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Police Reform and Social Responsibility Bill

Volume 729: debated on Monday 11 July 2011

Report (3rd Day) (Continued)

Amendment 109A

Moved by

109A: Clause 29, page 21, line 7, at end insert—

“( ) A police and crime panel must—

(a) review the police and crime commissioner’s human resources policy; and (b) make a report or recommendations on that policy.( ) Where a panel makes a report or recommendation on the police and crime commissioner’s human resources policy, the police and crime commissioner must—

(a) review the policy, taking the panel’s report or recommendations into account; and(b) resubmit a revised human resources policy to the panel for the panel’s consideration.”

My Lords, this group contains a considerable number of government amendments that in essence ensure that all the staff, property rights and liabilities of police authorities pass first to police and crime commissioners and the MOPC on the day of creation in order to maintain current arrangements. They then allow for secondary transfer schemes to be put in place to allow staff to transfer to the chief officer of police.

I understand that the Association of Police Authorities supports the Government’s approach. Much as I admire that association, I believe it is misguided, as do a number of staff organisations. The association may envisage the police and crime commissioner retaining the non-operational police staff and transferring the operational police staff to the chief constable. Of course, that is not necessarily the case, but I am concerned at the proposal to split staff into two legally separate workforces under different employers in each force. This increases the number of police employers from the current 43 police authorities to 86 police and crime commissioners and chief constables. At the very least, that will drain resources from front-line policing and lead to the unnecessary loss of both police staff and police officer posts because of the infrastructure cost involved. Indeed, the split between the staff under the PCC and the chief constable is likely to be haphazard and arbitrary, depending on how local relationships work out. The general public, who rely on the force to keep them safe, will surely be confused and indeed concerned at the proliferation of new police employers and the associated bureaucracy, which would risk the confidence of local communities in their police force.

Having two separate workforces in each force is bound to lead to inefficiencies, confusions and the possibility of a two-tier workforce on different terms and conditions. The Government are proposing a two-stage staff transfer, first from the police authority to the police and crime commissioner and then, at a later date, from the police and crime commissioner to chief constables, resulting in twice the opportunity for things to go wrong and for staff interests to be prejudiced. I remind noble Lords of the requirement under the Local Government Pension Scheme for scheme liabilities to be crystallised at the point of transfer between employers; this will have to happen twice and will require the necessary financial undertakings to be given twice.

The Government say that they believe in the concept of a single police force in which police staff and officers come together in unified, effective work. However, these proposals contain the prospect of the police staff workforce being divided between two separate employers, which could threaten all the good work of the last 10 years to build a one-culture police service. I remind the noble Baroness of Tom Winsor’s independent review of police officers’ and staff’s pay and conditions, which has already delivered its part one report in March this year; part two is expected in January 2012. All the evidence in the part one report shows that there is an appetite for harmonising pay and conditions in the police service as a means of modernising the police employment framework. Two of the unions that have talked to me, UNISON and Unite, support that agenda. However, that positive agenda could be frustrated if the police workforce is carved up in the way the Government propose, with their two-stage, two-employer model.

My Amendment 264A, which is in this group, seeks to create in policing the same employment framework that exists in the rest of the public sector, with staff employed by the organisation as a body corporate rather than by one powerful individual. I believe that it fits very much into the framework of the amendment moved by the noble Baroness, Lady Harris, in our first-day debate in Committee. Her concept of a police commission would allow for the corporate employment of staff and would be a much more satisfactory way of dealing with these matters.

Amendment 109A, which is the first in this group, concerns the role of the police and crime panel. Given that so much power is being given to the police and crime commissioner in relation to resource, responsibilities and now staff, it is right that it comes under scrutiny. My Amendment 109A would give the police and crime panel the responsibility for reviewing the human resources policy of the police and crime commissioner. It is, if you like, a second-best amendment, because I would much prefer that the Government’s amendments are not moved. I would much prefer there not to be the prospect of all staff being handed over to the police and crime commissioner to do what he wills. However, if that is the Government’s firm intention, at the very least the police and crime panel ought to have a specific statutory responsibility for reviewing and commenting on the performance of those duties by the police and crime commissioner. I beg to move.

My Lords, I will speak to Amendments 257 to 267, which are remarkably similar to the Minister’s amendments except that they refer to PCCs and MOPC rather than to the “policing body”, which is perhaps a more elegant formulation.

I seek clarity as to the Government’s intentions for all this. The Government have brought quite a number of these problems on themselves. At the end of last week, I spoke to a senior lawyer employed by a police service who described the Bill as being “inherently contradictory” because of the confusion about what it is trying to achieve. While I welcome the Minister’s proposals in her amendments—which will allow for a two-stage transfer because it will require a two-stage transfer to sort out exactly what the details, the most sensible disposition of staff and the most appropriate way of doing it are going to be—this is a problem that the Government, policing bodies and the police service did not need to have. I cannot understand what is gained by chief officers of police employing all their staff. What extra ability does it give them, apart from a great deal of hassle and potential problems, over having direction and control of those staff? That is a point that the Minister will no doubt explain.

