development too, and construction for good measure.

The noble Baroness very patiently set out why the Bill has come about. Apparently, it is both the long awaited answer to local government problems which have been thought about by the Government's officials for years and a response to the Prime Minister’s current economic mess. I fear that I find those two explanations somewhat contradictory, but whichever is the more likely story is not really the issue here. The reality is that the Bill is not the answer we have been looking for; it does not actually do very much at all.

In our debate on the gracious Speech last week, I said that I thought this was a ramshackle piece of legislation with,

“lots of motherhood and apple pie”,—[Official Report, 10/12/08; col. 404.]

but no real substance. The community empowerment elements that the Government trumpeted in the draft Queen's Speech have been quietly dropped. They have instead taken a few half-hearted ideas from here and there, bound them together with a dose of warm intentions and called them a Bill.

There are, it is true, proposals in this Bill to which this side of the House has no objection. We support the move to reform the functions of the Electoral Commission according to the recommendations of the Committee on Standards in Public Life. The construction clauses appear to do what they say on the tin. We will, of course, be looking at the Government’s proposals with close care in Grand Committee in the new year. However, other parts of the Bill leave me baffled. Only this year the Government set up the Office for Tenants and Social Landlords, Oftenant. It has been operational for only a few days. Surely even this Government are not yet able to judge its success, so why is another tenant board being created, necessary though I am sure the Government will show it to be? Why was it not included in the Housing and Regeneration Act 2008?

Above all, why do the Government claim to promote local democracy in Part 1, and undermine it in later parts by establishing more tiers of bureaucracy? Part 1 will apparently be a panacea for the ills of voter disillusionment and poor participation in local government. Apparently individuals will be able to petition their way to satisfaction, while local authorities will be duty-bound to provide it for them at a cost, of course, of millions of pounds and the creation of new bureaucrats’ posts. I am sorry, but I think this is a fig-leaf proposal, which will do nothing to empower local people. For example, if someone organises a petition on a matter about which they feel strongly, such as the workings of a primary care trust, they may raise searching and pertinent issues. They will then, inevitably, face frustration and disappointment. Their local authority will take steps, as it is obliged to do, to respond, but that response will probably be, “Sorry, we cannot help you because we do not have the power to do so”. As the Minister said in opening, the local authority will guarantee a response, but not a solution.

This Bill effectively enshrines in statute the duty of councils to be accountable, but for the decisions and actions of quangos and bodies over which they have not been given the power to exercise control. In that respect, perhaps these provisions could have a beneficial effect over time. They will eventually allow people to see just how much power has been sapped away from their local elected representatives and placed in the hands of unaccountable committees, commissions and boards. The Minister told your Lordships’ House that the more people feel involved, the more likely they are to feel satisfied, the better services will be and the more confident the community will be. I am impressed by the Minister’s faith in the power of petitions to deliver such peace and prosperity. I, however, do not believe that a costly form-filling exercise will cover up the real criticism that people have of local government: too often the men and women they have elected to represent their views and interests are prevented by a thickening layer of bureaucracy from actually doing so.

I have already described this Bill as the “motherhood and apple pie Bill”. Perhaps the “bureaucracy Bill” is more succinct. I am sure that other noble Lords with an ear for the mot juste will have other, pithier suggestions for a catchier title than the Bill currently has. I feel that the true theme of this piece of legislation is to add more strips of red tape to local government, chapter by chapter. Take the leaders’ boards for regional strategy: these are welcome up to a point, for at least they recognise that local authorities must not be bypassed, but they are still top-down arrangements. The Secretary of State retains extensive reserve powers, and she is unlikely to approve anything that does not fit with the Government’s agenda of creating a layer of bureaucrats to implement the will of Whitehall. That will mean that the boards will likely cleave to the views which come from the centre, and the claims for devolving strategy will be little more than an illusion. Once again, the Government can use this to continue their attack on the green belt, as we have already seen in the south-east. We must ensure that this Bill does not become the “green belt up for grabs Bill”.

We could use this Bill to look at the delegation of funds. Currently the Bill allows the regional development agencies to trundle along unchanged, and to continue to control the purse strings. For example, in the huge work of developing Birmingham New Street station, every invoice must be signed by the RDA, rather than it simply delegating the money where appropriate. Then there is the proposal for economic prosperity boards, which—despite their somewhat alarming, iron curtain-style resonance—are really a new level of unnecessary officialdom. They put on a statutory basis something that councils are quite happy to do anyway, which is to co-operate when they need to. We must ensure that such agreements stay as voluntary agreements and that any such arrangements are fully accountable. Trusting local communities is giving them space to do what they feel they need, and not prescribing them to do what they must. The Secretary of State will have the power to get involved in the make-up of an EPB, but only a majority of its members must be elected councillors. Where will the rest be drawn from? How can we be sure that there will not simply be government placemen installed to make sure that the Secretary of State may meddle more easily?

It is typical of this Government that they have latched on to an idea and obsessively overmanaged it. I fear that all these statutory provisions will end up weakening democratic accountability—responsibility is once again taken away from local government and moved upwards, into the ever burgeoning tier of quangos and bureaucrats. The structure is becoming more important than the economic outcome.

I hope that we are able to show the Government the merits of our arguments, because I truly believe that these provisions, and others like them, undermine all the fine talk about empowering communities and improving local democracy. Failing that, I suppose I could always start a petition; but who would be the appropriate authority that I would present to? Can I be sure that I would be the appropriate petitioner? Presumably, there will be a newly created petitions officer whom I could consult.

On a more serious note, I draw your Lordships’ attention to the recent debate in Manchester about congestion charging. Charging was supported by the Association of Greater Manchester Authorities and resoundingly rejected by the people of Manchester in a referendum, on a high turnout of over 1 million people. That is the sort of empowerment, the sort of engagement and the sort of local democracy in action that I understand all those terms to mean. Local people responded to an issue that mattered to them. It was debated frankly and publicly, and it seems pretty obvious that the people of Manchester were unimpressed at being told what to think by officials; they have told the officials in unambiguous terms what they actually think. Should the voters of Manchester, and elsewhere, be uneasy then, with Clause 99, which will allow the Secretary of State to pass over transport arrangements to a combined authority?

We will be looking very carefully in Committee to make sure that this is not the Government’s route to get around awkward voters who show that they understand very well how local democracy works. We must ensure that this Bill does not disempower communities by stealth. We must ensure that this does not become a “congestion charge by the back door” Bill.

I have drawn attention to a few specific points and a few general themes. Other noble Lords will no doubt approach this Bill from different angles in their usual forensic manner. We will have a good deal to examine in Grand Committee. This side of the House is concerned that the Bill is not the miraculous cure to all the problems of local government that the Government might claim. It is, in fact, a stealth attack on the rights and freedoms of local voters. The Bill is a curious mishmash of the vague and the ill thought-out, which adds to the ceaseless slow drip away from local authorities of meaningful power and responsibility. There is a new quango here, and a new set of Whitehall guidelines there, which are building up to the opposite of what the Minister has said she wants to see.

As for an answer to the problems of the Prime Minister’s recession, the spending of many millions of pounds of public money in each of the next two years on what is in essence a job-creation scheme for new town hall bureaucrats does not seem to this side of the House to be serious economics. The Minister has been at pains to stress that this money has been carefully budgeted for but, if the recession deepens, will we find that local councils start feeling pressure to meet more of the costs of these schemes out of their own overstretched budgets? This is a matter that we will be looking at carefully, at a time when local authorities are trying to keep council tax rises to a minimum to ease some of the burden being felt by hard-working families.

The Government claim that this Bill will empower people; what it really does is show how much power has ebbed away from their elected representatives. The Government might believe that they are encouraging democratic participation by putting petitions on a statutory footing; what they are in fact doing is meddling in what councils are better placed to arrange themselves. The Government claim that the Bill will strengthen local economies, but it chips away at the accountability of those who make decisions. The Government might also believe that they can develop local responsibility through the interference of the Secretary of State. We remain to be convinced.

Finally, I hope that this is not another attempt by this Government to be seen to be doing something because they have once more run out of substantial and serious measures for these most serious of times.

My Lords, I, too, thank the Minister for her introduction to the Bill. I fear that that may be one of the only polite things that I have to say and I am not happy to be in that situation. I am sorry that she is landed with such a Bill, which we on these Benches see as largely unnecessary, in parts offensive to local government and a waste of the time of Parliament and, more important, of organisations outside Parliament, including the local authorities.

In their briefing pack, the Government in part justify the Bill by their belief in subsidiarity. As my noble friend Lord Tope explained last week, subsidiarity is something to which we subscribe enthusiastically. The briefing pack states that,

“decisions can be taken at the right level, by those who are closest to the issues affecting places and with the full involvement of local people and partners”.

At the end of her speech, the Minister expressed her confidence in local government. I have to say that it is a colossal cheek that the UK Government, not having been notable enthusiasts in practice for the European Charter of Local Self-Government, which enshrines what its title suggests, are promoting an amendment to the charter that would place a duty on local authorities to promote democratic understanding and participation. Let us get our own house in order first.

It is not that we do not support those principles, but is legislation really required to enable local authorities to do pretty much all that they will be required to do, or is the truth that central government are looking to control the “how” as well as the “what” and to insert the Secretary of State or another relevant national authority by means of orders or guidance? I detect another agenda: a move towards the uniformity of large unitary authorities imposed from the centre. I refer, for example, to the way in which multi-area agreements are dealt with; again it is a question of “how”, not “what”. That is the point; it is quite distinct from local authorities and communities working these matters out for themselves. Another part of the agenda is that there is a move not just to an overarching but to an overwhelming role for leaders.

We do not necessarily argue against unitaries per se, but I must ask whether they are moving in a different direction from that which Clause 1 suggests is the Government’s objective. My noble friend Lady Maddock, who hopes to take part in Committee, although she cannot stay for the whole of the debate today, talks powerfully about the reduction in the number of councillors in her area of Northumberland from more than 300 to 67 as a result of reorganisation. That will not do much to promote understanding and opportunities for input. Some people might dismiss the kind of anecdotes that councillors pick up from meeting people every day in their local areas, but it does an awful lot to keep councillors on their toes when they know that they are likely to be collared in a village street in a rural area or in a supermarket in an urban area, in which residents know and recognise their local councillor and feel that they can collar them by the cereals counter or whatever.

Why is it necessary to impose systems for petitions by defining what is a valid petition, time limits for dealing with them and lists of appropriate actions that can be taken in response? Any councillor and council with any nous, even the most cynical and uncaring, will know that for electoral reasons at the very least they need to cater for petitions. Most councillors know that the best way to take an issue forward is often to encourage or to instigate a petition. Given the considerable campaigning experience on these Benches, I did wonder about getting up a petition against much of this Bill.

The noble Baroness referred to the Local Government and Public Involvement in Health Act in involving local people and ensuring that councils take up issues raised by the public. She describes the provisions in this Bill as taking forward that programme. It seems that we have another example of the Government not seeing how something works. It cannot be that last year’s legislation has been tested and found wanting; it was only enacted last year.

There will be a duty on local authorities to explain the governance of decision-making. The problem is that that keeps changing. I hope that the Government did not spend too much on the research that revealed that there is little knowledge among the public of the tiers of governance; many noble Lords will confirm that without research. The problems are real but we part company with the Government on whether legislation is the answer. One legislative response on the issue of involvement might have been to revise the Widdicombe rules, which restrict political activity.

With regard to extending the role of overview and scrutiny, I appreciate the frustrations of the restrictions of that role, but ensuring public debate can be a powerful tool, which might well be applied beyond the local authority and PCTs. Public bodies, more than the designated local area agreement partners, could hold question times, organise webcasts and have joint scrutiny arrangements. All of this would go some way towards addressing the deficits in accountability and involvement. These are two aspects of democracy that we see as inseparable.

I agree with the Government and with the analysis of the Centre for Public Scrutiny—I declare an interest as a member of its advisory board; I have been associated with the body from the beginning—that the scrutiny function requires officer support and that scrutiny as a career path for officers and members requires support. I am uncomfortable, however, with the proposal to make the scrutiny officer one of a tiny handful of statutory posts. Scrutiny is qualitatively different from, for instance, children’s services and finance, which attract those designations. It is certainly the case that scrutiny requires dedicated support. Officers who spend the morning advising the executive and the afternoon advising the scrutineers on the same subject are in an impossible position. Is this not a matter for the authority itself? Of course, we believe in evolution on a local basis.

