(1) After considering the information in a local spending report a local authority may, subject to this section, make a recommendation to the Secretary of State for a transfer of functions from one person to another.
(3) Within 6 months of receiving any recommendations the Secretary of State must either adopt and implement (or commence the process of implementation) or reject the recommendation, and in either case shall give reasons for his decision.
(5) At least once in every calendar year the Secretary of State must publish a report listing all decisions taken by him pursuant to this section and containing the reasons for those decisions.. [Mr. Hurd.]
day on which this Act is passed.
I rise to move the new clause, numb with the realisation that it is almost five months to the day since the Bill passed its Second Reading in this Chamber. At times it has seemed a lot longer than that; there were periods when it seemed that the Bill would never leave Committee and that it was the fate of those condemned to serve on it to spend every Wednesday morning of their elected life turning up at Committee Room 10 to be told that they had to wait. I was once asked whether we were waiting for Godot or for
Gordo, but the truth is that we were waiting for Government amendments, which were necessary because the version of the Bill that was considered on 19 January was honest but imperfect.
Amendments and new clauses have finally arrived, and they reflect the fact that we still have a bit of talking to do on Report. That is unsurprising, as the Bill is controversial. It plays a modest part in a wider process of great change in how decisions in the public sector on behalf of the communities we serve will be taken in future.
In considering new clause 6, it is important to remind Members of the premise of the Bill. In shaping the future of the communities where we live and work, meet our partners and friends and raise our children and grandchildren, we must accept that local people know best. If we want to engage local people in decisions we must give them greater influence and power over them, and as we agreed during our proceedingsthe Minister accepts thispower is money.
Philip Davies (Shipley) (Con): I congratulate my hon. Friend on getting his Bill to this stage. In terms of new clause 6, I agree with the thrust of what he says: local people know best and they should have more control over things. However, does he agree that the Bill is only as good as the Secretary of State, and that it is implicit in it that the Secretary of State thinks that local people know best? Does he have confidence in that?
Mr. Hurd: I accept the premise of my hon. Friends intervention. In the end, these matters will be down to the will of the individual Secretary of State. There are always ways and means that they can use: if the Secretary of State of the day is unhappy with the mechanics, processes and principles underlying the Bill, I am sure that clever people will be engaged to throw as many obstacles as possible in the way. However, I sense that there is a cross-party consensus in the House in favour of greater devolution. The test is how far any Government are prepared to go.
That brings me on to the main point on new clause 6. It is intended to replace clause 5, which is the key clause in the Bill as it is the ultimate test. It is the real test of how far any Government are prepared to go in giving people power, because it is designed to give them much greater influence over how money is spent in their community. As I have said, our sense during our deliberations is that the Government are genuinely committed to devolution; a large body of their legislation travels in that direction. However, we appear to have hit a buffer in terms of the test I have described and what the Government are prepared to accept.
New clause 6 is supported by the hon. Members for Falmouth and Camborne (Julia Goldsworthy) and for Stroud (Mr. Drew). It is intended to be a compromise, and it is important to set it in context. You do not need me to tell you that five follows four, Mr. Deputy Speaker. Clause 4 is important, and therefore so is what follows it. I like to think of it as a small grenade thrown into the tranquil pool of public spending. There are currently plenty of fish swimming in that pool leading
a calm life, but clause 4an emotive term historically for the Labour partywill stir the waters. If the provisions of the clause are implemented, for the first time every community will be able to see how almost every pound of taxpayers money is spent in that community; it is currently impossible to trace such money in that way. The example that we used in Committee was of £9 billion of taxpayers money being invested in Kent and only £2.5 billionstill a huge amountbeing under the control of the local authority. That left £7 billion being spent by central Government in a way that is very hard to map.
Robert Neill (Bromley and Chislehurst) (Con): My hon. Friend will know, as will the Minister, that the London borough of Bromley has raised this issue on an number of occasions. We have highlighted the difficulty of tracing precisely how much funding all the agencies receive. In relation to formula grant, the headline figures often bear little relation to what is actually available and frequently render meaningless the various indices by which the Government calculate deprivation and so on. I congratulate my hon. Friend on introducing this important proposal for much greater transparency and local planning.
