House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Fifth Report

12 The draft Natural Environment and Rural Communities Bill

110. The Bill document is in three parts:

A policy statement putting the draft Bill in context, explaining the policy background to its provisions and, in Part Three, inviting views on some possible further provisions

The text of the draft Bill itself, with explanatory notes

A draft Regulatory Impact Assessment which assesses the impact of measures in the draft Bill and also of those proposed in Part Three of the policy statement.

111. The Bill is divided into five Parts:

Chapter 1 of Part 1 reshapes the organisational arrangements for delivering natural environment and rural affairs policy, establishing the Integrated Agency
Chapter 2 of Part 1 establishes the Commission for Rural Communities
Part 2 of the Bill reconstitutes the Joint Nature Conservation Committee to give it a UK-wide remit
Part 3 is entitled 'Flexible administrative arrangements':

Chapter 1 of Part 3 allows for agreements for the exercise of functions of Ministers and certain other bodies by other bodies.

Chapter 2 of Part 3 will enable Ministers, subject to Parliament's approval of necessary secondary legislation, to abolish existing levy bodies or to create new bodies to help develop and promote agricultural and related industries

Chapter 3 provides for financial assistance by the Secretary of State

Part 4 of the Bill renames and reconstitutes the Inland Waterways Amenity Advisory Council
Part 5 deals with miscellaneous and supplementary issues such as granting powers to make further provision by way of both affirmative and negative resolution orders. This part also covers amendments to existing legislation and extent.

Scope of our pre-legislative scrutiny

112. Given our interest in the Rural Strategy, and even more importantly the tight timetable, our pre-legislative scrutiny focused on the text of the draft Bill itself, and especially on those aspects most directly concerned with taking forward the Rural Strategy. We have not been able to devote time to the examination of some other issues raised in the text of the draft Bill, e.g. those relating to the Joint Nature Conservancy Committee and the Inland Waterways Amenity Advisory Council. Furthermore, given the pressure of time, we decided not to examine the provisions contained in Part Three of the policy statement which may be included in the final Bill when it is presented to Parliament. However, several submissions did comment on these provisions and we expect Defra to take them into account in reaching decisions on whether, and in what way, these proposals are taken forward.[195]

113. In this chapter of our report, therefore, we examine and comment on each of the major provisions of the draft Bill about which we received evidence. Those are the two new bodies (Part 1) and flexible delivery arrangements, including the levy bodies (Part 3, Chapter 1). We have also examined the other principal order-making powers in the draft Bill and comment on them briefly.

114. Following standard practice in pre-legislative scrutiny, we have also examined the Regulatory Impact Assessment (RIA) that accompanies the draft Bill. The information on costs it contains, together with that included in Defra's supplementary evidence, has also informed earlier sections of this report.[196]

Part 1, Chapter 1: the Integrated Agency

115. Clauses 1-16 and Schedule 1 of the draft Bill establish the 'Integrated Agency' (IA), which will take over the functions of English Nature, the Rural Development Service and elements of the Countryside Agency as "a more powerful champion of our environment". Defra states that the IA will be "a very powerful and independent organisation … [and] more than the sum of its parts". The 'Integrated Agency' is a working title; the Government hopes that the name of the organisation will be included in the final Bill when it is presented to Parliament.[197]

Clause 2: purposes

116. Clause 2 of the Bill sets out the Agency's general purpose as being "to ensure that the natural environment is conserved, enhanced and managed for the benefit of present and future generations, thereby contributing to sustainable development." Clause 2(2) states that this purpose includes:

(a) promoting nature conservation and protecting biodiversity,

(b) conserving and enhancing the English landscape,

understanding and enjoyment of nature,

(d) promoting access to the countryside and open spaces and encouraging

open-air recreation, and

(e) contributing in other ways to social and economic well-being through

management of the natural environment.

117. There was broad agreement in the evidence on the wording of Clause 2(1), but strong and differing views were expressed on Clause 2(2). They reflected some of the arguments we heard during evidence on the Strategy itself.[198] The CPRE, RSPB, Wildlife Trusts and Council for National Parks (CNP) all wanted the "environmental" purposes to take precedence over the others in the event of conflict - thus applying the 'Sandford' principle, which is incorporated in legislation relating to the National Parks.[199] Witnesses supporting this approach emphasized that it would be a "last resort" option in the event of irreconcilable conflict between purposes.[200]

118. On the other hand, the Ramblers' Association, the British Mountaineering Council and others argued strongly against nature conservation being given precedence.[201] English Nature argued that there was no need for any kind of hierarchy among the purposes set out in the Bill: "We acknowledge that there may occasionally be conflict between some of these purposes, [but] we do not believe it would be helpful to specifically prioritise them in statute". It added that there were not that many conflicts in practice between conservation and recreation, and they could be sorted out on an ad hoc basis.[202] The CPRE, RSPB and others agreed that there was "little risk" of conflict", but noted "this risk exists".[203]

119. The Environment Agency, also noting that conflict between the purposes might be rare, felt that the Integrated Agency, rather than make choices between them, should be able to take them forward together, in the way that the three bodies coming together to form the IA already did. The Environment Agency argued that the purpose of conserving the natural environment in Clause 2(1) "sits above the more specific purposes and so should determine how [the IA] takes forward the more detailed roles and considers the interactions between them". Nevertheless, in the "very exceptional circumstances" where the IA needed to make a judgement, the Sandford principle would provide a model which the IA could use "to help it achieve its overall role of environmental protection".[204]