I want to understand exactly what the Government’s amendments do. I assume that the new amendments that the Minister is introducing are intended to maintain the status quo from the commencement of the Bill until the second transfer scheme is effective. I would be grateful if she could confirm that. There is an interesting anomaly if you have a two-stage process. During the first stage, before the second stage kicks into action, there is presumably the potential for the chief officer of police to employ new staff directly subsequent to the first transfer scheme, and this would then create two classes of police staff. I would be grateful if the Minister could tell us whether having two classes of police staff, because there is a two-stage transfer agreement, is intentional and whether she wishes to return to this at Third Reading. I am also not clear whether there is a deadline by which the second-stage transfer should take place. My own view is that the complexities of this mean that it may take a considerable period of negotiation to reach a mutual agreement for staff to be transferred to the chief officer of police, and it is better that those discussions take place at a leisurely pace to allow all the relevant interests to be consulted and involved.

I have one additional question. Will the Minister say whether the transfers under Schedule 15 are going to be legally effective under Scottish law as well as the law in England and Wales? As I understand it, a number of police authorities around the country hold land in Scotland, so these transfers are important.

My final point—again, I would be grateful for the Minister’s explanation—is that, as I understand it, her amendments to Clauses 19 and 20, which were agreed on the first day of Report, will mean that the police and crime commissioner or the MOPC in London will not be able to delegate either to the chief constable or to the Commissioner of Police for the Metropolis any of that body’s staff. They would not be able to delegate to the chief officer of police to arrange a function—the PCC or the MOPC will have to engage the chief officer formally to carry out some functions rather than simply delegate them.

I have seen a letter—rather, I have been provided with a letter; there is no question of it having been “seen” because it was leaked to me or anything like that—from the right honourable Nick Herbert, Minister of State for Policing and Criminal Justice, to the Commissioner and Deputy Commissioner of the Metropolitan Police, a “Dear Paul and Tim” letter, which tries to set out the Government’s policy. However, it leaves me even more confused as a result. He says:

“On delegation, I have said from the outset that I want the office of the PCC/MOPC and the office of the Chief Officer to be clearly distinct so as to enable proper accountability and a clear division of responsibilities. Preventing the PCC/MOPC from delegating to the Chief Officer is an important part of this”.

Will the Minister tell us why that is so important, because delegation is a very clear statement?

Nick Herbert goes on to say:

“This means that should a PCC/MOPC want a Police Force to carry out some functions, he or she will have to formally engage the Chief Officer to do so, rather than simply delegate it. This will help clarify roles and responsibilities, which I do not believe is the case under the current system”.

I dispute that. Will the Minister explain to us very clearly the distinction between delegation and formal engagement? What is the process that underpins formal engagement? Is it a contract or a memorandum of understanding? What exactly is envisaged? I suspect that the Government are creating a new bureaucracy, further uncertainty and further duplication.

My Lords, we do not disagree with the principle behind the amendments proposed by the noble Lord, Lord Harris, that the PCC or the MOPC should be able to make their own decisions about transfers. However, the government amendments will maintain the status quo—the noble Lord asked about that, and that is the intention—and provide stability in the transitional phase by providing that all staff and assets transfer from police authorities to PCCs or the MOPC initially. They then enable the PCCs and the MOPC to write transfer orders to transfer staff to the chief constable or commissioner.

Perhaps I could begin by addressing first the amendments of the noble Lord, Lord Hunt. Amendment 264A would mean that a police authority could transfer staff only to the police force; no member of the police authority staff could be transferred to the PCC or the MOPC. As a preliminary point, the Bill provides for the police staff to be employed by the chief officer of police, not the police force, which does not exist as a separate entity capable of employing staff. Noble Lords whose names have been put to these amendments might like to make the police force the employer rather than the chief officer, but no amendment has been tabled to achieve that. Obviously, I can answer only to amendments that have actually been tabled.

To clarify the separate roles of the PCC or the MOPC on the one hand and the chief officer on the other, and to ensure that each can carry out his or her functions independently, it is essential that each employs his or her own staff. As such, the Bill must allow for staff to be transferred to the PCC and to the MOPC; it does not direct that that happens, but it allows for the best decisions to be made locally.

Amendment 109A would give police and crime panels a role in reviewing PCCs’ human resources policy. This would already fall under the existing general powers of panels to scrutinise PCCs. I do not think that the way forward taken by these amendments would achieve the sort of protection needed, but I make a commitment to the House that I will consider the matter further. Perhaps this can be returned to in the other place, given the late stage of this Bill. I therefore ask that the amendments are not pressed to a vote.

I will now speak to the government amendments and answer some of the points made by the noble Lord, Lord Harris, who asked why delegation was necessary. It is exactly as the Minister for Policing and Criminal Justice says; if the PCC wants to ask the chief constable to do something, he or she will need to commission it formally—they cannot just order the PCC to do it.

I am trying to understand how the process that is being described will differ from delegation, which is not the same as simply ordering—it is a process. How is that going to change when you do not have delegation but instead have this commissioning process?

