Civil Defence (Grant) Bill

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Mr. Collins: My hon. Friend will have noticed that the concerns that he has expressed, which are addressed in the amendment, are reinforced by proposed new section 3B(4), which states:

    ''An authority shall repay to the designated Minister any sum which . . . (b) exceeds the amount to which the authority is entitled under that section for that year (whether or not by virtue of a varying determination''—

a determination of the sort that my hon. Friend refers to. It is precisely for that reason that it would help if the Minister gave us an assurance that he will seek to use the power that the amendment would delete—the power to vary the determination by a further determination—only in exceptional circumstances. It would also help to have some idea of what those circumstances might be.

Mr. Luff: That is exactly the point. If the Minister can give a clear indication of how he expects the powers to be used, my county council and I might be reassured. The nature and scope of the powers is considerable. I know that the total sums of money are small in the context of a county council's budget, but we all agreed on Second Reading that civil defence is important. If the moneys available to county councils for such purposes are to be controlled in such an arbitrary way, we need to know what criteria the Minister will use when exercising those powers.

Mr. Andrew Miller (Ellesmere Port and Neston): The hon. Gentleman would agree that one of the problems with county council expenditure is the rigidity of the standard spending assessment formula. Does not clause 1 have the opposite effect by creating flexibility to allow the Minister to respond to positive representations from bodies such as the hon. Gentleman's county council in the event of unforeseen circumstances arising from acts of God or acts by a foreign power?

Mr. Luff: A reassurance to that effect from the Minister would be very welcome. However, it is the emphasis on repayment of overpayments to county councils, to which my hon. Friend the Member for Westmorland and Lonsdale referred earlier, that makes one suspicious—it moves in the other direction. My county council tells me that, as a final degree of uncertainty, the grant payable to any authority could arbitrarily be reduced to zero from the original determination. That could be announced at any time, even after the grant period has started, leaving local authorities without any resource to carry out this important function. That goes to the heart of our concerns about the Bill. I hope that the Minister will be very specific in his response and tell us exactly how the powers will be used.

10.45 am

Mr. Leslie: Both amendments essentially relate to the flexibility issues in the Bill. It is useful to have the opportunity to address both of the points raised. First, on amendment No. 1, although I understood the points made by the hon. Member for Winchester, the Government believe that Ministers need the ability to treat different authorities in different ways, because without that power, all authorities would have to be treated identically, regardless of type. For example, the characteristics of fire and civil defence authorities are different from those of metropolitan authorities. Taking my own constituency as an example, Bradford metropolitan district council receives a civil defence grant, but so does the West Yorkshire fire and civil defence authority.

Without the ability to use different formulas for different types of authority, we could end up with overlapping authority activities receiving twice the amount of grant, and other areas that do not have fire and civil defence authorities, for example, not receiving that funding. The provision is necessary to help overcome some of the problems of overlapping and to ensure that the formulas can be different to reflect the difference between London boroughs and county authorities, for example.

Mr. Oaten: I am grateful to the Minister, but his explanation does not help me. I thought that that was what a formula did in the first place—that it was set in order to take account of those different types of authorities.

Mr. Leslie: I am advised that a series of different formulas are necessary to apply to different sorts of authority. That is why the provision is necessary. Otherwise, there would be a single formula, which could be challenged in so far as it would differ from authority to authority, regardless of the type.

Mr. Luff: Are there precedents elsewhere in local government for different formulas being applied to different authorities performing the same basic function?

Mr. Leslie: Yes. As I said on Second Reading, sections 46 and 47 of the Police Act 1996 contained similar provisions, although they have not been precisely replicated in the Bill because the circumstances are different. This is standard practice for most cash-limited grant arrangements in local government finance and other associated areas.

It is also important to understand that unforeseen or exceptional circumstances might arise, and the amendment would make increases or reductions in grants much more difficult. The provision could possibly be needed to address the problem of the different characteristics of authorities, such as coastal proximity, if, in the future, we need to address particular eventualities.

