Clause
12
Provision
relating to membership etc of
authorities
Question
proposed, That the clause stand part of the
Bill.
Alistair
Burt:
Without going over the short debate that we have
just had, given that this is an extensive provision will the Minister
confirm that the aim of the clause is to restate the existing
structures of any bodies that he will have rearranged through the
reorganisation process that we have discussed? He is to have powers to
deal with
“the total
number of members
of”
local
authorities,
“the number
of councillors to be
returned”
and
“the
name of any electoral area”.
Those are extensive and it would be
interesting to hear how they are to be exercised. A number of areas may
face a reduction in the number of councillors. How might that be
handled?
Mr.
Woolas:
The hon. Gentleman is right to raise that matter.
It is slightly more extensive than the simple requirement to ensure
proper change, because it covers the transitional period of change from
one authority structure to
another.
The clause
defines the “electoral matters” in respect of the
councillors, in clause 11(4)(c), including the total number of
councillors of any local authority
and
“the number of
councillors to be
returned”
in any
particular ward, division or electoral area. It mentions appointing
existing councillors as councillors to the new authorities for a
transitional period until the first elections for those authorities are
held. Obviously, they would be the councillors for that electoral area.
The clause also makes provision for elections to the new authority, in
case the Electoral Commission is not able to carry out a review and put
in place electoral arrangements for the new authority before it is
established. I do not believe that that has ever happened, but the
clause could, hypothetically, do so. To be fair to the hon. Gentleman,
the measure is slightly more extensive in that it covers the
transitional
period.
Alistair
Burt:
Will the Minister confirm that district and borough
elections this year will take place in all those areas that currently
have bids going forward and that no decision is anticipated as to
whether it makes sense for them to take place? Will they definitely
take
place?
Mr.
Woolas:
I am grateful for the opportunity to put this on
the record once again. I recall being woken early one morning, last
summer, to respond to a Conservative party press release that the BBC
read at 6.30 in the morning. “Thanks,” was my response.
Of course, under any circumstances, the elections will take place this
year. It is a serious point—apart from being a point-scoring
one—because in previous reviews there has been uncertainty about
whether elections would be necessary or desirable and people were then
saying, “What’s the point?” That is unfair to the
public and particularly unfair to the people who may be standing. I am
grateful to the hon. Gentleman for giving me the opportunity to explain
that—and for reminding me of that summer
morning.
Question
put and agreed
to.
Clause 12
ordered to stand part of the
Bill.
Clauses 13
to 16 ordered to stand part of the
Bill..
Clause
17
Residuary
bodies
Question
proposed, That the clause stand part of the
Bill.
Mr.
Syms:
There are a few items that I wish to raise. Clearly,
much can go on with residuary bodies. Commitments can be entered into
by local authorities
for the long term. For all their benefits, private finance initiatives
can sometimes land authorities with considerable costs in the long
term, committing them to office buildings and other matters such as
computer contracts. Will the Minister reassure us about how residuary
bodies will operate and confirm that the consequence of reorganisation
will be that the successor authority does not inherit more longer term,
higher cost contracts than need be the
case?
Under the clause,
the residuary bodies will turn over most of the assets but, as we know,
a lot of local government is tied up with ancient charities, gifts of
land or school buildings which the authority is not sure whether it
owns. Things might be vested into a charitable or residuary body for
some years to come. I want reassurance from the Minister about how the
process will operate. Will the costs of running residuary bodies
dealing with the loose ends of reorganisation be taken into account for
what was described earlier as the aggregate financial
envelope?
Andrew
Stunell:
A lot of local government mythology is backed up
by some pretty clear-cut anecdotes, if not evidence that could be put
before a court, of circumstances in which councils going out of
existence have left poisoned pills for their successors in one form or
another. A notable case in my constituency goes back to 1973-74, so
such cases can be enduring. With all the attention of the Minister and
the Government on the performance of local authorities and their
regulation, will he say something about how that will be prevented from
happening in this round? What role will the residuary bodies play when
dealing with it? What will happen to the finances of the new receiving
authority if such an event takes place? The financial predictions on
which the original decision was made could easily be blown out of the
water. I should be interested to hear what the hon. Gentleman
hasto
say.