120. The Minister stated that "there is always bound to be some conflict between the objectives of the agency" but he did not accept that "conservation should always override everything".[205] Defra further explained:

206

121. We agree that conflicts between the purposes of the Integrated Agency listed in Clause 2(2) of the draft Bill should be rare, and that good management and cooperation between parties should allow them to be overcome. But we recommend that provision be made in the Bill for the 'Sandford principle' to apply in those exceptional circumstances where there is an irreconcilable conflict, to make clear that the aim of conserving and enhancing the natural environment takes precedence over other purposes.

Protecting the landscape

122. Clause 2(2)(b) requires the IA to "conserve and enhance" the English landscape, while Clause 2(2)(a) requires it to "protect" biodiversity. The RSPB, the Wildlife Trusts, the Woodland Trust and CPRE all argued for "protect" to be extended to the landscape as well. CPRE told us that it had received legal advice that 'conserving' was a significantly weaker term than 'protecting'.[207] Defra argued that the general purpose of ensuring that the natural environment is conserved, enhanced and managed "intrinsically includes the protection of the whole natural environment", that "conserve and enhance" is the standard phrase used in legislation since the 1940s and "we are not changing that". However, Defra did undertake to examine CPRE's legal advice on this point.[208]

123. Defra argues, in respect of the reference to landscape in Clause 2(2)(b), that the Integrated Agency's general purpose in Clause 2(1) of ensuring that the natural environment is conserved, enhanced and managed implicitly includes protecting the landscape. But the inclusion of the phrase "protecting biodiversity" in Clause 2(2)(a) could be seen as leaving landscape in an inferior position, as it is not explicitly "protected". We therefore recommend that, for the avoidance of doubt, Clause 2(2)(b) be amended to include reference to the "protection" of the English landscape.

Open-air recreation

124. Clause 2(2)(d) refers to "encouraging open-air recreation". The RSPB and the Wildlife Trusts argued that this should be amended to "quiet recreation", to avoid the IA having a duty to encourage inappropriate forms of recreation that might damage the environment and reduce the ability of others to study, understand and enjoy nature.[209] The Woodland Trust told us that there was a view that "leisure activities are somehow inherently benign and probably most of them are highly sustainable", but some forms of recreation, such as four-by-four use and paintballing were "incompatible with the protection of a natural resource which is irreplaceable". For this reason the Trust felt the definition of "open air recreation" in the draft Bill needed to be examined.[210]

125. Defra argued that no such change was needed, on the grounds that enough statutory safeguards already applied, such as restricting access or controlling such activities. Defra stated that it would be wrong for the Bill to limit the activities the IA could consider appropriate, as the IA's purpose should be "broad, enabling and flexible".[211]

126. We note Defra's argument that the Integrated Agency should have an 'enabling' purpose, but believe this could still be secured while ensuring that the IA does not run the risk of having to promote recreation of a kind that is contrary to the principles of sustainability. We therefore recommend that Clause (2)(2)(d) of the Bill be amended so that the relevant purpose would read: "promoting access to the countryside and open spaces and encouraging quiet open-air recreation.

Social and economic well-being

127. Clause 2(2)(e) refers to "social and economic well-being", reflecting the comment in the policy statement that the IA will "seek to deliver economic and social benefits through its championing of the environment".[212] The NFU argued in that in many cases, the delivery of the IA's environmental purposes "will greatly depend on a high degree of socio-economic well-being", and was therefore concerned that the draft did not give enough prominence to the socio-economic purpose:

213

As noted in paragraph 32 above, the CLA also wanted the IA to have an economic and social remit to underpin its environmental objective.[214]

128. The LGA argued that the promotion of socio-economic well-being should be a function of the IA, and not just an objective to which it might contribute through its work. To achieve this, Clause 2(2)(e) could be revised to read "promoting and contributing to social and economic well-being as it relates to the other general purposes defined for the Agency."[215] Defra argued that although the IA's purpose required it to contribute to social and economic well-being, as an environmental body it could not be expected to deliver "wholly social and economic policies".[216]

129. We agree with Defra that the Integrated Agency is an environmental body. But part of its remit is to deliver socio-economic benefits through the discharging of its environmental role. We therefore recommend that Clause 2(2)(e) be amended so that the IA's purposes include "promoting, and contributing in other ways to, social and economic well-being through management of the natural environment". Any potential conflict between this purpose and the wider role of the Agency as a champion of the natural environment could be resolved through the application of the 'Sandford principle' recommended above.

