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Ministers would still have that opportunity if the amendment were accepted. It is just that they would have to think of it a bit earlier and not leave it to be informed by some tactical political consideration nearer the date.

We would argue that the concept of making that change and imposing a limit is what the Government originally set out to do. It is sensible to introduce the safeguard that the Electoral Commission believes should be introduced, and the idea of a one-year moratorium on date changes fits existing legislative provision, in the 1983 Act. I look forward to hearing the Government’s response. If they do not feel able to accede to our proposal at this point, I hope that they will give a clear indication that they will engage in discussion with the commission and, if necessary, table an appropriate amendment later. For a second champagne moment, the Minister could say that she has heard the argument, listened to what the commission has had to say and is delighted to accept our amendment.

Angela E. Smith: The champagne moment has passed.

We have had an interesting discussion and I was pleased by the reassurance from the hon. Member for Poole (Mr. Syms) that his amendment was a probing amendment. Both he and the hon. Member for Lichfield (Michael Fabricant) spoke about having to ensure that the election process was as simple as possible and that any changes provided clarity for electors. The hon. Member for Poole made some specific points on that subject and I shall come to those shortly.

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It is fair to say that all the amendments are about giving councils more say in the electoral arrangements for their area and enabling them to take the initiative. The Bill contains safeguards to ensure that the public retain confidence in the fairness and probity of our electoral arrangements. I am pleased that the hon. Member for Poole made it clear that he did not intend to press his amendment No. 163 to a vote, as it would remove probity from the process, leaving it open to manipulation. The Electoral Commission opposed the amendment on the grounds that it risked undermining the established process of electoral reviews and the principle of equality of representation across local authorities.

The hon. Member for Poole said that he was trying to ensure that it would not be possible for local councils, on a whim, to increase the number of electors in a ward where they had a majority, and reduce the number of electors in another ward. In fact, although the Government amendments would not do that, his amendment would. Taking it at face value, amendment No. 163 could mean that electors in a ward could be asked by the council, “Do you want to increase the number of councillors you have?” It would not be beyond the bounds of possibility for the electors to respond that they did want that but, since it does not specify that the offer would have to be made to residents in every ward, the amendment would therefore undermine the principles of equality of representation. All hon. Members are elected, and I appreciate that all of us would like to have some control over our constituency boundaries. Those of us facing boundary commission changes perhaps feel that more strongly than others, but I can assure the hon. Gentleman that the Government’s aim is to ensure that there is equality between all the votes cast in an election.

The hon. Gentleman asked various specific questions about the boundary committee’s role in single-member wards. When a local authority approaches the Electoral Commission to seek authority to move to single-member wards, it will be for the commission to decide whether that move is appropriate. The exceptional cases to which the hon. Gentleman referred, where multi-member wards were considered to be more appropriate, would be referred to the boundary committee. Councils would not be able to make the decision in such cases.

The hon. Member for Lichfield (Michael Fabricant) asked whether single-member wards could revert back at a later date. They can, but such decisions would be made following the regular review undertaken by the boundary committee. The Bill does not provide for such decisions, as a two-way street already exists.

The hon. Member for Hazel Grove (Andrew Stunell) referred to a letter that he had received from the Electoral Commission. I wish that I had been able to see it before today’s debate, as that would have enabled me to give a more considered response, but I hope that he will consent to give us sight of that letter as the debate goes on. He explained that his amendment No. 265 would require the Secretary of State to lay before the House any order that combined local government and European elections one year before it was due to take effect.

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When Ministers looked at the amendment, our concern was that, given the need for meaningful consultation on decisions about setting election dates, the lead-in time for all the necessary procedures would be something like 18 months. We would like to discuss the proposal further, as we want to ensure that the process is not rushed, but orders such as the one that we are discussing must be approved by both the House of Commons and the House of Lords, and we consider that to be adequate protection.