Our different approach also shows in regional matters. Leaders’ boards are not the answer to the democratic deficit in the regional development agencies. Of course let us have contact between the local authorities and the RDAs; regular contact, consultation and working together are all important, but that is a different issue. The leaders’ boards seem to have the potential to turn into exclusive clubs where the big authorities exclude the smaller and where there is no or little opposition voice. These are not the priorities of any leader, who naturally has the concern of his particular local authority at the front of his mind. The knock-on effect is to exclude the non-leaders back at home. Is this part of a programme of assigning to the RDAs expanding influence that is unscrutinised?

We are certainly heading for debates on the context and priorities of regional strategies, which are to set out,

“policies in relation to sustainable economic growth”.

Should we not be aiming to integrate those with spatial strategies that have policies for all aspects of sustainable development, including tackling the mitigation of, and adaptation to, climate change? I have already talked in the Chamber this week about how sustainability is not static. Society changes and its knowledge and aspirations change. We will use the opportunity provided by the Bill to revisit the legislation establishing regional development agencies. As I recall, one of the purposes of an RDA is to,

“contribute to the achievement of sustainable development in the United Kingdom where it is relevant to its area”.

That was 10 years ago, and the thinking has moved on. The Minister’s justification of the single strategy seemed precisely to support our revisiting that purpose.

We appreciate the importance of economic concerns but should there really be a duty to prepare an economic assessment? Would it not be better to give a local authority space to prepare one rather than worry about whether it is meeting the Secretary of State’s requirements? No doubt local authorities do consult their partner authorities, but what does this requirement add if there is no duty on the partners to co-operate?

Economic prosperity boards are, I understand, to be voluntary and the legislation is enabling, so why is it necessary to include them in the Bill, unless it is to ensure that the pattern, as expressed in the five conditions set out in the Bill, to the Government’s design is the one that takes effect? Incidentally, I note that the CBI is distinctly underwhelmed and I am very much aware of concerns about achieving housing development in the new structure.

I have not enjoyed making a bad-tempered and rather sour speech. I know that I have not covered everything—for example, I have not dealt with the tenant’s voice. Those of us who are, to use a phrase used in a different context two days ago, survivors of the Housing and Regeneration Bill anticipated this coming and we welcome it. I have not dealt with areas that are more technical than political, but let no one characterise us in our attitude to the Bill as being against democracy just because democracy is part of the Title.

On Monday, in the Second Reading debate on the Marine and Coastal Access Bill, my noble friend Lord Tyler, in saying that we would “rigorously scrutinise” the Bill, conflated those words to promise that we would “rigorise” it. We will rigorise this Bill as well. We will do so as far as we are able, but I have to say that the organisation of business in your Lordships’ House will not facilitate that. From these Benches, we alerted the Government as soon as we realised that this Bill and the Marine and Coastal Access Bill would be dealt with concurrently. However, we did not anticipate that that would have to mean exact concurrency. As we see it, there is a considerable overlap in the interests of noble Lords in both Bills. Certainly that is the case from these Benches but I do not believe that it affects the Liberal Democrat Benches alone. Yet the Forthcoming Business indicates that on at least two days the Committee stages will coincide. It is not apparent to us that this is because of urgency or because of a lack of other business. There is real anger and frustration on these Benches, because we are keen to contribute and play a full part in both Bills. As I said, I do not suggest for a moment that this problem is confined to these Benches. We will return to this issue in due course and we will also rigorise the Bill.

My Lords, I welcome the Second Reading of this Bill and congratulate my noble friend on the thoughtful, sincere and intelligent presentation of its content. Those noble Lords who have worked over a long period with the noble Baroness, Lady Andrews, know that she is immensely sincere and thoughtful in the way in which she goes about her business and her handling of this Bill will not be any different.

I also congratulate the noble Baroness, Lady Warsi, on her debut speech and welcome her to this select band of survivors of the Housing and Regeneration and Planning Bills. I am sure that if her contribution today was anything to go by, we will have debates full of style and verve. Although I did not agree with much of what she said, it was delivered in a most entertaining and impressive way.

At Second Reading of the Planning Bill, I said that the noble Baroness, Lady Andrews, was a glutton for punishment. However, it seems that there is simply no end to her stamina. After drawing breath for five minutes since piloting that important legislation, and the Housing and Regeneration Bill before it in the pervious Session, here she is back again with this new Bill.

What an interesting Bill it is, with an eclectic mix of provisions. It may be just that this is the festive season, but when I was sitting studying the Bill yesterday it struck me that it had many similarities to a rather exotic box of chocolates that had found its way on to my desk. Contained in it are some soft centres which we bite into and explore something rather marvellous, such as the establishment of the national tenants’ voice. Like other noble Lords, I am not quite sure why this was not contained in the Housing and Regeneration Bill, but it is welcome here none the less.

As the noble Baroness, Lady Warsi, said, we are aware that the Tenants Service Authority has been set up recently and is committed to being a tenants’ champion. However, a separate tenant voice is also needed. When I sat on Ofgem’s board, I was glad on many occasions that Energywatch existed. Often there is an understandable coincidence, and sometimes a conflict of interests, between economic regulation and consumer interest. That is simply a fact. In terms of energy, things can, and did, fall through the cracks; therefore the establishment of a national tenant voice is welcome. This proposal is sweet indeed.

In the mix, however, there are also some hardboiled fellows. The separation of the boundary issues from the Electoral Commission is very welcome. It addresses a serious and important issue and deserves our support, which it will have from many noble Lords across the House.

I am sorry about all of these puns, but there are also some nuts to crack here. Stick with me; this is the pantomime season. The business of co-ordinated and coherent economic development has fixated Governments in the UK for more than 50 years. Immediately after the war, when the key issue was foreign direct investment, UK regions performed well and were good at promoting and differentiating their offer. However, for the past 20 years, the task has been much tougher.

Foreign direct investment in the UK has dwindled to a fraction of its post-war significance. The challenge for English regions these days is to continue the transition of their economies to a new world where they can take advantage of emerging opportunities and the new industries created by a more global and knowledge-based economy. As the noble Baroness said, some have been better at this than others.

The key to facilitating the right kind of dynamic conditions for effective economic development is energy, innovation, drive and focus. When we come to debate Parts 4, 5 and 6 of the Bill, we need to keep applying a clear test to what we are proposing. Do the changes provide the focus so desperately needed to create effective conditions for economic development? If we do not believe that the changes should achieve that end, we should be vigilant and rigorous, as the noble Baroness, Lady Hamwee, has said, in debating those and putting it right. We need to crack this nut as it is so important for the future prosperity of our country.

I do not intend to cover today those sections which cover local government. There is much expertise in your Lordships’ House and much experience of local government. I take on board the comments of the noble Baroness, Lady Hamwee. She is a very thoughtful and intelligent critic in this House. If she is concerned, we take that concern very seriously and we listen to her very thoughtfully indeed.

Notwithstanding that, I welcome the Bill; many of its provisions are really important. If we focus on those and avoid the fudge—the festive season is getting to me—we will do very well indeed.

My Lords, the noble Baroness is quite right: this is very much a mixed bag, but I shall not pursue the metaphor. Parts of the Bill apply to England and Wales; parts to England only; parts to Wales only and parts to Scotland and Northern Ireland only. All those differences in application are helpfully clarified and set out in the Explanatory Notes.

Those of us with a particular interest in Wales have also been provided with a detailed commentary on Welsh aspects of the Bill by the Wales Office. I express my gratitude to the Minister in charge in the other place, Wayne David MP. He also arranged for the Welsh Assembly Government Minister, Dr Brian Gibbons, to attend a briefing for Peers. Alas, I was the only one able to attend at lunch time last Thursday. I apologised for the absence of colleagues from all sides of the House, as I am sure they would have wished me to do. I hope that the Whips in each party will take account of what I have just said and look into the matter because it is important that we have a good attendance at such briefing meetings involving Ministers coming down from Cardiff to London.

First, I shall deal with the exclusively Welsh Clause 29, on the powers of the National Assembly for Wales. Briefly, that clause proposes to give the Assembly legislative competence; that is, to give it power to legislate by Assembly measures in two very specific areas. The first relates to decision-making structures of county and county borough councils and the second relates to joint overview and scrutiny committees set up by such principal councils.

The explanatory memorandum provided by the Wales Office explains in some detail why the Assembly Government require these powers, what they intend to do with them and the limitations on such action. This is very helpful and to be encouraged for the future because it is not easy for this Parliament to give away legislative powers to other institutions when we have no idea what will be done with them. Conversely, it is much easier when we know the why and wherefore of the transfer. The intention of Assembly legislation would be to redesign options for political structures so that all 22 Welsh councils could sign up to some form of executive structure. Clearly, there is a great deal of diversity in structures, possibly an excess at present. I hope the Minister can throw a little more light on this point. Of course, the matter can be probed further in Committee. We do not want an excess of uniformity in structures either.

It is also proposed to establish joint scrutiny committees between neighbouring authorities so that services being delivered jointly across county boundaries may be subject to effective review. I understand that local authorities currently have the power, but not the duty, to form such joint committees.

Joint scrutiny committees, together with the proposals for strengthening them and improving their performance that the Assembly Government have in mind, are an essential arm of good local government and, I hope, will promote collaboration between authorities, something I devoutly wished for when my noble friend Lord Hunt of Wirral and I reorganised local government in Wales in the early 1990s.

It will be asked why any reforms intended by the Assembly Government cannot be included directly as clauses in the Bill and implemented after Royal Assent rather than being subject to a framework clause that enables the Assembly to legislate at a later date. I know that among the reasons are that a great deal of discussion of the issues has been going on in Wales of which we are only faintly aware here and that those who have participated in those discussions should have their say in producing the legislative outcome.

In this context, it would be helpful if we had sight of some of the documents commissioned by the Assembly, including Sir Jeremy Beecham's report Beyond Boundaries: Citizen-Centred Local Services for Wales. That is only one of a number of documents referred to in the Wales Office brief. This material would amplify the background information we have for the framework powers sought by the Assembly in this Bill. On occasions when we are discussing framework powers for the Assembly, we would like to have as much background information as possible.

I welcome Part 1, on the promotion of democracy and involvement in local government. I only hope that it does not result in even more glossy publications that are only scantily informative and destined for the reader's wastepaper basket. One of the things we really need to promote local democracy is a high reputation for honesty, integrity and public service on the part of elected members. There are far too many tales of scandalously high or misapplied expense claims, not only by local councillors, but at Assembly and parliamentary level too.

I favour the petition chapter, prima facie. We have too many single-issue ad hoc bodies that, because they have no status, tend to arrogate power to themselves and end up inconveniencing the public and abusing the public’s tolerance. Such groups should be directed towards their representatives on elected authorities, preferably those with a power to do something about the cause of complaint, especially in view of what my noble friend Lady Warsi said.

When I see that Wales is excluded from Parts 4, 5, 6 and 7, which provide for economic assessments, regional strategies, economic prosperity boards and combined authorities, I have a twinge of regret. There is no doubt in my mind that local authorities potentially have a very important role to play in countering the effects of the current recession, which is likely to prove more dire as we move into next year. I hope that the Wales Office and the Assembly Government will study these parts that apply to England only and ensure that any potential beneficial effects contained in them are available in Wales, where we also have internal regions and possibilities for combined action between authorities and multi-area agreements. We no longer have the Welsh Development Agency, as it was abandoned by the Assembly. I hope the Minister will draw the attention of Welsh colleagues to what I have said on this score.

My Lords, the meeting to which the noble Lord referred was one of which we were not aware. No discourtesy was intended, and we feel deprived of briefing. I hope he will pass on that it is clear that lines got crossed.

My Lords, I declare my interest as president of the Local Government Association and I extend my thanks to the LGA not only for helpful briefings but for co-ordinating and expressing the local government perspective in its influential discussions on this Bill with central government. I know that the LGA welcomes this Bill, which it sees as a step along the path of devolution from central to local government. At first sight, the Bill’s measures for promoting local democracy appear paradoxically to be a lengthy list of additional duties and requirements imposed on local councils by central government. But the dilemma of how greater local devolution can be achieved by central government directive is resolved if one recognises that the Bill will give local government the central role in increasing democratic participation and citizen engagement. A statutory basis for this role for local authorities not only underpins and emboldens their efforts, but justifies the time and money that needs to be spent, sometimes against hostile sniping locally.