Mr.
Woolas:
The hon. Gentleman has made an entirely fair and
reasonable point about residuary bodies. Indeed, I remember
representing an employee of a local authority that had been abolished
under the previous process. He had been employed to count the number of
oak trees in the area and had then been employed subsequently by the
residuary body. It took some seven years to unwind the contract, during
which time the number of trees had not changed. That is the stuff of
employment
tribunals.
Clause 24
deals with the contracts that local authorities may enter into during
the period. A probing amendment has been tabled to the provision, which
hopefully we shall debate. The clause under discussion enables the
Secretary of State to establish one or more corporate bodies to take
over property, rights, liabilities and the functions of those local
authorities that cease to exist as a result of either structural or
boundary changes. They are the residuary bodies to which the hon.
Gentleman refers.
The
use of residuary bodies is not, in fact, common. We do not expect that
there will be a requirement for residuary bodies in this round of
restructuring. However, it is prudent to allow a power to the Secretary
of State to provide for them until the precise implementation
arrangements for each new authority
are known. I am sure that members of the Committee will wish to ask
questions about such matters when we reach that stage in the
Bill. 6
pm
A residuary body
could be used, for example, to take responsibility for any property,
liabilities or functions not transferred to the new authorities because
we do not expect that they will be required within the configuration.
For example, following a reorganisation, if there is property surplus
to the requirements of the new authority, it might be more appropriate
to transfer it to a residuary body responsible for the
property’s maintenance until it is disposed of. The residuary
body would meet the costs out of its assets, and the net proceeds would
be returned at the end of that period to the new authority. That
approach was taken in the 1980s when the metropolitan counties were
abolished. There were residuary assets, and the Committee can probably
guess by now where the tree counter was
employed.
Subsection
(2) will allow the Secretary of State to make provision relating to a
residuary body, including provision for its constitution, membership
and power to borrow and lend money. It will also allow the Secretary of
State to require such a body to submit to him or her a scheme for its
own dissolution, because by definition residuary bodies are intended to
have ashelf
life.
Subsection (3)
provides for the Secretary of State to transfer any property rights,
liabilities or functions of a residuary body to any other body and
provides for him or her to give effect to a scheme for the dissolution
of that residuary body. Subsection (4) provides that the
Secretary of State may make any incidental,
consequential, transitional or supplementary provision, in particular
those mentioned in clause 15, which relate to the modification and so
on of an enactment.
The
clause therefore provides for the Secretary of State to establish
residuary bodies as the result of an order for structural and/or
boundary change under clause 7 or 10, whichever contains the relevant
procedure. That is the intention. As I said, it is not envisaged that
that will be required under the window of opportunity, but it might
come up through that route or through boundary changes resulting in
structural change. I therefore think it sensible for the Committee to
adopt the
clause.
Question put
and agreed
to.
Clause 17
ordered to stand part of the
Bill.
Clause
18
Staff
commissions
Question
proposed, That the clause stand part of the
Bill.
Alistair
Burt:
I would be grateful for some clarification from the
Minister on staff issues. Subsection (5) says in
italics:
“Any
expenses incurred by a staff commission under this section and not
recovered from a relevant authority shall be paid by the Secretary of
State out of money provided by Parliament.”
Can he give us any indication of where and
when he expects that provision to be triggered? Is it an indication of
concern that the costs of winding up an authority might not or should
not be met by that authority, and that the money will therefore have to
come from Parliament? If so, what provision has been made for it? What
sums are anticipated? It would be appreciated if he said something
about that.
I would
also like clarification on how the staff commission would deal with
some of the practical problems arising from reorganisation. It is a
disorienting time. During the transition, some workers may choose to
leave the authorities in transition and go to more settled neighbouring
authorities, depriving the area of key skills. In all the areas on the
fringe of London, it is easy to transfer to neighbouring areas, take
skills elsewhere and not be caught up in transition. Would the measures
involve the payment of bonuses to retain key staff during the
transition? Might short-term contracts be involved to bring in
specialised skills to cover the transition period? Who will meet the
costs?
