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Session 2002 - 03
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Delegated Legislation Committee Debates

Draft Contracting Out (Functions in Relation to the Management of Crown Lands) Order 2003

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Fifth Standing Committee
on Delegated Legislation

Tuesday 1 July 2003

[Miss Anne Begg in the Chair]

Draft Contracting Out (Functions in
relation to the Management of Crown
Lands) Order 2003

2.30 pm

The Minister for the Arts (Estelle Morris): I beg to move,

    That the Committee has considered the draft Contracting Out (Functions in Relation to the Management of Crown Lands) Order 2003.

I welcome you to the Chair, Miss Begg; it is a pleasure to work with you.

The draft order is made under section 69 of the Deregulation and Contracting Out Act 1994. The responsibilities being contracted out in the order are those of my right hon. Friend the Secretary of State for Culture, Media and Sport for the management of the historic royal palaces and royal parks under the Crown Lands Act 1851.

The order allows my right hon. Friend to authorise other persons to exercise her statutory responsibilities for the management of Hampton Court gardens, green, and road, and Hampton Court park and Kensington gardens. The order extends the authorisation, approved by the House, in the Contracting Out (Functions in relation to the Management of Crown Lands) Order 1998. Under that order my right hon. Friend contracted with the Historic Royal Palaces trust to manage the historic royal palaces on her behalf.

It is important that I assure the Committee that the order introduces no proposal to contract out further responsibilities for the historic royal palaces. Its purpose is to correct an error made in the original order that has only recently come to light.

The 1998 order authorised my right hon. Friend to contract out her responsibilities under section 21 of the Crown Lands Act 1851. The intention was to authorise her to contract out her responsibilities for the historic royal palaces; and, in the case of Hampton Court, for the gardens and park which form part of the Hampton Court palace estate and, in the case of Kensington gardens, those small parts of the gardens that are managed as part of the Kensington palace state apartments.

Unfortunately, my right hon. Friend's powers to manage the gardens and park at Hampton Court and Kensington palace gardens are contained in section 22 of the Crown Lands Act 1851. The 1998 order should therefore have made reference to sections 21 and 22 of the Crown Lands Act 1851. It is that error that the draft order seeks to make right.

Michael Fabricant (Lichfield): Does the Minister know whether those gardens are open to the public? If

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they are, will people notice a marked improvement in their maintenance?

Estelle Morris: Strangely, the body now running the parks has been acting as if it had responsibility anyway. We trust that we were not acting illegally; the Department certainly had a contract with it to manage the whole of the estate. I would be quite happy to go over the matter if the hon. Gentleman would like me to do so, but there has been a marked improvement in investment in the parks and the quality of facilities made available to the public. I reiterate that the order seeks merely to regularise and make legal a contract that has been in place for the past few years.

In the event, the contract that we entered into with the Historic Royal Palaces trust on 1 April 1998 allowed the charity to manage all the historic unoccupied royal palaces, including the gardens and park that are the subject of the order before the Committee. Indeed, to answer the hon. Gentleman, the arrangements have worked well. The Department has no desire to take back the running of the parks; indeed, under the present arrangements, the historic royal palaces and the grounds have been managed very well.

I am happy to tell the Committee that the arrangements entered into in 1998 have worked very well and our confidence in passing to the Historic Royal Palaces trust the day-to-day management and presentation of the unoccupied royal palaces has been fully justified. The trust has maintained, managed and presented the historic royal palaces to a high standard. Indeed, since 1998, it has invested £41 million in the conservation of the palaces and their contents, which are better conserved than ever.

I confidently assure the Committee that the contracting out of the management of the historic royal palaces has been and continues to be a success. So far as I am aware, no body of opinion wishes that the 1998 decision had been other than it was. The order will merely correct an administrative error made in 1998.

Mr. Adrian Flook (Taunton): Are there any liabilities from the period when the organisation should have passed to different management-contracted legal bodies that might come back to hit the ownership of the contracted-out element?

Estelle Morris: The lawyers will tell me if I am wrong, but I believe that the answer is no. There were two parts to the arrangement. The first gave the Secretary of State the power to contract out the management, but the manner in which that was achieved was subject to a contract between the Department for Culture, Media and Sport and the body undertaking the management. I understand that that contract was proper and that no liabilities are likely to come back.