I guarantee to write to the noble Lord about this, but the principle behind it is that it is very clear to the public who is responsible for what. The process that will be employed is more detailed than I have information for tonight, but I shall write to him specifically on the issue of process that he has raised.

The amendment from the noble Lord, Lord Harris of Haringey, would allow PCCs and the MOPC, as well as police authorities, to make transfer schemes to transfer staff and assets. I completely appreciate the position that the noble Lord is coming from. The Government have been working closely with police forces and authorities on how the transitional arrangements should operate.

Many are concerned about whether there is enough time in which to write transfer schemes ahead of the introduction of PCCs and the Mayor’s Office for Policing and Crime. They have also expressed concerns about trying to second-guess what staffing a PCC may want when they come into office. As such, it is eminently sensible, as the noble Lord, Lord Harris, suggests, to allow PCCs and the MOPC to write transfer schemes. However, government Amendments 256B to 267M in this group simplify matters even further. They simply maintain the status quo for a period, with all police authority staff and assets transferring initially to PCCs and the MOPC. This will enable transfer schemes to be written by PCCs and the MOPC in slower time. I hope that the noble Lord will look at my proposed amendments and agree that they achieve the same end, and I hope on that basis that he will agree to withdraw his amendment and support the government amendments.

The noble Lord also asked about Scotland. I understand why he asked that. Government Amendments 309ZB and 309ZD extend the territorial extent of Schedule 15, so that transfers under that schedule are legally effective under Scots law as well as in England and Wales.

Government Amendments 256A and 267P to 267Q enable the continued employment of chief officers of police. There has been a lot of discussion on this matter, but, finally, Amendment 267N ensures that accounting and audit arrangements can be put in place for police authorities and the PCC or the MOPC in respect of the financial year when the transition takes place. I realise from the interest that the noble Lord, Lord Harris of Haringey, has taken in this in particular that these are important matters. We want to get it right, and I will promise to write to him on matters of process and update him on where we are.

I am grateful to the Minister. My noble friend and I perhaps come at this from different viewpoints, but I am deeply concerned about the power that is being given to individual elected PCCs over the staff. The fact that you would depend on them for the staff transfer to the chief constable gives huge leverage to the police commissioners in their dealings with the chief constable, which raises all my hackles about the problems with this legislation. One point about the need for government amendments on staff transfers related to the risk of mistakes being made because of the shortness of the timetable. I think the Minister spoke of being “hasty”.

That brings me to the substantive point. The rush to have elected police commissioners in place in all the police force areas in a matter of months is going to lead to risks and confusion. Staff deserve to be dealt with in a fair, effective and administratively sound way, and I worry that the result of this two-tier tight transfer is going to be major problems for the staff.

The Minister said that some of these points could be dealt with in another place. I would be grateful if she would clarify that, because there are very narrow rules in the process of ping-pong. I would have thought that as she has promised to write to my noble friend, we should come back to this point on Third Reading. I would be grateful if she could clarify whether from her point of view that might be a sensible way in which to allow us to explore these matters in greater detail in the light of her letter to my noble friend.

My Lords, I do not think it will be possible to come back to this matter on Third Reading. However, I have given the commitment to have it looked at again in another place.

My Lords, my point is that the rules of ping-pong allow that to happen. You cannot simply use ping-pong to table lots of government amendments. It would be better if we had a further discussion on Third Reading.

My Lords, I realise that we are stretching the rules of Report, but this is important. Presumably when the matter goes to the other place, we can receive back from them only amendments that relate to amendments passed by your Lordships' House. That will produce a very narrow range of areas. Areas on which there is no amendment from your Lordships' House will not be covered. I make this plea for the fourth time that it would be in the Government’s interests to postpone Third Reading on this Bill to 5 September. It would lose them only one parliamentary day, but it would enable the Home Office, the Minister’s officials and colleagues around the House to spend a little bit more time getting the details right. It would also give the Minister the opportunity to come back on some of these detailed points.

My Lords, I have suddenly realised that some days ago I moved an amendment, did I not, about statutory protection for chief executives, and withdrew it because the noble Baroness would not give me any assurances on this. Does this not rule out any changes? I am puzzled because I did move this amendment and, as I recall, it was rejected.

My Lords, I hear what noble Lords have said about the use of ping-pong and the other place; I am not a business manager and the matter of when Third Reading of any Bill takes place is not in my hands. I have heard what the House has said tonight and I will take it away for further advice.

My Lords, I am very grateful to the Minister, and I would encourage my noble friend to table an amendment on Third Reading to allow us to debate this further. Clearly, there may be some discussions with the usual channels, so I thank the Minister and beg leave to withdraw my amendment.

Amendment 109A withdrawn.

Amendment 110

Moved by

110: Clause 29, page 21, line 8, after “Schedules” insert “1 (procedure for appointments of senior staff),”

Amendment 110 agreed.

Amendments 111 to 114 not moved.

Amendment 115

Moved by

115: Clause 29, page 21, line 19, after “Schedule” insert “1,”

Amendment 115 agreed.