Sustainable development

130. We have noted in paragraphs 29-31 above the discussion over the Integrated Agency's sustainable development remit. The Country Land and Business Association (CLA) argued that the draft Bill was too weak on the new Agency's role in relation to sustainable development and that the Agency should have a purpose to "promote sustainable development" or "to contribute to the achievement of sustainable development", parallel to that of the RDAs. The CLA believed it was wrong that an environmental body did not have the same purpose regarding sustainable development as the RDAs.[217] The English Regions Network also argued for a stronger reference to sustainable development in the draft Bill.[218] But the Wildlife Trusts argued the IA "should not have a duty to deliver sustainable development per se; it should be up to Government as a whole to reconcile any differences".[219]

131. Defra explained that the IA's purpose requires it to contribute to sustainable development, including social and economic well-being, while generating environmental outcomes. But it could not be expected to "integrate sustainable development considerations on matters which are outside its remit."[220] The Minister argued that the provisions in Clause 2 meant that socio-economic purposes should be pursued in a way that minimises damage to the other objectives, which would thus ensure sustainable development.[221]

132. We note Defra's argument that the Integrated Agency cannot be expected to integrate sustainable development considerations on matters outside its remit. But it does not follow from this that the IA has no role at all in promoting sustainable development. We therefore recommend that Clause 2(1) of the draft Bill be amended so that the general purpose of the IA includes "to promote sustainable development", rather than simply "contributing" to it through its work.

Future environmental change

133. Section 131(2) of the Environmental Protection Act 1990 states that the conservation agencies, including English Nature, should "take appropriate account of actual or possible ecological changes". This requirement has been dropped from the general purposes of the Integrated Agency. English Nature regarded this as "odd" in the current circumstances of "a rapidly-changing global climate and increasing threats from human movement of invasive species." EN suggested that this wording should be replicated in the draft Bill, perhaps with "environmental" replacing "ecological".[222]

134. Defra's argument against replicating this wording was threefold:

Carrying forward this clause would detract from the intention of the Integrated Agency having a clear and unified purpose;

The obligation still applies (via Clause 33 of the draft Bill) to the work of the Integrated Agency through the Joint Nature Conservation Committee, where clearly ecological change is very important from a national and international perspective;

223

135. We are unclear why Defra believes that requiring the Integrated Agency to take appropriate account of actual or possible environmental changes would stop the IA having a unified purpose, or why such wording is so important for the Joint Nature Conservation Committee while being unnecessary for the IA. We agree with English Nature that it is odd, at the least, to drop such wording from the draft Bill, and, in the absence of any very strong arguments from Defra to remove it, recommend that it be included, as parallel wording was in the 1990 Environmental Protection Act in respect of English Nature.

Clause 10: the Integrated Agency and Regional Spatial Strategies

136. Clause 10 of the draft Bill makes provision for the Integrated Agency's advisory and consultancy work. In particular, the Clause allows the Agency to give advice "to any person on any matter relating to its general purpose", at the request of that person, or if the Agency thinks it appropriate to do so, on its own initiative (Clause 10(4)). The CPRE, the RSPB, the Wildlife Trusts and the Woodland Trust, in joint evidence, suggested that this clause could be amended in respect of Regional Spatial Strategies (RSS) established under the Planning and Compulsory Purchase Act 2004. The joint submission argued that the IA needed to be able to engage fully with the development of Regional Spatial Strategies. The IA's advisory function, under Clause 10, could be extended by an amendment giving the IA a statutory duty to contribute to Regional Spatial Strategies, which are prepared by the regional planning body, and a statutory right to be heard at the Examination in Public for any RSS.[224]

137. We have already noted the importance of the relationship between the new arrangements for rural delivery and the planning system. One way of helping ensure this relationship works effectively would be to create a statutory link between the functions of the Integrated Agency and the regional planning bodies. We therefore recommend that the advisory powers of the IA, set out in clause 10, be extended to include a duty to contribute to Regional Spatial Strategies. We note the suggestion in evidence that the Integrated Agency be given a statutory right to be heard at the Examination in Public for any Regional Spatial Strategy. Section 8(2) of the Planning and Compulsory Purchase Act 2004 states that "No person has a right to be heard at an examination in public." We are not convinced that it would be appropriate to make an exception solely for the Integrated Agency.

Clauses 15 and 16 and Schedule 1: independence of the Integrated Agency

138. Much of the evidence argued that the Agency's independence could be compromised by the provisions of Clause 15 (guidance by the Secretary of State) and Clause 16 (directions by the Secretary of State). There were also concerns on the same grounds about Schedule 1 (membership). Clause 15 states that the Secretary of State may give the Agency guidance as to the exercise of its functions, and that the Secretary of State must publish any such guidance. Clause 16 states that the Secretary of State may give the Agency general or specific directions as to the exercise of its functions; such directions are also to be published. Schedule 1, paragraph 3, states that the Agency is to consist of "a chairman appointed by the Secretary of State, and such other number of members as the Secretary of State may appoint."