Mr. Fabricant: I am grateful to the right hon. Lady for giving way a second time. Would not the contract have been ultra vires because it could not be replaced by virtue of the fact that the powers did not exist until and unless we passed them today? Furthermore, the order is not retrospective, so even if we pass it, a contract that is ultra vires will remain so.

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Estelle Morris: The past is past. The arrangements that existed between the Department and the management worked well by virtue of the contract. The error should have been spotted in 1998, and I apologise on the Department's behalf for the fact that it was not. However, nobody wants to rerun the past five years. Historic Royal Palaces has been well run and we have been happy with the contract. Both parties to the contract want to regularise the position under law and to continue as they have been doing. That is our wish and I shall be happy to clarify any point that the Committee raises.

2.37 pm

Mr. Malcolm Moss (North-East Cambridgeshire): It is a pleasure to serve under your chairmanship for the first time, Miss Begg. I also take the opportunity to welcome the Minister to her new portfolio—I believe that this is her first official parliamentary session apart from Question Time yesterday.

The Minister said that the problem came to light recently. Can she clarify how recently ''recently'' is? Five years is a long time, particularly when one considers the excellent point of my hon. Friend the Member for Lichfield (Michael Fabricant) that for all that time the contract has probably been illegal because DCMS did not have the legal right to offer it in the first place.

Michael Fabricant: May I correct my hon. Friend in the nicest possible way? The contract would have been not illegal but ultra vires or void. It would not have been illegal; it would not have existed.

Mr. Moss: I am most grateful to my hon. Friend. He is obviously correct.

We shall not stand in the way of rectifying the error for which the Minister has rightly apologised. It is not the first error that has come to light since the DCMS was formed, although that might be because, as an amalgamation of various interests and of other Departments, it took time to bed in and to focus on details such as this one, which seems to have gone unnoticed to start with.

With regard to the success or otherwise of the contracting out of the functions in relation to the management of the royal palaces, the Minister observed that it had been successful and that nobody wanted to make any fundamental change. I would endorse that in the sense that the contracting out has been a success and the management team has done an excellent job. However, it is a bit like the Post Office—part privatised and part public. It does not have the freedom that a private company would have to go out and raise capital. The Department keeps a tight rein on it and tells it that it must submit the correct accounts and keep within its budget. Of course, it derives a handsome income from visitors to its palaces, but there is not enough to plough back into the heritage factor and the built environment. As we know, many palaces require huge sums to maintain their fabric and to keep them in a state that will continue to attract tourists.

The Minister does not want to revisit the contracting-out, but I put it to her that there will be

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a question mark over the work of the management team if the Government are not prepared to consider ways of making available capital for renovation projects and building. The team simply cannot maintain the fabric of its palaces out of its income. As it is part privatised, it cannot borrow money or use it in the way that a private company might.

That is a real problem, which must be addressed. Obviously, the Minister cannot do so today, because she is new to her brief and was probably not anticipating my question. I simply flag it up as something in which she might want to take an interest. We all want the fabric of these famous palaces to be maintained and to be renovated according to general architectural principles. That requires huge sums, however, and it is extremely difficult to do gather sufficient money from revenue income to initiate a medium-term programme. The Minister may be able to address the issue this afternoon. Otherwise, she may want to write to me.

Given the earlier oversight, the order is long overdue, and we shall not oppose it.

2.41 pm

Mr. Adrian Sanders (Torbay): I welcome you to the Chair, Miss Begg. This is the second time in as many weeks that I have been under your chairmanship.

I have no objections to the order, but one question arises. One advantage of contracting out is that new sources of funding, such as lottery funding, become available. It may be that no lottery funding has been forthcoming as regards the management services that we are discussing. However, the management team would not have been eligible for any such funding that it secured on the basis that services had been contracted out to it, because they had, in fact, not been. I do not want to put a spanner in the works, but I seek reassurance that no lottery funding has been forthcoming and that any funding that has been forthcoming is not connected with the services that we are now contracting out.

2.42 pm


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