Local Government Bill

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Mr. Davey: I was not completely convinced by the Minister's reply. On some of the examples that he gave, one can see many ways round the potential problems he suggested that the amendment would give rise to. In relation to the example of a local authority seeking to take anti-crime measures near a station that was being refurbished by the PPP, one could make grants to that local authority under clause 31. I was not convinced by his argument on that matter. He might have more of a point when he says that it might be more efficient for the contracts of PPP contractors to be changed slightly, so that anti-crime measures could be included. I had not considered that point, which seems reasonable.

I am pleased that the Government have again said that there will be no bail-out of the PPP—that the project will live and die on its own merits. However, I was slightly concerned to hear the Minister say the Government have that bail-out power anyway. That was not how the matter was described when we debated that particular legislation. We were given categorical assurances then that there would be no bail-out, just as we were given categorical assurances about many other aspects of the PPP, which have not been valid. I think that this short debate—I shall bring my remarks to a close shortly—has been worth it, because the Minister has yet again said on the record that there will be no bail-out of the PPP. For Londoners, I hope that he is right, and that the project will work in the way that the Minister has suggested.

It is in no one's interest for the tube to grind to a halt. As we have seen recently during the fire strike and after the accident on the Central line, the closing of many stations causes huge inconvenience. However, many of us remain to be convinced that the model that the Government have chosen for London Underground will work in the way that they describe. Despite the Government's assurances, I still fear that at a future date the Minister or his successors will have to come to the House to justify using national taxpayers' money to bail out their failed project. However, that debate is for another day, and therefore I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Swayne: Subsection (2) places a condition on the Mayor to pass on funds to a functional body. I notice that under subsection (5) the Mayor enjoys that power even when he is not placed under such a

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condition. In his earlier response, the Minister said that the purpose of the clause is to adapt slightly the powers granted under clause 31, and I wish to probe him on that. Given that under clause 31 a Minister may make a grant to whomever he determines—a huge, sweeping power—he can therefore hand the money directly to a functional body, should he so wish. Why is it therefore necessary to have clause 33, and subsection (2) in particular, which enables a condition to be placed on the Mayor, so that the Mayor has to pass the money on to a functional body? Under the powers granted under clause 31, the Minister can give the money straight to the functional body himself.

9.15 am

Mr. Clifton-Brown: My hon. Friend the Member for New Forest, West makes an interesting point. I had not spotted the difference of emphasis between subsections (2) and subsection (5), which the Minister might like to explain. It appears that subsection (5) weakens the requirement in subsection (2). Subsection (5) says that the Mayor may transfer the grant to a functional body. Presumably it means that he may not also. The Minister needs to explain that. I would also be grateful if he could explain the need for the clause. Why not simply include a clause that says that the Minister may pay a grant either to the Mayor or to a functional body? If the Minister paid the grant direct to the functional body there would be no need for all this complication.

I should also be glad of explanation of subsection (6). Who is the transferee and who is the transferor? It is not entirely clear. The Secretary of State transfers the grant to the Mayor, who transfers it to the functional body. Which in that chain is the transferee and which the transferor? I suspect that the Minister will say that it is all about devolution—about giving the Mayor more devolved powers. The Minister shakes his head, so he must have another explanation. I shall be happy to listen to it.

I am concerned about clause 31(1), referred to by my hon. Friend, which states:

    ''A Minister of the Crown may pay a grant to a local authority towards expenditure incurred or to be incurred by it.''

That is a wide power. I am still concerned about how, under these clauses, we will track the money, both to ensure that we obtain best value and to ensure that fraud or misappropriation is not involved. In giving away the powers concerning where money is to be spent, the Minister needs to assure the Committee in strong terms how it will be properly tracked and monitored.

Mr. Raynsford: Clause 33 slightly adapts the grant-making power in clause 31 for the purposes of the Greater London Authority. That is its purpose. It is not a special devolution arrangement; it is to take account of the special relationship of the authority with its four functional bodies—Transport for London, the Metropolitan Police Authority, the London Fire and Emergency Planning Authority and the London Development Agency. It is a unique relationship in local government and its unique circumstances necessitate the clause.