Where will
pension costs lie under transition? Which authorities can be expected
to make provision for them? It is likely that authorities with very
different financial situations will be brought together. Some will have
been prudent and have significant reserves, but others will have very
few. That will affect the payment of costs and pensions and,
ultimately, the amount of council tax being paid by taxpayers. Who is
picking up the bill for the transitional process? I would be very
grateful if the Minister could enlighten us on that matter. In
particular, when does he expect the provisions in subsection (5) to be
triggered?
Mr.
Woolas:
I shall try and answer the hon. Gentleman’s
questions, which once again are quite reasonable—they have been
asked by trade unions, on behalf of employees, and by staff
associations during this and previous rounds of consultation.
The employer of local authority
employees is, of course, the relevant local authority and not the
Government. The hon. Gentleman made the point about parliamentary
accounts. Furthermore, on the 89 funds that make up the local
government pension scheme, the local council or councils—they
are combined for the purposes of the pension fund—are the
employer. In that case, the Government are the regulator, given that it
is a funded scheme. Of course, the points about potential redundancy
pensions under such arrangements are very important indeed. It might be
worth while for the Committee to note that the new regulations for the
local government pension scheme are currently subject to consultation
in a process that is coincidental to the proposal before the
Committee.
The clause
will try to deal, therefore, with transitionary periods and is similar
to the proposal that has been put forward in previous reorganisations.
I imagine that the new unitary authorities created through the process
will want to take a fresh look at their management and staffing
structures. Indeed, in large part, proposals for savings and
efficiencies would probably look at staffing costs, given that those
account for about 50 per cent. of local government’s total
expenditure—80 per cent. if one includes the
commissioned or contracted sector. Nevertheless, the Government
obviously recognise that staff will be anxious about the restructuring
and, therefore, we will be holding discussions with those involved in
local government and groups such as the local government employers body
and public sector trade unions in preparing for
implementation—should any go ahead through the current window of
opportunity. The
clause, therefore, allows the Secretary of State to establish one or
more staff commissions to consider staffing arrangements, transfers and
problems that might arise as a result of orders for structural or
boundary changes—the two procedures that might lead to such
situations. Staff commissions may also be established to advise the
Secretary of State on the steps necessary to safeguard the interests of
staff affected by such an order. That provision is broadly consistent
with previous legislation. In the reorganisations of the 1990s, staff
commissions were established with the remit to advise the Secretary of
State on the transfer of staff and to ensure that transfer schemes
established by local authorities complied with regulations made by the
Secretary of State.
As
I said, staff anxieties are high on our agenda. Subsection (2) provides
that a staff
“commission
can be established for the whole or any part of
England.”
That will give
us flexibility depending on the proposals that come forward and will
allow the Secretary of State to establish a staff commission to
consider matters relating to an individual area, or number of areas,
depending on the circumstances. Subsection (3) provides that the
Secretary of State may direct the
“staff commission with respect to
their
procedure.”
Subsection (4)
will enable the Secretary of State to direct an authority or a
residuary body, relating back to clause 17, to provide the information
requested, implement any advice given by the staff commission, and to
pay the staff commission any expenses it incurs as a result of work
requested by the authority so, again, it is not a cost on the council
tax payer. Under subsection (6), the Secretary of State may wind up a
staff commission.
We
do not anticipate that funding from central sources will be required,
to address the question of the hon. Member for North-East Bedfordshire.
However, as happens often in local government, a local authority could
undertake functions and is responsible for pay and rations, as it were,
even when the functions are undertaken on behalf of the wider
community, the national Government or other agencies. Such instances
are many and varied. Clause 18 gives the Secretary of State some
flexibility to ensure that the burdens that rightfully fall on central
Government are met by them and not by local government.
I am confident that the clause
reflects previous practice and gives a wide flexibility for staffing
arrangements. However, I emphasise that the specific concerns of
individual local authorities and the public sector unions will be
subject to discussion between those bodies as the measure is rolled
out.
Question put
and agreed to.
Clause 18 ordered to stand
part of the Bill.
Clauses 19 to 23 ordered to
stand part of the Bill.
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