Amendment 116 not moved.

Amendment 117

Moved by

117: After Clause 29, insert the following new Clause—

“Functions of police and crime panels: conduct, complaints and audit committees

(1) Every police and crime panel shall—

(a) deal with complaints and conduct matters in relation to the police and crime commissioner and members of the police and crime panel;(b) monitor the discharge of the police and crime commissioner’s functions to deal with complaints in relation to the police force for its area;(c) monitor the accounts and audit matters of the relevant Police Commission, police and crime commissioner, and chief constable, as the case may be.(2) A police and crime panel must establish one or more independent sub-committees to discharge its functions under subsection (1).

(3) For the purpose of subsection (2) an “independent sub-committee” is one which comprises the following members appointed by the police and crime panel—

(a) an independent person to chair the sub-committee who is not a member or a member of staff of a police and crime panel, a local police body, a police force or a local authority;(b) at least three other independent people to be members of the sub-committee who are not members or members of staff of a police and crime panel, a local policing body, a police force or a local authority; (c) up to three members that are police and crime panel members, at least one of whom must be a co-opted member. (4) In appointing members to an independent sub-committee the police and crime panel must ensure—

(a) that people with sufficient relevant skills and experience are appointed to undertake the role effectively;(b) it does not appoint a person who has or appears to have a conflict of interest or a personal or prejudicial interest in becoming a member of the sub-committee.(5) An independent sub-committee may—

(a) make recommendations to the police and crime panel or police and crime commissioner about action to be taken to resolve a complaint or conduct matter;(b) make recommendations to the police and crime panel, police and crime commissioner or chief constable about audit and finance matters.(6) If an independent sub-committee makes a recommendation in accordance with subsection (5), the person or body to whom it is made shall have regard to it.”

My Lords, in moving Amendment 117 I shall speak also to Amendments 144, 148, 149, 150, 154, 156, 232 and 232A.

Amendment 117 confers specific functions for complaints, conduct and audit matters on panels and obliges each panel to establish an independent sub-committee to discharge these functions. It also makes provision about the composition of the independent sub-committee so that it is chaired by an independent person and has a majority of other members independent of the police and of local authorities. The people appointed to that committee must have relevant skills to contribute to its functions and must not have a conflict of interest. The independent sub-committee can make recommendations in relation to conduct or audit matters to the police and crime panel, the commissioner or the chief constable, who must have regard to those recommendations.

Amendment 144 enables panels to require information from chief constables or commissioners about complaints, conduct and audit matters to support this function. Amendments 148 to 150 include provisions about breaching codes of conduct within the proposed new clause that deals with suspending commissioners. At present the standard for suspension is a criminal one and does not include conduct matters. Amendment 154 effectively removes Schedule 7 because this is replaced by the other provisions in my amendments. Amendment 156 provides that a code of conduct will be formulated independently, which will apply to commissioners and panel members. Finally, Amendments 232 and 232A disqualify panel members and commissioners if they fail to sign the code of conduct within a month of assuming office.

I would like to say at the start of this group of amendments that, given the strength of feeling expressed about the Bill’s utterly inadequate provisions relating to the conduct of police and crime commissioners and police and crime panels, I am quite alarmed and dismayed that the Government have not put forward far more far-reaching proposals about this at Report. I appreciate that the Minister has put forward some amendments to include the newly created deputy commissioners within the conduct proposals applying to commissioners and also seems to have an amendment specifying that the MOPC or Deputy Mayor for Policing and Crime should be covered by the conduct provisions applicable to local government. I may have missed something but I do not think the same provisions have been applied to commissioners or deputy commissioners outside London—perhaps the Minister can clarify. Even if they have been, these are in the process of being changed and I fear they may not prove robust enough for people charged with police governance. Police governance requires even higher standards of personal integrity than would be expected in other areas of local government because of the nature of the role, and my amendments set out how this might be done.

The other issue that my amendments address is the matter of audit. This relates back to a number of concerns addressed at Committee and on the first day of Report about the creation of two corporations sole in each police area both for the commissioner and for the chief officer of police. Doubts were expressed then, and have not been fully addressed by Government, that it was not clear how this structure was consistent with good financial governance; in particular it was not clear how the need to have two separate strands of audit would work for one police fund. The Minister also supplied some assurances on the first day of Report that the Government were serious about applying principles of good governance to the new structures they envisaged for policing. My amendment, like all my amendments, is an attempt to help the Government in this respect. In relation to good governance of financial issues a key requirement is an effective audit committee. My noble friend Lord Harris brought forward some proposals about how this might be done within a non-executive board linked to the office of the commissioner. However, the House rejected this so I am proposing an alternative method of ensuring sound financial and ethical governance.

My amendment proposes that an independent sub-committee should be formed within the police and crime panel which would have responsibility for audit and conduct matters. In relation to financial governance it would have responsibility for audit matters in relation to both the chief officer’s remit and the commissioner’s office. It would be able to link the audit requirement for one police fund to the two bodies that will manage it. I am not aware of any other accepted method of carrying out financial responsibilities in the corporate context except through an audit committee. The virtue of my proposal is that this will become a function which is to all intents and purposes carried out by independent people, thus avoiding the dangers of politicisation.