As we have heard from several Members of this House today, some fears remain that central government will be unable to resist trying to control local initiatives and will impose rigid centralised and bureaucratic constraints on how each council interprets its new duties. It would help if the Minister could be reassuring that, having devised a sensible statutory framework, the Government see their task as standing back and encouraging varied and imaginative local action to increase democratic and participative engagement at the local level.

I should like to pick up on a new duty under Clause 1(1) and (2), which relates to a requirement on local authorities,

“to promote understanding of the”,

role of councillors—that is, how to become one—and the support available to them to carry out their role. As always, there are already some great examples of councils taking seriously the need for renewal among their council membership, recruiting people of all kinds to become elected members, as so ably advocated by Dame Jane Roberts in her recent commission on this theme.

I was pleased to sit on an inquiry by the All-Party Parliamentary Local Government Group, organised by the Local Government Information Unit, which has produced first-class guidance for councils on this theme. One of our witnesses was a really good woman councillor from south London who, despite disability and family responsibilities, was clearly an excellent representative for her community. It is not always necessary for councillors to regard their task as a full-time job, as a very long-term commitment or as a stepping stone to some other position, although all those are sometimes the case: rather, acting as a good neighbour for a whole community, giving authentic voice to local needs through the local democratic process, can be the very best form of citizen involvement and engagement. I commend this ingredient in the Bill and I hope that it will reinforce and extend the efforts of all local authorities to draw in more of the latent talent in their areas.

As you might expect from someone on these Benches, I add that people with no political affiliations—after all, more than 98 per cent of the population do not belong to a political party—also need encouragement to seek election as council members. I speak as one whose father served as an independent councillor for 40 very fulfilling years, although I suspect that Lord Nolan’s commission would have suggested that a rather shorter term should be the norm.

I turn to those parts of the Bill concerned with regional strategy. Here, the LGA can claim to have achieved an important change from the current arrangements, with the Bill now proposing a key role for local government through the local authority leaders’ boards working jointly with the regional development agencies. This measure, as the LGA says, plugs a democratic deficit in the Government’s original proposals and ensures that directly elected authorities are fully involved in decisions about regional strategy. My hesitation here, as with the economic prosperity boards, concerns the degree of real autonomy and unfettered decision-making that gets passed down the line, together with worries about the extent to which funding is actually going to be devolved. I know that noble Lords will want to explore these issues further as the Bill progresses.

I want to add a word on multi-area agreements, the voluntary agreements between neighbouring local authorities which enter into a contract with central government. These products of the Government’s sub-national review, now being piloted in seven places, look set to be popular and effective in tackling the issues that cross council boundaries. They get the seal of approval in principle from such bodies as RICS and the CBI, and I note the headline in the Local Government Chronicle of 4 December: “Zest for Sub-Regional Powers—LGC survey reveals unanimous support for statutory city regions”. With new measures for economic development becoming vital as recession hangs over us, these partnerships could make a big difference. This is already the outcome emerging from sub-regions as diverse as Greater Manchester, about which we may hear more later, and South Hampshire.

Perhaps I may make two further brief points. First, I refer to the creation of the so-called national tenants’ voice to enhance the support for and representation of tenants in social housing. Now that the new Tenant Services Authority has got off to a good start, this is an important additional measure for all those in council and housing association accommodation. However, it is not a national tenants’ voice because it excludes the large, expanding private rented sector and further widens the gap between tenants in social housing and the tenants of private landlords. The latter pay higher rents, perhaps three or four times as much in places like London, but compared with tenants in social housing enjoy very limited security of tenure. The new Rugg review calls for measures to regulate landlords and, echoing key recommendations from Sir Bryan Carsberg in his report for RICS, for redress and an ombudsman scheme to protect private tenants. I declare an interest as deputy chairman of the Ombudsman Scheme for Estate Agents, which covers some lettings agents in the private rented sector, but relatively few since the scheme, unlike that for those buying and selling properties, is not mandatory. I ask the Minister whether this Bill, one that already embraces a mixed bag of different concerns, might not incorporate some first steps on the road to giving a voice and some protection to private as well as social housing tenants.

Secondly, in terms of possible additions to the Bill—here I declare my interest as a member of the NCVO Advisory Council—this Bill could be the moment to put on a statutory basis the role of the Compact Commissioner, who handles relationships between statutory bodies, including very prominently local authorities, and the voluntary sector. I understand that the Government are considering a new clause to give the commissioner powers to enhance this important role. Any further news on developments from the Minister, whose stamina, courtesy and skill I cannot praise enough, would be gratefully received.

My Lords, I also pay tribute to the Minister’s excellent tour d’horizon in introducing this legislation, although I have to say that when I listened to the speeches from the Front Benches opposite, my mind went back to the days when I worked in the Augean stables of Scottish local government legislation in the other place. The late Donald Dewar and I probably had recurrent nightmares of the annual treadmill that was the yearly local government (miscellaneous provisions) Bill. It was perhaps not quite as elegantly named as this Bill but it is quite clear that the arguments being deployed by the opposition Front Bench are almost identical to the ones that we brought forward regardless of the content of the local government reforms. I have said enough about local government and I do not wish to say anything more about that today.

I declare an interest as president of the Specialist Engineering Contractors Group and I wish to concentrate on Part 8. Obviously we will get down to the fine print in Committee but it is worth flagging up some of the concerns. The noble Baroness, Lady Warsi, made an impressive speech in which she referred to Part 8. She said that, basically, she was not unhappy about it because it says what is in the tin and that is what you are going to get. Part 8 deals with construction contracts and the feeling I have about it, at least in part, is that it is rather like going to a supermarket and bringing back what you think is a tin of thick vegetable soup but instead you get a wishy-washy gruel.

This is a vexed area. The Specialist Engineering Contractors Group is an umbrella body for six trade associations of varying sizes, including heating and ventilating contractors, electrical contractors, and people engaged in steelwork, lifts and plumbing, as well as the electrical contractors in Scotland, who have their own organisation, SELECT. These are the people in the construction industry who do the business, deal with the highly skilled aspects of the work, and are very often engaged in complicated contracts and work which requires addressing high engineering specifications. They are therefore at the mercy—I use the word advisedly—of major contractors who dither and find excuses for not paying.

A few weeks ago, the noble Lord, Lord Mandelson, was proud to make the point that the Government, as a major customer of the construction industry, are determined to pay their bills within 10 days, but, of course, the people who will be paid are not the men and women I am talking about. The major contractors will get their payments but there is no obligation on them to trickle it down through the system, yet this legislation has the important objective of facilitating what Keynes would have called the countercyclical economic activity which we hope will diminish the worst effects of the oncoming recession.

In the 21 October edition of the Independent, information was provided that the construction industry accounted for 21 per cent of all insolvencies, compared with 8 per cent in financial services and 5 per cent in the retail sector. We are all worried about the situation at Woolworths and a number of other such stores, and we are concerned about the unemployment that is flowing out of the City of London and out of financial services centres across the UK, but a sizeable number of businesses in the construction industry were going bust quite some time before the flood that is now coming out of the City.

The trade association of which I speak has some 60,000 members that employ 300,000 people. You do not have to be a mathematical genius to divide 300 by 60 to see how many people work for these very small businesses, some of which are one-person businesses. They do not have the resources to enter into expensive adjudication processes if people quibble or deny them the right to payment timeously. Equally, if they become awkward and do that, the chances of them getting follow-up contracts are limited.

I am not carping here about the intention of the legislation—we agree that it is desirable and worth while—but when we get to Committee it will be useful for us to look rather more closely than I feel that officials have done at the drafting of this legislation. We want to look at the whole issue of a payment notice, which is rather strange. We would expect that if you submitted a bid to get some building work, once you had completed the work you would send in a bill and say, “That’s the work done, and this is what we want paid”. But in the construction industry what happens is that the person who has had the work done then sends out a notice of how much they are going to pay the contractor. There is a period within which that has to be done but, if that is in the 59th minute of the 23rd hour, that is rather uncomfortable for the business that has people and suppliers to pay. Businesses naturally get distressed about that.

The major contractors, in the main, are not the villains of the piece. A cynical minority use their position of power and their wealth—and that wealth tends not actually to be theirs but to be money that they have been paid from the final client. That money should be going on to the subcontractors but in a number of cases that does not happen. When it does not, we get the kind of insolvencies we are talking about here.

We need to look at this more closely when we get to Committee and Third Reading. We need to look again at questions regarding the time of notice and whether there should be a more specific period there. We need a single mandatory statutory procedure for adjudication, reflecting the adjudication procedure that is already in the scheme for construction contracts. In some respects we are talking about matters of detail, and I do not want to go down that road in what is, after all, a Second Reading debate.

This is a small part of the Bill but a significant one. If we are going to see the construction industry meeting its responsibilities and delivering on the Government’s ambitions for reducing the impact of the recession that is coming upon us, we have to ensure that the parties engaged in the industry have a degree of fairness about the payment system. Given the nature of perhaps only 50 companies responsible for the major contracts, that group does not take a lot of policing. Almost inevitably, though, as a consequence of the force majeure that their economic power affords them, they are at an advantage over the small plumber, the small glazier or the small heating contractor whose work is just as valuable and essential for the turnkey at the end of the process. We therefore have to make that balance a bit better. The Government have had a first stab at that but I do not think it is quite good enough. There will be ways in which we might be able to look at amendments to it, and I look forward to having discussions with my noble friend on this issue.

There is a special hell for those people who enjoy local government legislation procedures in this place. I have tried to avoid it now for the past 25 years. I may not be present for any of the Bill except Part 8, but I wish the rest of those assembled here well—from my bitter experience, it is one thing they probably want to get out of as quickly as possible. Apart from that, I welcome the Bill.

My Lords, contrary to the noble Lord, Lord O’Neill, some of us are desperate to be in on the discussions on the Bill, but government business managers seem to be trying to prevent us. I shall say no more about that, having made the point in support of my noble friend Lady Hamwee.

I declare my usual interest in these matters as a member of a district council in England. I congratulate the noble Baroness, Lady Andrews, on the delivery of her speech and on the content, which I thought was in some respects better than the content of the Bill. We will discuss all that in future. I thank my noble friend Lord Tope—I was going to call him Councillor Tope—for undertaking the onerous task of winding up for the Liberal Democrats so that I do not have to do it.

I thought that this was a bits-and-pieces Bill when I took off the wrapping paper and threw away the tinsel. The noble Baroness, Lady Ford, who is not in her place at the moment, thought that it was a box of chocolates and the noble Lord, Lord O’Neill, suggested that it was soup. If it is soup, it is of the alphabetti spaghetti kind, with lots of different bits that you hunt around for. If it is a box of chocolates, it contains some of those chocolates that look wonderful but are just a shell with nothing inside and others that have very hard toffee inside that breaks your teeth. Nevertheless, some of the chocolates are of rather better quality than that, so I will not be too churlish.

I want to speak on Part 1, which is on local democracy, and follow on from what I said in a debate on the White Paper that I had the privilege to sponsor earlier this year, in the previous Session. I will try not to repeat everything that I said then—I will not have time—but the bits on local democracy in this Bill are really quite thin. We are expecting more in a draft Bill later.

Chapter 1 is on the publication of information on how people can get involved. It is, I suppose, a good idea and we will look at it. Chapter 2, which covers petitions, is extraordinary. I am enjoying myself telling people that the Government are proposing eight pages of primary legislation on how to propose a petition to your local council and watching their faces break into a great grin. It is not a grin that shows that they think it a wonderful idea, but a grin of astonishment. How daft can this Government get on some things?

What is local democracy? This Bill describes it as “democratic arrangements”. Clause 1(3) states that,

“‘democratic arrangements’ means arrangements for members of the public to participate in, or influence, the making of decisions”.

Well, yes, that is part of local democracy—a very important part of local democracy. When I started as a councillor, I was told that I was some sort of red revolutionary for suggesting that it should be allowed. Nowadays it is much more generally accepted, but it is not local democracy and it is not democratic arrangements.

An elected local council is at the very heart of local democracy—it is the central feature—just as Parliament is at the heart of democracy at a national level. Local authorities provide services, facilities, community leadership, a forum for debate about all manner of issues and a means by which local communities can find an advocate for those things they need that are provided by other authorities.