The hon. Member for Hazel Grove was worried about party political advantage, although I do not see where that would lie. The Government do not consider his amendment to be necessary but, without having seen the views of the Electoral Commission, it is difficult to make any further comment. I hope that he might be prepared to share the contents of the letter from the Electoral Commission with us.

5.45 pm

Andrew Stunell: The communication was dated 9 May and it had not occurred to me that the information was not already in the Government’s hands. I shall of course make sure that copies are available immediately after these proceedings.

Angela E. Smith: I am grateful to the hon. Gentleman for raising the matter. I certainly do not suggest that he should have shown us a private letter to him, which he is obviously entitled to use, but it is a shame that the Electoral Commission did not share with us its thoughts about legislation that the Government were putting before the House. At this stage we cannot support the amendments, but if we can have a look at the hon. Gentleman’s information, we will consider that particular point further before coming to a final decision.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 5

Duty of local authority to provide Boundary Committee with information

‘(1) The Local Government Act 1992 (c. 19) is amended as follows.

(2) In section 13 (electoral reviews and recommendations), after subsection (7) insert—

“(8) A local authority must, if requested by the Boundary Committee for England to do so, provide that Committee, by such date as that Committee may specify, with any information that that Committee may reasonably require in connection with any of their functions under this section.”’.— [Mr. Woolas.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 6

Consequential amendments

‘Schedule (Elections: consequential amendments) has effect.’.— [Mr. Woolas.]

Brought up, read the First and Second time, and added to the Bill.

22 May 2007 : Column 1149

New Clause 22

Entities controlled etc by local authorities

‘(1) An order under this section is an order which requires, prohibits or regulates the taking of specified actions by entities connected with a local authority.

(2) The Secretary of State may make an order under this section in relation to—

(a) all English local authorities;

(b) English local authorities of particular descriptions;

(c) particular English local authorities.

(3) The Welsh Ministers may make an order under this section in relation to—

(a) all Welsh local authorities;

(b) Welsh local authorities of particular descriptions;

(c) particular Welsh local authorities.

(4) An order under this section may also include provision which requires, prohibits or regulates—

(a) the taking of specified actions by a local authority in relation to entities connected with the local authority;

(b) the taking of specified actions by members or officers of a local authority who are qualifying persons.

(5) An order under this section may make provision in relation to—

(a) every entity connected with a local authority;

(b) such entities of a particular description.

(6) Where an order under this section makes provision in relation to entities of a particular description, it may provide for any expression used in identifying that description of entity to have the meaning for the time being given by—

(a) any document identified by the order; or

(b) any re-issue of such a document.

(7) For the purposes of this section an entity (“E”) is “connected with” a local authority at any time if—

(a) it is an entity other than the local authority; and

(b) according to proper practices in force at that time, financial information about E must be included in the local authority’s statement of accounts for the financial year in which that time falls.

(8) In this section—

“actions” includes courses of action;

“English local authority” means a local authority in England;

“entity” means any entity, whether or not a legal person;

“financial year” means a period for which accounts of the local authority must be prepared by reason of section 2 of the Audit Commission Act 1998 (c. 18) or section 13 of the Public Audit (Wales) Act 2004 (c. 23);

“local authority” means any body which—

(a) is a local authority for the purposes of section 21 of the Local Government Act 2003 (c. 26) (see subsection (6) of that section and section 23 of that Act); and(b) is required to prepare statements of accounts by regulations made under section 27 of the Audit Commission Act 1998 (c. 18) or section 39 of the Public Audit (Wales) Act 2004 (c. 23);

“qualifying person” means a person who—

(a) is authorised to represent the local authority at meetings of an entity that is connected with the local authority; or(b) is a member or director of such an entity or the holder of any other specified position in relation to such an entity;
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“specified” means specified, or of a description specified, by the order;

“Welsh local authority” means a local authority in Wales.’.— [Mr. Woolas.]

Brought up, and read the First time.

Mr. Phil Woolas (Minister for Local Government): I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss the following:

Government new clause 23— Trusts.