An independent sub-committee would also have responsibility for complaints and conduct matters. Incidentally, there is nothing in my amendment to prevent a panel from setting up more than one independent sub-committee, but equally audit and conduct functions could be undertaken by the same committee, if that was appropriate to local circumstances. Either way, my key point is that these independent committees should be comprised largely of independent people; it is essential for good governance and public confidence that this should be the case so there are no doubts about bias or vested interests. It would also help to guard against politically motivated complaints and countercomplaints being traded between the commissioner and the panel if the panel is not alone responsible for this but is required to undertake this at arm’s length through more independent arrangements.

In relation to both the commissioner and the panel, the suggestion is that the independent sub-committee should handle any complaints against individuals. If there is reason to believe that a complaint involves a serious matter or criminal behaviour, there is nothing to stop the panel referring this to the IPCC, the police, the CPS, HMIC or another appropriate body. It implies, however, that the first port of call for all complaints matters against commissioners and panel members should normally be the independent sub-committee. It should decide how best to handle the complaint and if it is a relatively routine conduct matter it should be able to deal with it. I believe that this rebalances the proposals in the Bill, which effectively suggests that the IPCC should be the first port of call in relation to commissioner complaints and does not address complaints against members of the panel at all.

Because this amendment reverses the proposals in the Bill about the role of the IPCC, which incidentally is likely to be swamped with complaints when it first takes this role on, I have removed Schedule 7 which proposes the opposite. There could still be a role for the IPCC under my amendment, but it is one that I believe should first be filtered at local level by independent committees which could decide whether to escalate the matter. I also want to mention that, in relation to force conduct matters, my amendment suggests that the independent sub-committee should have a role in monitoring how the commissioner is carrying out his or her functions in this regard to provide public reassurance.

Earlier amendments I put forward also suggested that the independent sub-committee should have a role in dealing with disciplinary matters for senior officers to ensure that a commissioner or chief officer is using disciplinary powers appropriately. In order to carry out functions in relation to complaint and audit matters which have an impact on both the commissioner and the force, it is very necessary for the panel to receive the information to enable them to do this, so there is also provision in my amendments that the panels may require information from both commissioners and chief officers in relation to their responsibilities for audit and conduct matters.

The amendment would also remove the current standard by which conduct matters are judged, which is effectively a criminal standard. In Committee I spoke about my concern that this was a ludicrous criterion to use in the context of police governance. Noble Lords will not be surprised to learn that I have not changed my mind. On the basis of zero tolerance, if I may borrow an Americanism, one would address issues of concern at the lowest level. One should not wait for them to become a major problem before taking action. The conduct criteria need to be rebalanced around the standard of acceptable behaviour. Criminal behaviour should be the extreme end of the scale, not the starting point. For this reason I propose a code of conduct, which I shall shortly explain, but first I want to mention that part of the rebalancing exercise should be the inclusion of a clause on the suspension of commissioners setting out provisions that would enable them to be suspended for breaches of the code of conduct as well as criminal behaviour.

Incidentally, the amendment would also remove the current proposal that the commissioner can be suspended only if he is charged with an offence that carries a maximum sentence of more than two years. Not only is that inconsistent with the general disqualification provisions for a commissioner that are invoked by any criminal offence, which my amendment reaffirms, it is an absurdly high bar for an individual in an office which requires a high level of public trust and confidence. A lot of offences carry a sentence of less than two years, but I do not think the public would want a commissioner to carry on if charged with most of them. I appreciate that we are only talking about charges, but that does not mean the position of the commissioner would be any more tenable or that the public would have any confidence whatever in that person.

Moving on to the code of conduct itself, which I intend should set the framework to describe what unacceptable behaviour is, I believe that it is important that it should be formulated independently. In Committee I suggested that that should be done by the Committee on Standards in Public Life because I cannot think of any body better suited to the role. However, I am happy to listen to alternative suggestions for the appropriate body to carry out this function. The amendment provides that the code of conduct should set out criteria for appropriate standards of behaviour for police commission members, which would include both the commissioner and the panel, and suggests specifically that a commitment to diversity is set out. This would help guard against extremist commissioners or panel members. The code should set out the key criteria about what constitutes a conflict of interest for police commission members.

Solutions around handling conflicts of interest are lacking in the Bill, but in reality this will become the key issue when complaints start being raised against commissioners and panel members. For instance, a ripe area of concern would be if a commissioner was signing contracts involving large amounts of public money with companies in which he might have an interest. The Bill is silent on this possibility, but it would be a real issue for local people. The final amendment in this group provides that police and crime panel members would be disqualified if they did not sign the code of conduct within one month of taking office. This is obviously an important amendment to make the code of conduct enforceable.