People’s ability to take part in what a local authority does is vital, but this process has to be bottom-up. It comes, for us Liberals, from the personal autonomy of people in the community, who come together in a voluntary way, by voluntary association, to put their views to the authority and to take part in it. They do this as individuals, as groups, as organised pressure groups and sometimes as an informal wave of opinion. This process is messy; it is much messier than civil servants, Ministers and drafters of legislation like to think. It is diverse and, in many cases, it is confrontational. In some cases, it is not confrontational but well ordered and organised, taking place according to the guidelines for public consultation that the Government lay down, but in many cases that does not happen. In many cases, the authorities try that organised, well ordered approach and it does not work, because people decide that they want to take a more revolutionary or confrontational—I was going to say “revolting”—attitude.

The processes may break down. I have been to many public meetings when people have been standing up and shouting at the people on the platform. I have done it myself, many a time—rather a long time ago, I hope, but perhaps not. I have also been sat in the chair at public meetings where people have been shouting at me. These are all perfectly legitimate processes, which have to be managed and coped with, but it is not all nice, easy, safe and organised. Very often, politics comes into it; political parties and local pressure groups get involved. That is all very legitimate and all part of the process—but, again, one sometimes thinks that, given the way in which the Government look at local participation, they want to depoliticise the whole process.

I joined the Liberal Party and grew up in it when Jo Grimond, as leader in the early 1960s, started talking in a big way about the importance of public participation in decision-making and provision of services. It had fallen out of fashion for a long time since the war, but it has increasingly come into fashion since then. However, we must also understand that you cannot make people do this. When my own council was working out some of its targets, it had an absolutely stupid target for the number of people turning up to address its area committees. We scrapped that; we said that it was nonsense. If the committee goes through a period when there are lots of controversial things to discuss, there will be lots of people there; if it goes through a period when there are no controversial things, there will not be many people turning up. It is just the natural ebb and flow of things. These are not things on which people can be judged in that way; people have a right not to take part.

People have been celebrating the birth of John Milton just over 400 years ago. He is a great hero for anybody who believes in the concepts of liberty. He wrote in one of his poems:

“They also serve who only stand and wait”.

It was a poem that he wrote on his blindness later in life. People have a right to dissent from a system that is trying to get them to take part. They have a right to sit at home grumpily and say, “We don’t want anything to do with this”. They also have a right to take part in different ways and to choose not to turn up to a well ordered public meeting but, if they want to, to organise a march through the streets—to go hammering on the door of the town hall to hand in the petition instead of coming in an orderly way to the council meeting. The Government are trying to fit people into a system that they think is how things should work, rather than one that people will actually take part in.

The responsibility of bodies such as local councils is to provide structures for participation that are open and accessible, which provide information on how to do it and on who takes decisions, which are responsive, but which accept that in many cases people will do things in different ways because that is how things are—and doing things in a different way is just as valid as the way laid down by the Government.

All the rules set out in Chapter 2 on petitions seem a bit dubious on those grounds. It is typical of the Government’s approach, illustrated here, that they identify a problem, notice that there is a diversity of experience out there that is organised and spontaneous, produce a White Paper and legislative proposals, and then legislate. In legislating, they impose rules and uniformity on a top-down basis. If they are not careful, that will destroy everything that they are trying to do.

Of course, we welcome the conversion of the Government—and the Labour Party over the years—to a much more participative, community-based way of making decisions locally, delivering local services and providing local facilities. But it must be understood that local communities are all different and local councils are often different in different areas. Local democracy is a large, complex and diverse beast. It is difficult to fit it into a one-system-fits-all approach.

Everybody and all the parties are now in favour of localism. However, localism is just a word. We can all unite around a word. The problem is what that word means in practice. We continue to have grave doubts about the willingness and ability of central government to devolve seriously to local level. The Government do bits here and there and then take a bit back and then another bit. Reviving local democracy is not just about looking at how things are done in each area, although that is very important. It is vital that the Government let go of powers. In addition, when they give powers to local government—this is the case with existing powers, too—they should not try to set detailed rules, regulations, legislation and guidance, which everybody is then expected to follow to the letter. If the Government want to let go, they really have to let go.

The first part of the Bill is misguided in the way in which it tries to introduce what basically is a sensible idea—the ability of people to petition their local council. The fact is that the vast number of people in this country can petition their local council. When they do so, whatever the surveys that the Minister quotes say, the council takes it seriously, discusses the issue and tells people what it is doing about it. That is the truth on the ground. If the Government want to put that in legislation, that is fine, but not by eight pages of primary legislation and goodness knows how many more in delegated legislation and guidance.

My Lords, I, too, congratulate my noble friend on the way she introduced the Bill. I share the views of the noble Lord, Lord Best, that participants in local government welcome the Bill. That is important. I felt that the comments of the Front Benches opposite were certainly lacking in the seasonal spirit of goodwill.

Harold Wilson said that a week is a long time in politics. It does not seem that to me. We are again, on a Wednesday evening, talking about these matters as we were last week in the address on the gracious Speech. In some sense, it is a big change for me. In addition to the interests I declared last week, which was as leader of a local council, chairman of AGMA—and I am sure I might respond to some of the comments made earlier on that—and as chair of what is already a north-west leaders’ board, I was appointed on Sunday to be a member of the North West Development Agency, so Members can treat me with even greater suspicion than they do already.

One of the reference papers on this document about being a member of a council had a quote from someone saying, “I am 32 and I haven’t a clue what a councillor does”. I was 32 when I was elected as a councillor. I did not have much of a clue about what being a councillor was and had to learn while doing the job. During those early years, and mainly under the Thatcher Government of the Conservative Party opposite—and it may be a lesson in history for the noble Baroness, Lady Warsi—I remember there was a constant attack on the powers and the financial responsibilities of local government. You cannot get away from it—the greatest loss of local authority autonomy was under that particular Government. If that has changed, we welcome it.

My experience of local government has taught me three lessons. If the world is divided, as the noble Lord, Lord Tope, told us it was last week, into two parties, I am very much in the localist camp. I have learnt that. If we are going to improve services to local people, devolution is the path ahead.

There are two uncomfortable lessons for the Government, and this would be true of any Government. First, situations will vary. As the noble Lord, Lord Greaves, said, local authorities are different. Their priorities will be different and although you will not get a uniform service across the country, it may well meet what local people want. Secondly, there will be failures. Some local authorities will fail. We are not the only organisation that has failed. In the papers today, there are reports of pensions mistakes and the Sutherland report into the mistakes in the examinations agency. Other public servants make mistakes. We have to learn from mistakes and not just assume that if a local authority makes a mistake, that is a problem for local government. It is a problem that we all should face up to.

If we are to deliver effectively, we shall have to work in partnership locally and to work collaboratively with other authorities. After all, as my noble friend said in her introductory remarks, the economy is not consistent with local authority boundaries. If we want to do well, we need to collaborate with others. I welcome the fact that the Bill recognises that and allows it to happen.

If local authorities and local government are to mean anything, elected members need to be at the heart of what we do. The difference between a local authority and a PCT is that the former is elected. The noble Baroness, Lady Warsi, referred to a referendum and appeared to use the word “officials” as a term of abuse. However, elected council leaders promoted the scheme she discussed. She may not have liked it but it would have attracted £3 billion-worth of investment in transport to Manchester, so it had a lot going for it. We cannot now proceed with the scheme, but we acknowledge people’s views on it, as reflected in the referendum. We put the matter to a vote. However, local elected councillors, not officials, saw a need for the scheme and proposed it. We need to recognise that.

Noble Lords have adequately covered the democracy provisions in Part 1. However, we need to recognise that time will be needed to implement these changes. When I bemoaned the lack of good women candidates in my local area, my wife said, “Most women are too sensible to put up with what you do”. Perhaps that comment gives pause for thought. The other fly in the ointment is that, at the end of the day, the electorate, not the parties, choose the councillors.

I was interested in what was said about petitions and share some of the concerns mentioned. However, we must be honest about what we mean by the word “respond”. I suspect that people interpret it differently. Some believe that it means to accede to a request. We need to ensure that we listen to people. However, we also need to acknowledge that we do not always accede to their requests. We need to be up-front about that. I am concerned about the implications of petitions. I believe that they are very much the preserve of the middle classes. People in middle-class communities are much more likely to respond to petitions than those in the deprived communities that I represent. We need to be aware that petitions may represent the views of only a part of a community. If I may slide into a “Donald Rumsfeldism”, people only know what they know and they don’t know what they don’t know. They respond to petitions on that basis.

In my local area, two primary schools which took their intake from deprived communities had falling rolls. The simple decision would have been to close one and concentrate on the other. However, they both had outdated buildings. With the support of the local Member of Parliament, we agreed that we would close both schools and build a new one, but in so doing construct a new complex with the involvement of other public services. The proposed closure of both schools upset two sets of parents and petitions were submitted. However, we stood firm. We now have a brand new primary school, which is performing better than either of the two previous schools, a health centre and a housing office. Despite its initial response to the project, that community is proud of what has been achieved in the long term.

The message that seems to be directed to my noble friend from all sides of the House is that we need a Swedish minimalist approach to regulations as regards Part 1. We must not overburden local authorities by making them undertake those measures in certain ways but give them the chance to tackle them in their own way.

As regards the economic development provisions, I am very much in favour of local authorities developing their economic assessments. If they are to achieve what they need to do locally, they need to understand how their local economies work. If we are saying—as I think we are—that local economies and local authority boundaries are not coterminous, it may be sensible to have an economic assessment for the whole of the Manchester economy concentrating on the problems and issues within districts rather than doing 10 different assessments, which would all be pretty much the same and would involve paying 10 sets of consultants rather than one. Certainly, we would want to do that in Greater Manchester. I hope we will be allowed to do that.

I hope the Minister can also look into Clause 64, which refers to the partners that we need to consult. It does not mention health. The health service is both a major employer in most areas and a major procurer of local services. If we are going to look at the economy, we need to engage with health as well.

As I said in the debate on the gracious Speech last week, I am a great supporter of Part 5 of the Bill, which deals with regional strategy. One of my roles, although I will be rid of it early in the new year, is that of chairman of 4NW, which was a forerunner of the proposed leaders’ forums. We did it by means of all-party voluntary agreement in the north-west because that seemed to us the sensible way to have real and intelligent dialogue with the RDA, and to have much more influence than we ever had before. It is beginning to work. I assure the noble Baroness, Lady Hamwee, that it works in the north-west. We engage more with other partners; we talk to all our constituent bodies to make sure that we are doing what they want us to do. While I have been chairman of 4NW and its predecessor, which was an executive board for the regional assembly, I managed to avoid any need for votes. We understood that, if we were to move together, we had to do so on a consensual basis. I confess that there was one vote, which was on the change of name to 4NW. I am not sure that that was the best decision we ever made, but that was how we did it.

We are also pioneering work on a single regional strategy. I take the point that this needs to be broadly based and sustainable, and needs to recognise the issues that are coming forward. What has tended to happen in the past, unless all parties engage in such discussion, was that the RDA put down its strategy and the regional assemblies put their spatial strategies forward in response. These were not aligned and were not able to move the area forward in the same way.

In Greater Manchester, we also set up an economic commission, which does broadly the work of the economic prosperity boards. In looking at the detailed legislation, I hope we can make it less prescriptive, because that is what we have done. The 10 authorities have agreed that we should not all have a seat on the board. If we had, in Greater Manchester there would have to be seats for 10 local authorities to start, before anybody else. It gets too big. Secondly, the majority of the board are from business and the private sector, and we have a private sector chairman, who is a significant person. Unlike the CBI, which has a lot to learn and should come to Manchester, we get significant private sector players who want to make a contribution.

Finally, the MAAs are voluntary. We welcome the fact that this puts them on a statutory basis, but they are voluntary agreements. I hope the Government will accept that what we agree to do together in Manchester will be different from what we agree to do in other parts of the country, and rightly so. I apologise for speaking for too long. I am sure that we can improve this Bill and that we will do so in Committee.

My Lords, I thank the Minister for her explanation of the Local Democracy, Economic Development and Construction Bill, which she has just introduced. It is a Bill of many parts, which do not all hang together but come from various elements of her department, as my noble friend Lady Warsi correctly identified. I will speak about Part 1, “Democracy and involvement”, touch on economic development in Parts 5 and 6 and make a few comments about construction contracts. First, I declare an interest as an elected member of a local authority, the King’s Lynn and West Norfolk Borough Council.

