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Session 2002 - 03
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Standing Committee Debates
Local Government Bill

Local Government Bill

Standing Committee A

Tuesday 4 February 2003


[Mr. Derek Conway in the Chair]

Local Government Bill

8.55 am

The Chairman: Good morning, everyone, and welcome to another exciting sitting. We move on with great courage to clause 32 and amendment No. 85.

Clause 32

Ancillary powers

Mr. Edward Davey (Kingston and Surbiton): I beg to move amendment No. 85, in

    clause 32, page 14, line 21, leave out 'require' and insert 'ask'.

It is a real pleasure, Mr. Conway, to see you back in your place. Like us, you are full of enthusiasm.

Subsection (2) states:

    ''A Minister of the Crown may in connection with that section''—

that is clause 31, which is about the power to pay grant—

    ''require a local authority to formulate policies in relation to any matter.''

The amendment is about democracy; it is about whether or not local authorities should be free to spend the moneys that they receive from local and national taxpayers.

The Government tell us—we shall doubtless debate the matter in detail on the Floor of the House—that they want to reduce ring-fencing. They want to ensure that local authorities receive their grants and revenue from the local taxpayer and use the money as flexibly as possible. The reason for the amendment is that I believe that the Government have made a drafting error. I think that they meant to ''ask'' not ''require'' local authorities, because the latter goes against the Government's rhetoric and their policies. It is bizarre that the Government should ''require'' local authorities to formulate policies in exactly the manner that the Deputy Prime Minister and his colleagues want; I would have expected a Government who talk about local democracy to do the reverse of that.

I expect an early treat today. I expect the Minister to say that he believes in local democracy. I hope that he will say, ''The hon. Gentleman is right; we meant 'ask'. We do not require local government to do exactly what we say in every aspect of their policies, and we will accept amendment No. 85.''

Mr. Desmond Swayne (New Forest, West): There is indeed something sinister about the wording of subsection (2). I wonder whether the Minister would explain the distinction—if there is one—between requiring a local authority to formulate policies on a particular matter and determining what those policies are. I hope that the Minister will assure us that there is

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such a distinction. Otherwise, there is little point in placing a duty on the local authority to formulate policy if the Minister is going to do it himself.

Mr. Geoffrey Clifton-Brown (Cotswold): Good morning, Mr. Conway. I apologise for being a minute or two late. Perhaps we should ask the House of Commons cleaners not to occupy the lifts at 6 minutes to 9 in the morning. I may not have the running power of Seb Coe, but I assure the Committee that it took me approximately a minute and a half to get here from my office on the fourth floor of Portcullis House.

The hon. Member for Kingston and Surbiton (Mr. Davey) makes a good point with amendment No. 85. The ancillary power contained in subsection (2) could be particularly onerous. The Minister should explain it in context. Although the Government are always giving local authorities new duties, they do not often finance them—and even when they do finance them, they do not finance them in full. Added to the duties that the Government, through the Secretary of State, impose on local authorities, are the new duties that will be imposed by whatever type of regional bodies—God forbid—that emerge. There are huge powers under the Planning and Compulsory Purchase Bill for the regional planning body to require local authorities to carry out a vast range of duties, for most of which they will not be reimbursed. This is a sensible amendment, as the clause as drafted could be very onerous. It will also be difficult for the Audit Commission or the Public Accounts Committee to scrutinise properly what is being requested of each local authority. The Minister will be more familiar than I with the fact that it is not just financial transactions that the Audit Commission, the Public Accounts Committee and the National Audit Office scrutinise; they also scrutinise best value for money. They have a role in scrutinising whether Government instructions to local authorities are reasonable. If the Minister is reasonable, he will accept the amendment from the hon. Member for Kingston and Surbiton.

The Minister for Local Government and the Regions (Mr. Nick Raynsford): The Minister is reasonable, but he will not accept the amendment from the hon. Member for Kingston and Surbiton. I was disappointed by the hon. Gentleman. We heard the usual rhetoric from him and from the Liberal Democrats about democracy and devolution and all the rest. He actually accused us of making a drafting error when moving his amendment. I must say to him that the drafting error was made in his amendment. Why have the Liberal Democrats been so timid? Why are the Tories behind the times? Of course, we know about the hon. Member for Cotswold and his encounter with the cleaners. In both cases, the Opposition have not recognised that there was a good intention behind this subsection: to ensure that we have the necessary information when we are making grants to a local authority.

Mr. Clifton-Brown: Does the Minister accept that I had a good intention to be here on time?

Mr. Raynsford: I know that the hon. Member for Cotswold always has a good intention; it is simply his misfortune to have joined an outfit that is constantly

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accident-prone. The purpose of subsection (2) is to assist in the provision of information to enable the Government to pay grants to local authorities. On reflection, we believe that there is no need for that subsection at all, and on Report I intend to table an amendment to delete it entirely. I hope that the Committee will approve that and understand why I ask the hon. Member for Kingston and Surbiton to withdraw his amendment.