In summary, I believe that the proposals for complaints and conduct issues in relation to police and crime panel members and commissioners currently in the Bill are woefully inadequate. My amendments seek to address this by providing constructive solutions. I hope that the Minister will take these concerns seriously, and particularly will consider my suggestion that complaints should be dealt with at the lowest level. We hear a lot in the Bill about devolution to the lowest level and enabling local people to carry things out. What I am suggesting here is a good example of that. Local committees should deal with complaints at the first level before escalating them upwards if that proves to be the right thing to do.

Likewise, I have concerns that good financial governance has not been adequately considered. It is essential that audit committees are created to undertake this function. If the Government are intent on splitting audit arrangements into two separate policing bodies for each area—for both the force and the commissioner—the audit committee needs to have oversight of both bodies in order to join up the dots. It will need to make sure that public money is being spent wisely and lawfully, and among other things it must ensure that the same money is not being spent twice, since under the Government’s proposals there will be two bodies and one police fund. My amendment suggests how the audit arrangements can be made suitably independent but still coherent with the other proposals about police governance. My other amendments also bring rigour and independence to complaints and conduct matters which I believe are essential to public confidence.

As I have already pointed out, I am seeking to enable the panel and the commissioner to work effectively and ethically as they conduct their business, and I am trying to build on such governance structures as are in the Bill, but I think we are already agreed that what is there is woefully inadequate. I can understand that one of the parties opposite might want the panel to be weak. As I recall, it was after all an afterthought to the original muscular proposal of party political commissioners, but I cannot understand why the Liberal Democrats are unable to go beyond generalities and actually try to put in place tangible and practical “checks and balances”. Clearly, what they understand by that phrase is different from my interpretation. What I am trying to do in the area of standards and complaints is prevent us going back 20 years. We are going to go back 20 years in terms of party-political policing, but please do not let us go back 20 years in terms of complaints, audit committees and standards. A lot has been learnt over the past 20 years, and we should take that on board. I beg to move.

My Lords, I support some of the amendments in this group, to which I have added my name: namely, Amendments 117, 144, 154, 156, 232 and 232A. As we have heard from the noble Baroness, Lady Henig, all these amendments deal with the conduct of PCCs, panel members and audit matters. As we have heard, details on these are virtually absent from the Bill except for very limited PCC complaints matters set out in Schedule 7, which is largely predicated on a criminal standard. In my opinion, this is utterly inadequate for a public position where many other types of inappropriate but not criminal behaviour could arise, so our proposal is to delete Schedule 7 and rebalance the way complaints are dealt with.

The proposals in relation to audit committees are consistent with established good governance principles and provide an additional reassurance about probity, particularly in light of the concerns about corporations sole, about which we have heard so much in your Lordships’ House. The amendments require police and crime panels to set up independent sub-committees to deal with both complaints and audit issues on behalf of the panel. The noble Baroness went into detail about those, so I will not try to emulate her. They also enable panels to require information from PCCs and chief officers in relation to complaints and audit matters.

Amendments 156, 232 and 232A propose that a code of conduct for police and crime commissioners and panel members, collectively referred to as police commission members, is drawn up independently. It also provides for both PCCs and panel members to be disqualified from office if they fail to sign the code of conduct. Amendment 144, in my submission, should have been dealt with in the fifth group, but it appears here. It provides that panels should be able to require information from both forces and PCCs about complaints and audit matters. Amendments 232 and 232A also provide that panel members and PCCs should be disqualified for failing to sign the code of conduct within a month. These are sensible and practical amendments, which I support wholeheartedly.

My Lords, it has already been pointed out that under the current terms of the Bill, the powers of the police and crime panels are limited to a veto over the appointment of the chief constable and a veto over the precept. The purpose of this group of amendments, moved by my noble friend Lady Henig, is to provide police and crime panels with the powers to act as a much more effective check on the way the proposed police and crime commissioners exercise the considerable powers given to them under the terms of the Bill. As my noble friend Lady Henig has said, the main amendments refer specifically to conduct and complaints, and to the issues of accounts and audit.

The amendments provide for an independent sub-committee or sub-committees to deal with the issues of conduct, complaints and audit, with an independent person chairing the sub-committee, at least three other independent members and up to another three who are police and crime panel members, at least one of whom must be a co-opted member. These independent sub-committees must be established by the police and crime panels.

The amendments provide also for a police and crime panel to require information it needs from the police and crime commissioner and they would change the criteria relating to the powers to suspend the police and crime commissioner to include where the commissioner has breached any required standards of conduct pending investigation of the allegations brought against them. The amendments provide also for a code of conduct for police commission members to be formulated by the Committee on Standards in Public Life, covering standards of behaviour, commitment to equalities and conflicts of interest.

The amendments proposed by the Government, to which the Minister will presumably refer, appear to lack the strength and robustness in relation to police and crime panels of those proposed by my noble friend Lady Henig and the noble Baroness, Lady Harris of Richmond. As has been said, those amendments come back to the issue that has been raised on a number of occasions during our discussions on the Bill: namely, where are the checks and balances to address the abuse or misuse of the considerable personal powers given to the police and crime commissioners? What is the effective role and purpose of a police and crime panel if it is not to be able to provide part of those checks and balances and thus help ensure that a police and crime commissioner pays regard to the views and concerns of such panels, providing them with the information they need to carry out a meaningful role and thereby helping enhance confidence in the system and structure on the part of the public?