The Minister fully understands the significance of clause 4, and the opportunity that it provides to place every public sector budget under scrutiny with a much greater degree of transparency than exists today. The question is: how will the public react? They might shrug with a great gesture of collective indifference, but we believe that they will not. Once the spotlight has been shone into every nook and cranny of public expenditure, great curiosity will be aroused and elected representatives will be encouraged to campaign for something different. This will really stir things up.
The importance of new clause 6and old clause 5 is that it has to follow on because it enables a response. We will give people the information and show them the money. This provision provides a mechanism that will allow them to respond and to argue for the reallocation of resources in the light of the information that they have received.
Mr. Greg Knight (East Yorkshire) (Con): I hope that my hon. Friend will not mind my making a minor criticism. Why did he not include in subsection (5) a duty on the Secretary of State to report back to the House?
Mr. Hurd: The short answer to that question is that we did. We had considerable debate in Committee on the mechanics of accountability. The great driving forces behind the Bill are transparency, accountability and empowering people. There was a debate about the need for the Secretary of State to report back to Parliament, but there was push-back from the Government on that. Perhaps the Minister will comment further on that when he responds today. I would also encourage my right hon. Friend to come back to the Minister on that point.
Mr. Dan Rogerson (North Cornwall) (LD): I congratulate the hon. Gentleman on all the work that he has done on pushing the Bill through, during the many months that we have had to wait for it to return to the House. He is making a crucial point. Does he agree that this is the reason that the Bill has created such an upsurge of support from various organisations across the country? They see it as a significant measure, not just as a means of assessing and discussing the administration of local functions. They see that it could provide the opportunity for change and for new ways of doing things in each local area.
Mr. Hurd: I could not agree with the hon. Gentleman more. I am looking at the measures through the prism of my own constituency, as every Member will. We all know that money cannot buy love, but it can save a post office, it can keep Northwood police station open for longer hours, it can hire more youth workers to work with kids and keep them off Joel street on a Friday night, and it can go towards a new youth centre. What we want, and what I believe the Minister wants, is for local communities to engage and to feel that they can influence these decisions.
I am sure that every Member is as concerned as I am about the growing sense of drift and distance from the political process. People really do not feel that it is worth getting involved. The driving force behind the Bill is that we want to send a powerful signal that it is worth getting involved because there is a decent chance of changing things. We do not underestimate the difficulties involved, but if we can create a mechanism that will allow local communities to influence the way in which taxpayers money is spent in their area, we hopeit might be a naive hopethat it will transform the level of civic engagement.
Philip Davies: Will my hon. Friend elaborate on this subject, perhaps to whet the appetite of people in my constituency? Will he tell us what transfer of functions he envisages? Will the new clause provide an opportunity for far more to be decided at parish council level, rather than by district or county councils?
My hon. Friend has asked for a specific example. If he has the time and inclination, he might like to read the record of our deliberations in Committee, where we went through a working example of a specific case. I do not know how active Business Link is in Shipley, but consideration was given in Committee to the proposition that if a local authority and a local community felt that Business Link was not doing an adequate job and that there was a better way of deploying the money that Business Link was spending to support local businesses in the area, they should feel free to make the case for the function and resources of Business Link to be reallocated. The crucial question was whether the local authority, if that was the body to which the function was reallocated, should be free to implement its own policy, perhaps for supporting small local businesses. It might, for example, decide that it wanted to keep post offices open
and reallocate money for that purpose. There would be an active dialogue with Business Link on the issue, and if Business Link did not co-operate, the local authority would have the right under the new clause to go to the Secretary of State and say, We have a mandate from the community. We believe that this is the right strategy for supporting local businesses in our area, and we want the function and resources to be reallocated to us. I hope that that example helps my hon. Friend.