Mr. Davey: I had expected the Minister, because he is such a reasonable chap, to give us an early victory; I did not, however, anticipate such a huge retreat. [Interruption.] The hon. Member for Scarborough and Whitby (Lawrie Quinn) asks whether it is the Minister's birthday. It is neither his birthday, we had that last week, nor is it mine. The Minister has made a very wise and sensible decision, and he will gain plaudits from both sides of the Committee for it, and from local government throughout the country. It augurs well for the morning's proceedings. Therefore I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 ordered to stand part of the Bill.

Clause 33

Application to Greater London Authority

Mr. Davey: I beg to move amendment No. 86, in

    clause 33, page 15, line 3, at end insert—

    ''(6A) No grant may be paid under this section in relation to any agreement under the Public-Private Partnership for London Underground.''.

I doubt that we will be quite so fortunate on amendment No. 86. The Minister may even accuse me of being slightly mischievous in moving it. We tabled the amendment because, under clause 33, the GLA will be able to receive grants at the will of Ministers without any check by Parliament. We debated parliamentary scrutiny of expenditure, and the Minister undertook to read my paper on the issue.

I do not want to retread that ground, but it is vital that we scrutinise clause 33 to consider what moneys are to be paid to the GLA at the whim of Ministers. We are approaching the matter in a slightly different way because the obvious grants that could be paid to London Underground without scrutiny are grants to support the public-private partnership. That takes me and the Minister down a nostalgic route because I think it was in this Committee Room that we debated, for more than three months, the Greater London Authority Bill, which set up the framework for the public-private partnership for London Underground. I shall not rehearse the many and long arguments that were advanced in that Committee, except to say that we did not agree with the Government's approach. We said that the Government's financing models were wrong, that they would not manage to sign the contract for many years—we were proved right on that—and that they would end up having to put a lot of taxpayers' subsidy into the system because it was such an inefficient way of raising and allocating finance.

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Hon. Members may think me cynical, but my fear is that clause 33 is the bail-out clause for the public-private partnership, which will enable the Government to lever in money to rescue their failed London Underground project. The Committee that debated the Greater London Authority Bill in huge detail over three or four months, during which my hon. Friend the Member for Southwark, North and Bermondsey (Simon Hughes) entertained us with the details of public-private partnership, did not see any legislation that would allow a bail-out of PPP. That was controlled in the mother legislation. This clause has been sneaked into a Bill that is completely unrelated to PPP and the powers of the Greater London Authority and would allow the bail-out that we predicted would take place. Therefore, before the Committee assents to this extremely large clause, we need some assurances. If the Minister can give us an assurance that the Government have absolutely no intention of using the powers in clause 33 to bail out the London Underground PPP, we may be able to achieve some consensus, but if the Minister is unable to give us that assurance, we may have to press the amendment to a vote.

Mr. Raynsford: Clause 33 slightly adapts the grant-making power in clause 31 for the purpose of the GLA. It takes account of the special relationship of the authority with its four functional bodies and acknowledges the central role of the Mayor in the GLA structure.

Amendment No. 86 would prevent the new power from being used to support the London Underground PPP. As the hon. Member for Kingston and Surbiton will recall from his time serving on the Committee that considered the Greater London Authority Bill, we already have the power under section 101 of the Greater London Authority Act 1999 to provide financial support for the tube when it transfers to Transport for London ownership, so we would not expect to need to use the new power for that purpose, and we certainly have no intention of bailing out the PPP, which will achieve substantial investment for improving the much-neglected infrastructure of the London underground. However, I do not intend to debate that now.

We want to retain some discretion in the matter because we might conceivably need the flexibility that the new power will allow. The amendment could have unforeseen and unfortunate consequences. For example, the Government might use the new power to support a London borough's initiative to reduce crime in the vicinity of its local underground station. Measures could well include the installation of CCTV cameras on London Underground property itself. The most practical option might be for the PPP contractors to do the work under a variation to their contracts, in return for some share of the grant. The amendment would make that impossible, which is why we do not want to accept it, although I can give the hon. Gentleman the assurance that he seeks that there is no intention to use the provision as a main source of funding for the PPP, for which it is not necessary in any case, as the PPP is a financial arrangement in its

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own right, with its own grant-making powers available to the Government.

The arrangements in the clause do not disadvantage the bodies at all. It would not be possible for the Mayor to divert resources in a way that would be contrary to the intentions of Ministers, and I hope that the hon. Gentleman will recognise the good sense of retaining the Bill as currently drafted, which is designed to cope with the special and different circumstances of the GLA. I hope that he will withdraw his amendment.


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