139. The Council for National Parks felt the independent "arms length" nature of the organisation might be undermined by the wide-ranging powers to give guidance.[225] The Wildlife Trusts noted that the terms of Clauses 15 and 16 were much wider than the parallel statutory provisions relating to other bodies such as the Environment Agency. The Wildlife Trusts also noted that the limitations on the Secretary of State's power of direction in relation to English Nature contained in Section 131(4) and Section 132(1) of the Environmental Protection Act 1990 had not been replicated in the draft Bill in respect of the Integrated Agency.[226] (There is no statutory provision for the Secretary of State to issue guidance to English Nature, although she can issue directions.[227])

140. The Chief Executive of the Environment Agency acknowledged concerns about the possible impact of guidance from Ministers and sought to allay them. She argued that the EA benefited from "strategic" guidance from Ministers and that such guidance could also help the IA. She explained how the Environment Agency's guidance worked in practice:

228

English Nature felt that it would be possible to safeguard the IA's independence without compromising Governmental flexibility, by amending the draft Bill to make clear guidance would be issued after consultation with the IA, and that the IA should "have regard to" guidance, while "complying" with directions.[229] Defra stated:

230

141. The Minister told us that the model for these clauses was the legislation relating to the Environment Agency.[231] But in fact there are substantial differences, as noted below (significant differences in wording are underlined):

Environment Act 1995, Clause 4

with respect to objectives which they consider it appropriate for the Agency to pursue

shall have regard to

after consultation with the Agency

142. Earlier in our report we noted how important it was that the new Integrated Agency be a truly independent body. That independence must be explicitly enshrined in statute. We are concerned that the Bill as currently drafted gives the impression that the IA would have less independence from Ministers than either English Nature or the Environment Agency. This is unacceptable. We welcome Defra's statement that the IA would not be bound to follow guidance from the Secretary of State, but believe this should be spelt out on the face of the Bill, by making clear that the IA should only "have regard to" such guidance. This would increase public confidence in the new Agency. For the same reason, we also recommend that the Bill be amended to make clear that guidance relates to objectives which the Secretary of State considers it appropriate for the Agency to pursue; and that guidance would be issued only after consultation with the Agency. We also recommend that Defra explain why the limits on Ministerial directions to English Nature have not been replicated in the draft Bill in respect of the IA.

143. Evidence also noted the difference between the draft Bill's provisions regarding the Secretary of State's power to appoint members and that contained in the legislation underpinning the Environment Agency and English Nature. In both those cases, the relevant Act lays down the minimum and maximum number of members who can be appointed. The 1995 Act also states, in relation to the Environment Agency, that the Secretary of State "shall have regard to the desirability of appointing a person who has experience of, and has shown capacity in, some matter relevant to the functions of the Agency".[232] English Nature believed such a model was better suited to a large NDPB than the "completely open scenario" in the draft Bill.[233] The Wildlife Trusts noted that the draft Bill did not define upper or lower limits to the size of membership, and were also anxious that the membership should have a majority with experience directly relevant to the IA's general purpose.[234] The British Mountaineering Council described the draft Bill as giving the Secretary of State "sweeping powers" to appoint members of the IA.[235]

144. Defra's written evidence notes that there is currently no limit on the number of Countryside Agency board members, while English Nature's legislation sets a range of numbers - 10 to 14 - but includes provision for the Secretary of State to be able to change this range by order. Defra has adopted the Countryside Agency approach "because it is simpler and more flexible".[236] However, Defra witnesses told us, in respect of both the IA and the CRC, that Defra did not "feel strongly about the question of prescribing members".[237]

145. We were unconvinced by Defra's arguments in favour of the Secretary of State's wide-ranging power to appoint members of the Integrated Agency, contained in the draft Bill. Ministers have nothing to fear and much to gain from an independent and independently-minded Agency, and the public are more likely to accept that the IA is such a body if the provisions in the Bill relating to its membership make clear the limits to the Secretary of State's powers. We therefore recommend that the provisions of Schedule 1 to the draft Bill, relating to membership of the Integrated Agency, be amended as follows:

A minimum and maximum number of members should be specified, as is the case with the Environment Agency
The Secretary of State should have regard to the desirability of appointing a person who has experience of, and has shown capacity in, some matter relevant to the functions of the Agency
It should be clear on the face of the Bill that the chairman of the Agency, as well as the Secretary of State, has power to appoint some members.

Part 1, Chapter 2: the Commission for Rural Communities

146. Clauses 17-25 and Schedule 2 of the draft Bill provide for the establishment of the Commission for Rural Communities (CRC), which will take over the Rural Advocate function of the Countryside Agency and be a "national rural advisor, advocate and watchdog". The CRC will not be a delivery body but "as a wholly impartial watchdog will challenge government and delivery organisations … to do better in focusing on policy and delivery on need and disadvantage".[238]

147. In the case of some of the issues raised about the CRC, witnesses made clear that they were not seeking amendments to the draft Bill, as these issues could be dealt with administratively. But as with the IA, there was concern over what the drafting implied about the independence and influence of the CRC, and its purposes.

CLAUSE 18: PURPOSES

148. Clause 18 of the draft Bill sets out the Commission's general purpose. Clause 2(b) defines "rural needs" as "the social and economic needs of persons in rural areas in England (especially the needs of those suffering from social disadvantage and economic under-performance)". The LGA argued that the defection of "rural needs" in Clause 2(b) could be too narrow and suggested that rural needs might be better defined as "(especially, but not exclusively, the needs of those suffering from social disadvantage and economic under-performance)."[239] The NFU also felt that the Bill should make it clearer that, while the CRC would be concerned with rural areas suffering from social disadvantage and economic under-performance, its activities would not be exclusively confined to them.[240] The County Councils Network was concerned about the "narrow focus" of social and economic disadvantage implied in the draft Bill, assuming it was based upon Defra's definition of economically lagging districts, as this did not take "sufficient account of the problem of hidden deprivation in much of rural England".[241]

149. We are not convinced that it is necessary to lay down in statute that the Commission for Rural Communities should play a special role in respect of particular groups of rural people. The focus of the CRC's work will change over time to reflect the changing priorities of rural England, and the draft Bill should give it that degree of flexibility. We therefore recommend that the definition of "rural needs" in Clause 18(2) be amended to read: "the social and economic needs of persons in rural areas in England". If the Secretary of State wishes to direct the work of the CRC to focus on specific groups within the rural population, such as those suffering from social disadvantage, we believe it should be possible for her to do so, either through the provisions relating to directions contained in Clause 25, or through a new power to give guidance, as in the case of the Integrated Agency.