The provision seeks to make legal only the activities under the formula that previously operated. The amendment would make a return to that system impossible. We should regard flexibility as a virtue, rather than an evil aspect of legislation. Discretionary powers are necessary because we cannot always predict what will happen, particularly in this area.

Mr. Collins: The Minister has begun to deal with the point that I wanted to put to him, and has said something reassuring, but I should like further clarification. He said that the wording that the amendment would remove from the Bill is intended to ensure a return to the way the system operated before the famous legal case that created the need for the Bill. Does he envisage that, under the Bill, the Government would behave, with respect to the relationship between local authorities and the distinctions that are made between them, broadly as they did before the legal case of 18 months or two years ago? Do they want to make distinctions between local authorities in addition to, or different from, those made in the recent past?

Mr. Leslie: The Bill is intended to make legal a practice that previously occurred. The Government have yet to decide whether precisely the same formula that existed before the challenge would be applied. I understand that those matters were tackled in the emergency planning review that we discussed on Second Reading. Certainly, given the fact that the new financial year is relatively close, I anticipate no significant changes to the formula that was used, although we reserve our right to examine it, particularly in the light of recent events.

Geraint Davies (Croydon, Central): Is the idea to apply different formulae appropriately to different authorities, so that there is both budgetary certainty for those spending the money and ministerial discretion in the light of the inherent uncertainty surrounding planning for emergencies? That would mean that Worcester or other local authorities could have an idea of the money coming in, rather than not knowing whether they are coming or going.

Mr. Leslie: That is broadly correct. The Government need sufficient discretion to be able to respond to unforeseen situations. We may also need to be able to consider enabling some authorities to take on a civil defence role on behalf of others, in a joint agreement, as already happens in some cases. With reference to points that were made about amendment No. 5, questions arise about how the Government might make payments in advance of a financial year. Special projects could also be considered.

Mr. Luff: I appreciate the Minister's helpful remarks. He has told the Committee two things. First, he has clearly implied that, in the coming financial year, the review of grant payable is likely to be upwards only; there are unlikely to be significant cuts in grants to individual authorities. Secondly, he has suggested that the variation of determination by a further determination would, again, be upwards only, in an attempt to help an authority with a civil emergency. Worcestershire county council was concerned that the powers might be used for cuts. I think that the Minister has told us that that is unlikely.

Mr. Leslie: I suspect that I must disabuse the hon. Gentleman as to the precise wording of my comments. I was referring to the ability to institute a formula allocation. The amounts for the next financial year are yet to be determined and we are in negotiations in the usual way with the Treasury. The Government need sufficient flexibility in our allocation of civil defence grant to ensure that we continue the good practice and solid financial planning that existed previously.

Amendment No. 5 would make certain existing practices very difficult, particularly if the grant were only to be paid annually in the relevant financial year. For example, the current practice is that 90 per cent. of the grant is paid in each financial year—in September, I think. The remaining 10 per cent. is normally paid in the subsequent financial year, following receipt of audited accounts that specify that the money has been spent for the purposes intended. That is standard National Audit Office practice, and is best practice in terms of financial arrangements. The amendment would make that difficult to fit in.

Mr. Collins: I am grateful to the Minister for giving way again. He is genuinely helping the Committee, which we all appreciate.

I want to remind the Minister of some of his remarks on Second Reading. He said that the Bill would benefit local authorities because they

    ''need to know how much the Government are going to make available in support of emergency planning activities for each financial year, and need a clear indication of what will be available provisionally for future years. They need to know how the total is going to be allocated among them so that they can make their own calculation of their share of the cake.''—[Official Report, 28 November 2001; Vol. 375, c. 1013.]

Thus the Minister was making a powerful case in favour of local authorities knowing what their grant was likely to be as far in advance and in as much detail as possible.

I want to press the Minister, therefore, on the time scale. He referred on several occasions to the fact that the grant allocation under the Bill for the next financial year could not be determined. It is nearly Christmas, and the next financial year begins only three or four months into the new year. There is some uncertainty, so will he be clearer on when local authorities will know how much they will receive for the next financial year, and whether they will receive rather more notice of the likely sums in future?

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