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The grant power will operate in basically the same way as for other authorities, but any grants intended for the functional bodies, because of the structure of the GLA, have to be paid first to the Mayor and then, with the provisos in subsections (2) and (4), transferred to the individual functional body.

Clause 33(5) is separate. It allows Ministers also to pay grants to the Mayor that are not earmarked for any individual body. That gives the Mayor discretion as to how to use the grants. Those are the two separate functions that apply in the case of the GLA that require a special formulation. There is nothing sinister about it; it is a reflection of the structure of the GLA, of which the hon. Member for Cotswold would probably have a deeper understanding if he had suffered for three months, along with the hon. Member for Kingston and Surbiton, on the Greater London Authority Bill Committee. I hope that hon. Members will accept that the purpose of the clause is to ensure proper measures to scrutinise expenditure and to counter fraud. The arrangement whereby all grants have to go via the Mayor with a central financial control is clearly advantageous in that respect.

Question put and agreed to.

Clause 33 ordered to stand part of the Bill.

Clause 34


Question proposed, That the clause stand part of the Bill.

Mr. Clifton-Brown: I welcome the Under-Secretary of State for Wales to the Committee. If he has come to deal with the two lines of clause 34, he has had an interrupted morning. Perhaps we shall hear more from him later. I could not let this little clause, two lines long as it is, go without comment. It states:

    ''In the application of this Chapter to local authorities in Wales, references to a Minister of the Crown include the National Assembly for Wales.''

I did not say what I said just now to the Minister for Local Government and the Regions without purpose. I led him into a trap, into which he fell beautifully. That has now put his hon. Friend the Under-Secretary into the position of needing to do some explaining. Whereas the Government are keeping control of devolution to London and the regions—the Planning and Compulsory Purchase Bill is hedged with huge controls over the regions—in Wales, by contrast, the Government are prepared to devolve everything, including financial powers.

I am sure that the Under-Secretary will confirm that exactly what the clause means is that the money will be given to the Welsh Assembly. Under clause 31(1), which I have already read out, it may disburse the money to any of its local authorities. It is entirely up to the Welsh Assembly how that money is disbursed. If my interpretation is correct that we have a fully devolved power for financial purposes, my next question for the Under-Secretary is: how does the Westminster Parliament, which gives the block grant

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to Wales, retain control over that money? How does Parliament track that best value is being achieved from the spending of that money? How does it track that the money is not being defrauded or misappropriated?

We must ask those serious questions of those devolved functions, because while Westminster looks after the taxpayers' money that is raised throughout the United Kingdom, we have a responsibility to ensure that it is spent and disbursed properly. I look forward with interest, as always, to a courteous explanation from the Under-Secretary.

The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): May I say at the outset, Mr. Conway, on my first appearance to speak in Committee, that I am delighted to serve under your chairmanship? I also express my deepest appreciation to you and your fellow Chairman, Mr. Griffiths, and to all colleagues on the Committee, for the understanding that has been shown for my absences. In the past few weeks I have served on three Bill Committees, including the Planning and Compulsory Purchase Bill Committee, like the hon. Member for Cotswold. I am grateful that my colleagues appreciate that.

The grant power in clause 31 will operate in Wales, whereas clause 34 provides that the grants will be awarded at the discretion of the National Assembly for Wales. As is probably made clear in clause 31(5), the Treasury's consent is required to award the grants in England. That consent will not be required in Wales because it is a matter for the National Assembly under the devolved settlement. The Assembly intends to put in place controls to ensure that that power is exercised prudently and properly.

I fear that we might rehear some of the arguments that we had in the Planning and Compulsory Purchase Bill Committee with the hon. Gentleman. God has made it my mission in life to explain to the Tories what devolution means. It means that this Parliament has created a system of devolved government. That applies to Wales, and, under the Government of Wales Act 1998, a large number of responsibilities that the Secretary of State for Wales, in partnership with other Ministers, previously exercised are now the responsibility of the National Assembly. Clause 34 means that, under the devolution settlement, the Assembly has the power and the right already given to it by this Parliament to exercise those responsibilities. I constantly have to explain that to the hon. Member for Cotswold. I do not know how else to do it, other than to keep reiterating that that is what Parliament has decided.

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