If the Government have really been listening to concerns expressed in your Lordships' House, including over appropriate financial and ethical governance arrangements, they will support the thrust of these amendments.

My Lords, parallel to our discussions on this Bill, the Localism Bill is in Committee. In that, there has been discussion both on a code of conduct and on the need for a standards committee. There has been discussion around whether the code of conduct should be voluntary or statutory—there is a strong view, I think, in your Lordships' House that it should be the latter. On standards committees, which are likely to be abolished under the Bill, I also detected in your Lordships' House strong support for each local council having such a committee.

Irrespective of that, there are two major issues of principle here. The first is the role of audit, which, it is important to bear in mind, is not the same as scrutiny and which has statutory force in local government. The second is that audit should be independently led. The powers currently given to the panels are insufficient to deliver those two principles.

Audit is not just about finance; it is also about a whole range of matters including procurement policy, contracting, managing very large budgets, procedures being followed, human resources policies and equal opportunities. An amendment is being made here which I hope the Government might find helpful. It proposes that audit be fundamental part of the checks and balances we need in relation to a police and crime commissioner. Subsection (1) of the proposed new clause is right in stating that every police and crime panel should deal with complaints and conduct matters, monitor the discharge of the police and crime commissioner’s functions and monitor the accounts and audit matters of the relevant police commission, police and crime commissioner and chief constable as the case may be.

The question is whether that task should be undertaken simply by the panel or whether a slightly different structure is needed. I think that a different structure is needed, because audit is an important issue when public money is being looked after. There should be two sub-committees—I refer here to subsection (2) of the proposed new clause—one of which looks specifically at audit and the other at conduct and complaints.

The proposal in Amendment 117 relates to the nature of the independence of the sub-committee. To have someone who is independent and appointed according to Nolan principles chair that sub-committee is important. To have then at least three other independent people, balanced by up to three panel members, means that the public would gain confidence in that structure because they would see that there were more independent members than members of the panel.

At the heart of the problem is the fact that no governance structure lies underneath an elected police and crime commissioner. In other words, there is a perception in the Bill if you simply have direct election of a commissioner there is legitimacy in that. Well, of course there is, but one has to have checks and balances—which the coalition agreement has identified and said have to be strict. Having a clear audit function which is publicly accountable is a matter of fundamental importance; otherwise, those checks and balances cannot be properly delivered.

My Lords, I thank the noble Baroness, Lady Henig, for her very detailed amendment and for the care and attention which she has given to this important area of checks and balances. She offers in effect an alternative model to that offered in Clause 32 and Schedule 7 and wishes to replace Schedule 7 with this lengthy and detailed amendment. Schedule 7 sets out that regulations subject to affirmative resolution will be brought to this House to set up a model that is not fundamentally different from what the noble Baroness is proposing, but in which we see the police and crime panel as the body which provides the checks and balances to the police and crime commissioner. To that end, the police and crime panel would set up its own committees, which would be part of the process through which the ongoing process of scrutiny is attended. Schedule 7 talks precisely about that level of complaints which goes underneath criminal activity; that is, inappropriate behaviour, referred to in Clause 32 and Schedule 7 as “conduct matters”. Schedule 7 states specifically that the police and crime panel will deal with conduct matters which are below the level of criminality.

The amendment would expand the panel's role as a scrutiny body, but presents an alternative model. We have set out in the Bill a framework which addresses the conduct of commissioners, including complaints against them. We have been careful also to read across—I say this to the noble Lord, Lord Shipley—to the Localism Bill and the changes made there. We are doing our best to balance out some of the problems that we have been left with from the previous regime which arose from the Standards Board for England being exploited by some political parties against their opponents. We stress throughout the Bill that all those involved in the management and scrutiny of policing are subject to the Nolan principles on conduct in public life.

The noble Lord, Lord Shipley, talked about the importance of audit and the extent to which the audit function is allied to but separate from the ongoing process of scrutiny. The police and crime panel will receive audit reports and will be designated as such for the purposes of the Audit Commission Act. The police and crime panel will thus hold to account the police and crime commissioner for the group audit of the police and crime commissioner and the chief constable. The police and crime commissioner will hold the chief constable to account for their audit. It will be entirely appropriate for the police and crime commissioner to form an audit committee, if he or she wishes to do so, in order to monitor the chief constable’s fulfilment of that purpose. The police and crime panel, or a committee of the police and crime panel, will act as an audit committee for the PCC. The detail of the PCC complaints regime will be in regulations. It is not in the Bill, as Schedule 7 sets out. Regulations will state that complaints not involving criminal allegations will be resolved by the PCP. This is the appropriate-level approach that I suggest the noble Baroness, Lady Henig, is asking for. We are already providing for police and crime panels to be able to require the attendance of the PCC, or members of its staff, in order to answer questions.