The participation of electors in local council elections is disappointingly low and efforts to increase that participation must be encouraged. The report of the Councillors Commission, Representing the Future, made a number of recommendations, which the Government seek to implement by way of Part 1. However, placing a duty on local authorities to promote understanding of their functions and democratic arrangements, together with the functions of other public bodies in their area and how to take part in those arrangements, is not entirely new. As the noble Baroness, Lady Hamwee, stated, local councils have been undertaking this work for decades. From now on, local authorities will have to refer to statutory guidance on how to fulfil this duty. I am sure that it will become one of the numerous performance indicators that waste so much of local authority officers’ time in compiling for audit. That is the top-down approach, which really does not empower local authorities. As the noble Lords, Lord Smith and Lord Best, identified, we need to do this with a much more light-handed approach.

What is really needed is individual registration on electoral rolls, which the Electoral Commission has been advocating for a number of years, together with the reintroduction of postal voting following individual registration. When the pilot scheme for all-postal voting was tried in west Norfolk in 2003, the number of votes recorded increased by 10 percentage points.

Petitions to local authorities should be treated with care and respect. It is quite proper to consider both paper and electronic versions. With rights go responsibilities and, in devising a scheme for a local authority, it is important to balance the one with the other. Like other noble Lords, I am concerned that hopes may be raised by organising a local petition—for instance, about placing a ban on the development of wind energy, which might receive enthusiastic support from the public, and even members of the council, only to be instantly dismissed by the Secretary of State. Perhaps the Minister could confirm that petitions are only an expression of local opinion and will have no effect on policy. We will need to explore in Committee whether only those on the electoral roll should have the right to sign a petition, as council tax payers will be footing the bill for the action taken by the local authority to give effect to the action demanded by the petition.

I turn to regional policy for a moment. The Bill replaces one or two quangos with three or four quangos. The regional strategy will replace the existing regional spatial strategy for the region, so the notes to the Bill explain. We will have the regional development agency and the new leaders’ board to enable local authorities to act collectively and decisively at regional level. Although the RDA and the leaders’ board will have the economic development and regeneration of the region, the promotion of employment, business efficiency and investment and the contribution to sustainable development, including the mitigation and adaptation to climate change, in their remit, the Government have decided that economic development and regeneration should be undertaken by yet another board, the economic prosperity board. A majority of the EPB must be elected members of the constituent councils, who may already be on the leaders’ board. Although the Secretary of State will provide funds for the leaders’ board, the EPB will be funded by the constituent councils.

Together with my noble friend Lady Warsi, I believe that this will be a recipe for muddle and confusion and will not add value to the work undertaken by the county councils and the borough or district councils acting together locally. These quangos are mostly talking shops that represent the Government’s attempt to force regional government on to an unwilling public, who have demonstrated that regional government is not for them. Some infrastructure projects, such as highways and mineral development, should be considered at a regional level, but not business efficiency and investment.

Lastly, I should like to encourage the Government in their review and reform of the Housing Grants, Construction and Regeneration Act 1996, especially Part 2 regarding construction contracts. I played a small part in the formulation of that legislation when I was a Minister of State at the Department of the Environment in 1995 and I am pleased that the Act has stood for 12 years. The concept of adjudication was introduced by the 1996 legislation, which gave each party to a construction contract the right to refer a dispute to adjudication. In Committee, it would be worth exploring the introduction of a single mandatory statutory procedure for adjudication to reflect the procedure in the scheme for construction contracts that the noble Lord, Lord O’Neill of Clackmannan, mentioned.

Clauses 136 to 139 tackle the problem of payment under a construction contract and seek to improve the existing arrangements. The payment of subcontractors in an industry that has multiple contracts and subcontracts is always fraught with difficulty. However, the issue of paying for work done, not just “pay when paid”, needs to be looked at again. The introduction of payment notices may be a way forward. In Committee, it will be worth exploring the issue of who should issue payment notices. The amount paid should be paid by the final date for payment unless the paying party has issued a notice in the mean time reducing the amount claimed and giving the reasons for doing so.

Apart from the review of construction contracts, this Bill replicates so much of what local authorities already do, and do well, that I can give it only a cautious welcome.

My Lords, to my mind, local government in many parts of the country seems to be in a state of poor health. Of course, I know that many local authorities and the services that they provide achieve success—in housing, education, business development and even, sometimes, social services departments, which are not all to be properly described as inadequate. I am well aware, as are especially Members of this House who are members of local authorities, that large numbers of elected councillors and officials serve their communities with dedication and effort.

However, if you think of the public’s attitude, you must recognise, whether you are in local government or not, that local government is seen as worthy but remote, as is evidenced by the low turnout at elections, which has been referred to several times this evening. To that I would add the reduced coverage of activities and debates by the local media. I am afraid that elected representatives are often seen not as “us” but as “them”.

In its early parts, the Bill seeks to give local government a boost and to reinvigorate local democracy. The iconic word of the moment is “empowerment”—I do not say that I am enthusiastic about it, but what it means is clear enough—whereby representative democracy is supplemented by voters becoming active citizens, not just once every few years in the polling booths, but with an ongoing role in influencing the decision-makers and holding them to account on a regular basis.

A new duty on councils to promote democracy and to show people how they are to get involved may be, like other things in the Bill, something that many good councils are doing already, as the noble Viscount just indicated. They are not doing it everywhere, however. For the sake of local democracy across the country, not just in patches of the community, it is important to have these provisions.

Useful, too, are the proposals to enhance accountability through regular public hearings and petitions that must be responded to. I accept what the noble Lord, Lord Smith of Leigh, has said; there may be misconceptions. “Respond” does not necessarily mean “agree”. “Response” does mean, however, an intelligent, reasonable response to the points that have been raised. Without that, “response” would mean nothing.

I am particularly interested in the proposals for better redress facilities if service delivery goes wrong. The Government’s White Paper of July, Communities in Control, pointed out that a substantial number of people are dissatisfied with the quality of local services and often do not know how to complain. Those who do complain are dissatisfied at how their complaint is handled. Greater understanding of these matters, including of the role of the Local Government Ombudsman, is vital.

The Local Government Ombudsman has not been mentioned so far this evening. I hope that some of the weaknesses of the Local Government Ombudsman system, especially the difficulties in enforcing its findings, are to be remedied. Due to the ombudsman’s powers of investigation, which no individual councillor or member of the public has, empowering the ombudsman seems an obvious practical way of empowering the citizen.

My right honourable friend Hazel Blears said in July,

“there is no conflict between representative and participatory forms of democracy”.—[Official Report, Commons, 9/07/08; col. 1413.]

I hope that she is right but I am not sure, as I have concerns that introducing participatory forms of democracy may reduce the desire and interest of more politically active members of the community to seek election as councillors. Being a councillor will not be quite as significant if participatory democracy begins to be as important as representative democracy. I am not sure that representative democracy would be reinforced, as the Government hope, rather than undermined by the direct participation of citizens.

In an interesting passage in the White Paper, the Government admit that shifting power to citizens generally may be “uncomfortable” for both politicians and service providers. Whether it is uncomfortable or not, I agree that that should not stand in the way of desirable change. The test must be what is in the best interests of the community.

Your Lordships may think that I am going off at a tangent and that I am being extreme, but I have more to say about my anxieties. The impact of the detailed provisions of the Bill should be examined carefully by us, by the other place and by the Local Government Association, from whose president, the noble Lord, Lord Best, we heard earlier. I would be grateful if Ministers could reassure me that my anxieties are unfounded. Am I wrong, for example, to fear that unelected and possibly unelectable individuals could acquire undue influence locally by pushing single-issue populist projects, manipulating and exploiting the new statutory processes by petitions, calls for public meetings, calls for referenda and the like?

I said that I was going off at a bit of a tangent at this point, but these anxieties have been thought about by people in the past. They seem not to have troubled the representatives of local councils who have spoken to us so helpfully this afternoon, but ministerial assurance from our splendid Minister, the noble Baroness, Lady Andrews, would be excellent.

My Lords, I welcome the Minister’s and the Government’s concern in the Bill to give a stronger voice to local people in determining the future of their communities. I believe that the Minister’s wishes, expressed in her response to the gracious Speech last week, to,

“provide real help for people in tough times; to support strong … communities; to continue to plan for the long term by creating more sustainable communities; and to prepare people and businesses so that they are best positioned to take advantage when the upturn comes”,

are genuine desires of both her and this Government. I also agree that:

“There is a direct link to be made between the connection people feel to their communities and how far they feel that they can influence change and impress their views and concerns on local government for a thriving, confident economy. People are more resilient when they feel they belong and can play a full part in communities that are strong and sustainable”.—[Official Report; 10/12/08; cols. 399-400.]

That is all correct, in my view. As a general statement, who can disagree? The difficulty comes when we get into the detail and what this all means in practice.

Can we believe that all our local councillors have the experience to be our local leaders? That might be true in some places but not everywhere. Some local leaders who are well respected and have achieved much are not members of local councils; they have not chosen that route.

I worry, as does the noble Baroness, Lady Warsi, that, when notice of this Bill was first given, more emphasis was placed on community empowerment but some elements of that have been dropped. This is a real shame, at a time when we need to empower local leaders, who can deliver real change on the ground. Why have we watered down the Bill? It would be helpful to know.

In my response to the gracious Speech last week, I described some of the work of social entrepreneurs—local leaders whose serious track record in building strong, sustainable communities is not even referred to in the Bill. The Bill assumes that the public sector will lead us all and do it all for us. I do not believe it.

Social entrepreneurs and the social enterprise movement have achieved a great deal and have demonstrated real delivery on the ground. Responses to the social entrepreneurial approach have changed over the years. At first, politicians thought it a great idea but bemoaned the lack of examples. When Community Action Network—which I co-founded and thus must declare as an interest—and others started to uncover examples in communities across the country, some politicians were pleased to see them but remained sceptical about their usefulness. Now that there are many good examples of success in delivering results for people, some politicians worry about democratic accountability. You can’t win.

That does not mean that the social entrepreneur should be discounted. Quite the opposite: it demonstrates a need for all our politicians now to develop a political framework that legitimises this approach and brings it more seriously into the mix. The Bill does not do this.

Service delivery needs clearly accountable leadership. We need to find ways of encouraging this and giving legitimate authority to the Jamie Olivers of this world. Equally, I could mention John Bird, founder of The Big Issue, or Tim Smit of the Eden Project, and there are many others who are less well known. They are people with a track record of leadership and delivery in local communities and they are very accountable.

We also need to invest in future generations of these people. They should not still be forced to face into the wind, as we have had to do for so long in Bromley-by-Bow while the council sorts it all out for us. These entrepreneurs have earned the right to have the wind put into their sails.

People make the assumption that simply involving more people in the representative decision-making process is a good thing because it is “more democratic”. As a new life Peer, I have heard this argument a lot during debates about the future of your Lordships’ House. I have listened to all three main parties in this House arguing for a 100 per cent elected representative Chamber in this House believing that greater representation will mean a more lively democracy. This has not been our experience on the streets of Bromley-by-Bow. Local people do not feel represented; they often do not feel or see the practical results of that representation and so do not feel empowered. They feel disillusioned with the democratic process. People are practical; they want to see a connection between what they do and what happens on the ground, then they get interested and committed.

At both central and local government level, New Labour has rightly taken steps to strengthen the power of elected leaders and enhance their ability to act decisively. There are many examples of this, but perhaps the clearest is the agenda for modernising local government, replacing old-style council committees with a leader and cabinet model, in some cases with the direct election of executive mayors. This new thinking, while not perfect, has really begun to move the public sector on in east London. When I first arrived there 25 years ago, the London boroughs of Tower Hamlets, Newham and Hackney were basket cases. They are not so today.

Yet the Government’s modernisation of Whitehall and town hall politics is strangely at odds with the approach taken by a whole plethora of neighbourhood-based regeneration schemes, most notably the Neighbourhood Renewal Unit, whose work in overseeing the Government's neighbourhood renewal strategy is, as its website said, “a continual, two-way process” between Whitehall and local government and communities, rather than being about Whitehall telling local government and communities how they should run things.

At the same time as one part of government has been removing committees from town halls, another has created a massive committee infrastructure in disadvantaged neighbourhoods across the country. This all seems confused. I would suggest that the time has come for politicians to put real energy into creating a political framework in which the work of leaders such as Jamie Oliver, and the Tim Smits of this world, who have not chosen the representative route, can be given greater legitimacy. Many of them are well respected leaders in their own communities and in their own right, are not local councillors, and have a serious track record of delivery and success.