Government new clause 24— Further provision about orders.

Government new clause 25— Exemptions from orders.

Government new clause 26— Definition of certain terms for purposes of other enactments: England.

Government new clause 27— Definition of certain terms for purposes of other enactments: Wales.

Government new clause 28— Consequential amendments.

Government amendments Nos. 114, 115, 117, 121 and 122.

Government new schedule 3— Consequential amendments relating to entities controlled etc by local authorities.

Government amendment No. 130.

Mr. Woolas: I am grateful for the opportunity to table these amendments. I beg the indulgence of the hon. Member for North-East Bedfordshire (Alistair Burt) as I try to explain the proposals and to persuade the House that they are wholly desirable. I shall not go into too much detail, because if you thought that some of our previous debates were technical, Madam Deputy Speaker, “you ain’t seen nothing yet”, as they used to say in westerns.

The arrangements for ensuring accountability and propriety in the conduct of local authority companies are set out in part V of the Local Government and Housing Act 1989 and in an order made under it—the Local Authorities (Companies) Order 1995. The current controls variously placed on the face of legislation and in the provisions of the order address the accountability, auditing and personnel requirements of a local authority company and are known collectively as the propriety controls.

The existing part V arrangements are complex, outdated, and cover only companies, which is the essential point. Local authorities operate through entities that are not embraced by the narrow definition of a company provided in part 5.

Previously, the capital finance regime for local authority companies relied on part V to define the relationship between a local authority and its companies when deciding the borrowing limits for the authority as a whole—not just for the company. Now, under the prudential borrowing regime, introduced by my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), who is not in the Chamber, authorities are free to take on as much debt as they can afford to service from their revenue resources. There are no longer any direct constraints on borrowing by the companies or similar entities that they own.

22 May 2007 : Column 1151

Michael Fabricant: I am grateful to the Minister for giving way. He quite rightly says that local councils are proprietors—if that is the right word—of organisations other than companies, as defined by the companies legislation. Will he go into a little more detail about precisely what he means? Is he talking about partnerships, associations, sole traders or companies that in some way are not controlled by the companies legislation? I was under the impression that a body could not call itself a company or a corporation unless it was either a limited company or a public limited company. Perhaps he could amplify that point.

Mr. Woolas: The hon. Gentleman said that he was grateful for my giving way. I am grateful to him for intervening, because it gives me a chance to draw breath. As I will go on to explain in more detail, in the diverse world of commissioning and in the light of the greater co-operation and the partnerships between local authorities and other public, private and voluntary sector organisations, the issue of the types of organisations that are owned by local authorities is complex. The idea of a council owning a company has been around for many years. Interestingly, the definition is partly based on companies legislation and partly on part V of the 1989 Act. A local authority company is in some ways different from what one might in lay person’s terms describe as a company.

The next part of my speech explains the answer to the hon. Gentleman’s question. I am sure that he will support the measures when he has heard the explanation. I am grateful that he has stayed awake to listen to what I am saying. Tens—if not hundreds—of millions of pounds of public money is backed up in these organisations, so it is important that we explain the measures and seek the support of the House.

There are no longer direct constraints on borrowing by companies or similar entities that authorities own, but any transaction by such an entity that increases or reduces the revenue resources of the authority will still need to be taken into account under the prudential regime, since it will affect the amount of borrowing that the authority can afford to service. The borrowing of that organisation is ultimately underwritten by the local authority and, therefore, the taxpayer. There are implications not just for the local authority and the council tax payer, but overall for public sector borrowing requirements and therefore for the central tax payer.

The borrowing regime currently relies on a different set of accounting definitions, which are provided in the Chartered Institute of Public Finance and Accountancy “Code of Practice on Local Authority Accounting in the United Kingdom: A Statement of Recommended Practice”, which is known in the trade as SORP. I have a copy of the document and I am tempted to say that if the Opposition push their amendments in later groups, I will read it out.

Michael Fabricant: If you go too fast, you may need to.

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