The PCP will have a role in referring allegations to the Independent Police Complaints Commission, and in receiving reports from the IPCC. Where the IPCC determines that there are reasonable grounds for an investigation to be established, the PCP shall receive a report of that investigation once it has been concluded. The government amendments, which are intended to address criticisms made of the Government’s preferred model, will mean that any criminal allegations against the mayor, the deputy mayor for policing and crime and the deputy PCC would be the subject of scrutiny by the IPCC. I apologise for the acronyms.

In the case of the mayor, criminal allegations would be the subject of scrutiny by the IPCC whether or not the allegation was connected to his or her role as the Mayor’s Office for Policing and Crime. Where a complaint against the mayor, or against a deputy mayor for policing and crime who is an Assembly Member, is not serious enough to require investigation by or under the management of the IPCC, the regulations will provide for it to be dealt with under the local government standards legislation that is applicable to the mayor and Members of the Assembly. Subject to the will of Parliament, that legislation will be amended by the Localism Bill, with which a number of the noble Lords taking part in these discussions are at present engaged.

We accept that removing the reference to “other corrupt behaviour” would achieve greater clarity without significantly reducing the scope of the provisions. Behaviour that could be regarded as corrupt is highly likely to involve the commission of some criminal offence in any event. Any complaints or allegations which fall below this test will be left for the police and crime panel, or for a committee of the police and crime panel, to handle. The mechanism for these complaints will also be set out in the regulations. These regulations will be subject to the affirmative resolution procedure, and noble Lords will therefore have the opportunity of debating the finer detail of these procedures when they are introduced to the House. I hope that that provides some assurance to the noble Baroness, Lady Henig, and will persuade her to accept and support government Amendments 151, 152, 153 and so on.

Will the Minister confirm that the proposed arrangements for audit will be voluntary, in that a commissioner may set up an audit committee or, by definition, may not? If that is right, will he tell the House who undertakes audit and how any report will be presented to the commissioner? I think he said, fairly early on in his response, that the commissioner could receive audit reports. Who would make that report if an audit committee was not set up? I am sorry if I have bowled him too detailed a question at this point.

I thank the noble Baroness for that detailed question. PCCs will have a chief finance officer, with the professional qualifications and the professional obligations of a chief finance officer. If a police and crime commissioner does not choose to have his or her own audit committee, the PCP’s audit functions will play a much more active role in scrutinising what the PCC provides, whether by the whole panel or by its own audit committee. The legal obligations for audit are, I am assured, the same as those for police authorities. However, we are very happy to write in detail on that, and a number of these matters will of course come up when the detailed regulations are put for affirmative resolution before the House.

My Lords, I have a problem with the response. This is a very big issue about public confidence. It is about putting processes in place that will reassure the public that everything is being done ethically and correctly, and that governance structures meet certain standards. I heard what the noble Lord said. My worry is that some of this is being left to laissez-faire: you can do this or you need not do this; there is a model here that you could follow if you would like to.

These matters are really important. I agree absolutely with the noble Lord, Lord Shipley. Therefore, I do not understand why these serious principles cannot be in the Bill, and why we cannot agree on a way to encapsulate them that meets both what the Government want and what I am asking for. The difference between us is not great.

Serious principles are at stake: for example, the serious principle that audit needs to be carried out and needs to be independently led. I think that we all agree on that. Another principle is that codes of conduct and standards need to be established. Again, they need to be led by an independent committee. A third issue, on which perhaps the Minister feels less strongly than I do, is that low-level complaints should be dealt with first at local level and then escalated; they should not be dealt with by the IPCC and then come down.

I have just been reading Schedule 7. As I said, it has an element of laissez-faire about it. If the Government agree about the issues and believe that they are as important as I believe they are, what is the problem with putting them explicitly in the Bill? I cannot understand what the difference is between what I am asking for and what the Government want. Why will they not accept that these principles are very important and therefore state that they will try their best to put them explicitly in the Bill? I do not understand their hesitation. What am I asking for that is so revolutionary that the Government are resisting it? All I am asking for are the most basic principles of good governance. If the Minister is not able to meet my concerns, I will have to test the opinion of the House, because the issues are fundamental and I do not understand the problem that the Minister is facing. Perhaps he would like to reassure me in another way.

I suspect that a great deal of what the noble Baroness is asking for is in regulations under previous legislation, and will be in regulations under this legislation. That is why I fail to see a difficulty. I assure her that we all understand that these are extremely important principles, and that the role of the chief finance officer and of the PCP in looking after the audit will be set out extremely carefully in regulations.

The problem for me is that this is like justice; it must not only be done but be seen to be done. Not only must we have high standards and regulations, but the public must be convinced, and must see, that they are there and that they are explicit in the Bill. If we care about these things, we must spell them out. I will find it tragic when noble Lords opposite vote against something that they all believe in, but I cannot avoid it. These matters are so important that I wish to test the opinion of the House.

Consideration on Report adjourned until not before 8.42 pm.