It would be helpful if this Bill could send out absolutely clear messages that this kind of leadership must not be diluted by bureaucracy and a culture of committee that imagines everyone should be consulted about everything. In return, such leaders would be expected to take personal responsibility for both their successes and failures. If the Bill were to open that box—and I fear it will not—and put this discussion on the map, it might have an important contribution to make towards both local economic development and greater community and individual empowerment.

The practical experience of the social entrepreneur is starting to influence behaviour in the public sector. There are examples of local authorities coming to similar conclusions to us. The London Borough of Newham has also been grappling with the issue of local leadership, shifting its emphasis from neighbourhood committees to active community teams made up of volunteers and linked to the borough's Olympic volunteering programme. These teams work with local councillors to help shape and strengthen their communities, for example through free events, which are used to help the council and community lead councillors to identify and address the priorities in each area, and to help inform future service priorities, such as crime and anti-social behaviour services, sports facilities and parks.

This has echoes of the way in which Barack Obama, the President-elect of the United States, has mobilised his very large number of volunteers, whom he hopes to use as he moves into the White House. He recognises that it is not just what government can do that counts. This approach is encouraging a broad range of people to help shape their neighbourhoods through practical activity, rather than perpetuating talking shops with the usual suspects. In the process, volunteers develop skills that help them in employment and other areas of their lives.

I encourage the Government to look closely at Newham's approach. There are clues here as to how, in practice, you actually begin to empower local government. LOCOG would also do well to study Newham's approach, as it recruits and trains its volunteers for the 2012 Games.. It is a shame that what I am suggesting here is not reflected at all in the Bill, but I thought that it might be helpful if I brought it to the attention of your Lordships’ House and made some tentative suggestions about how the Government might at least begin to welcome these entrepreneurial leaders into their structures and into the fold. The Bill could make a major contribution towards practical community empowerment if it took the first tentative steps towards both recognising and involving these practical people in the process.

My practical thoughts on what these steps might be are as follows. The Bill could publicly recognise that local people, businesses and social entrepreneurs should be involved in the local delivery of local services, where they wish it. Encouraging them simply to comment on how the state talks and delivers does not go far enough. One of the ways in which the Government could help small businesses in the coming recession and increase social cohesion, tackle worklessness and create community empowerment is by promoting a broader local economic mix. The state is too large a proportion of the local community, particularly in regeneration areas. It wastes money, creates dependency and costs taxpayers a great deal.

The Bill makes no reference to partnership and to encouraging and promoting local procurement from SMEs and there is nothing about engaging with business and entrepreneurs in the setting-up and running of economic prosperity boards. The assumption seems to be to leave it to the state. I ask the Minister whether it would be possible at this late stage to include in the Bill some of this thinking.

I make some specific suggestions. In Chapter 2, about petitions, could the Bill encourage local people, businesses, members of the voluntary community services and social entrepreneurs to present petitions to run any service which is currently run by one of the statutory partners? Could we introduce a presumption that, if such organisations can deliver to the same cost and at least the same quality, they should be entitled to deliver that service? This could include measurement of value of other community benefits; for example, social cohesion, employing local people and so on. Government could use the proposed audit function to provide an objective analysis on the benefit that would bring, otherwise the statutory body will simply justify itself. Perhaps the Government could pilot this first in the economic prosperity board areas.

Part 6 of the Bill could suggest that everyone who sits on the economic prosperity boards is there because of specific expertise they have and not just because they represent particular committees. We all know from hard-won experience that representative committees of this kind simply do not work. If those boards are truly to be about economic prosperity, then a majority of the board must be made up of local entrepreneurs, with focus on smaller rather than larger businesses. Without that experience around the table, those boards will produce a great deal of paper and many expensive strategy documents but little prosperity. Could we allow local social entrepreneurs, or members of the voluntary community sector, or other local partnerships to petition to set up an economic prosperity board? If not, why not?

In Part 2, Chapter 2, the Bill suggests that there is also a strong audit function, which is necessary. Could the Bill give a specific role to audit on how well public bodies are using their purchasing power to support local businesses and social enterprise? To do that, of course, one would need some of those employed in the audit function to have actual experience of small businesses or social enterprise, not just the statutory sector.

I have used this speech to further set out the case for the role of social enterprise and the part played by the social entrepreneur. I would like to know whether the Minister is interested in any of my suggestions, which are designed to empower local communities in practical ways at a time of financial hardship. Last week, during his summing-up in response to the gracious Speech, the noble Lord, Lord Hunt, suggested he would like a meeting. Perhaps we could meet before Committee stage to see whether any of these points can be taken on board.

Earlier today, I hosted a very helpful visit of the Secretary of State from DCLG to east London to explore deepening the role of social entrepreneurs and social enterprise in the Olympic legacy. Both she and the Minister are deeply concerned about those issues. I welcome the opportunity to discuss these matters in your Lordships’ House. New ways of working are emerging; we all need to engage with them for the sake of our democracy.

My Lords, I begin by welcoming the noble Baroness, Lady Warsi, not only to the House but to the Front Bench and to speaking on the Bill. I took careful note of a number of things that she said. She said that the Bill is not the answer to the problems; does little to deal with the real problems; is full of half-baked ideas; is full of fig leaves; is a form-filling exercise; is an apple pie Bill; is a green-belt-up-for-grabs Bill; undermines empowerment; is a congestion-charge-by-the-back-door Bill; is an attack on local democracy; is a mishmash of meaningless powers; allows powers to seep away from local people; and chips away at accountability. With a friend like that, who wants enemies? She nailed her flag to the mast straight away and maintained her reputation for blunt, plain speaking.

The noble Baroness’s experience in local government is much more recent than mine, which goes back more than 50 years. What the Government have done is very ambitious. No one in this House ought to decry ambition, but the Bill may be too ambitious for the circumstances and resources, and it may be too ambitious to achieve, especially at local government level. I hesitate to think that on a wet Thursday night in Edmonton I would go round knocking on doors asking, “Can I interest you in stimulating your democracy?”. I know what the answer would be; I would get very short shrift. So, it ain’t what you do; it’s the way that you do it. Provided that all sides of the House recognise that something has to be done—and I do not think that they do—we can examine the Government’s proposals.

When I read the papers, I noted that the Minister and her advisers have not dreamed up their proposals out of the air, but have consulted and have brought forward ideas that are broadly approved of by wide sections of the people. Of course, they do not approve politically as the job of opposition is to pick holes in the Government’s proposals, and I do not object to that. I was in opposition far longer than I was in government.

We are trying to make the service from the centre—Whitehall—and the locality to the people that we serve more effective. I can answer the question, “Where were you when you heard the news of President Kennedy’s death?”. I was in the civic centre at Enfield creating the new London Borough of Enfield, which came into being in 1964. I later became leader of that council. The people of Edmonton, Enfield and Southgate—three very different economic, social and cultural communities—were spatchcocked into one political identity. My near neighbour and friend, Iain Macleod, whom I fought at the 1966 election, had a great deal to do with the creation of the London Borough of Enfield. When we had our first election, we won by a massive majority—31 to 29—and, as good democrats, we looked at the 10 aldermanic seats, decided to make our lives easier and took all 10, so the borough started with 41 to 29.

Of course, things quickly changed. In 1968, the people spoke and the election returned 51 Conservative and nine Labour councillors, and we were out in the wilderness for a long time. The point I am trying to make is that by spatchcocking them in to a situation where they had to produce an answer, three separate, politically diverse places were fused, which had not appeared to be possible, wanted or needed. It took them many years to find the answer, but they did. Politically, the borough has gone backwards and forwards and no doubt that will continue. I am not put off by the size of the problem, nor am I put off by the solutions which may appear in the Bill. Kindly, I would say to my noble friend, the term “regulation with a light touch” comes to mind. Before these things are set in stone—that is, in statute—I hope that careful consideration is taken of the impact and that local people are brought in in order to see exactly what they want.

This Bill provides for us to look at a number of situations in the light of 2008-09. Those who have been involved in local government, and in life, for a number of years will realise that there have been enormous changes. When I reflect on my activity as a young man who wanted to become involved, a range of people and organisations—churches, businesses, groups and clubs—were not only there, but they were known to young people. Now and again when people are in trouble I hear, “Well there is nothing for young people to do”. There was nothing for young people to do when I was young or at any time. You have to look for it.

We miss the determination of parents to make sure that their teenagers are funnelled into meaningful activity. When I was young, there were very few cars, very few televisions, no foreign holidays or any holidays at all for some, and no affluence or money. If we are serious about increasing participation in our democracy, we in this House and at Westminster have a responsibility—it is not an overriding responsibility—at least to put forward ideas. Whitehall can identify, can expose the needs, provide the cash and provide the leadership, but on the ground, in the localities, we rely on local people. No one in this House has a claim that is better than that of anyone else from their experience. We are all politicians; we have all been involved in political work and therefore we know our communities very well.

I look on this as an opportunity Bill; as providing the opportunity for those who wish to take part to do so. It will not be easy because some local authorities will say, “We have done it all. It failed. We will not do it again”. Or they may say, “We do not need your advice because we are all right”. Would you believe that there will be local councillors who, because their fiefdom provides them with an opportunity to return election after election, will ask, “Why should I go about stimulating the opposition or those who are involved?”? It will not be easy.

While I have lauded the Bill for what it contains, I cannot let pass this opportunity to express my disappointment that it does not contain provisions to bring greater equality in a spirit of civic pride and service, which I have raised in this House on three occasions. I refer to the honourable and distinguished realm of the Guild of Freemen which exists in many towns and cities throughout the land.

The Guild of Freemen is descended from medieval times and perpetuates trades and companies which have played a part in the history of our nation, but governed as they are by local and national bodies, the fact remains that statute restricts the membership of local guilds to males. By parliamentary procedures and devices, and using the Private Member’s Bill route, I have brought forward three times the Borough Freedom Bill, which has passed through all its stages in this House. I see the noble Lord, Lord Dixon-Smith, is in his place. On more than one occasion he has spoken in support of this measure. It is an equality Bill, designed to provide for female as well as male family members to inherit the freedom of their father on his death. The sad fact is that because of parliamentary procedures, we have not been able to make progress. I intend to put down an amendment which will provide for a borough freedom Bill. I cannot believe that in this day and age such an equality measure, once it has been carefully explained and scrutinised in this House and in the other place, will be resisted.

I do not expect the Minister to be able to say anything today because the amendment has not yet been tabled, but I hope that this proposal will make progress both here and in the other place. I rest my case.

My Lords, it is a particular pleasure to follow the noble Lord, Lord Graham, because in recent years it has usually been he who follows me and immediately demolishes my arguments. I am not going to return the compliment—

I probably could, my Lords, but I am mindful of the strictures of the noble Lord, Lord Smith, that this is the season of goodwill, and I am trying to show some of it by saying that we on these Benches acknowledge that there is a considerable problem in the form of a democratic deficit that needs to be fixed. Our concern is: does the Bill actually understand what the problem is? If it does not, it is unlikely to bring forward the right measures to solve it. That is our concern rather than blindness to real issues or a belief that everything is all right.

The debate has been called wide-ranging, and I think that it has been both interesting and thoughtful. I must confess to having been distracted early on by the reference by the noble Baroness, Lady Ford, to an exotic box of chocolates and later by my noble friend Lord Greaves to cans of soup—I thought that it was alphabet spaghetti, not alphabet soup. However, I now have our official party line from the Front Bench: we are going to describe this Bill as a mashed fig and apple pie Bill. I listened with great interest to the noble Lord, Lord O’Neill, and aside from his less than generous references to local government, I disagree with him on one point. He suggested that the title of the Bill before us is more “eloquent”—I think that was the word he used—than those of the Bills that he and I used to consider: the annual local government (miscellaneous provisions) Bills. I think that that title would be much better for this legislation, and a lot easier to say.

As always, I shall declare my interests. I am a councillor in the London Borough of Sutton and a member of its executive. I am also a governor of a junior school in the ward that I represent. That does not make me an apologist for local government; quite the contrary because, as in any profession, those of us who dedicate most of our lives to improving standards and to working in a particular area probably feel the most strongly about those who let us down. As the noble Lord, Lord Smith, said, there are bad councils, poor councils and weak councils, and there always will be. We in local government probably feel as strongly about them as anyone else, not least because they let down our reputation collectively. Anything I say will not, I hope, be interpreted as an apology for poor local government—it is not.

