Clause
3
Invitations,
directions and proposals:
supplementary
Question
proposed, That the clause stand part of the
Bill.
Alistair
Burt:
I should be grateful if the Minister bent his mind
to a couple of issues arising fromclause 3. I draw attention
to subsection (1), which states
that
“The
Secretary of State may give a direction under section 2 only where he
believes that it would be in the interests of effective and convenient
local government to do
so”
and to subsection
(7), which
states:
“An
invitation or direction under section 2 may be varied or
revoked.”
Will the
Minister clarify what he means by effective and convenient local
government? The powers are broad ranging and sweeping. I ask because we
have determined that although he might be constrained to limit his
power of direction in terms of geography and time, he has not given a
clear sense whether his power of direction will be coupled with any
locally derived consent that he will prescribe should be measured by a
referendum or in any other way. We are still left with a Bill that
gives him very wide powers. Phrases such as
“effective and convenient local
government”
lead us to
think how controlling and centralising the Government have been of
local government, and of the sense out there about the
Government’s powers and local authorities’ relationship
with his Department and the wider
electorate.
In recent
years, in conversations with local government representatives, it has
become increasingly clear that the power of the assessment and audit
process and the number of targets and quotas that local government must
meet have become so onerous that local authorities are no longer
looking outward to the electorate. Instead, they are looking upward to
the Departments and the bodies that regulate and inspect them.
Individual chief executives will complain, but the evidence is plain
from the inspection regime, some of which the Minister intends to cull
using the Bill. There has been an incredibly damaging effect on the
relationship between central Government and local government, and
between local government, its electors and councillors. The
overwhelming sense now is that local government exists to further
central Government’s agenda—it is there to deliver what
the Government want to see happen at local
level.
Part of that
relates to the financing of local government, which returns us to a
theme of our discussions with the witnesses who came before
the
Committee, and indeed with some who did not come before the Committee.
Because the relationship between local and central Government is so
intimately tied up with financing, it would have benefited us to listen
to what Michael Lyons has in mind for the future financing of local
government. We
contend that if the definition of effective and convenient local
government still means essentially that local government delivers what
central Government want, with considerable pain for local government if
it does not, there is a risk that the Government will not find the
support that they are seeking for their proposals because public
suspicion that everything is controlled from Whitehall will not be
diminished.
12.30
pm
If individual
officers are asked to do work that is not prescribed in the assessment
process, or if things need to be done by the local authority that have
no particular tick box and will not be looked for in the comprehensive
assessment process, they know that the time that they spend on it will
be time wasted from dealing with the things that the Government have
asked them to do. Individual officers know that they are rated as much
on how their department has delivered what the Government wanted from
it as on their service to the public. In the event of a conflict, they
know where their duties and loyalties lie—with the people who
are paying the bills, and those assessing their careers and how they
are delivering. The whole notion of
“effective and convenient local
government”
leads one to
ask, “effective for whom?” and “convenient to
whom?” We are seriously concerned that, without any limiting
powers or the matter being considered during our deliberations on the
power of direction, the phrase reinforces that sense of the centralism
of local government and its power.
I return to the briefing that
we had from Unlock Democracy, which, if I may remind the Committee, is
the coming together of Charter 88 and New Politics Network. I know that
certain of my colleagues have moved quite a long way in their politics
in recent years—a matter of some delight and joy to
me—but associating the Conservative party with Charter 88 is
probably a little far-fetched. That group cannot in any way be
suggested to be a form of Tory stooge body, or anything like that. When
Unlock Democracy says in its briefing that,
“The UK is the second
most centralised
country”
in the EU,
as
“94 per cent. of all
tax revenue in this country goes through central government; the
average in the European Union is... about 50 per cent... In
the long run as long as central government raises the overwhelming
majority of the money spent by local authorities then Councils will be
beholden to central government... Central government will want to
direct how money is spent, or, in the words of an old saying,
‘He who pays the piper calls the
tune’”
it reveals
the sense out there that local government has to respond to the demands
of central Government and that their relationship is breaking down.
That relationship, in which strong-minded local councils have a degree
of autonomy, with the ability to say no to Government, to be backed up
by their local electors and, sometimes, to be wrong in their judgment,
has
been seriously circumscribed in recent years. We have played our part in
that—we understand that. But before we hear the rigmarole about
the power of central Government, let me state clearly that we have
learned from this process about the dangerous breakdown in
relationships between councillors and their electorate and between
councils and central Government. That is why we are so concerned about
this issue now.
