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Chilterns Area of Outstanding Natural Beauty (Establishment of Conservation Board) (Amendment) Order 2009

Volume 711: debated on Wednesday 10 June 2009

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Chilterns Area of Outstanding Natural Beauty (Establishment of Conservation Board) (Amendment) Order 2009

I shall speak also to a similar order, with an almost identical title, relating to the Cotswolds.

These draft orders will allow the conservation boards of the Cotswolds and Chilterns areas of outstanding natural beauty to reverse the effect of Financial Reporting Standard 17 in respect of pension fund adjustments when compiling their annual statements of accounts. FRS 17 requires a conservation board, when compiling its accounts and subject to having a turnover in excess of £1 million, to provide for the possibility of all its staff being made redundant at the same time and taking their pension entitlement.

The background is that currently there is no legislative requirement for any particular accounting practice to be followed by conservation boards. In practice, the two conservation boards—the Chilterns and the Cotswolds—follow the relevant parts of the code of practice of local authority accounting in the UK, a statement of recommended practice. Under current regulations, when the turnover of a conservation board exceeds £1 million, it becomes subject to FRS 17 requirements. The Cotswolds Conservation Board’s turnover exceeds £1 million and although the Chilterns Conservation Board’s turnover is less than that at the moment, it is anticipated that it will increase to more than £1 million in the next few years.

In contrast to conservation boards, local authorities are exempt from the financial implications of FRS 17, but conservation boards do not currently fall within the ambit of that exemption. That means that the charge which conservation boards have to make to the revenue account for pensions is higher than for mainstream local authorities, as local authorities need only to provide for a regular but small-scale series of retirements and redundancies. The requirements of FRS 17 mean that the conservation boards must allocate a higher proportion of their budget to provide for pensions than local authorities are required to. It is this inconsistency that the draft orders are intended to address.

The long-term effect of FRS 17 on conservation boards with an annual budget of more than £1 million is that an increasing amount of resources will be transferred away from their environmental work into their pension fund reserve so as to provide for the winding-up of the board and all its staff taking their pension entitlements. However, a conservation board is no more likely to be wound up than a local authority, and local authorities do not have to include provision in their accounts for all their staff being made redundant at the same time. When a local authority is abolished, its duties and any outstanding liabilities are simply transferred to the local authority that takes over its responsibilities, and often many of the staff are taken on by the new authority. If no action is taken, the eventual outcome could be that a large proportion of the funds that the Cotswolds and Chilterns conservation boards receive from Natural England and local authorities would go towards meeting pension fund requirements rather than the environmental work which is, after all, what a conservation board is all about. While the Chilterns Conservation Board is not currently in the same position as the Cotswold board, which already has a budget of more than £1 million, with a growing budget it is anticipated that the Chilterns will eventually be similarly affected.

The order would apply Regulation 30 of the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 to the Cotswold and Chilterns conservation boards. This means that the boards would need to provide pension funds only in the event of occasional redundancy rather than in the unlikely situation of the entire body of staff being made redundant at the same time, as is the case now.

The draft orders will ensure that the boards will be able to make best use of their budgets. It is important that the boards are able to devote more of their resources to fulfilling their duty to conserve and enhance the natural beauty of the AONB and to increase the understanding and enjoyment of the area’s special qualities while at the same time providing for pensions in the same way that local authorities are required to do. Without the order, it seems inevitable that the Cotswolds and Chilterns conservation boards will encounter increasing difficulty in carrying out the functions for which they were created as an increasing amount of their budget is set aside to meet FRS 17 requirements. I commend the draft orders to the Committee. I beg to move.

I thank the Minister for giving us the opportunity to discuss these two orders. I declare an interest as a farmer, but the Fens are not likely to be subject to a designation. It is important to debate the Chilterns and the Cotswolds, two self-evidently scenic parts of our country. These designations were made only in 2005, but I wonder what assessment Defra has made of their success since then. The orders address the internal management of the finances of the conservation boards, particularly the pensions provisions. As the Minister has presented them, they may represent good housekeeping. However, they open up the possibility of a broader debate on the administration and performance of AONBs. Therefore, I hope that the Minister will understand if I ask questions about them.

First, how many and which members of each board are Secretary of State appointees, and how long have they been in post? How many are due to be reappointed in the next 10 months and what procedures have to be followed to appoint extra people to the boards? Does the passing of the statute imply the de facto limitation of any future government action involving the dissolution of a conservation board; for example—the Minister mentioned that local authorities do not disappear but morph into different local authorities—by changing an AONB into a national park?

Would the statute apply even if a conservation board were to increase in size? If so, how were the current board structures decided and, if they have to be expanded, how can they be changed? Are the existing boards audited, performance-reviewed or otherwise monitored to ensure that they are effective? If not, how can the Government be sure that they will continue as currently structured and staffed? I ask these questions because there has been considerable concern at the size of these boards and the risk that accountability may not be as strong as it could be. Has any assessment been made of that?

I apologise to the Minister for bombarding him with questions, but they are a reasonable background against which to set these statutory instruments. Areas of outstanding natural beauty are an important element of our country’s heritage, and getting the right balance between excessive bureaucracy and the conservation requirement is very important. I hope the Minister can address that in his reply.

I declare an interest: I live on the edge of the Chilterns area of outstanding natural beauty, I am president of the CPRE in Oxfordshire, which covers the Cotswold and Chiltern areas, and I am president of Friends of the Ridgeway. The content of the orders is to be welcomed. These boards are doing good work. Despite what the noble Lord, Lord Taylor of Holbeach, says, they have not existed for very long, and it would probably be difficult at this stage to show much of a track record. I assure him, though, that they are doing useful work.

There is much to be done. These are fragile areas, particularly the Chilterns because it is a desirable area close to London and therefore could be subject to quite a lot of development. That area is also subject to plagues such as—this will be well known to the noble Baroness, Lady McIntosh of Hudnall—aircraft noise, which is very disturbing around there.

I have no objection to these orders, and I am happy that they should go ahead.

It is traditional at this point to thank noble Lords who have taken part, but it would take some effort on my part to do that in view of the number of questions that I cannot answer. I might be able to answer the series of questions tangentially but it is too long a list. I shall stick to topics such as accountability.

The boards are independent corporate bodies. However, the establishment order requires that the board should provide whatever paper, accounts and documents as may be required to the Secretary of State. There were questions about the boards’ success. They have not yet been audited, but they will be.

If I may interrupt the Minister, I understand that it can be difficult in debate, and I did ask an awful lot of questions. We would all be quite happy—I am sure I speak for the noble Lord, Lord Bradshaw, and my noble friend the Duke of Montrose—if he wrote to us subsequently, if he felt that he would then have time to address the detail. I understand that some of the answers may have to be brief summaries of the position.

That is very kind of the noble Lord. Also, we are having a Tube strike, and it is refreshing to have a Tube strike that I am not responsible for. I will take advantage of his offer and promise to write. Briefly, I can tell him that the Chilterns has eight members appointed by the Secretary of State, while the Cotswolds has 14.

We believe strongly that these conservation boards bring benefits. The boards are independent corporate bodies, which enables them to challenge local authorities when necessary. This results in better decision-making. The benefits of a board include higher-status independence through its higher profile and a greater ability to attract third-party project funding.

The board has various functions, except planning, that the local authorities derogate or share with it in pursuit of their purposes. In contrast to that, the alternative—the joint advisory committee model which is used to manage almost all other areas of outstanding natural beauty—has no powers and can only advise local authorities on what decisions to make. If I have not answered the other questions put to me, I am more than content to write to noble Lords.

Motion agreed.