I want to take issue with the noble Lord, Lord Smith, on one point. He rightly referred to the 18 years of Conservative Government when this country moved in the opposite direction to the rest of western Europe by becoming more and more centralised while every other country was becoming, each in its own way, more decentralised.

One of the great pleasures of my local government life was to be present in Strasbourg in 1997, within weeks of the election of the new Labour Government, when the European Charter of Local Self-Government was signed. I believed genuinely at that time that there was a wish to move in the opposite direction to what we had known for the past 18 years. That intention was there then, but I saw a couple of years ago a report from that same Council of Europe, whose Charter of Local Self-Government it is, that much of the Council’s work, through its Congress of Local and Regional Authorities, is to monitor democracy in its 41 member countries. It assessed in 28 countries whether the degree of central control was growing or reducing. The United Kingdom was one of seven where the Council of Europe—not someone as biased as me but the Council of Europe—assessed that central control, certainly in England, was growing not reducing. That is a Council of Europe assessment to which we would do well to pay attention.

Not surprisingly, my greatest interest is in Parts 1 and 2 of the Bill. Again in the season of goodwill, I will join with the noble Lord, Lord Best, in welcoming the fact that Part 1 recognises the important role that local government has to play in reducing the democratic deficit and in helping people to know, understand and participate in local democracy. That I welcome. I worry that the Government and the Minister, in her good opening speech, seem to believe that putting this in a Bill would contribute to reducing the problem. All good local authorities—I would suggest all local authorities—already do all this work, although of course some, or probably all, could do it better. So while it may be welcome to recognise the role by making it a statutory duty, that will not of itself bring about any greater improvement.

This suggests that we have not really understood and analysed the problem. It is not only a problem with local government but with government in the widest sense of the word, and until we know and understand that, no amount of trying to tell people how their local council works, when they really do not want to know, will make any significant difference.

I turn now, with some trepidation, to the issue of petitions. I was genuinely surprised to hear last week that three-quarters—I think today we heard it was four-fifths—of local authorities apparently do not respond to petitions. I do not claim to have knowledge of what every local authority in the land does—of course I do not—but it seems incomprehensible that a local authority could not respond to a petition. I think that perhaps the noble Lord, Lord Smith, is right.

I asked myself, “What is the position with my own local authority?”, and consulted my council’s constitution, which of course I carry with me everywhere, as a dedicated executive member. It tells me that the chief executive must report the receipt of every petition and it even tells me what a petition is; it gives petitioners the right to address the council, the executive or the local committee; it gives us the right to question petitioners and for them to respond; it gives people who may have a different view from the petitioners, which might particularly be the case in planning applications, the right to address the committee and answer questions; it gives rights to delegations to speak—we have set up local committees where the residents participate in the process of the committee, but nowhere in this huge document could I find anything that said that the council must acknowledge receipt of the petition or respond to the petition. So we do all of what I have just outlined but apparently we do not respond to the petition. The Minister may need to look more deeply at what is meant by “responding to petition” because I find it completely incredible that 70 or 80 per cent of local authorities do not respond to petitions. My bet is that the vast majority of councils now do what my own council has been doing for over 20 years: respond fully to petitions.

I think everyone who has addressed this issue today has urged the Government not to be so prescriptive. I join with that. Speaking as one who does not have quite as much experience as the noble Lord, Lord Graham, but who over the past 30 years has at least had to wrestle with council standing orders and, so often, had to suspend council standing orders that did not quite envisage the circumstances in which we found ourselves, I know that the more you try to be prescriptive in setting out the rules and regulations, the more barriers you inevitably create to free participation and involvement.

The Government feel it necessary to legislate to require councils to receive and respond to petitions—so be it. I cannot be against that; it is what they are all doing already. But I ask the Government: please do not try to stipulate in legislation or in regulations how every local authority has to do it, how you describe what a petition is, and so on. My noble friend Lord Greaves described very well the different circumstances that apply in different areas and different parts of a local authority. If we are really going to engage with local communities and get community empowerment, we need fewer rules, regulations and restrictions. The fewer we have, the more likely we are to succeed.

I was interested that the noble Lord, Lord Smith, warned us about expecting too much of petitions. I was trying not to have too much sympathy with him but I know where he was coming from. One needs, too, to understand that while people will sign petitions they are not necessarily the be-all and end-all, and that responding to a petition cannot always mean agreeing with it. That is neither desirable nor possible, although if petitioners present a petition, possibly with thousands of signatures, and for very good reasons—often legal reasons—a council cannot agree, those petitioners are not going to go away happy and feeling satisfied with the state of our democracy. That is inevitable, and I am sure we will spend some time on it. I urge the Minister, as has everyone else who has addressed this point, to think carefully about what really needs to be in a Bill that will refer to petitions.

With regard to scrutiny, my noble friend Lady Hamwee, who is a much greater enthusiast for the scrutiny role than I am, perhaps because I am a member of an executive, said that she was far from convinced that we need to have a statutory scrutiny officer. I share her doubt; again, to have one is missing the point. For the scrutiny role to be effective, it needs proper officer support. I seem to remember saying so when this was coming in nine years ago. Unless there is scrutiny support that is separate and different from that which is advising the executive, it is not going to function properly. Of course there should be greater support and strength for the scrutiny function within local authorities, but that is not going to be achieved by designating an existing council officer as “the scrutiny officer”. That just creates yet another unnecessary statutory post that does not answer the question.

I will say nothing now about leaders’ boards, except that they were said to be addressing a very real democratic deficit and I accept that there is such a deficit. At the risk of straying into the territory of the noble Lord, Lord Graham, I remember becoming leader of a London borough council the day after the GLC was abolished. We had no choice but to set up lots of joint boards and joint bodies to try to help London to function because there was a substantial democratic deficit. It was not all bad—it helped London borough councils to work more effectively together—but it was certainly not the answer to the democratic deficit in London. That deficit took 14 years to be rectified. I am not going to stray into a debate on how well, or otherwise, the Greater London Authority has done that.

I would be cautious in suggesting that these proposals will correct or address the gap between central government and what I usually call “substate government” at a regional level. We need to address properly and effectively the issue of—I shall just call it “government at regional level”, in case I provoke the noble Lord, Lord Dixon-Smith.

I said last week in response to the gracious Speech that I judge local government legislation not by whether it will make the worst any better, because that is usually easy, but by whether it makes the best better. I see nothing in the Bill, certainly not in its first two chapters, that will make good councils into better councils.

My Lords, I hope that the calls of “Hear, hear!” are not too premature. This has been a long and interesting debate and it is a privilege to speak at the end of it. I am grateful to the Minister for her introduction of the Bill and for all the contributions. I may pick up on one or two points if my memory does not fail me completely.

In discussing this subject, we are debating the nature of democracy—which of course means different things to different people—particularly the nature of local democracy. My experience suggests that the vast majority of people do not want to be interested in politics. They may want to take an interest in their community on specific subjects; most people require an issue if they are to get involved. The majority of our citizens would rather lead their lives, successfully and peacefully, without the interference of government or regulation if that were possible. Of course, the taxman is universal and problems are always occurring, so every now and again everybody becomes involved in the particular issue that interests them at that time.

The plea for greater interest in local elections as an indicator of interest in what is happening in local communities is simply not a real measure. The only hope we have if we believe in democracy and local government is to assume that those who do not vote assent. By and large, that is true. It may be humiliating for us as politicians, but that is largely the situation. People get involved when there is a particular issue that bothers them.

I was very interested in the description of this Bill by the noble Baroness, Lady Ford, as a box of chocolates. It may well be so, but we all have different tastes; there are chocolates we like and those we do not like within any box. Not only that, there are some manufacturers we prefer over others. Inevitably, sitting on this side of the Chamber, our preference would not be for a Bill from the manufacturer of this one. This goes back to what the noble Lord, Lord O’Neill of Clackmannan, said about the opposition Front-Bench speakers enunciating philosophies that he enunciated when he was fighting miscellaneous provisions local government Bills in the other place. That, too, is inevitable.

I was here when the Labour Government first arrived in 1997, and one aspect of that occasion was the fascinated realisation that there was a wonderful game of musical chairs. We all found ourselves sitting somewhere else, but the speeches stayed exactly where they were. I look forward to that happening again in the not-too-distant future, as it undoubtedly will.

I read the first part of the Bill with a sort of déjà vu. I got involved in local government at a time when the authority of which I was a member controlled colleges, further education colleges, the police authority, the fire service, magistrates’ courts and the Probation Service. These were all functions under and within the remit of the county council. The other great joy was that central government subscribed less than 50 per cent of our funds. We were masters in our own house. I remember warning then that, when that contribution went over 50 per cent, we would be lost. Now it is more than 80 per cent. I understand, because of that wretched word “accountability”, the need for the Government to feel that they control local government expenditure, even though the proposition is hopelessly wrong if they believe in local democracy.

That leads me to a different aspect of this Bill. Of course, the responsible authority will do its best to explain all the workings set out in Part 1, but to invite someone who is not responsible to explain adequately to someone who is interested something for which they have no direct responsibility is a slight misconception. Obviously, they would gather all the information that they could, put it together in the most presentable form and hand it out—but to ask them to explain it is unreal. I have no doubt that we will continue to have problems in this area, whatever happens, because new people will come into the field of play; they will develop and move into an area. There will always be people asking questions but, personally, I have always taken the view that if you want a question answered it is best to ask the person responsible for the situation. Making an authority responsible for informing about a wholly different group of authorities somewhat misses the point.

The other point that I want to make arises later in the Bill, regarding the economic prosperity boards, which the Secretary of State can establish by order after consultation with the participants, and whose membership and voting arrangements he can determine. I may have misread the Bill—I see the Minister looking at me—but there seems to be no requirement for local authority agreement to the Secretary of State’s proposals. In Clauses 83 to 89 we run into that problem. The local authorities may review the performance and propose changes in the course of time, but the initial proposals come from the Secretary of State, who does not have to agree to the local authorities’ revised proposals.

I am not sure exactly who is in charge of this wonderful creation. My own view is that local authorities need to look with great caution at what is being proposed in this part of the Bill. It is not easy to see where the local interests end and the Secretary of State’s interest begins—I accept that.

I do not doubt the good intentions of the Government, but under Parts 6 to 9 all the essential decisions can be taken by the Secretary of State. I wonder whether that is right. I think it is inevitable. We need to worry seriously on behalf of local government. This comes back to accountability. I have always believed that accountability goes where the money comes from; there is no escaping that. Unless we can put that right, we will not get local government that genuinely serves its community in an absolute way. I think the task is probably impossible. I regret that.

The Bill will provoke a great deal of interest in Committee, when we will have many ways to improve it. In particular, we will be trying to reduce the overall interest of the Secretary of State and to make sure that local authorities are freer to manage and look after their own affairs.

My Lords, I am extremely grateful to all noble Lords who have spoken in this excellent and thoughtful debate, which has given me pause for thought. I welcome the noble Baroness, Lady Warsi, to the Front Bench—or to the hell that is, in short, local government legislation. I think that the season of good will has been short; I hope that things improve as the season rolls forward. I look forward to more constructive engagement—shall we say?—at later stages of the Bill, when we get down to the detail of what it is designed to do and what it will achieve.

I very much welcome what the noble Lord, Lord Tope, said in his summing-up speech about shared recognition of the problem. There were times, as I listened to the Front-Bench responses, when I wondered whether there was shared recognition of the problem and, indeed, the task to be undertaken. I will return to the noble Lord’s sensible challenge about whether we have incentivised or helped the best to improve. I particularly welcome the support offered by the noble Lord, Lord Best, and my noble friends Lord Smith and Lady Ford. They speak with total authority about local authorities and what they want, particularly the noble Lord, Lord Best, as president of the Local Government Association.

I also welcome the fact that the noble Lord, Lord Greaves, took the time to describe what a messy process local democracy is. On the one hand, I am not going to apologise for the ambitions in the Bill, although I would say to the noble Baroness, Lady Warsi, that I thought that it was a parody to say that anyone described the Bill as being the solution to all problems. It certainly is not, but it is a solution to some of the problems that we think we can deal with. On the other hand, I should say that, as questions have been raised about what is not in the Bill, she will know, as will other noble Lords, that we were unable to legislate on all the White Paper commitments in this Session. We make no secret about that. We have announced our intention to publish draft legislation in the spring for pre-legislative scrutiny, which I think the House will welcome.