Patrick
Hall:
I am following the hon. Gentleman’s speech
closely. Is he indicating that the Conservative party is now ready to
support the relocalisation of the business
rate?
Alistair
Burt: I am
grateful—
The
Chairman:
Order. I am sorry, but business rates have
nothing to do with the clause. I have to rule that out of
order.
Alistair
Burt:
You are correct, Mr. Benton. Of course,
had Michael Lyons come before us, the business rate might well have
been before the Committee, but we will never know. The hon. Gentleman
will have to wait a little longer to find out the views of my
colleagues on that.
I
am sure that the point that I am making—the picture that I am
building—is not unfamiliar to any member of the Committee. There
is a sense that local government is now terribly prescribed by central
Government, so that when we see a phrase in the Bill saying that the
Minister is able to take action in what he believes is in the best
interests of
“effective
and convenient local government”,
we conclude that it can only mean that,
yet again, the decision-making process is moved far away from what
local people may think—even if they might be wrong—and
transferred to his office.
I would like to hear the
Minister’s comments because we have begun a dialogue about those
concerns. The Minister believes that the Bill is a seriously devolving
measure and many of his comments and the briefings about the Bill
suggest that the Government believe that, but there is a degree of
hesitation in the wider world about whether that is truly the case. I
am giving the Minister another opportunity to say now, in this debate
on clause 3 stand part, why he thinks that the measure is rather more
devolving of power than people outside think it is, and why we should
not be as afraid of that phrase as it stands.
My second point is on
subsection (7), which states:
“An invitation or
direction under section 2 may be varied or
revoked.”
Again, our
concern is with the Minister’s power to make adjustments to the
bids that he has been receiving, which could allow him to invent
virtually any pattern of local government in an area that he wants.
That question has not been fully tied up. I asked him whether it was
possible for a proposal to come forward under his direction for a
solution to local government in a geographical area that had not been
brought forward by one of the parties involved, because he
found that the proposals were all mutually
contradictory and his own view of what constituted effective and
convenient local government conflicted with theirs, with the result
that he issued a direction and varied an order to the extent that he
wished in order to create a geographical area and structure different
from any of those that were previously proposed. As far as I can see,
the Minister is able to do that. That power is very wide and I would
like him to spell out how he sees it being constrained. How will he
make sure that there is a way of ensuring that there is a degree of
public support for his
proposal? On behalf of
those of us who live in Bedfordshire, I have to say that it is
currently the most exciting area for local government in the entire
country. I am sure that the hon. Member for Bedford will confirm that
it has every prospect of being so for several months to come as we head
not only towards local government elections, but to mayoral elections
in Bedford borough. It could turn out to be the case study on the
remodelling of local government for our generation. The fact that there
are some voices saying, “Leave it all alone, Minister. There is
a perfectly decent two-tier structure,” as so determinedly
championed by the hon. Member for High Peak earlier, only adds to the
mix. However, it is possible for the Minister to draw out from all the
proposals that have come forward a determination simply to leave things
as they are.
The
Committee would like to hear from the Minister what factors he will
take into account when making decisions in which he has such widespread
discretion. What does he consider to be effective and convenient local
government? What sort of reasons would make him use his powers to vary
or revoke an order? Until those are spelled out in more detail, we
cannot give a clean bill of health to clause
3.
Mr.
Woolas:
I am happy to try to answer thehon.
Gentleman’s questions. He commented on centralisation and
alleged over-burdensome regulation. I wish to come to those points in
the part of the Bill that deals with performance assessment but will
briefly make one comment, namely that legislative measures have been
taken to devolve such powers.
A case in point is the
Licensing Act 2003, the heart of which gave local authorities greater
freedoms from central Government agencies and others to provide for a
more joined-up licensing regime in their areas. As part of that
process, the proposal to allow flexibility in licensing times for
premises selling alcohol was a devolutionary measure. However, it would
not have been recognised as such from the Opposition’s response
and the public debate that ensued, which went along the lines that the
Government were going to force people to drink for 24
hours.
Alistair
Burt:
They want something to do before the casinos
open.
Mr.
Woolas:
Again, the hon. Gentleman intervenes from a
sedentary position. I find it remarkable that his party should
be—how can I describe it—in favour of such a nanny
state.