Clauses 19 and 25 and Schedule 2: independence, influence and 'rural proofing'

150. As with the Integrated Agency, much of the evidence questioned whether the bill as drafted gave the CRC sufficient independence from Government. Evidence focused on the provisions on direction by the Secretary of State; whether the fact that advice from the CRC has been rejected should be made public; and the Secretary of State's power to appoint members. Linked to these concerns were doubts about whether the language of the draft Bill sufficiently reflected the importance of the CRC's "rural proofing" role.

151. Clause 19 of the draft Bill states that the Commission "must take such steps as appear to it to be appropriate" to represent rural needs to relevant persons, and to provide relevant persons with information and advice about issues connected with rural needs or ways of meeting them. It must also monitor the way in which policies adopted by relevant persons are implemented and the extent to which those policies are meeting rural needs. A "relevant person" is defined in Clause 18(2) as "a public authority, or a body which appears to the Commission to be concerned with any aspect of rural needs".

152. On "rural proofing", Countryside Agency witnesses told us that, ideally, a duty to "rural proof" the activities of public bodies would have been included in the draft Bill itself. However, they accepted this was not possible: "we are reasonably content that we have got the best deal that we can have at the moment and that rural proofing will be taken seriously".[242]

153. The NFU argued that the CRC was in danger of being a "toothless watchdog" unless it had more power to influence the rural agenda and especially if its advice were ignored. The NFU therefore suggested that, at the least, the CRC should have the same power as the Integrated Agency to require a public authority which has received advice to confirm to the Agency whether it has been rejected. That way it would be on the public record.[243] The Countryside Agency suggested that the CRC should be obliged to report on and publish the results of its monitoring of the impact of policies and delivery, which is not currently explicit in the draft Bill. The CA argued that such a change would strengthen the Commission's watchdog function.[244]

154. We have already noted that the Commission for Rural Communities needs to be able to seek the "rural proofing" of all levels of Government. In the context of the draft Bill, we believe this function could be strengthened by amending Clause 19 as follows:

Clause 19(b) should include a provision allowing the CRC to require a "relevant person" to confirm whether its advice has been rejected.
Clause 19(c) should include a requirement on the CRC to report publicly on the outcome of its monitoring of the extent to which policies are meeting rural needs

155. Clause 25 gives the Secretary of State power to give the CRC "general or specific directions as to the exercise of its functions". Schedule 2 (Membership) gives the Secretary of State power to appoint the Chairman and places no limit on the number of other members the Secretary of State may appoint. As with the parallel powers in respect of the IA, some witnesses argued that these powers might compromise the independence of the CRC. The Family Farmers' Association felt that the Secretary of State would have "enormous power" over the CRC.[245] Defra states that directions to the CRC (and the other directions in the draft Bill) are standard:

246

(An example of a body which is independent but still subject to directions from Ministers is the NHS Appointments Commission.)

156. In order to ensure the independence of the Commission for Rural Communities is properly entrenched in the draft Bill, and is made evident to those whom it will serve, we believe that the Secretary of State's powers to appoint its members needs to be limited. We therefore recommend that the draft Bill be amended to make similar provision for appointments to the CRC as we have recommended in respect of the Integrated Agency. We accept that it is standard practice for Ministers to take powers in legislation to issue directions to public bodies, and that this does not necessarily affect the ability of such bodies to act independently. But we note that in some circumstances the remit of directions from the Secretary of State is limited in statute, as in the case of English Nature. We therefore recommend that Defra consider ways in which the power of direction relating to the CRC contained in the draft Bill could be made less all-encompassing, in order to make clear the CRC's independence from Ministers.

Part 3: flexible delivery arrangements

157. The main area of comment in the evidence we received on this Part of the draft Bill was Chapter 1 (Clauses 41-48), which covers agreements between the Secretary of State and certain other bodies, and between such bodies, to perform functions of the Minister, and Chapter 2 (powers to reform agricultural etc. bodies). We received virtually no evidence on Chapter 3 (power of Secretary of State to make grants).

