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Clause 5
Lords amendment: No. 10, in page 4, line 5, after ("on") insert
("an application for judicial review or")
Ms Armstrong: I beg to move, That this House doth agree with the Lords in the said amendment.
Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 11 and 12.
Ms Armstrong: The amendments reflect concerns raised by the hon. Member for Sutton and Cheam (Mr. Burstow) in Committee, as well as in outside consultation. They have two effects. They expressly give a court a discretion in judicial review, as well as in audit review, to determine that a certified contract shall have effect as if the local authority had had power to enter into it and had exercised that power properly. They also require the court, in considering how to exercise that discretion, to have regard to two matters. The court would have to consider the likely consequences of a decision to
set the contract aside, first, for the authority's financial position and, secondly, for the provision of services to the public.
It is important that where a certified contract is challenged in judicial review or by the auditor, the court shall have a clear discretion to allow the contract to continue if, after weighing up all conflicting interests and taking account of all relevant circumstances, it feels that, on balance, that would be in the wider interests, financial and otherwise, of the local community.
Mr. Paul Burstow (Sutton and Cheam):
I thank the Minister for considering the discussions in Committee and on Report in which I raised the matter and which led to the amendment. It is important that the courts can have regard for the consequences for council tax payers and for the finances of the local authority, but I ask the Minister to assure the House that the Bill does not preclude the courts from considering the impact of discharge terms. Having read the debate in the other place, especially in Committee, I was struck by the remarks of the Lord Donaldson, who said:
Ms Armstrong:
As we are in the final stages of the Bill, I want to make sure that I get this absolutely right.
If the discharge terms are set aside, the repudiation terms apply, as set out in clause 7. In other words, if the judge is not satisfied that the discharge terms are not proper discharge terms, he can apply clause 7, the repudiation terms.
Lords amendment agreed to.
Lords amendments Nos. 11 and 12 agreed to.
Mr. Raynsford:
I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment was made partly in response to a point raised by Lord Bowness on Second Reading in another place about the relationship between clauses 6(4) and 7(3).
The amendment clarifies the circumstances under which there are no discharge terms having effect. Clearly, there will be no discharge terms where none have been agreed by the parties to the certified contract. It is also possible, however, that, despite clause 6(4), a court might conclude in an extreme case in public law proceedings
that terms agreed as discharge terms are not to have effect. The amendment to clause 7(3) makes it clear that that, too, would be a situation in which there were no discharge terms, so that the contractor or financier would be entitled to repudiatory damages.
Mr. Raynsford:
I beg to move, That this House doth agree with the Lords in the said amendment.
Mr. Deputy Speaker:
With this, it will be convenient to take Lords amendments Nos. 16 to 18.
Mr. Raynsford:
I beg to move that this House doth agree with the Lords in the said amendment.
The effect of amendment No. 14 is that where a local authority is to enter into a certified contract, it may authorise the contractor to exercise any function that it is permitted to contract out by an order under part II of the Deregulation and Contracting Out Act 1994 for the period for which the contract is to operate, subject to a maximum of 40 years. The 1994 Act at present limits authorisations to 10 years, which would limit the scope for partnerships.
Amendments Nos. 16 and 17 are consequential. The effect is that the new clause will be treated in the same way as clauses 2 to 8. It will come into force at the same time as those clauses, on a day to be appointed by the Secretary of State, and it will apply to any contract entered into after 12 June 1997.
Amendment No. 18, which slightly modifies the title of the Bill, is required to reflect the subject matter of the new clause.
Lords amendment agreed to.
Ms Armstrong:
I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment refines the amendment to section 57 of the Justices of the Peace Act 1997 proposed in clause 9 of the Bill, and further extends the opportunity to enter into partnership contracts. Under section 55(2) of the Act, a magistrates courts committee is able to procure any goods and services that are current expenditure items direct from suppliers, rather than through the paying authority.
Section 55(3) defines current items as items that, if they were procured by the paying authority, would not be capital expenditure. The amendment, by including section 55(3) in the regulation-making power conferred by clause 9, will enable expenditure under certain partnership contracts to be treated as "not capital" for the purpose of allowing magistrates courts committees to procure direct. That will allow the committees to enter into specified contracts direct with suppliers.
Mr. Chope:
I thank the hon. Lady for the way in which she has dealt with this and the other amendments. It is significant that there is a lot more interest in the Bill at this stage, after it has been considered in the other place, than there was when it was initially considered. Perhaps that is an indication of the increasing pressure on the Government as the weeks of this Parliament go by.
Conservative Members are certainly conscious of the fact that we could have debated these issues all night. The lack of knowledge that certain Labour Members have on this subject tempted us to take them through the procedure for the whole night, but we decided on reflection that we would not do so on this occasion. Perhaps future opportunities will arise.
Lords amendment agreed to.
Lords amendments Nos. 16 to 18 agreed to.
Motion made, and Question put forthwith, pursuant to Standing Order No. 119 (9) (European Standing Committees),
"I just do not know whether a court could set aside discharge terms."--[Official Report, House of Lords, 21 October 1997; Vol. 582, c. 629.]
Can the Minister say whether the Bill would prevent a court setting aside discharge terms? That goes to the heart of the matter that I raised. It would help the House to have an assurance on that basis.
Lords amendment: No. 13, in page 5, line 16, leave out from ("section") to ("do") in line 21 and insert
("the circumstances in which there are no relevant discharge terms having effect between the local authority and a person who is a party to the contract include (as well as circumstances in which no such terms have been agreed) circumstances in which the result of a determination or order of a court, made (despite section 6(4)) on an application for judicial review or an audit review, is that such terms")
Lords amendment: No. 15, in page 6, line 22, leave out ("55(7)") and insert ("55(3) or (7)")
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