Mr. Philip Hollobone (Kettering) (Con): I congratulate my hon. Friend on steering the Bill so ably through the Committee, on which I had the honour to serve. His latest words will be very encouraging for the constituents of Kettering, where there is even now an example involving Business Link, although sadly this legislation may be too late to make a difference there. The East Midlands Development Agency has seen fit effectively to close the local Kettering business venture trust. Had this legislation been on the books, the local council could have made a powerful case to the Secretary of State for taking over the funding of the operation.
Mr. Hurd: I thank my hon. Friend for his intervention, which is helpful in illustrating and reinforcing the potential of the Bill and the new clause. I thank him, too, for the manner in which he has supported the Bill in Committee.
Mr. Mark Field (Cities of London and Westminster) (Con): I support what my hon. Friend is saying about encouraging flair and innovation in our local communities. Does he acknowledge, however, that certain concerns are being expressed? Will he comment on the argument that a postcode lottery might be created, given that so much of local government finance comes directly from central Government? Is that not an integral problem in many areas of public policy, but particularly in relation to the Bill? How would my hon. Friend counter the argument that a postcode lotterywhich would run counter to the flair and innovation that he supportsmight be created?
Mr. Hurd: I would counter the postcode lottery argument in two ways. First, please let us not be under the illusion that postcode lotteries do not already exist under the present system. Secondly, if we genuinely believe in localism, we have to tolerate differences in the spirit of innovation and with the full realisation that things might go wrong. Rather than accept mediocre standards across the board, we should have the chance to raise them somewhere, to develop best practice and to provide a mechanism for people to learn from other people. That is how I would respond to the traditional argument against localism, which is increasingly unsustainable.
I tried to make the point earlier that new clause 6 is a compromise. The original clause 5the one that we now have is, I think, the third variant on the originalwas much more radical. It would have given local authorities the right to recommend the reallocation of money without reference to functions being transferred, and with a strong presumption that the Secretary of State would accept local recommendations.
New clause 6 would replace clause 5, which was a softened version of the original provision and gave the Secretary of State more leeway while still giving local authorities the right to argue for the reallocation of moneys irrespective of function. The Minister did not oppose the clause in Committee; in fact, in the afternoon sitting of 23 May he said that he did not intend to oppose new clause 3, as it was then. He was true to his word and we were told to expect amendments to the detail, but not to the principle.
Today, we shall be considering an amendment to remove clause 5 completely and when the Minister explains that proposal, he willwith your indulgence, Mr. Deputy Speakersteer us towards his amendments to new clause 1. I look forward to his arguments that his proposals are an authentic and satisfactory response to the points we are making and the principles we are trying to establish and make clear in the Bill. In the distinctive spirit of consensus and cross-party support that is so integral to the Bill, we shall try to keep an open mind, but he knows that we were disappointed and have not been persuaded thus far, which is why we tabled the new clause as a compromise. We did so for two reasons, the first of which relates to form and narrative.
As I hope I have explained, we need a mechanism to follow clause 4. In Committee, there was much talk of the campaign for clear English, led by the right hon. Member for Holborn and St. Pancras (Frank Dobson), who pointed out that much of the legislation that leaves this place is impenetrable to the public. It was put to me that if the ten commandments had been handed to parliamentary counsel, the audience would have scratched their heads, saying, What do you think he meant by that? There is some truth in that observation.
The Ministers new clause 1if I may refer to it, Mr. Deputy Speakerhas a useful provision about the right to transfer functions, which we have, in effect, copied into new clause 6, but it is in the wrong contexta national plan that is a one-off exercise in terms of the Bill. We see the publishing of local spending reports as a regular process that is subject to review, and certainly not as a one-off exercise. The Ministers proposal is in danger of leaving us with a Bill that lacks coherence.
Mr. Alan Beith (Berwick-upon-Tweed) (LD): The hon. Gentleman made a point about clear English. As we are trying to enable local communities to engage with public authorities on the direction of policy, we need to make changes in all the jargonnot just in legislation but also in reports and accountability statementsif people are not to be prevented by the opaque language used from understanding the very things the Bill is supposed to bring out.
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