Chapter 1: agreements with designated and non-designated bodies

158. Defra argues that the new arrangements in Chapter 1 provide "a simple and efficient way to move functions with the minimum bureaucracy … [with] no overlap or duplication arising".[247] Clause 41 allows Ministers to enter into an agreement with a designated body authorising that body to perform an eligible function of the Minister. ("Designated bodies" are Defra-sponsored bodies listed in Schedule 5.) Clause 42 allows the Secretary of State to enter into an agreement with a non-designated body (defined simply as a body not listed in Schedule 5), authorising that body to perform an eligible Defra function. Clause 43 allows designated bodies to enter into agreements with other designated and non-designated bodies. Defra argues that the Clause 43 power removes potential obstacles to the wider adoption of the practice of nominating "lead delivery agents" amongst partnerships.[248]

159. Eligible functions that can be delegated under this Chapter include the power to enter, inspect or take samples, but do not include: the power to make appointments, give guidance or directions or lay reports or accounts; powers to make subordinate legislation; the functions of an accounting officer; or (with limited exceptions) powers to fix fees or charges.[249] Defra gave some examples of possible delegations of functions:

Between designated bodies

The Forestry Commission might delegate certain functions for providing grants for managing forested land to the Integrated Agency (which would already have powers to give grants for land management generally)
The Integrated Agency might delegate some of its functions to a national park authority or an Area of Outstanding Natural Beauty in a given area, allowing local bodies (with staff on the ground) the powers and resources to deliver integrated services

From designated to non-designated bodies:

The Integrated Agency might delegate some of its functions (e.g. licensing functions) to a local authority (which has its own, similar licensing powers, e.g. planning consents) so that locally there is a single point of contact on licensing issues.[250]

160. Some evidence was supportive of the proposed arrangements. The LGA welcomed them:

251

English Nature concluded that, subject to the safeguard contained in the Policy Statement that delegations would be by mutual consent, "these powers allow welcome future flexibility in the delivery of public services".[252] The Ramblers' Association thought these provisions would enable more effective delivery and the pooling of relevant knowledge and resources.[253] The Environment Agency and the RDAs were also broadly supportive.[254]

161. Support for the proposals was not, however, unqualified. The Forestry Commission and the Environment Agency both had concerns about their specific statutory powers being delegated.[255] Another concern shared by several organisations was that appropriate funding should follow the functions being delegated.[256] The RDAs also raised a particular concern about how the process of mutually delegating functions might cut across existing regional arrangements. They argued that delegation should be linked closely to any relevant regional and local strategies and frameworks:

257

162. Among those who opposed the proposals, there was particular concern about the wide scope of the definition of "non-designated bodies" in Clause 42(3). The RSPB believed the drafting of the Bill. in theory at least, would allow for the delegation of functions to non-public bodies:

258

The NFU also felt clarification was needed on whether such bodies could include non-statutory private bodies.[259]

163. The CLA opposed these provisions, on the grounds they could allow the Secretary of State to authorise NGOs to carry out an "investigative or policing type role", which would be "wholly inappropriate".[260] The Countryside Alliance believed the draft Bill could allow organisations with a "political agenda" to perform Defra functions.[261] Ofwat was concerned that this provision might be "a source of regulatory uncertainty".[262]

164. The Minister denied to us that there was any intention to sub-contract Defra functions to the private sector, and seemed to imply that the provisions related to public bodies:

263

He also gave the impression that Defra was open to suggestions about how to make this section of the Bill clearer:

264

165. Defra's supplementary written evidence, however, appears to put a somewhat different interpretation on the power to delegate Defra functions to non-designated bodies:

265

166. We support the draft Bill's aim of allowing greater flexibility in the delivery of rural services, and removing obstacles to the creation of lead local delivery agents. But on the basis of the evidence we have received, from the Minister and others, we require more clarity about precisely what is envisaged before we can agree to the provisions relating to agreements with designated and non-designated bodies. We are concerned about the apparent contradiction between the Minister's oral evidence, which gave the impression that the power of delegation related to public bodies, and Defra's written evidence, which refers to private sector bodies. This confusion only serves to justify the anxieties expressed to us about the possible range of organisations which could be given responsibility for discharging the functions of Defra, and bodies within the Defra family. Given that the draft Bill proposes that such delegations of functions shall take place with no automatic scrutiny by Parliament, it is especially important that the Government make clear its intentions.

167. We recommend that, in its response to our Report, Defra makes a clearer statement about how each of the provisions in Clauses 41 to 43 will operate in practice, including further concrete examples; and about the role to be played by non-public bodies, and how such bodies will be held accountable for their discharge of their functions.

Chapter 2: agricultural and horticultural levy bodies

168. Chapter 2 (Clauses 49 to 59) of Part 3 of the draft Bill puts in place a general provision which would enable Ministers to abolish, amend or merge the existing agricultural and horticultural levy boards, or to create new bodies. A review of the levy boards was recommended by Lord Haskins and was announced by Ministers on 15 March 2005.[266] Although this chapter of the draft Bill is not concerned with the immediate implementation of the Rural Strategy, we examined it because it would give the Secretary of State wide-ranging powers (under Clauses 49 and 53) to reconstitute or abolish, by way of secondary legislation, bodies set up by primary legislation. We have not at this stage addressed the policy issues relating to these bodies, but we comment below on the proposed order-making powers and their scrutiny by Parliament.