I agree that you cannot legislate—and you should not try—to force people to take an active part in the community. That would be absurd. What we are trying to do—and it is the right thing to do—is to see how we can remove barriers to democratic engagement. If we divide on whether legislation is necessary, we do not divide on whether we think that it is worth trying to establish what, with only 35 per cent of people voting in local elections, is stopping people understanding and engaging with what is going on in their local community when there are so many things on a day-to-day basis that make their lives more difficult and, in some instances, almost intolerable. What can we do to encourage more understanding, democratic engagement and economic working together?

I shall be delighted to meet the noble Lord, Lord Mawson. I cannot promise that that will occur before the Committee stage, as I think that that is due to start fairly imminently when we return after Christmas. Everything that he said was right. I say that not just on the basis of his experience but on the basis of our experience of working through regeneration situations and projects. Social enterprise is the big idea. Relationships work, not structures, but sometimes without an enabling structure you do not get to first base as regards constructing relationships based on trust. However, we clearly have a lot to learn. As he will know, £5.9 million has been allocated to improve social enterprise business support through the RDAs alone. He will know how much this Government have spent on social enterprise, and quite deliberately so.

I must confess that I was a bit disappointed by the slightly negative responses of the noble Baronesses, Lady Warsi and Lady Hamwee. I refer to what the noble Lord, Lord Best, said in that regard. Indeed, my noble friend Lord Graham analysed the range of didactic responses that the noble Baroness, Lady Warsi, made to the Bill. If one dismisses the content of the Bill, one needs to be very careful about putting oneself at odds with the evidence, including all the evidence that I quoted. Certainly, the party opposite needs to be careful about putting itself at odds with the LGA, which has welcomed the Bill. As the noble Lord, Lord Best, said, the Bill underpins and emboldens the effort that can go into raising the quality of local democracy. The party opposite needs to be careful about putting itself at odds with the best that local government can achieve, whether that is a voluntary coming together in multi-area agreements, proactive engagement with local democracy or, indeed, the leaders’ boards that my noble friend Lord Smith described. Such an attitude puts the party opposite at odds with what the Bill intends to, and will, achieve. It is not a panacea, but it is an important and measured step forward.

I was slightly disappointed that there was not more positive engagement with the single regional strategy, which has been universally welcomed as constituting an end to the absurd separation of spatial strategy and economic strategy. I say to the noble Viscount, Lord Ullswater, who I believe is not in his place—

I beg the noble Viscount’s pardon, my Lords. I am mortified. I had not noticed that he is the Deputy Speaker. Therefore, he cannot interrupt me. I understand some of the historic anxieties about the regional arrangements. However, far from creating a messy situation, we are creating something that is more transparent and more streamlined and is positively sought by the regions.

Before I answer some of the specific questions, I wish to refer to a few of the larger themes. On the balance between duties and the voluntary enabling of local authorities, why do we need duties? The LGA certainly welcomes the duty to promote democracy, as I said. The noble Lord, Lord Tope, said that this has been done for decades. Indeed, some local authorities have been doing it for decades. However, as my noble friend Lord Borrie said, many have not. This duty is not carried out well or systematically in many areas. An exemplary council such as the one represented by the noble Lord, Lord Tope, may well have written an entire document on how to carry out this duty. However, doing nothing is not an option as regards communicating local authority responsibilities to local communities. We are imposing a duty because we think that the discipline is necessary. We need consistency as regards access and scope.

On the new duty on economic assessments, Middlesex University published in March this year the Review of Economic Assessment and Strategy Activity at the Local and Sub-regional Level. That reviewed the range and types of economic assessments and observed that many assessments failed to provide a coherent view of local economic conditions, paid little attention to wider sub-regional economies and displayed little integration and co-ordination of activity across spatial scales. We need to do something about that because information is the basis of judgment and proper and better decision-making.

On the other hand, and by way of balance, the economic prosperity boards are voluntary. The duties around multi-area agreements are voluntary. They are there as additional powers to be used as and when those local authorities think that they need them and can make best use of them. The noble Lord, Lord Best, asked me to demonstrate that there is balance between the powers that enable the Government to provide a framework and minimal regulation. The noble Lord, Lord Tope, begged me to show how— particularly in relation to petitions—we seek minimal regulation. I take as an example the leaders’ board. The leaders’ board, which has been anticipated in the north-west, creates its own configuration in response to the region’s geography, history, politics and circumstances. If we look across the regions, we find different configurations; different leadership arrangements will be put in place. The south-east, for example, aims to establish the south-east leaders’ board by April 2009 to replace the assembly. It will be very different from that of the north-west. We are not laying down templates or patterns; we are not telling people how to do it.

On petitions, we have not set thresholds. I take the point made by the noble Lord, Lord Tope, about his own responsiveness. The distinction between responsiveness and the guarantee of action is important. We do not agree—and nor could local authorities—with every petition. The e-petitions on the Downing Street website are evidence of that. The Local Government Association found that only one-third of local authorities guaranteed a response. I had people in my office last week who told me that three petitions on allotments had been completely ignored by the local authority, which I will not name. I find that intolerable and we should do something about it, but how to do so is left up to local authorities. We have specified in the Bill some ways of doing it, but it is for local authorities to decide how those ways are put into effect.

I do not think that the leaders’ boards would be exclusive clubs, as was suggested by the noble Baroness, Lady Hamwee. Moreover, the EPBs are voluntary organisations, made up of elected local authorities that want them and have shown that they are likely to deliver benefits. The noble Lord, Lord Best, quoting from the Local Government Chronicle, said that there is a “zest” for sub-regional powers. We are trying to build on that sort of zest, enabling people to take advantage of it. The noble Lord, Lord Tope, asked how the Bill will encourage the best to do better. That is an example of an opportunity that is not there at the moment.

Members of the EPB will not be appointed by the Secretary of State. It will be up to local authorities to come up with the membership arrangements for the EPB. I think that that was one of the questions raised by the noble Lord, Lord Dixon-Smith. The Bill also sets out that any members of an EPB who are not elected members of constituent authorities must be non-voting unless the voting members agree to change this.

I turn now to some of the specific questions raised by noble Lords. The noble Lord, Lord Best, asked about the delegation of functions. We have taken a deliberate decision not to legislate to provide for RDAs to delegate their functions and decision-making powers to local authorities. We still want to deliver the outcomes discussed in the SNR, but it is important to preserve the current flexibility inherent in the RDAs’ single-funding arrangements, and to keep the direct line of accountability to RDAs for the use of money voted to them by Parliament. That is important during a period of economic challenge. Because of that, we now intend to pursue the investment planning approach, which many regions already successfully utilise and which the RDAs and the LGA put forward in their joint response to the SNR consultation.

Under this proposal, the regional strategy implementation plan would set out a broad regional programme of outcomes to be delivered in the region. This would then be worked up into detailed local plans setting out a clear investment blueprint for an individual area. Regional partners, including RDAs and local authorities, will be involved in developing these plans, agreeing the level of support involved, which is very important, and signing them off; but it would then be for local authorities to take forward the delivery elements. That is a genuine, organic and deliverable partnership.

The noble Lord, Lord Best, then raised the question of the tenants’ voice, which was also raised by the noble Baroness, Lady Warsi. That is in the Bill because we have had to have consultation and make funding arrangements with the existing tenants’ organisation. We had to make sure that it was done properly, with its full co-operation, and that is exactly where we are. In relation to private tenants, the noble Lord knows that I very much sympathise with what he is saying, and we are looking at what Julie Rugg has come up with as regards what we may take forward.

The noble Lord particularly asked me about the compact arrangement, going back to the tenants’ voice, and whether the Bill should be used to protect private tenants. We would expect the National Tenant Voice to consider this when it is up and running; that would be a useful task for it. In terms of the compact, we are very well aware of the opportunity that the Bill might present. There is still a lot of consultation, because it is not simple, but we are talking to people about some of the implications and how best they might be addressed. I can give the noble Lord a qualified positive response.

In relation to Wales and the questions raised by the noble Lord, Lord Roberts of Conwy, even if he were the only one at that meeting, I am sure that he spoke for all his comrades in Wales and will bring those messages back to this House. We have given Wales what it requested, where possible. Obviously, that includes the framework power on governance and scrutiny. No framework power on petitions was requested by the Welsh Assembly, so we have met in full what WGA wanted, but I would certainly be happy to write to the noble Lord if there are any further details. In Committee, we will explore where that might take us.

In relation to the issues raised by my noble friend Lord Smith of Leigh about why health bodies were not included on the list of partner authorities for the economic assessment duty, we limited the list to those bodies we thought had a particular economic focus. We did not want to place burdens on those bodies that did not have such a significant economic role. However, if authorities wish to consult other bodies that they think are important to the local economy, they are able to do so. We can tease some of that out in Committee. The noble Baroness, Lady Hamwee, raised a related question about why there was no duty to co-operate on partner authorities on the economic assessment duties. We took the view that we should not place an undue burden on partner authorities by forcing them to participate in large numbers of assessments. Again, it is the question of balance. As the Bill is drafted, partner authorities can be involved but do not have to have a large role where they do not feel it is necessary.

My noble friend Lord Borrie raised some very interesting questions which, in a way, were counterpart questions to those asked by the noble Lord, Lord Greaves, about the messiness of democracy and whether the arrangements would lead to the process being hijacked. In relation to petitions, we have made it clear that local authorities can act to prevent petitions being hijacked by people who are intent on vexatious or harassing activities. That is certainly something that we are aware of, which can be addressed in guidance, I suspect.

My noble friend Lord Graham returned to a theme which he has resolutely maintained in this House, and rightly so, about freemen. Given that this Bill is not least about equality, it is appropriate that he should bring forward an amendment on that, and I look forward to having that debate with him.

Finally, my noble friend Lord O’Neill and the noble Viscount, Lord Ullswater, raised the question of the construction industry, and I take their detailed points. We are doing something which will be of great benefit to the construction industry at this particular time, but clearly points of detail, involving notice of payments and so on, need to be addressed. My noble friend Lord Brett will have the great pleasure of taking those parts of the Bill through Committee. Given his grasp of the industry and the implications for it, we will have very good and constructive debates on that issue.

I hope that I have addressed most of the questions that have been raised in the context of what the Bill is trying to do.

I return to the point made by the noble Baroness, Lady Hamwee. The scheduling of debates in Grand Committee is obviously agreed through the usual channels, but my noble friend the Chief Whip has today undertaken to look again at the dates and to consult with the usual channels. The point is taken. Although we are stretched for resources, I would particularly like to have the noble Lord, Lord Greaves, in action on this Bill, because I have found him to be a constant source of information and inspiration on local government. I learn a great deal every time that he and I engage. I look forward very much to that and I hope that the usual channels can work out a solution.

In conclusion, I reiterate that the Bill is based on evidence, on what people want and what people know works. It is based on an ambition to try to tackle a problem that is getting worse—the ageing of our elected local authority officers and, if we are not careful, a sclerosis in the type of people who come forward in local government. That issue should be balanced with the need to engage local government at a regional level in more effective ways. I should say to the noble Baroness, Lady Warsi, that there is no internal contradiction in the Bill; it is about local democracy and the effectiveness of local economic arrangements at regional and local levels. The Bill is completely consistent on that point. It is also consistent in that it is an enabling Bill which we seek to put into operation with the lightest touch possible. We shall be marching alongside the Local Government Association, the good work of local authorities in the new leaders’ boards and much else.

With those assurances, I hope that we will enter the season of goodwill feeling heaps more cheerful about the Bill, and that by the time we reach Committee we will agree on detail as well as principle. I beg to move that the Bill be committed to a Grand Committee.

My Lords, briefly, I am grateful for what the noble Baroness said, but I must make it clear that the usual channels—certainly our usual channels—did not agree to the scheduling of business. Objecting to committing a Bill to a Grand Committee—in other words, wishing that it be dealt with on the Floor of the House—would answer the problem, because the Bill would not coincide exactly with the Marine and Coastal Access Bill.

I have talked about the wish to contribute and, despite my unhelpful comments earlier, both I and my colleagues wish to contribute to this Bill and to the Marine and Coastal Access Bill. It does not seem to us that there is an urgency that needs to be addressed in either of the Bills. With good will and with consultation between the usual channels—I am not addressing this to the Minister—we could be more effective in producing good legislation. It would be desirable to address both communication and co-operation.

My Lords, the point has been taken and I will ensure that the usual channels are open. I take note of what the noble Baroness said.

Bill read a second time and committed to a Grand Committee.

House adjourned at 7.45 pm.