Nevertheless,
the serious point is that these proposals bear some relation to the
relationships with central and
local government. It is precisely because of the point that the hon.
Gentleman makes that I have difficulty with that part of the
Sustainable Communities Bill that deals with the national plan and the
division of finances. I believe that that would be a centralising
measure, not the devolutionary one that this Bill helps us create.
However, I can see, Mr. Benton, that you do not want me to
go down that
route. Clause 3 limits
the Secretary of State’s power to direct authorities to come
forward with proposals for unitary government. The Secretary of State
may only direct an authority under clause 2 when she believes that it
would be in the interests of effective and convenient local government,
ensuring that whatever arrangements are put in place are fit for
purpose, deliver cost-efficient and effective services and democratic
accountability.
The
hon. Gentleman asked why we had included in the Bill the reference to
“effective and convenient” local government. The concept
of something being in the interests of effective and convenient local
government is of long standing in legislation. For example, under the
Local Government Act 1972, that test had to be met by any boundary
changes. It also underpinned the restructuring following the Banham
reviews under the Local Government Act 1992. The concept has been
understood in the context of a local authority’s ability to
deliver quality local services economically, efficiently and
effectively, and in order to give local people a democratic voice in
the decisions that affect them. The reason for including the words
“effective and convenient” is to bring this
long-understood concept into any decision on
restructuring.
Alistair
Burt:
I am perfectly comfortable with the phrase and I
understand where it comes from. My point was to ask the Minister
whether he feels that its meaning has changed over the years as a
result of the concerns that I raised on behalf of local government. The
feeling in local government is that “effective and
convenient” now means what is effective and convenient to his
Department, not necessarily to the people whom local authorities
serve.
Mr.
Woolas:
The hon. Gentleman is trying to tempt me into a
debate on performance assessment and the local target regime. I am
happy to discuss that later. I do not accept the point that he makes on
this clause.
The clause
provides that the Secretary of State can set a deadline for the receipt
of proposals, and it provides that any proposal made as a result of an
invitation or direction, as defined under clause 2, must contain an
area that is currently two-tier. The chapter provides a framework for
structural change, so it would not make sense for proposals to be
submitted from existing unitary areas. In addition, it would not be
appropriate for an authority that is currently single-tier to submit a
proposal through which it would seek to merge with an adjoining area
that is also unitary and thus expand its boundaries, which was the
point made by the hon. Member for Hazel Grove. I do not know whether my
hon. Friend the Member for Denton and Reddish would agree with that
point in respect of Stockport, but perhaps we should not go down that
road.
Subsection (5)
provides that when submitting a proposal, an authority must have regard
to any
guidance issued by the Secretary of State as to what the proposal seeks
to achieve and matters that should be taken into account. This chapter
provides the broad framework for structural change, and the guidance
issued by the Secretary of State is essential in supporting that. The
guidance for the invitations, for example, sets out the criteria
against which proposals would be judged, such as affordability and the
ability of the new structure to provide strong, effective and
accountable strategic leadership for the local authority area. It is
perfectly reasonable and appropriate for such matters to be included
within guidance. A
proposal can be submitted by a single authority or jointly by a number
of authorities. That will allow for circumstances in which there may be
a number of authorities in an area that wish to merge and would like to
submit one joint proposal. The hon. Member for North-East Bedfordshire
drew attention to clause 3(7) and the power to vary or revoke an
invitation or direction, and again I can give him assurances as to why
an invitation could be changed in such a way. It could be the case that
an invitation has been made to two councils and, after discussions, it
becomes apparent that a third council should be involved with the
potential restructuring. We may also want to vary the deadline for
submission of proposals as a result of such conversations.
On the other point, there may
be particular local circumstances, such as avian flu, or foot and mouth
might be a better example, where, if an area were involved in
discussions about changes in structure, it would be inappropriate for
those to continue. It is with that intent that we have drafted the
clause.
12.45
pm
The clause
allows, therefore, the Secretary of State and local authorities to act
in respect of an invitation or direction. We are creating a framework
for a permissive structure to allow proposals to come from the bottom
up. The hon. Gentleman is reasonably questioning their remit, but I
hope that I have reassured him of the good intention behind the clause.
Therefore I commend it to the Committee.
Question put and agreed
to.
Clause 3
ordered to stand part of the Bill.
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