169. The levy boards have welcomed the proposal for a review and the NFU "generally welcomed" these provisions[267], although the CLA felt it was difficult to assess whether the "wide-ranging powers" to reform the boards were necessary in advance of the review.[268] The levy bodies stressed the need for full consultation, including with the funders of the levy bodies, before bodies were abolished or reformed. The Home-Grown Cereals Authority (HGCA) argued:

269

Lord Whitty assured us that there would be full consultation during the review and on its outcome.[270] The Royal Institution of Chartered Surveyors argued that existing bodies should not be dissolved under Clause 53 until their functions have been transferred to new bodies.[271] The Minister responded that Ministers would be guided by whatever the reviewer recommended.[272]

170. The powers to make these changes to the levy bodies would be exercised through secondary legislation. This means that Ministers would be able to amend the various Acts of Parliament which established the bodies by unamendable statutory instruments. The Bill provides for such orders to be subject to the affirmative resolution procedure. The NFU argued that, although it was right to use the affirmative rather than the negative procedure, not least because such orders would impose compulsory levies, more detailed Parliamentary scrutiny, e.g. by this Committee, was necessary "than is possible under the 'accept or reject' nature of scrutiny of statutory instruments by Parliament."[273] The RICS was concerned that this power might be "a circumvention of the parliamentary process".[274]

171. It should be noted that the power to establish new public bodies by secondary rather than primary legislation is not unprecedented. For example, NHS Trusts are established by orders made under the National Health Service and Community Care Act 1990. The 1990 Act includes provision for statutory consultation before NHS Trusts are created.[275]

172. We are content in principle with the proposal in Chapter 2 of Part 3 the draft Bill that Ministers be given power to amend primary legislation relating to the levy bodies by way of secondary legislation. We note that it is not unprecedented for Ministers to take power to create new public bodies by secondary legislation. However, the present proposals could involve the wholesale abolition of existing bodies, some with a long history and all of them of great importance to those who pay the compulsory levies that fund them. For this reason, we believe that an additional degree of Parliamentary scrutiny of orders made under this Chapter would be appropriate. We recommend that, in its response to our Report, Ministers give an undertaking to publish any orders made under this chapter in draft for 'pre-legislative scrutiny' by this Committee, and to allow adequate time for the Committee to carry out such scrutiny if it chooses to do so.

173. We welcome the assurances from the Minister that there will be full consultation concerning the forthcoming review of the levy boards, but, given the potentially wide-ranging changes that might emerge from the review, we recommend that a requirement to consult be included on the face of the Bill.

174. Clause 50 of the Bill states that one of the permissible purposes of levy bodies set up under this Part is 'agriculture', defined as including:

horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, and the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds.

The NFU, the HGCA and the Horticulture Development Council (HDC) all argued that the definition was inadequate. The HGCA suggested that someone

276

The HDC argued that the definition appeared to be "arbitrary and overlapping", and could provide scope for some sections of the industry to claim that they were not covered by the Act and consequently would not be subject to an order under Clause 49. The HDC proposed that the draft Bill could include a broad approach - e.g. arable, forestry, horticulture and livestock - that could later be refined in any order under Clause 49 to define the specific crops to be covered by that board.[277]

175. Defra told us that "we are happy to consider whether there is benefit in departing from the standard definition for the limited purposes of this Act."[278]

176. We have some sympathy with the points made to us about the definition of agriculture contained in Clause 50(4), and welcome Defra's readiness to consider this issue. But we recommend that any redrafting of the definition builds on the existing wording, and does not discard any of its elements.

Order-making powers: general

177. The draft Bill contains a number of order-making powers in addition to those relating to the levy boards in Clauses 49 to 59. They are set out in Defra's written evidence. In this section we briefly consider each one and state whether we believe the proposed form of Parliamentary oversight is appropriate.

178. Clause 11 (3) (power to charge fees for issuing of licences by the Integrated Agency):

Power conferred on: Secretary of State

Power exercisable by: Statutory Instrument

Parliamentary procedure: Negative Resolution

This provision enables the Secretary of State to provide for the Integrated Agency to charge fees so as to meet its reasonable costs of processing licence applications. The CLA argued that it was not clear for what purposes such licences would be issued, and wished this to be clarified.[279] English Nature told us that the ability to charge fees for licences was carried over from English Nature and the RDS.[280] Defra states that "safeguards and detailed provisions to ensure that such charging regimes would be fair, proportionate and only cover costs of administering would be built into an order."[281]

179. We are content with the order-making power in Clause 11 (3), and welcome Defra's assurance that orders made under it would include safeguards to ensure any charging regimes were fair, proportionate and would only cover the costs of administration. But given that such orders concern the charging of fees, we believe that a greater degree of Parliamentary scrutiny is appropriate. We therefore recommend that such orders be subject to the affirmative resolution procedure.

180. Clause 41 (4) (adding public bodies to a list of designated bodies):

Power conferred on: Secretary of State

Power exercisable by: Statutory Instrument

Parliamentary procedure: Negative Resolution

This mechanism allows the Secretary of State to add or remove names from the list in Schedule 5 if new bodies are created or existing bodies are dissolved. The Minister told us that this provision would not allow Ministers to abolish any of the bodies.[282]

181. We are content with the order-making power in Clause 41(4) and the use of the negative resolution procedure, given the Minister's assurance that it does not allow for the abolition of any of the bodies concerned.

182. Clause 44 (4) (c) (power to enable certain charges to be fixed by bodies authorised by the appropriate Minister of the Crown):

Power conferred on: Secretary of State

Power exercisable by: Statutory Instrument

Parliamentary procedure: Negative Resolution

Defra explains that this provision allows the Secretary of State to authorise a public body to review and consider the relevant fixing of a fee based on its own assessment of research and information relating to costs. An order under this section would enable the Secretary of State to prescribe powers to fix fees or charges which the public bodies could take on. "The order would contain safeguards to the extent that the body must follow detailed conditions that are laid down in it as to the criteria that would need to be addressed before fee increases could be made".[283]

183. We are content with the order-making power in Clause 44(4)(c), and welcome Defra's assurance that orders made under it would include appropriate safeguards. But given that such orders concern the charging of fees, we believe that a greater degree of Parliamentary scrutiny is appropriate. We therefore recommend that such orders be subject to the affirmative resolution procedure.

184. Clause 67 (power to make further provision)

Power conferred on: The Secretary of State

Power exercisable by: Statutory Instrument

Parliamentary procedure: Affirmative Resolution for amending primary legislation

Negative Resolution for amending secondary legislation

Defra describes this as "a standard provision to ensure that there is power to do everything to give full effect to the Act". It enables further consequential amendments of other primary legislation that are not addressed in Schedules 10 and 11 to be made by statutory instrument^. Existing references in secondary legislation to English Nature or the Countryside Agency, which are to be dissolved by this Bill, will be dealt with under this section by a single instrument that makes all the necessary changes. Defra notes several recent examples of this kind of provision, including Section 28 of the Child Trust Funds Act 2004 and Section 250 (read in conjunction with Section 265) of the Housing Act 2004.[284] It is noticeable that any amendment of primary legislation under Clause 67 must be made through the affirmative resolution procedure.

185. We are content that the order-making power in Clause 67 is reasonable, and that the use of the affirmative resolution procedure to amend primary legislation, and the negative resolution procedure to amend secondary legislation, is appropriate.

The Regulatory Impact Assessment

186. In August 1998 the Prime Minister announced that no policy proposal which has an impact on business, charities or voluntary bodies should be considered without a Regulatory Impact Assessment (RIA) being carried out. The RIA is an assessment of the impact of policy options in terms of the costs, benefits and risks of a proposal. Cabinet Office guidance encourages Departments not just to identify costs and benefits, but also to quantify them where possible, and advises that: "There is likely to be uncertainty over the valuations. In this case spell out your assumptions and use ranges or ballpark figures where necessary".[285]

187. The RIA produced in support of the draft Bill appears to be essentially policy-driven. That is, rather than rigorously testing the merits of the various options outlined, the RIA seems to be merely an exercise in justifying the policy decisions already made. It is difficult to see what understanding the RIA adds to the draft Bill.

188. For example, the RIA outlines three options in relation to the establishment of an Integrated Agency. Option 1 is to do nothing, Option 2 is to partially align English Nature, the Countryside Agency and the Rural Development Service, and Option 3 is to establish an Integrated Agency. Costs and benefits associated with the preferred Option 3 are detailed, but similar assessments of the other two options are not provided, with the economic benefits of Option 2 simply described as "limited".[286] It is therefore not possible to compare fully the relative virtues of the three options.

189. We recommend that in presenting the final RIA the Government provides, for those measures within the Bill for which it is possible, comparable estimates of the costs and benefits associated with the various options presented. Failure to do so would render the RIA little more than a cost/benefit analysis of the Government's favoured options.

190. To the extent that the RIA already quantifies some of the costs and benefits of the proposals in the draft Bill, we are disappointed that the figures fail to add much to our knowledge. Most critically, there is no indication of how the estimates have been arrived at. The figures are absolutes, rather than ranges, and there is no discussion of the potential impact of changes in assumptions.

191. For example, with reference to the Integrated Agency, the RIA merely presents a total estimated investment cost of £30 million.[287] In response to our written questions, the Department was able to provide us with much more detail, including a breakdown of this total across different cost elements. These figures were presented as ranges and an explanation was given for the basis of these in each instance. The response shows that the Government expects investment costs to be in the range of £25.3 million to £36.8 million, with IT systems representing the single largest cost.[288]

192. The Department has informed us that the figures presented in the draft Bill will be subject to further refinement as the practicalities of the legislation become more certain, and that the RIA published with the final Bill will be updated to reflect the results of work undertaken between now and then.[289]

193. We recommend that the final RIA contains the level of detail provided to us by the Department in response to our written questions. That is, it should contain a breakdown of estimated costs and savings with details of the assumptions used. Where there is uncertainty, figures should be presented as ranges.

195 Defra's written evidence includes a list of key points made in evidence and Defra's response to them. Appendix 26b section D Back

196 See paras 95-102 above Back

197 Policy statement, p 9 Back

198 See paras 32-34 above Back

199 Appendix 3, para 2.1.5; Appendix 17 para 16; Appendix 23 para 4, Q 509 Back

200 Appendix 36, section 2 Back

201 Appendix 8, para 14; Appendix 10, paras 9-10 [BMC] Back

202 Appendix 5, para 6, Q 464 Back

203 Appendix 36, section 2 Back

204 Appendix 18a Back

205 Q 527 Back

206 Appendix 26b, part D, section 6 Back